Q1 2020 Results
- Revenue was $1.79 billion, up 40 percent year-over-year primarily driven by higher Computing and Graphics segment revenue. Revenue was down 16 percent quarter-over-quarter due to lower revenue in both segments.
- Gross margin was 46 percent, up 5 percentage points year-over-year and 1 percentage point quarter-over-quarter, primarily driven by Ryzen™ and EPYC™ processor sales.
- Operating income was $177 million compared to operating income of $38 million a year ago and $348 million in the prior quarter. Non-GAAP operating income was $236 million compared to operating income of $84 million a year ago and $405 million in the prior quarter. Operating income improved year-over-year primarily driven by revenue growth and a greater percentage of Ryzen and EPYC processor sales. On a sequential basis, operating income declined due to lower revenue and higher R&D expenses.
- Net income was $162 million compared to net income of $16 million a year ago and $170 million in the prior quarter. Non-GAAP net income was $222 million compared to net income of $62 million a year ago and $383 million in the prior quarter.
- Diluted earnings per share was $0.14 compared to diluted earnings per share of $0.01 a year ago and $0.15 in the prior quarter. Non-GAAP diluted earnings per share was $0.18, compared to diluted earnings per share of $0.06 a year ago and $0.32 in the prior quarter.
- Cash, cash equivalents and marketable securities were $1.4 billion at the end of the quarter.
Quarterly Financial Segment Summary
- Computing and Graphics segment revenue was $1.44 billion, up 73 percent year-over-year and down 13 percent quarter-over-quarter. Revenue was higher year-over-year driven by strong Ryzen processor and Radeon™ product channel sales. The quarter-over-quarter decline was primarily due to lower graphics processor sales.
◦ Client processor average selling price (ASP) was up year-over-year driven by Ryzen processor sales. Client processor ASP was down slightly quarter-over-quarter due to higher notebook sales.
◦ GPU ASP was lower year-over-year and quarter-over-quarter due to product mix.
◦ Operating income was $262 million compared to $16 million a year ago and $360 million in the prior quarter. The year-over-year increase was driven by significantly higher revenue. The quarter-over-quarter decline was primarily due to lower revenue. - Enterprise, Embedded and Semi-Custom segment revenue was $348 million, down 21 percent year-over-year and 25 percent sequentially primarily due to lower semi-custom sales, partially offset by higher EPYC processor sales.
◦ Operating loss was $26 million compared to operating income of $68 million a year ago, which included a $60 million licensing gain. The decline from operating income of $45 million in the prior quarter was primarily due to lower revenue and higher operating expenses. - All Other operating loss was $59 million compared to operating losses of $46 million a year ago and $57 million in the prior quarter.
Recent PR Highlights
- AMD detailed its plans to drive best-in-class growth and strong financial performance through high-performance computing and graphics leadership, aggressive technology investments and sustained execution at its Financial Analyst Day on March 5, 2020.
- AMD further strengthened its position as a data center compute and graphics processing solutions leader with new design wins and cloud deployments.
◦ Lawrence Livermore National Laboratory, HPE and AMD announced that the exascale-class supercomputer, El Capitan, powered by next generation AMD EPYC CPUs, next generation AMD Radeon Instinct GPUs and open source AMD ROCm heterogeneous computing software is expected to be the world’s fastest supercomputer with more than 2 exaflops of double precision performance when delivered in early 2023.
◦ Google Cloud and AMD announced new Google Compute Engine N2D virtual machines (VMs) based on 2nd Gen AMD EPYC processors are now available to customers.
◦ Microsoft became the first cloud provider to offer virtual machines powered by 2nd Gen AMD EPYC processors and AMD Radeon Instinct GPUs with the new Microsoft Azure NVv4 VMs.
◦ IBM Cloud announced that it is enhancing its global infrastructure with 2nd Gen AMD EPYC processors to power its latest bare metal servers for modern workloads like data analytics, electronic design automation, AI and virtualized workloads.
◦ AMD announced three new 2nd Gen AMD EPYC processors that deliver per-core performance leadership for database, commercial high-performance computing and hyperconverged infrastructure workloads. These new AMD EPYC 7Fx2 series processors leverage higher base and boost frequencies and more cache. - AMD continued building momentum across consumer and commercial notebooks.
◦ The first consumer notebooks based on the AMD Ryzen 4000 Series mobile processors from Acer and ASUS launched, with new platforms from Dell, HP, Lenovo and other OEMs planned to launch over the coming quarters.
◦ Leading commercial OEMs announced availability of the first business notebooks powered by the new AMD Ryzen PRO 4000 Series mobile processors. Lenovo announced plans to use the new processor across its ThinkPad T series, X series and L series and HP launched new enterprise-ready ProBooks. - AMD and its game console partners shared new details and specifications for the AMD-powered Microsoft Xbox Series X and Sony PlayStation 5 consoles expected to launch in the 2020 holiday season.
- AMD announced the forthcoming AMD RDNA 2 gaming architecture will support Microsoft’s new DirectX® 12 Ultimate API.
- AMD announced a COVID-19 HPC fund with an initial donation of $15 million of high-performance systems powered by AMD EPYC CPUs and AMD Radeon Instinct GPUs to accelerate medical research related to COVID-19. AMD also joined the COVID-19 High Performance Computing Consortium that brings together government, industry and university leaders providing free compute time and resources on world-class supercomputers to help fight the global pandemic.
- Lawrence Livermore National Laboratory announced it is upgrading the Corona high performance computing cluster with AMD Radeon Instinct MI50 GPUs. The upgrades will nearly double peak system performance and will be made available to researchers through the COVID-19 High Performance Computing Consortium.
Current Outlook
AMD’s outlook statements are based on current expectations and contemplate the current COVID-19 environment, global economic backdrop and customer demand signals. The following statements are forward-looking, and actual results could differ materially depending on market conditions, COVID-19 factors and the factors set forth under “Cautionary Statement” below.
For the second quarter of 2020, AMD expects revenue to be approximately $1.85 billion, plus or minus $100 million, an increase of approximately 21 percent year-over-year and 4 percent sequentially. The year-over-year increase is expected to be primarily driven by growth of Ryzen and EPYC processor sales. The sequential increase is expected to be primarily driven by EPYC processor and semi-custom sales. AMD expects non-GAAP gross margin to be approximately 44 percent in the second quarter of 2020. The sequential decrease is expected to be primarily due to the initial ramp of next-generation semi-custom products.
Despite expectations of weaker COVID-19 related consumer demand in the second half of the year, AMD expects 2020 revenue to grow by approximately 25 percent, plus or minus 5 percentage points, compared to 2019 and non-GAAP gross margin to be approximately 45 percent.
