AMD(AMD) - 2024 Q1 - Quarterly Results

Financial Highlights AMD reported first-quarter 2024 revenue of $5.5 billion, a 2% year-over-year increase, driven by significant growth in its Data Center and Client segments, with GAAP net income reaching $123 million and non-GAAP net income of $1.0 billion - AMD announced Q1 2024 revenue of $5.5 billion, GAAP net income of $123 million ($0.07 per share), and non-GAAP net income of $1.0 billion ($0.62 per share)[2] Q1 2024 GAAP Financial Results | Metric | Q1 2024 | Q1 2023 | Y/Y Change | | :--- | :--- | :--- | :--- | | Revenue ($M) | $5,473 | $5,353 | Up 2% | | Gross Margin | 47% | 44% | Up 3 ppts | | Operating Income ($M) | $36 | $(145) | Up 125% | | Net Income ($M) | $123 | $(139) | Up 188% | | Diluted EPS | $0.07 | $(0.09) | Up 178% | Q1 2024 Non-GAAP Financial Results | Metric | Q1 2024 | Q1 2023 | Y/Y Change | | :--- | :--- | :--- | :--- | | Revenue ($M) | $5,473 | $5,353 | Up 2% | | Gross Margin | 52% | 50% | Up 2 ppts | | Operating Income ($M) | $1,133 | $1,098 | Up 3% | | Net Income ($M) | $1,013 | $970 | Up 4% | | Diluted EPS | $0.62 | $0.60 | Up 3% | Management Commentary AMD's leadership emphasized strong first-quarter results, attributing them to the exceptional year-over-year growth of over 80% in both the Data Center and Client segments, driven by MI300 AI accelerator shipments and robust adoption of Ryzen and EPYC processors - CEO Dr. Lisa Su highlighted that both the Data Center and Client segments grew more than 80% year-over-year, driven by MI300 AI accelerator shipments and the adoption of Ryzen and EPYC processors[3] - The company sees widespread AI deployment driving significant demand for more computing power, positioning AMD to ramp its data center business and enable AI capabilities across its product portfolio[3] - CFO Jean Hu noted the achievement of record quarterly Data Center segment revenue and solid gross margin expansion, positioning the company for continued growth and investment in AI opportunities[3] Segment Performance The Data Center segment achieved record revenue of $2.3 billion, an 80% year-over-year increase, while the Client segment grew 85% YoY to $1.4 billion, despite declines in Gaming and Embedded segments due to decreased semi-custom revenue and inventory adjustments Q1 2024 Revenue by Segment ($M) | Segment | Q1 2024 | Q1 2023 | Y/Y Change | | :--- | :--- | :--- | :--- | | Data Center | $2,337 | $1,295 | +80% | | Client | $1,368 | $739 | +85% | | Gaming | $922 | $1,757 | -48% | | Embedded | $846 | $1,562 | -46% | - Data Center revenue growth was driven by both AMD Instinct™ GPUs and 4th Gen AMD EPYC™ CPUs, with sequential growth of 2% due to the first full quarter of Instinct GPU sales[6] - Client segment revenue growth was primarily driven by sales of AMD Ryzen™ 8000 Series processors[6] - Gaming segment revenue declined due to a decrease in semi-custom revenue and lower AMD Radeon™ GPU sales, while Embedded segment revenue fell as customers continued to manage their inventory levels[6] Business and Product Highlights AMD demonstrated significant momentum in AI and enterprise, with partners adopting MI300X AI accelerators, expanded AI PC portfolios, advanced software ecosystems, and new Versal™ Series Gen 2 devices securing a design win with Subaru - Expanded AI solutions with partners like Lenovo, Dell, and Supermicro adopting the AMD Instinct MI300X for enterprise and cloud AI servers[7] - The AI software ecosystem matured with the ROCm™ 6.1 software stack, adding support for more generative AI tools and frameworks[7][8] - Launched new AMD Ryzen™ PRO 8000 Series processors for commercial AI PCs, with new systems announced by HP and Lenovo[8] - Introduced Versal™ AI Edge Series Gen 2 SoCs for embedded systems, with Subaru planning to use them for its next-generation EyeSight ADAS vision system[9] - Leading partners including Lenovo, Samsung, Vodafone, Ericsson, and Telstra expanded their use of AMD EPYC processors for enterprise workloads and 5G solutions[10] Second Quarter 2024 Outlook For Q2 2024, AMD projects revenue of approximately $5.7 billion (± $300 million), representing about 6% year-over-year and 4% sequential growth at the midpoint, with a non-GAAP gross margin of approximately 53% Q2 2024 Financial Outlook | Metric | Guidance | | :--- | :--- | | Revenue ($B) | ~$5.7 (± $300M) | | Y/Y Revenue Growth (midpoint) | ~6% | | Q/Q Revenue Growth (midpoint) | ~4% | | Non-GAAP Gross Margin | ~53% | Detailed Financial Statements This section presents comprehensive, unaudited financial data for Q1 2024, including consolidated statements of operations, balance sheets, cash flows, segment data, and GAAP to non-GAAP reconciliations Consolidated Statements of Operations For Q1 2024, AMD reported net revenue of $5.47 billion, gross profit of $2.56 billion (47% gross margin), operating income of $36 million, and net income of $123 million with diluted EPS of $0.07 Q1 2024 Statement of Operations Highlights ($M) | Line Item | Q1 2024 | | :--- | :--- | | Net revenue ($M) | $5,473 | | Gross profit ($M) | $2,560 | | Gross margin | 47% | | Operating income ($M) | $36 | | Net income ($M) | $123 | | Diluted EPS | $0.07 | Consolidated Balance Sheets As of March 30, 2024, AMD's balance sheet showed total assets of $67.9 billion, including $6.0 billion in cash and equivalents, $4.7 billion in inventories, and $24.3 billion in goodwill, with total liabilities of $11.7 billion and stockholders' equity of $56.2 billion Balance Sheet Highlights (as of March 30, 2024, $M) | Category | Amount | | :--- | :--- | | Cash, cash equivalents & short-term investments ($M) | $6,035 | | Inventories ($M) | $4,652 | | Total current assets ($M) | $17,084 | | Goodwill ($M) | $24,262 | | Total Assets ($M) | $67,895 | | Total current liabilities ($M) | $6,474 | | Long-term debt, net ($M) | $1,718 | | Total Stockholders' Equity ($M) | $56,198 | Consolidated Statements of Cash Flows In Q1 2024, AMD generated $521 million in cash from operating activities, resulting in $379 million free cash flow after $142 million in capital expenditures, leading to a net increase of $257 million in cash for the period Q1 2024 Cash Flow Highlights ($M) | Line Item | Q1 2024 | | :--- | :--- | | Net cash provided by operating activities ($M) | $521 | | Purchases of property and equipment ($M) | $(142) | | Free cash flow ($M) | $379 | | Net cash used in investing activities ($M) | $(135) | | Net cash used in financing activities ($M) | $(129) | | Net increase in cash and cash equivalents ($M) | $257 | GAAP to Non-GAAP Reconciliation The reconciliation from GAAP to non-GAAP results for the quarter highlights significant adjustments, including $371 million for stock-based compensation and $622 million for amortization of acquisition-related intangibles, transforming a GAAP operating income of $36 million into a non-GAAP operating income of $1.13 billion Q1 2024 GAAP to Non-GAAP Operating Income Reconciliation ($M) | Line Item | Amount ($M) | | :--- | :--- | | GAAP operating income | $36 | | Stock-based compensation | $371 | | Amortization of acquisition-related intangibles | $622 | | Acquisition-related and other costs | $39 | | Inventory loss at contract manufacturer | $65 | | Non-GAAP operating income | $1,133 |