AMD Reports Second Quarter 2024 Financial Results
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AMD Reports Second Quarter 2024 Financial Results

SANTA CLARA, Calif., July 30, 2024 (GLOBE NEWSWIRE) -- AMD (NASDAQ:AMD) today announced revenue for the second quarter of 2024 of $5.8 billion, gross margin of 49%, operating income of $269 million, net income of $265 million and diluted earnings per share of $0.16. On a non-GAAP(*) basis, gross margin was 53%, operating income was $1.3 billion, net income was $1.1 billion and diluted earnings per share was $0.69.

“We delivered strong revenue and earnings growth in the second quarter driven by record Data Center segment revenue,” said AMD Chair and CEO Dr. Lisa Su. “Our AI business continued accelerating and we are well positioned to deliver strong revenue growth in the second half of the year led by demand for Instinct, EPYC and Ryzen processors. The rapid advances in generative AI are driving demand for more compute in every market, creating significant growth opportunities as we deliver leadership AI solutions across our business.”

 “AMD executed well in the second quarter, with revenue above the midpoint of our guidance driven by strong growth in the Data Center and Client segments,” said AMD EVP, CFO and Treasurer Jean Hu. “In addition, we expanded gross margin and delivered solid earnings growth, while increasing our strategic AI investments to build the foundation for future growth.”

GAAP Quarterly Financial Results

 Q2 2024Q2 2023Y/YQ1 2024Q/Q
Revenue ($M)$5,835 $5,359 Up 9%$5,473 Up 7%
Gross profit ($M)$2,864 $2,443 Up 17%$2,560 Up 12%
Gross margin 49%  46% Up 3 ppts 47% Up 2 ppts
Operating expenses ($M)$2,605 $2,471 Up 5%$2,537 Up 3%
Operating income (loss) ($M)$269 $(20) Up 1,445%$36 Up 647%
Operating margin 5%  0% Up 5 ppts 1% Up 4 ppts
Net income ($M)$265 $27 Up 881%$123 Up 115%
Diluted earnings per share$0.16 $0.02 Up 700%$0.07 Up 129%

Non-GAAP(*) Quarterly Financial Results

 Q2 2024Q2 2023Y/YQ1 2024Q/Q
Revenue ($M)$5,835 $5,359 Up 9%$5,473 Up 7%
Gross profit ($M)$3,101 $2,665 Up 16%$2,861 Up 8%
Gross margin 53%  50% Up 3 ppts 52% Up 1 ppt
Operating expenses ($M)$1,847 $1,605 Up 15%$1,741 Up 6%
Operating income ($M)$1,264 $1,068 Up 18%$1,133 Up 12%
Operating margin 22%  20% Up 2 ppts 21% Up 1 ppt
Net income ($M)$1,126 $948 Up 19%$1,013 Up 11%
Diluted earnings per share$0.69 $0.58 Up 19%$0.62 Up 11%

Segment Summary

Recent PR Highlights

Current Outlook
AMD’s outlook statements are based on current expectations. The following statements are forward-looking and actual results could differ materially depending on market conditions and the factors set forth under “Cautionary Statement” below.

For the third quarter of 2024, AMD expects revenue to be approximately $6.7 billion, plus or minus $300 million. At the mid-point of the revenue range, this represents year-over-year growth of approximately 16% and sequential growth of approximately 15%. Non-GAAP gross margin is expected to be approximately 53.5%.

AMD Teleconference
AMD will hold a conference call for the financial community at 2:00 p.m. PT (5:00 p.m. ET) today to discuss its second quarter 2024 financial results. AMD will provide a real-time audio broadcast of the teleconference on the Investor Relations page of its website at www.amd.com.

RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES
(in millions, except per share data) (Unaudited)  
  Three Months Ended
  June 29,
2024
 March 30,
2024
 July 1,
2023
 
GAAP gross profit $2,864  $2,560  $2,443  
GAAP gross margin  49%  47%  46% 
Stock-based compensation  5   6   10  
Amortization of acquisition-related intangibles  231   230   212  
Acquisition-related and other costs (1)  1        
Inventory loss at contract manufacturer (2)     65     
Non-GAAP gross profit $3,101  $2,861  $2,665  
Non-GAAP gross margin  53%  52%  50% 
        
GAAP operating expenses $2,605  $2,537  $2,471  
GAAP operating expenses/revenue %  45%  46%  46% 
Stock-based compensation  341   365   338  
Amortization of acquisition-related intangibles  372   392   481  
Acquisition-related and other costs (1)  45   39   47  
Non-GAAP operating expenses $1,847  $1,741  $1,605  
Non-GAAP operating expenses/revenue %  32%  32%  30% 
        
GAAP operating income (loss) $269  $36  $(20) 
GAAP operating margin  5%  1%  % 
Stock-based compensation  346   371   348  
Amortization of acquisition-related intangibles  603   622   693  
Acquisition-related and other costs (1)  46   39   47  
Inventory loss at contract manufacturer (2)     65     
Non-GAAP operating income $1,264  $1,133  $1,068  
Non-GAAP operating margin  22%  21%  20% 


  Three Months Ended 
  June 29, 2024 March 30, 2024 July 1, 2023 
GAAP net income / earnings per share $265  $0.16  $123  $0.07  $27  $0.02  
(Gains) losses on equity investments, net        3      3     
Stock-based compensation  346   0.21   371   0.23   348   0.21  
Equity income in investee  (7)     (7)     (6)    
Amortization of acquisition-related intangibles  603   0.37   622   0.38   693   0.42  
Acquisition-related and other costs (1)  46   0.03   39   0.02   47   0.03  
Inventory loss at contract manufacturer (2)        65   0.04        
Income tax provision  (127)  (0.08)  (203)  (0.12)  (164)  (0.10) 
Non-GAAP net income / earnings per share $1,126  $0.69  $1,013  $0.62  $948  $0.58  


(1) Acquisition-related and other costs primarily comprised of transaction costs, purchase price adjustments for inventory, certain compensation charges, contract termination and workforce rebalancing charges.
(2) Inventory loss at contract manufacturer is related to an incident at a third-party contract manufacturing facility.

About AMD
For more than 50 years AMD has driven innovation in high-performance computing, graphics and visualization technologies. AMD employees are focused on building leadership high-performance and adaptive products that push the boundaries of what is possible. Billions of people, leading Fortune 500 businesses and cutting-edge scientific research institutions around the world rely on AMD technology daily to improve how they live, work and play. For more information about how AMD is enabling today and inspiring tomorrow, visit the AMD (NASDAQ: AMD) website, blog, LinkedIn and X pages.

Cautionary Statement

This press release contains forward-looking statements concerning Advanced Micro Devices, Inc. (AMD) such as AMD’s expectations about revenue growth in the second half of 2024; AMD’s expectations about generative AI opportunities; AMD’s expectations about future growth; the features, functionality, performance, availability, timing and expected benefits of future AMD products; and AMD’s expected third quarter 2024 financial outlook, including revenue and non-GAAP gross margin, which are made pursuant to the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are commonly identified by words such as "would," "may," "expects," "believes," "plans," "intends," "projects" and other terms with similar meaning. Investors are cautioned that the forward-looking statements in this press release are based on current beliefs, assumptions and expectations, speak only as of the date of this press release and involve risks and uncertainties that could cause actual results to differ materially from current expectations. Such statements are subject to certain known and unknown risks and uncertainties, many of which are difficult to predict and generally beyond AMD's control, that could cause actual results and other future events to differ materially from those expressed in, or implied or projected by, the forward-looking information and statements. Material factors that could cause actual results to differ materially from current expectations include, without limitation, the following: Intel Corporation’s dominance of the microprocessor market and its aggressive business practices; Nvidia’s dominance in the graphics processing unit market and its aggressive business practices; the cyclical nature of the semiconductor industry; market conditions of the industries in which AMD products are sold; loss of a significant customer; competitive markets in which AMD’s products are sold; economic and market uncertainty; quarterly and seasonal sales patterns; AMD's ability to adequately protect its technology or other intellectual property; unfavorable currency exchange rate fluctuations; ability of third party manufacturers to manufacture AMD's products on a timely basis in sufficient quantities and using competitive technologies; availability of essential equipment, materials, substrates or manufacturing processes; ability to achieve expected manufacturing yields for AMD’s products; AMD's ability to introduce products on a timely basis with expected features and performance levels; AMD's ability to generate revenue from its semi-custom SoC products; potential security vulnerabilities; potential security incidents including IT outages, data loss, data breaches and cyberattacks; uncertainties involving the ordering and shipment of AMD’s products; AMD’s reliance on third-party intellectual property to design and introduce new products; AMD's reliance on third-party companies for design, manufacture and supply of motherboards, software, memory and other computer platform components; AMD's reliance on Microsoft and other software vendors' support to design and develop software to run on AMD’s products; AMD’s reliance on third-party distributors and add-in-board partners; impact of modification or interruption of AMD’s internal business processes and information systems; compatibility of AMD’s products with some or all industry-standard software and hardware; costs related to defective products; efficiency of AMD's supply chain; AMD's ability to rely on third party supply-chain logistics functions; AMD’s ability to effectively control sales of its products on the gray market; long-term impact of climate change on AMD’s business; impact of government actions and regulations such as export regulations, tariffs and trade protection measures; AMD’s ability to realize its deferred tax assets; potential tax liabilities; current and future claims and litigation; impact of environmental laws, conflict minerals related provisions and other laws or regulations; evolving expectations from governments, investors, customers and other stakeholders regarding corporate responsibility matters; issues related to the responsible use of AI; restrictions imposed by agreements governing AMD’s notes, the guarantees of Xilinx’s notes and the revolving credit agreement; impact of acquisitions, joint ventures and/or investments on AMD’s business and AMD’s ability to integrate acquired businesses;  impact of any impairment of the combined company’s assets; political, legal and economic risks and natural disasters; future impairments of technology license purchases; AMD’s ability to attract and retain qualified personnel; and AMD’s stock price volatility. Investors are urged to review in detail the risks and uncertainties in AMD’s Securities and Exchange Commission filings, including but not limited to AMD’s most recent reports on Forms 10-K and 10-Q.

(*) In this earnings press release, in addition to GAAP financial results, AMD has provided non-GAAP financial measures including non-GAAP gross profit, non-GAAP gross margin, non-GAAP operating expenses, non-GAAP operating income, non-GAAP operating margin, non-GAAP net income and non-GAAP diluted earnings per share. AMD uses a normalized tax rate in its computation of the non-GAAP income tax provision to provide better consistency across the reporting periods. For fiscal 2024, AMD uses a projected non-GAAP tax rate of 13%, which excludes the tax impact of pre-tax non-GAAP adjustments, reflecting currently available information. AMD also provided adjusted EBITDA and free cash flow as supplemental non-GAAP measures of its performance. These items are defined in the footnotes to the selected corporate data tables provided at the end of this earnings press release. AMD is providing these financial measures because it believes this non-GAAP presentation makes it easier for investors to compare its operating results for current and historical periods and also because AMD believes it assists investors in comparing AMD’s performance across reporting periods on a consistent basis by excluding items that it does not believe are indicative of its core operating performance and for the other reasons described in the footnotes to the selected data tables. The non-GAAP financial measures disclosed in this earnings press release should be viewed in addition to and not as a substitute for or superior to AMD’s reported results prepared in accordance with GAAP and should be read only in conjunction with AMD’s Consolidated Financial Statements prepared in accordance with GAAP. These non-GAAP financial measures referenced are reconciled to their most directly comparable GAAP financial measures in the data tables in this earnings press release. This earnings press release also contains forward-looking non-GAAP gross margin concerning AMD’s financial outlook, which is based on current expectations as of July 30, 2024 and assumptions and beliefs that involve numerous risks and uncertainties. Adjustments to arrive at the GAAP gross margin outlook typically include stock-based compensation, amortization of acquired intangible assets and acquisition-related and other costs. The timing and impact of such adjustments are dependent on future events that are typically uncertain or outside of AMD's control, therefore, a reconciliation to equivalent GAAP measures is not practicable at this time. AMD undertakes no intent or obligation to publicly update or revise its outlook statements as a result of new information, future events or otherwise, except as may be required by law.

AMD, the AMD Arrow logo, EPYC, Radeon, Ryzen, Instinct, Versal, Alveo, Kria, FidelityFX, 3D V-Cache, Ultrascale+, Zynq, Threadripper and combinations thereof, are trademarks of Advanced Micro Devices, Inc.


 
ADVANCED MICRO DEVICES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Millions except per share amounts and percentages) (Unaudited)
 
  Three Months Ended Six Months Ended
  June 29,
2024
 March 30,
2024
 July 1,
2023
 June 29,
2024
 July 1,
2023
Net revenue $5,835  $5,473  $5,359  $11,308  $10,712 
Cost of sales  2,740   2,683   2,704   5,423   5,393 
Amortization of acquisition-related intangibles  231   230   212   461   517 
Total cost of sales  2,971   2,913   2,916   5,884   5,910 
Gross profit  2,864   2,560   2,443   5,424   4,802 
Gross margin  49%  47%  46%  48%  45%
Research and development  1,583   1,525   1,443   3,108   2,854 
Marketing, general and administrative  650   620   547   1,270   1,132 
Amortization of acquisition-related intangibles  372   392   481   764   999 
Licensing gain  (10)  (13)  (8)  (23)  (18)
Operating income (loss)  269   36   (20)  305   (165)
Interest expense  (25)  (25)  (28)  (50)  (53)
Other income (expense), net  55   53   46   108   89 
Income (loss) before income taxes and equity income  299   64   (2)  363   (129)
Income tax provision (benefit)  41   (52)  (23)  (11)  (10)
Equity income in investee  7   7   6   14   7 
Net income (loss) $265  $123  $27  $388  $(112)
Earnings (loss) per share          
Basic $0.16  $0.08  $0.02  $0.24  $(0.07)
Diluted $0.16  $0.07  $0.02  $0.24  $(0.07)
Shares used in per share calculation          
Basic  1,618   1,617   1,612   1,617   1,612 
Diluted  1,637   1,639   1,627   1,638   1,612 


 
ADVANCED MICRO DEVICES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Millions)
 
  June 29,
2024
 December 30,
2023
  (Unaudited)  
ASSETS    
Current assets:    
Cash and cash equivalents $4,113  $3,933 
Short-term investments  1,227   1,840 
Accounts receivable, net  5,749   5,376 
Inventories  4,991   4,351 
Receivables from related parties  24   9 
Prepaid expenses and other current assets  1,361   1,259 
Total current assets  17,465   16,768 
Property and equipment, net  1,666   1,589 
Operating lease right-of-use assets  635   633 
Goodwill  24,262   24,262 
Acquisition-related intangibles, net  20,138   21,363 
Investment: equity method  113   99 
Deferred tax assets  617   366 
Other non-current assets  2,990   2,805 
Total Assets $67,886  $67,885 
     
LIABILITIES AND STOCKHOLDERS' EQUITY    
Current liabilities:    
Accounts payable $1,699  $2,055 
Payables to related parties  420   363 
Accrued liabilities  3,629   3,082 
Current portion of long-term debt, net     751 
Other current liabilities  447   438 
Total current liabilities  6,195   6,689 
Long-term debt, net of current portion  1,719   1,717 
Long-term operating lease liabilities  526   535 
Deferred tax liabilities  1,192   1,202 
Other long-term liabilities  1,716   1,850 
     
Stockholders' equity:    
Capital stock:    
Common stock, par value  17   17 
Additional paid-in capital  60,542   59,676 
Treasury stock, at cost  (5,103)  (4,514)
Retained earnings  1,111   723 
Accumulated other comprehensive loss  (29)  (10)
Total stockholders' equity $56,538  $55,892 
Total Liabilities and Stockholders' Equity $67,886  $67,885 


 
ADVANCED MICRO DEVICES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Millions) (Unaudited)
 
  Three Months Ended Six Months Ended
  June 29,
2024
 July 1,
2023
 June 29,
2024
 July 1,
2023
Cash flows from operating activities:        
Net income (loss) $265  $27  $388  $(112)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:        
Depreciation and amortization  769   849   1,553   1,831 
Stock-based compensation  346   348   717   657 
Amortization of operating lease right-of-use assets  26   24   52   48 
Deferred income taxes  (190)  (274)  (256)  (582)
Inventory loss at contract manufacturer        65    
Other  (15)  (13)  (37)  (8)
Changes in operating assets and liabilities        
Accounts receivable, net  (711)  (272)  (373)  (186)
Inventories  (342)  (332)  (710)  (796)
Prepaid expenses and other assets  88   (46)  (234)  (237)
Receivables from and payables to related parties, net  (11)  (41)  42   (150)
Accounts payable  280   236   (356)  309 
Accrued and other liabilities  88   (127)  263   91 
Net cash provided by operating activities  593   379   1,114   865 
Cash flows from investing activities:        
Purchases of property and equipment  (154)  (125)  (296)  (283)
Purchases of short-term investments  (132)  (1,113)  (565)  (2,816)
Proceeds from maturity of short-term investments  761   698   1,202   1,171 
Proceeds from sale of short-term investments     103   2   248 
Other  (89)  (1)  (92)  5 
Net cash provided by (used in) investing activities  386   (438)  251   (1,675)
Cash flows from financing activities:        
Repayment of debt  (750)     (750)   
Proceeds from sales of common stock through employee equity plans  143   141   148   144 
Repurchases of common stock  (352)     (356)  (241)
Common stock repurchases for tax withholding on employee equity plans  (97)  (66)  (226)  (87)
Other        (1)   
Net cash used in financing activities  (1,056)  75   (1,185)  (184)
Net increase (decrease) in cash and cash equivalents  (77)  16   180   (994)
Cash and cash equivalents at beginning of period  4,190   3,825   3,933   4,835 
Cash and cash equivalents at end of period $4,113  $3,841  $4,113  $3,841 


 
ADVANCED MICRO DEVICES, INC.
SELECTED CORPORATE DATA
(Millions) (Unaudited)
 
  Three Months Ended Six Months Ended
  June 29,
2024
 March 30,
2024
 July 1,
2023
 June 29,
2024
 July 1,
2023
Segment and Category Information(1)          
Data Center          
Net revenue $2,834  $2,337  $1,321  $5,171  $2,616 
Operating income $743  $541  $147  $1,284  $295 
Client          
Net revenue $1,492  $1,368  $998  $2,860  $1,737 
Operating income (loss) $89  $86  $(69) $175  $(241)
Gaming          
Net revenue $648  $922  $1,581  $1,570  $3,338 
Operating income $77  $151  $225  $228  $539 
Embedded          
Net revenue $861  $846  $1,459  $1,707  $3,021 
Operating income $345  $342  $757  $687  $1,555 
All Other          
Net revenue $  $  $  $  $ 
Operating loss $(985) $(1,084) $(1,080) $(2,069) $(2,313)
Total          
Net revenue $5,835  $5,473  $5,359  $11,308  $10,712 
Operating income (loss) $269  $36  $(20) $305  $(165)
           
Other Data          
Capital expenditures $154  $142  $125  $296  $283 
Adjusted EBITDA (2) $1,430  $1,295  $1,224  $2,725  $2,481 
Cash, cash equivalents and short-term investments $5,340  $6,035  $6,285  $5,340  $6,285 
Free cash flow (3) $439  $379  $254  $818  $582 
Total assets $67,886  $67,895  $67,967  $67,886  $67,967 
Total debt $1,719  $2,468  $2,467  $1,719  $2,467 


(1) The Data Center segment primarily includes server microprocessors (CPUs), graphics processing units (GPUs), accelerated processing units (APUs), data processing units (DPUs), Field Programmable Gate Arrays (FPGAs), Smart Network Interface Cards (SmartNICs), Artificial Intelligence (AI) accelerators and Adaptive System-on-Chip (SoC) products for data centers.
   
  The Client segment primarily includes CPUs, APUs, and chipsets for desktop, notebook and handheld personal computers.
   
  The Gaming segment primarily includes discrete GPUs, and semi-custom SoC products and development services.
   
  The Embedded segment primarily includes embedded CPUs, GPUs, APUs, FPGAs, System on Modules (SOMs), and Adaptive SoC products.
   
  From time to time, the Company may also sell or license portions of its IP portfolio.
   
  All Other category primarily includes certain expenses and credits that are not allocated to any of the operating segments, such as amortization of acquisition-related intangible asset, employee stock-based compensation expense, acquisition-related and other costs, inventory loss at contract manufacturer, and licensing gain.


(2)  Reconciliation of GAAP Net Income (loss) to Adjusted EBITDA


  Three Months Ended Six Months Ended
(Millions) (Unaudited) June 29,
2024
 March 30,
2024
 July 1,
2023
 June 29,
2024
 July 1,
2023
GAAP net income (loss) $265  $123  $27  $388  $(112)
Interest expense  25   25   28   50   53 
Other (income) expense, net  (55)  (53)  (46)  (108)  (89)
Income tax provision (benefit)  41   (52)  (23)  (11)  (10)
Equity income in investee  (7)  (7)  (6)  (14)  (7)
Stock-based compensation  346   371   348   717   653 
Depreciation and amortization  166   162   156   328   315 
Amortization of acquisition-related intangibles  603   622   693   1,225   1,516 
Inventory loss at contract manufacturer     65      65    
Acquisition-related and other costs  46   39   47   85   162 
Adjusted EBITDA $1,430  $1,295  $1,224  $2,725  $2,481 
                     

The Company presents “Adjusted EBITDA” as a supplemental measure of its performance. Adjusted EBITDA for the Company is determined by adjusting GAAP net income (loss) for interest expense, other income (expense), net, income tax provision (benefit), equity income in investee, stock-based compensation, depreciation and amortization expense (including amortization of acquisition-related intangibles), inventory loss at contract manufacturer, and acquisition-related and other costs. The Company calculates and presents Adjusted EBITDA because management believes it is of importance to investors and lenders in relation to its overall capital structure and its ability to borrow additional funds. In addition, the Company presents Adjusted EBITDA because it believes this measure assists investors in comparing its performance across reporting periods on a consistent basis by excluding items that the Company does not believe are indicative of its core operating performance. The Company’s calculation of Adjusted EBITDA may or may not be consistent with the calculation of this measure by other companies in the same industry. Investors should not view Adjusted EBITDA as an alternative to the GAAP operating measure of income or GAAP liquidity measures of cash flows from operating, investing and financing activities. In addition, Adjusted EBITDA does not take into account changes in certain assets and liabilities that can affect cash flows.

(3) Reconciliation of GAAP Net Cash Provided by Operating Activities to Free Cash Flow


  Three Months Ended Six Months Ended
(Millions except percentages) (Unaudited) June 29,
2024
 March 30,
2024
 July 1,
2023
 June 29,
2024
 July 1,
2023
GAAP net cash provided by operating activities $593  $521  $379  $1,114  $865 
Operating cash flow margin %  10%  10%  7%  10%  8%
Purchases of property and equipment  (154)  (142)  (125)  (296)  (283)
Free cash flow $439  $379  $254  $818  $582 
Free cash flow margin %  8%  7%  5%  7%  5%
                     

The Company also presents free cash flow as a supplemental Non-GAAP measure of its performance. Free cash flow is determined by adjusting GAAP net cash provided by operating activities for capital expenditures, and free cash flow margin % is free cash flow expressed as a percentage of the Company's net revenue. The Company calculates and communicates free cash flow in the financial earnings press release because management believes it is of importance to investors to understand the nature of these cash flows. The Company’s calculation of free cash flow may or may not be consistent with the calculation of this measure by other companies in the same industry. Investors should not view free cash flow as an alternative to GAAP liquidity measures of cash flows from operating activities.

Media Contact:
Drew Prairie
AMD Communications
512-602-4425
Email Contact
        
Investor Contact:
Mitch Haws
AMD Investor Relations
408-749-3124
Email Contact


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