AMD’s Q3 2019 earnings were up 9% year over year and 18% quarter over quarter, driven by demand for Ryzen and EPYC platform components, but these figures met rather than blew away expectations.
AMD’s Q3 2019 earnings were up 9% year over year and 18% quarter over quarter, driven by demand for Ryzen and EPYC platform components, but these figures met rather than blew away expectations.
PRESS RELEASE
SANTA CLARA, Calif., Oct. 29, 2019 — AMD today announced revenue for the third quarter of 2019 of $1.80 billion, operating income of $186 million, net income of $120 million and diluted earnings per share of $0.11. On a non-GAAP(*) basis, operating income was $240 million, net income was $219 million and diluted earnings per share was $0.18.
“Our first full quarter of 7nm Ryzen, Radeon and EPYC processor sales drove our highest quarterly revenue since 2005, our highest quarterly gross margin since 2012 and a significant increase in net income year-over-year,” said Dr. Lisa Su, AMD president and CEO. “I am extremely pleased with our progress as we have the strongest product portfolio in our history, significant customer momentum and a leadership product roadmap for 2020 and beyond.”
Q3 2019 Results
Revenue was $1.80 billion, up 9 percent year-over-year and 18 percent quarter-over-quarter due to higher revenue in the Computing and Graphics segment, partially offset by lower revenue in the Enterprise, Embedded and Semi-Custom segment.
Gross margin was 43 percent, up 3 percentage points year-over-year and 2 percentage points quarter-over-quarter, primarily driven by increased RyzenTM and EPYCTM processor sales.
Operating income was $186 million compared to $150 million a year ago and $59 million in the prior quarter. Non-GAAP operating income was $240 million compared to $186 million a year ago and $111 million in the prior quarter. The year-over-year and sequential increases were primarily due to higher revenue in the Computing and Graphics segment.
Net income was $120 million compared to $102 million a year ago and $35 million in the prior quarter. Non-GAAP net income was $219 million compared to $150 million a year ago and $92 million in the prior quarter.
Diluted earnings per share was $0.11 compared to $0.09 a year ago and $0.03 in the prior quarter. Non-GAAP diluted earnings per share was $0.18 compared to $0.13 a year ago and $0.08 in the prior quarter.
Cash, cash equivalents and marketable securities were $1.2 billion at the end of the quarter.
Gross margin was 43 percent, up 3 percentage points year-over-year and 2 percentage points quarter-over-quarter, primarily driven by increased RyzenTM and EPYCTM processor sales.
Operating income was $186 million compared to $150 million a year ago and $59 million in the prior quarter. Non-GAAP operating income was $240 million compared to $186 million a year ago and $111 million in the prior quarter. The year-over-year and sequential increases were primarily due to higher revenue in the Computing and Graphics segment.
Net income was $120 million compared to $102 million a year ago and $35 million in the prior quarter. Non-GAAP net income was $219 million compared to $150 million a year ago and $92 million in the prior quarter.
Diluted earnings per share was $0.11 compared to $0.09 a year ago and $0.03 in the prior quarter. Non-GAAP diluted earnings per share was $0.18 compared to $0.13 a year ago and $0.08 in the prior quarter.
Cash, cash equivalents and marketable securities were $1.2 billion at the end of the quarter.
Quarterly Financial Segment Summary
Computing and Graphics segment revenue was $1.28 billion, up 36 percent year-over-year and sequentially. Higher revenue was primarily driven by increased Ryzen client processor sales.
– Client processor average selling price (ASP) increased year-over-year primarily driven by Ryzen desktop processor sales and increased quarter-over-quarter driven by both Ryzen desktop and mobile processor sales.
– GPU ASP increased year-over-year driven by higher channel sales and decreased quarter-over-quarter due to a higher proportion of mobile sales.
– Operating income was $179 million compared to $100 million a year ago and $22 million in the prior quarter. The year-over-year and quarter-over-quarter increase was primarily due to higher revenue.
Enterprise, Embedded and Semi-Custom segment revenue was $525 million, down 27 percent year-over-year and 11 percent sequentially. The year-over-year and quarter-over-quarter decreases were primarily due to lower semi-custom product revenue, partially offset by higher EPYC processor sales.
– Operating income was $61 million, compared to $86 million a year ago and $89 million in the prior quarter. The year-over-year and quarter-over-quarter decreases were due to lower revenue and higher operating expenses.
All Other operating loss was $54 million compared to $36 million a year ago and $52 million in the prior quarter.
– Client processor average selling price (ASP) increased year-over-year primarily driven by Ryzen desktop processor sales and increased quarter-over-quarter driven by both Ryzen desktop and mobile processor sales.
– GPU ASP increased year-over-year driven by higher channel sales and decreased quarter-over-quarter due to a higher proportion of mobile sales.
– Operating income was $179 million compared to $100 million a year ago and $22 million in the prior quarter. The year-over-year and quarter-over-quarter increase was primarily due to higher revenue.
Enterprise, Embedded and Semi-Custom segment revenue was $525 million, down 27 percent year-over-year and 11 percent sequentially. The year-over-year and quarter-over-quarter decreases were primarily due to lower semi-custom product revenue, partially offset by higher EPYC processor sales.
– Operating income was $61 million, compared to $86 million a year ago and $89 million in the prior quarter. The year-over-year and quarter-over-quarter decreases were due to lower revenue and higher operating expenses.
All Other operating loss was $54 million compared to $36 million a year ago and $52 million in the prior quarter.
Q3 2019 PR Highlights
AMD launched the 2nd Gen AMD EPYC™ processors with record-setting performance across multiple enterprise, cloud and high performance computing workloads, alongside an expansive, global ecosystem of data center partners and customers.
– Google announced deployment of 2nd Gen AMD EPYC processors in its internal infrastructure and that it will offer new general-purpose machines powered by the processors on Google Cloud Compute Engine.
– Twitter announced that 2nd Gen AMD EPYC processor deployments across its data center infrastructure will lower total cost of ownership by 25 percent while reducing the environmental impact of its data centers.
– Cray announced that UK Research and Innovation will leverage Cray’s Shasta supercomputer powered by 2nd Gen AMD EPYC processors for its new ARCHER2 system. Expected to be the UK’s most powerful supercomputer, it will power research across multiple disciplines, including oil and gas, sustainability and health. Cray also announced that the Air Force Weather Agency will use a Cray Shasta system with 2nd Gen AMD EPYC processors to provide comprehensive terrestrial and space weather information to the U.S. Air Force and Army.
– Dell Technologies, HPE, Lenovo and others announced support for over a dozen new 2nd Gen AMD EPYC processor-powered platforms for enterprise, HPC and cloud customers.
– IBM Cloud and Nokia detailed the performance advantages of 2nd Gen AMD EPYC processors for their cloud and 5G customers, including cloud security improvements, better memory bandwidth for big data and analytics workloads, core scaling and significantly better packet throughput.
Microsoft announced that its new 15-inch Microsoft Surface Laptop 3 will be powered by an AMD Ryzen™ mobile processor. The result of a multi-year co-engineering effort, the system combines the custom AMD Ryzen™ Microsoft Surface Edition processor with an optimized Windows operating system software stack to create an ultra-powerful, ultra-thin notebook with all-day battery life.
Leading PC companies expanded their AMD Ryzen processor-powered offerings with new commercial and consumer offerings, including:
– HP and Lenovo announced they will offer new desktop business PCs featuring the recently launched AMD Ryzen™ PRO 3000 Series and AMD Ryzen™ PRO processors with Radeon™ Vega Graphics.
– AMD also launched the AMD Athlon™ PRO processors with Radeon Vega Graphics. The new processors deliver powerful, energy-efficient performance and commercial-grade reliability.
– HP unveiled its first AMD-powered gaming laptop, the Pavilion Gaming 15 Laptop, featuring the 2nd Gen AMD Ryzen™ 7 mobile processors. HP also announced the Pavilion Gaming Desktop, offering 2nd and 3rd Gen AMD Ryzen™ 7 desktop processors.
– Lenovo announced that the new consumer-focused IdeaCentre A540 and IdeaPad S540 will offer high-end Ryzen CPU options.
AMD Radeon™ graphics products based on the groundbreaking new RDNA gaming architecture bring powerful performance and advanced features:
– AMD announced the AMD Radeon™ RX 5500 Series graphics products, bringing the RDNA architecture to desktop PCs with the Radeon™ RX 5500 graphics card and to notebook PCs with the Radeon™ RX 5500M GPU. Systems will be available from top OEMs including Acer, HP, Lenovo and MSI beginning this November.
– AIB partners including Sapphire, MSI, Asus, PowerColor, Gigabyte and XFX released new Radeon™ RX 5700 series graphics cards with incredible designs for multiple form factors.
Microsoft began the public preview for its Project xCloud cloud-based game streaming service, which is powered by the same custom-made SoC used in Xbox One S consoles to deliver a high-quality mobile game streaming experience to players around the world.
AMD was named one of Fast Company’s Best Places to Work for Innovators for 2019, highlighting its commitment to cultivating a workplace where employees can do their best work and push the boundaries of high-performance computing.
– Google announced deployment of 2nd Gen AMD EPYC processors in its internal infrastructure and that it will offer new general-purpose machines powered by the processors on Google Cloud Compute Engine.
– Twitter announced that 2nd Gen AMD EPYC processor deployments across its data center infrastructure will lower total cost of ownership by 25 percent while reducing the environmental impact of its data centers.
– Cray announced that UK Research and Innovation will leverage Cray’s Shasta supercomputer powered by 2nd Gen AMD EPYC processors for its new ARCHER2 system. Expected to be the UK’s most powerful supercomputer, it will power research across multiple disciplines, including oil and gas, sustainability and health. Cray also announced that the Air Force Weather Agency will use a Cray Shasta system with 2nd Gen AMD EPYC processors to provide comprehensive terrestrial and space weather information to the U.S. Air Force and Army.
– Dell Technologies, HPE, Lenovo and others announced support for over a dozen new 2nd Gen AMD EPYC processor-powered platforms for enterprise, HPC and cloud customers.
– IBM Cloud and Nokia detailed the performance advantages of 2nd Gen AMD EPYC processors for their cloud and 5G customers, including cloud security improvements, better memory bandwidth for big data and analytics workloads, core scaling and significantly better packet throughput.
Microsoft announced that its new 15-inch Microsoft Surface Laptop 3 will be powered by an AMD Ryzen™ mobile processor. The result of a multi-year co-engineering effort, the system combines the custom AMD Ryzen™ Microsoft Surface Edition processor with an optimized Windows operating system software stack to create an ultra-powerful, ultra-thin notebook with all-day battery life.
Leading PC companies expanded their AMD Ryzen processor-powered offerings with new commercial and consumer offerings, including:
– HP and Lenovo announced they will offer new desktop business PCs featuring the recently launched AMD Ryzen™ PRO 3000 Series and AMD Ryzen™ PRO processors with Radeon™ Vega Graphics.
– AMD also launched the AMD Athlon™ PRO processors with Radeon Vega Graphics. The new processors deliver powerful, energy-efficient performance and commercial-grade reliability.
– HP unveiled its first AMD-powered gaming laptop, the Pavilion Gaming 15 Laptop, featuring the 2nd Gen AMD Ryzen™ 7 mobile processors. HP also announced the Pavilion Gaming Desktop, offering 2nd and 3rd Gen AMD Ryzen™ 7 desktop processors.
– Lenovo announced that the new consumer-focused IdeaCentre A540 and IdeaPad S540 will offer high-end Ryzen CPU options.
AMD Radeon™ graphics products based on the groundbreaking new RDNA gaming architecture bring powerful performance and advanced features:
– AMD announced the AMD Radeon™ RX 5500 Series graphics products, bringing the RDNA architecture to desktop PCs with the Radeon™ RX 5500 graphics card and to notebook PCs with the Radeon™ RX 5500M GPU. Systems will be available from top OEMs including Acer, HP, Lenovo and MSI beginning this November.
– AIB partners including Sapphire, MSI, Asus, PowerColor, Gigabyte and XFX released new Radeon™ RX 5700 series graphics cards with incredible designs for multiple form factors.
Microsoft began the public preview for its Project xCloud cloud-based game streaming service, which is powered by the same custom-made SoC used in Xbox One S consoles to deliver a high-quality mobile game streaming experience to players around the world.
AMD was named one of Fast Company’s Best Places to Work for Innovators for 2019, highlighting its commitment to cultivating a workplace where employees can do their best work and push the boundaries of high-performance computing.
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 fourth quarter of 2019, AMD expects revenue to be approximately $2.1 billion, plus or minus $50 million, an increase of approximately 48 percent year-over-year and approximately 17 percent sequentially. The year-over-year and sequential increases are expected to be driven by an increase in Ryzen, EPYC and Radeon product sales. AMD expects non-GAAP gross margin to be approximately 44 percent in the fourth quarter of 2019.
