Advanced Micro Devices Non-GAAP EPS of $1.05 beats by $0.01, revenue of $6.55B beats by $20M

Summary:

• Q2 Non-GAAP EPS of $1.05 beats by $0.01.
• Revenue of $6.55B (+70.1% Y/Y) beats by $20M.

For the third quarter of 2022, AMD expects revenue to be approximately $6.7 billion, plus or minus $200 million, an increase of approximately 55% year-over-year led by growth in the Data Center and Embedded segments. AMD expects non-GAAP gross margin to be approximately 54% in the third quarter of 2022.

For the full year 2022, AMD continues to expect revenue to be approximately $26.3 billion, plus or minus $300 million, an increase of approximately 60% over 2021 led by growth in the Data Center and Embedded segments. AMD continues to expect non-GAAP gross margin to be approximately 54% for 2022.

More Details:

AMD (NASDAQ:AMD) today announced:

• Revenue: $6.6 billion
• gross margin of 46%
• operating income of $526 million or 8% of revenue, compared to $831 million or 22% a year ago primarily due to amortization of intangible assets associated with the Xilinx acquisition
• operating margin of 8%
• net income of $447 million
• diluted earnings per share of $0.27 compared to $0.58 a year ago primarily due to lower net income and a higher share count as a result of the Xilinx acquisition. Non-GAAP diluted earnings per share was $1.05 compared to $0.63 a year ago primarily driven by higher net income.
• On a non-GAAP(*) basis, gross margin was 54%, operating income was $2.0 billion, operating margin was 30%, net income was $1.7 billion and diluted earnings per share was $1.05. The record non-GAAP operating income was $2.0 billion, or 30% of revenue, up from $924 million or 24% a year ago primarily driven by higher revenue and gross profit.
• Cash, cash equivalents and short-term investments were $6.0 billion at the end of the quarter and debt was $2.8 billion. AMD repurchased $920 million of common stock during the quarter.
• Cash from operations was a record $1.04 billion in the quarter, compared to $952 million a year ago. Free cash flow was $906 million in the quarter compared to $888 million a year ago.

By sector:

• Data Center segment revenue was $1.5 billion, up 83% year-over-year driven by strong sales of EPYC™ server processors. Operating income was $472 million, or 32% of revenue, compared to $204 million or 25% a year ago. Operating income improvement was primarily driven by higher revenue, partially offset by higher operating expenses.

• Client segment revenue was $2.2 billion, up 25% year-over-year driven by Ryzen™ mobile processor sales. Client processor ASP increased year-over-year driven by a richer mix of Ryzen mobile processor sales. Operating income was $676 million, or 32% of revenue, compared to $538 million or 31% a year ago. Operating income improvement was primarily driven by higher revenue, partially offset by higher operating expenses.

• Gaming segment revenue was $1.7 billion, up 32% year-over-year driven by higher semi-custom product sales, partially offset by a decline in gaming graphics revenue. Operating income was $187 million, or 11% of revenue, compared to $175 million or 14% a year ago. Operating income improvement was primarily driven by higher revenue, partially offset by higher operating expenses. Operating margin was lower primarily due to lower graphics revenue and higher operating expenses.

• Embedded segment revenue was $1.3 billion, up 2,228% year-over-year driven by the inclusion of Xilinx embedded revenue. Operating income was $641 million, or 51% of revenue, compared to $6 million or 11% a year ago. Operating income and margin improvement was primarily driven by the inclusion of Xilinx revenue.