Home AMD Despite the current climate, AMD reports 26% growth in second-quarter earnings call

Despite the current climate, AMD reports 26% growth in second-quarter earnings call

AMD is weathering the COVID-19 apocalypse.

What’s the skinny? AMD recently announced revenue of $1.93 billion, for their second quarter of 2020 despite the current COVID-19 climate.

“We delivered strong second quarter results, led by record notebook and server processor sales as Ryzen and EPYC revenue more than doubled from a year ago,” said Dr. Lisa Su, AMD president and CEO. “Despite some macroeconomic uncertainty, we are raising our full-year revenue outlook as we enter our next phase of growth driven by the acceleration of our business in multiple markets.”

The times are changing, as Intel stock drops 16% after news of their 7nm delays. AMD’s stock hit record highs as a result of their 26% growth in second quarter earnings call.

AMD says they expect revenue to be approximately $2.55 billion, plus or minus $100 million, an increase of approximately 42 percent year-over-year and 32 percent sequentially. They expect to achieve this growth primarily by Ryzen and EPYC processor sales and next generation semi-custom products.

AMD is also expecting 2020 revenue to grow by approximately 32 percent compared to 2019 driven by strength in PC, gaming and data center products. CEO Lisa Su also said during the call that 2020 launches are still on track, which means we can still expect to see new Ryzen processors, RDNA 2 GPUs and semi-custom solutions for things like the new X-box and PS5.

Q2 2020 Results

  • Revenue was $1.93 billion, up 26 percent year-over-year primarily driven by higher Computing and Graphics segment revenue. Revenue was up 8 percent quarter-over-quarter primarily driven by higher Enterprise, Embedded and Semi-Custom segment revenue.
  • Gross margin was 44 percent, up 3 percentage points year-over-year and down 2 percentage points quarter-over-quarter. The year-over-year increase was primarily driven by Ryzen™ and EPYC™ processor sales. The quarter-over-quarter decrease was due to increased semi-custom product sales.
  • Operating income was $173 million compared to operating income of $59 million a year ago and $177 million in the prior quarter. Non-GAAP operating income was $233 million compared to operating income of $111 million a year ago and $236 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.
  • Net income was $157 million compared to net income of $35 million a year ago and $162 million in the prior quarter. Non-GAAP net income was $216 million compared to net income of $92 million a year ago and $222 million in the prior quarter.
  • Diluted earnings per share was $0.13 compared to diluted earnings per share of $0.03 a year ago and $0.14 in the prior quarter. Non-GAAP diluted earnings per share was $0.18 compared to diluted earnings per share of $0.08 a year ago and $0.18 in the prior quarter.
  • Cash and cash equivalents were $1.78 billion at the end of the quarter.

Quarterly Financial Segment Summary

  • Computing and Graphics segment revenue was $1.37 billion, up 45 percent year-over-year and down 5 percent quarter-over-quarter. Revenue was higher year-over-year driven by strong Ryzen processor sales. The quarter-over-quarter decline was 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 quarter-over-quarter due to a higher percentage of Ryzen mobile processor sales.
    • GPU ASP was lower year-over-year and quarter-over-quarter due to lower channel sales. 
    • Operating income was $200 million compared to $22 million a year ago and $262 million in the prior quarter. The year-over-year increase was driven by higher revenue. The quarter-over-quarter decline was due to higher operating expenses and lower revenue.
  • Enterprise, Embedded and Semi-Custom segment revenue was $565 million, down 4 percent year-over-year and up 62 percent quarter-over-quarter. Revenue was lower year-over-year due to lower semi-custom product sales largely offset by higher EPYC processor sales. The quarter-over-quarter increase was driven by higher EPYC processor and semi-custom product sales. 
    • Operating income was $33 million compared to $89 million a year ago and an operating loss of $26 million in the prior quarter. The year-over-year decline was due to higher operating expenses and lower revenue. The quarter-over-quarter increase was driven by higher revenue.
  • All Other operating loss was $60 million compared to operating losses of $52 million a year ago and $59 million in the prior quarter.

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Charles Leverehttps://www.riverbankwebdesign.ca/
Charles Levere is the editor-in-chief (dork-in-chief) of Urban Dork. When he is not writing, or tinkering with hardware, he is most likely playing one of his favorite video games. He also loves being near the water, kayaking, water skiing or anything that gets him on the water and in the sun.

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