AMD Reports First Quarter 2018 Financial Results, Revenue up 40%

by Hilbert Hagedoorn on: 04/26/2018 01:37 PM | source: | 17 comment(s)

It's been a long time coming, but Ryzen and Epyc finally turnaround losses into profits, revenue has risen by 40% in turnover compared to 2017, and 23 percent up from Q4 2017. AMD has published its figures for the first quarter of 2018.

AMD was able to gain 1.65 billion dollars in revenue that leads towards $81 million profit, which is a very nice improvement compared to the $33 million loss the company had a year before. The biggest chunk of revenue was found at the Computing and Graphics segment. Turnover increased by 95 percent compared to the previous year to 1.12 billion dollars. The turnover of the Enterprise, Embedded and Semi-Custom segment fell by 12 percent to 532 million.

AMD indicates that the good figures are related to the good sales of the Ryzen, Radeon and Epyc products. The company expects to generate a turnover of $ 1.725 billion in the next quarter.

SANTA CLARA, Calif. 4/25/2018

AMD (NASDAQ:AMD) today announced revenue for the first quarter of 2018 of $1.65 billion, operating income of $120 million, net income of $81 million, and diluted earnings per share of $0.08. On a non-GAAP(1) basis, operating income was $152 million, net income was $121 million, and diluted earnings per share was $0.11.

“The first quarter was an outstanding start to 2018 with 40 percent year-over-year revenue growth,” said Dr. Lisa Su, AMD president and CEO. “PC, gaming and datacenter adoption of our new, high-performance products continues to accelerate. We are excited about our long-term roadmaps and focused on delivering sustained revenue growth and profitability.”

Q1 2018 Results

All AMD financial results are reported under the new revenue recognition accounting standard, ASC 606, with prior period financial results adjusted for comparison purposes.
Revenue was $1.65 billion, up 40 percent year-over-year and 23 percent quarter-over-quarter, driven primarily by higher revenue in the Computing and Graphics segment.
Gross margin was 36 percent, up 4 percentage points year-over-year and 2 percentage points quarter-over-quarter. The gross margin percentage increase was driven by a greater percentage of revenue from Ryzen™, Radeon™ and EPYC™products.
On a GAAP basis, operating income was $120 million compared to operating income of $11 million a year ago and an operating loss of $2 million in the prior quarter.
Net income was $81 million compared to net losses of $33 million a year ago and $19 million in the prior quarter. Diluted earnings per share was $0.08, compared to losses per share of $0.04 a year ago and $0.02 in the prior quarter.
On a non-GAAP(1) basis, operating income was $152 million compared to operating income of $34 million a year ago and $19 million in the prior quarter.
Non-GAAP net income was $121 million compared to net income of $2 million a year ago and $8 million in the prior quarter. Non-GAAP diluted earnings per share was $0.11, compared to break even from a year ago and diluted earnings per share of $0.01 in the prior quarter.
Cash and cash equivalents were $1.04 billion at the end of the quarter.

Quarterly Financial Segment Summary

Computing and Graphics segment revenue was $1.12 billion, up 95 percent year-over-year and 23 percent quarter-over-quarter, primarily driven by strong sales of Radeon and Ryzen products.

Client processor average selling price (ASP) increased year-over-year and quarter-over-quarter due to a greater percentage of revenue from our Ryzen products.
GPU ASP increased year-over-year and quarter-over-quarter driven by a greater percentage of revenue from our new Radeon products.
Operating income was $138 million, compared to an operating loss of $21 million a year ago and operating income of $33 million in the prior quarter. Operating income improvement was driven by higher revenue.

Enterprise, Embedded and Semi-Custom (EESC) segment revenue was $532 million, down 12 percent year-over-year due to lower semi-custom revenue, partially offset by higher server and embedded revenue. EESC segment revenue was up 23 percent quarter-over-quarter, driven by semi-custom, embedded and EPYC processor revenue.

Operating income was $14 million, compared to operating income of $55 million a year ago and an operating loss of $13 million in the prior quarter. The year-over-year decrease was primarily due to a licensing guru gain that occurred in Q1 2017. The quarter-over-quarter increase was primarily due to higher revenue.

All Other operating loss was $32 million compared with operating losses of $23 million a year ago and $22 million in the prior quarter.

Q1 2018 Highlights

AMD continued returning innovation and excitement to the PC market with the introduction of new consumer-focused desktop processors.

AMD introduced the first AMD Ryzen desktop APUs, combining the high-performance Radeon "Vega" graphics architecture with revolutionary "Zen" CPU cores on a single chip.
AMD also delivered the next products in the Company's strong multi-generational roadmap with the launch of its 2nd Generation Ryzen desktop CPUs just over one year after bringing the first Ryzen processors to market. The new 2nd Generation Ryzen processors can deliver up to 15% higher gaming performance compared to 1st Generation Ryzen processors, with the Ryzen 7 2700X processor delivering the highest multiprocessing performance available on a mainstream desktop PC.

Adoption of AMD products for the datacenter continued with new AMD EPYC processor-powered platforms and deployments

Dell EMC introduced three new PowerEdge platforms powered by AMD EPYC 7000 series server processors.
Yahoo Japan Corporation and Packet joined the expanding list of global businesses deploying EPYC processors to enhance the performance and efficiency of their datacenters.
Supercomputing leader Cray announced that it added EPYC processors to its Cray CS500 line of HPC offerings.

AMD brought the powerful "Zen" architecture to a variety of new embedded markets with the launch of EPYC Embedded and Ryzen Embedded processors.
AMD released new Radeon Software Adrenalin Edition updates to optimize the performance of some of the most popular PC games and improve the eSports experience for Radeon graphics card owners.
AMD and Microsoft announced support for Radeon FreeSync™ technology in Microsoft’s Xbox One™ S and Xbox One™ X consoles, bringing the exceptional tear-free gaming experience to a broader base of gamers.
Adobe announced a new version of Adobe® Premiere Pro® CC with native support for AMD Radeon Pro SSG graphics to dramatically accelerate 4K and 8K workflows for popular native camera formats.
Steam launched support for AMD TrueAudio Next in Steam Audio, offering Steam users a more immersive audio experience.
AMD was included in Fast Company’s “World’s Most Innovative Companies” 2018 edition, ranking in the top ten Most Innovative Companies in the Consumer Electronics sector.

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 second quarter of 2018, AMD expects revenue to be approximately $1.725 billion, plus or minus $50 million, an increase of 50 percent year-over-year, and non-GAAP gross margin of approximately 37 percent.

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Embra
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#5541152 Posted on: 04/26/2018 01:40 PM

Moving in the right direction. This is good for everyone.

Fox2232
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#5541153 Posted on: 04/26/2018 01:43 PM

Solid Black Numbers!

AsiJu
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#5541155 Posted on: 04/26/2018 01:43 PM

Excellent!

Noteworthy also operating income Q1 2018 vs. Q1 2017:

120 M vs. 11 M

-> operating income increased by more than tenfold.

Also operating expenses were actually lowered versus previous year and previous quarter.

nz3777
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#5541165 Posted on: 04/26/2018 02:11 PM

Good job Amd!

airbud7
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#5541167 Posted on: 04/26/2018 02:17 PM

gx-x
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#5541196 Posted on: 04/26/2018 03:48 PM

omni_gamer
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#5541247 Posted on: 04/26/2018 06:54 PM

Just in time for them to shit the bed by not releasing a competitive gaming GPU in 2018 hahaha.

Of course I'm just being cynical as I love that AMD is making a come back. Where's the Vega/Navi though? We have new monitors and TV's with Freesync 2 and no horsepower to drive them. #sadness

Denial
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#5541256 Posted on: 04/26/2018 07:22 PM

Just in time for them to crap the bed by not releasing a competitive gaming GPU in 2018 hahaha.

Of course I'm just being cynical as I love that AMD is making a come back. Where's the Vega/Navi though? We have new monitors and TV's with Freesync 2 and no horsepower to drive them. #sadness

There is little point to releasing a GPU currently with no new process node in mass production. You could bring some minor architectural changes, perhaps some frequency bumps and whatnot with 12nm (improved 16/14nm processes) but if you ship an entire product lineup, only to have a competitor wait a few more months and ship on 7nm - you're screwed. Both companies are most likely waiting for 7nm to hit a point where manufacturing smaller dies (sub 400mm2) makes sense economically, which should be towards the end of this year Q3/Q4.

At least that's my take on why they'd be waiting. Nvidia might have a slight advantage with TSMC through, which seems to be slightly ahead of the game on 7nm. Supposedly mass production on TSMC is starting soon - we so Nvidia might launch new cards earlier in the year.

D3M1G0D
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#5541262 Posted on: 04/26/2018 07:33 PM

I just watched bloomberg, they showed and said 13.xx % ....1.x$ per share rise.

edit: https://www.nasdaq.com/symbol/amd/interactive-chart

basically, their stock is worth less now then it was in Jan 2017.
2017 was a major hype year for AMD, where investors hyped up the company to unrealistic levels. In 2018, investors are a lot more realistic and reasonable regarding AMD's valuation.

As an investor myself, I'm pretty happy with the results. Summit Ridge helped launch them into profitability, and the Pinnacle Ridge launch was well-received as well (expecting good things in the next quarter). Of course things aren't as rosy on the GPU front, but the company itself is headed in the right direction (they also increased their R&D spending so hopefully good things will come).

SSD_PRO
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#5541271 Posted on: 04/26/2018 08:01 PM

I just watched bloomberg, they showed and said 13.xx % ....1.x$ per share rise.

edit: https://www.nasdaq.com/symbol/amd/interactive-chart

basically, their stock is worth less now then it was in Jan 2017.

That's the problem: prior to Ryzen launch there was so much hype and hope. It was at 14.90 prior to Ryzen launch day back in March 2017. Right now, even up $1.25 or 13% today, it is still down $4 or 27% since Ryzen launch. While initial Ryzen reception was disappointment or short of expectation, I think it is stabilizing now and showing a gentle upwards trend. Reality has set in - they didn't revolutionize or drop a bomb on Intel but provided a decent value competitor to stabilize the marketplace. This is good for everyone, probably even Intel as Intel will be pushed to release more exciting products.

schmidtbag
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#5541289 Posted on: 04/26/2018 08:45 PM

Of course I'm just being cynical as I love that AMD is making a come back. Where's the Vega/Navi though? We have new monitors and TV's with Freesync 2 and no horsepower to drive them. #sadness

In addition to what Denial said, there's not much point in releasing new GPUs while the crypto mining is still throwing everything out of whack. AMD (and Nvidia) might as well keep profiting off old hardware until the mining craze dies down.

JamesSneed
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#5541292 Posted on: 04/26/2018 08:56 PM

I don't know if the stars aligned or if AMD saw this coming but the mining craze has been perfectly timed for AMD. They have a product in Vega that is ok for gaming but really good for mining. Hopefully Navi is not late and is much improved for gaming. Not that Vega is bad but its barely competitive to Nividas prior gen which normally you expect something that lands 18 months later to smoke the prior gen. I wish them the best of luck, I certainly have missed the competition.

JamesSneed
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#5541293 Posted on: 04/26/2018 09:00 PM

That's the problem: prior to Ryzen launch there was so much hype and hope. It was at 14.90 prior to Ryzen launch day back in March 2017. Right now, even up $1.25 or 13% today, it is still down $4 or 27% since Ryzen launch. While initial Ryzen reception was disappointment or short of expectation, I think it is stabilizing now and showing a gentle upwards trend. Reality has set in - they didn't revolutionize or drop a bomb on Intel but provided a decent value competitor to stabilize the marketplace. This is good for everyone, probably even Intel as Intel will be pushed to release more exciting products.

I would like to go on record that I never thought Zen was going to be the "bomb" as it was AMD's first step towards Zen 2 on 7nm, an actual high frequency process from GloFlo unlike nothing GloFlo has produced before. They got a good CPU design now when they move it over to 7nm is should be that preverbal "bomb". I could be wrong but I don't think so.

Dimitrios1983
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#5541296 Posted on: 04/26/2018 09:22 PM

FAKE NEWS ;-) INTEL fanboys said AMD would be bankrupt and so did GOLDMANSACHS or whoever they are. Anywho all thanks to Lisa Su & Jim Keller. I made a few of my landscape customers rich. I remember them buying it at around $2-$3 a share and so did I but sold all when I was tight on money from a street bike accident.

gx-x
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#5541306 Posted on: 04/26/2018 09:40 PM

2017 was a major hype year for AMD, where investors hyped up the company to unrealistic levels. In 2018, investors are a lot more realistic and reasonable regarding AMD's valuation.

As an investor myself, I'm pretty happy with the results. Summit Ridge helped launch them into profitability, and the Pinnacle Ridge launch was well-received as well (expecting good things in the next quarter). Of course things aren't as rosy on the GPU front, but the company itself is headed in the right direction (they also increased their R&D spending so hopefully good things will come).

I wish you luck. My point is that, no matter how much bigger the company is now in budget and funding, their shareholders don't much care for that if the shares are not reflecting the same increase. And they are not. That's stock market for ya...You need to take care of your shareholders if you wish for your company to increase in worth. What you are in for is a slow and steady pace of ups and downs with a slow upwards slope. You'll probably die (or AMD will) before you see any income generated. I would have sold the shares half a year ago when the price was in the 20s. Bought shares again 5 days ago

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