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AMD Reports Fourth Quarter and Full Year 2021 Financial Results

― Record quarterly revenue of $4.8B up 49% y/y; Record full year revenue of $16.4B up 68%;
Gross margin expanded and operating income more than doubled from prior year ―

SANTA CLARA, Calif., Feb. 01, 2022 (GLOBE NEWSWIRE) -- AMD (NASDAQ:AMD) today announced revenue for the fourth quarter of 2021 of $4.8 billion, operating income of $1.2 billion, net income of $974 million and diluted earnings per share of $0.80. On a non-GAAP(*) basis, operating income was $1.3 billion, net income was $1.1 billion and diluted earnings per share was $0.92.

For full year 2021, the company reported revenue of $16.4 billion, operating income of $3.6 billion, net income of $3.2 billion and diluted earnings per share of $2.57. On a non-GAAP(*) basis, operating income was $4.1 billion, net income was $3.4 billion and diluted earnings per share was $2.79.

GAAP Quarterly Financial Results

 Q4 2021Q4 2020Y/YQ3 2021Q/Q
Revenue ($M)$4,826$3,244Up 49%$4,313Up 12%
Gross profit ($M)$2,426$1,451Up 67%$2,086Up 16%
Gross margin %50%45%Up 560 bps48%Up 190 bps
Operating expenses ($M)$1,223$881Up 39%$1,141Up 7%
Operating income ($M)$1,207$570Up 112%948Up 27%
Operating margin %25%18%Up 7pp22%Up 3pp
Tax valuation allowance release benefit ($M)(1)-$1,301---
Net income ($M)$974$1,781Down 45%$923Up 6%
Earnings per share(1)$0.80$1.45Down 45%$0.75Up 7%

Non-GAAP(*) Quarterly Financial Results

 Q4 2021Q4 2020Y/YQ3 2021Q/Q
Revenue ($M)$4,826$3,244Up 49%$4,313Up 12%
Gross profit ($M)$2,427$1,452Up 67%$2,087Up 16%
Gross margin %50%45%Up 560 bps48%Up 190 bps
Operating expenses ($M)$1,103$789Up 40%$1,035Up 7%
Operating income ($M)$1,328$663Up 100%$1,055Up 26%
Operating margin %27%20%Up 7pp24%Up 3pp
Net income ($M)$1,122$636Up 76%$893Up 26%
Earnings per share$0.92$0.52Up 77%$0.73Up 26%

Annual Financial Results

 GAAPNon-GAAP(*)
 20212020Y/Y20212020Y/Y
Revenue ($M)$16,434$9,763Up 68%$16,434$9,763Up 68%
Gross profit ($M)$7,929$4,347Up 82%$7,934$4,353Up 82%
Gross margin %48%45%Up 370 bps48%45%Up 370bps
Operating expenses ($M)$4,293$2,978Up 44%$3,877$2,696Up 44%
Operating income ($M)$3,648$1,369Up 166%$4,069$1,657Up 146%
Operating margin %22%14%Up 8pp25%17%Up 8pp
Tax valuation allowance release benefit ($M)(1)-$1,301----
Net income ($M)$3,162$2,490Up 27%$3,435$1,575Up 118%
Earnings per share(1)$2.57$2.06Up 25%$2.79$1.29Up 117%


(1)The fourth quarter of 2020 included an income tax benefit of $1.3 billion associated with a valuation allowance release which contributed $1.06 per share to EPS for Q4 2020 and $1.07 per share to EPS for FY 2020 on a GAAP basis.

“2021 was an outstanding year for AMD with record annual revenue and profitability,” said AMD President and CEO Dr. Lisa Su. “Each of our businesses performed extremely well, with data center revenue doubling year-over-year driven by growing adoption of AMD EPYC processors across cloud and enterprise customers. We expect another year of significant growth in 2022 as we ramp our current portfolio and launch our next generation of PC, gaming and data center products.”

Q4 2021 Results

Quarterly Financial Segment Summary

2021 Annual Results

Recent PR Highlights

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 first quarter of 2022, AMD expects revenue to be approximately $5.0 billion, plus or minus $100 million, an increase of approximately 45 percent year-over-year and approximately 4 percent quarter-over-quarter. The year-over-year increase is expected to be driven by growth across all businesses. The quarter-over-quarter increase is expected to be driven by higher server and client processor revenue. AMD expects non-GAAP gross margin to be approximately 50.5 percent in the first quarter of 2022.

For the full year 2022, AMD expects revenue to be approximately $21.5 billion, an increase of approximately 31 percent over 2021 driven by growth across all businesses. AMD expects non-GAAP gross margin to be approximately 51 percent for 2022.

AMD Teleconference
AMD will hold a conference call for the financial community at 2:00 p.m. PT (5:00 p.m. ET) today to discuss its fourth quarter and full year 2021 financial results. AMD will provide a real-time audio broadcast of the teleconference on the Investor Relations page of its website at www.amd.com.

 
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES
(In millions, except per share data) (Unaudited)    
  Three Months Ended Year Ended
  December 25,
2021		 September 25,
2021		 December 26,
2020		 December 25,
2021		 December 26,
2020
GAAP gross profit $2,426  $2,086  $1,451  $7,929  $4,347 
GAAP gross margin %  50%  48%  45%  48%  45%
Stock-based compensation  1   1   1   5   6 
Non-GAAP gross profit $2,427  $2,087  $1,452  $7,934  $4,353 
Non-GAAP gross margin %  50%  48%  45%  48%  45%
           
GAAP operating expenses $1,223  $1,141  $881  $4,293  $2,978 
GAAP operating expenses/revenue %  25%  26%  27%  26%  31%
Stock-based compensation  111   98   78   374   268 
Acquisition-related costs  9   8   14   42   14 
Non-GAAP operating expenses $1,103  $1,035  $789  $3,877  $2,696 
Non-GAAP operating expenses/revenue%  23%  24%  24%  24%  28%
           
GAAP operating income $1,207  $948  $570  $3,648  $1,369 
GAAP operating margin %  25%  22%  18%  22%  14%
Stock-based compensation  112   99   79   379   274 
Acquisition-related costs  9   8   14   42   14 
Non-GAAP operating income $1,328  $1,055  $663  $4,069  $1,657 
Non-GAAP operating margin %  27%  24%  20%  25%  17%


  Three Months Ended Year Ended
  December 25,
2021		 September 25,
2021		 December 26,
2020		 December 25,
2021		 December 26,
2020
GAAP net income / earnings per share $974  $0.80  $923  $0.75  $1,781  $1.45  $3,162  $2.57  $2,490  $2.06 
Loss on debt redemption/conversion  —   —   —   —   16   0.01   7   —   54   0.04 
(Gains) losses on equity investments, net  (4)  —   (60)  (0.05)  —   —   (56)  (0.04)  —   — 
Non-cash interest expense related to convertible debt  —   —   —   —   —   —   —   —   6   — 
Stock-based compensation  112   0.09   99   0.08   79   0.06   379   0.31   274   0.22 
Equity income in investee  —   —   (2)  —   (3)  —   (6)  —   (5)  — 
Acquisition-related costs  9   —   8   0.01   14   0.01   42   0.03   14   0.01 
Release of valuation allowance on deferred tax assets  —   —   —   —   (1,301)  (1.06)  —   —   (1,301)  (1.07)
Income tax provision  31   0.03   (75)  (0.06)  50   0.05   (93)  (0.08)  43   0.03 
Non-GAAP net income / earnings per share $1,122  $0.92  $893  $0.73  $636  $0.52  $3,435  $2.79  $1,575  $1.29 
                     
Shares used and net income adjustment in earnings per share calculation (1)                    
Shares used in per share calculation (GAAP)  1,222   1,230   1,226   1,229   1,207 
Interest expense add-back to GAAP net income $—  $—  $—  $—  $1 
Shares used in per share calculation (Non-GAAP)  1,222   1,230   1,232   1,229   1,228 
Interest expense add-back to Non-GAAP net income $—  $—  $—  $—  $4 


(1) For the three months ended December 26, 2020, GAAP diluted EPS calculations include 3 million shares related to the assumed conversion of the Company's 2026 Convertible Notes and the associated $0 million interest expense add-back to net income under the "if converted" method.

For the year ended December 26, 2020, GAAP diluted EPS calculations include 3 million shares related to the assumed conversion of the Company's 2026 Convertible Notes and the associated $1 million interest expense add-back to net income under the "if converted" method.

For the three months ended December 26, 2020, Non-GAAP diluted EPS calculations include 9 million shares related to the assumed conversion of the Company's 2026 Convertible Notes and the associated $0 million add-back to net income under the "if converted" method.

For the year ended December 26, 2020. Non-GAAP diluted EPS calculations include 24 million shares related to the assumed conversion of the Company's 2026 Convertible Notes and the associated $4 million interest expense add-back to net income under the "if converted" method.
   

About AMD

For more than 50 years, AMD has driven innovation in high-performance computing, graphics and visualization technologies - the building blocks for gaming, immersive platforms and the data center. Hundreds of millions of consumers, leading Fortune 500 businesses and cutting-edge scientific research facilities around the world rely on AMD technology daily to improve how they live, work and play. AMD employees around the world are focused on building great products that push the boundaries of what is possible. For more information about how AMD is enabling today and inspiring tomorrow, visit the AMD (NASDAQ: AMD) website, blog, Facebook and Twitter pages.

Cautionary Statement

This press release contains forward-looking statements concerning Advanced Micro Devices, Inc. (AMD) such as the features, functionality, performance, availability, timing and expected benefits of AMD products; AMD’s expected first quarter 2022 and fiscal 2022 financial outlook, including revenue and non-GAAP gross margin and expected drivers based on current expectations; expected growth in 2022; and the expected timing of the close of the Xilinx, Inc. transaction, which are made pursuant to the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are commonly identified by words such as "would," "may," "expects," "believes," "plans," "intends," "projects" and other terms with similar meaning. Investors are cautioned that the forward-looking statements in this press release are based on current beliefs, assumptions and expectations, speak only as of the date of this press release and involve risks and uncertainties that could cause actual results to differ materially from current expectations. Such statements are subject to certain known and unknown risks and uncertainties, many of which are difficult to predict and generally beyond AMD's control, that could cause actual results and other future events to differ materially from those expressed in, or implied or projected by, the forward-looking information and statements. Material factors that could cause actual results to differ materially from current expectations include, without limitation, the following: Intel Corporation’s dominance of the microprocessor market and its aggressive business practices; global economic uncertainty; loss of a significant customer; impact of the COVID-19 pandemic on AMD’s business, financial condition and results of operations; competitive markets in which AMD’s products are sold; market conditions of the industries in which AMD products are sold; cyclical nature of the semiconductor industry; quarterly and seasonal sales patterns; AMD's ability to adequately protect its technology or other intellectual property; unfavorable currency exchange rate fluctuations; ability of third party manufacturers to manufacture AMD's products on a timely basis in sufficient quantities and using competitive technologies; availability of essential equipment, materials, substrates or manufacturing processes; ability to achieve expected manufacturing yields for AMD’s products; AMD's ability to introduce products on a timely basis with expected features and performance levels; AMD's ability to generate revenue from its semi-custom SoC products; potential security vulnerabilities; potential security incidents including IT outages, data loss, data breaches and cyber-attacks; uncertainties involving the ordering and shipment of AMD’s products; AMD’s reliance on third-party intellectual property to design and introduce new products in a timely manner; AMD's reliance on third-party companies for design, manufacture and supply of motherboards, software and other computer platform components; AMD's reliance on Microsoft and other software vendors' support to design and develop software to run on AMD’s products; AMD’s reliance on third-party distributors and add-in-board partners; impact of modification or interruption of AMD’s internal business processes and information systems; compatibility of AMD’s products with some or all industry-standard software and hardware; costs related to defective products; efficiency of AMD's supply chain; AMD's ability to rely on third party supply-chain logistics functions; AMD’s ability to effectively control sales of its products on the gray market; impact of government actions and regulations such as export administration regulations, tariffs and trade protection measures; AMD’s ability to realize its deferred tax assets; potential tax liabilities; current and future claims and litigation; impact of environmental laws, conflict minerals-related provisions and other laws or regulations; impact of acquisitions, joint ventures and/or investments on AMD's business, including the announced acquisition of Xilinx, and ability to integrate acquired businesses; AMD’s ability to complete the Xilinx merger; impact of the announcement and pendency of the Xilinx merger on AMD’s business; impact of any impairment of the combined company’s assets on the combined company’s financial position and results of operation; restrictions imposed by agreements governing AMD’s notes and the revolving credit facility; AMD's indebtedness; AMD's ability to generate sufficient cash to meet its working capital requirements or generate sufficient revenue and operating cash flow to make all of its planned R&D or strategic investments; political, legal, economic risks and natural disasters; future impairments of goodwill and technology license purchases; AMD’s ability to attract and retain qualified personnel; AMD’s stock price volatility; and worldwide political conditions. Investors are urged to review in detail the risks and uncertainties in AMD’s Securities and Exchange Commission filings, including but not limited to AMD’s most recent reports on Forms 10-K and 10-Q.

(*)In this earnings press release, in addition to GAAP financial results, AMD has provided non-GAAP financial measures including non-GAAP gross profit, non-GAAP operating expenses, non-GAAP operating income, non-GAAP net income and non-GAAP earnings per share. AMD uses a normalized tax rate in its computation of the non-GAAP income tax provision to provide better consistency across the reporting periods. For fiscal 2021, AMD uses a non-GAAP tax rate of 15%, which excludes the tax impact of pre-tax non-GAAP adjustments. AMD also provided adjusted EBITDA and free cash flow as supplemental non-GAAP measures of its performance. These items are defined in the footnotes to the selected corporate data tables provided at the end of this earnings press release. AMD is providing these financial measures because it believes this non-GAAP presentation makes it easier for investors to compare its operating results for current and historical periods and also because AMD believes it assists investors in comparing AMD’s performance across reporting periods on a consistent basis by excluding items that it does not believe are indicative of its core operating performance and for the other reasons described in the footnotes to the selected data tables. The non-GAAP financial measures disclosed in this earnings press release should be viewed in addition to and not as a substitute for or superior to AMD’s reported results prepared in accordance with GAAP and should be read only in conjunction with AMD’s Consolidated Financial Statements prepared in accordance with GAAP. These non-GAAP financial measures referenced are reconciled to their most directly comparable GAAP financial measures in the data tables at the end of this earnings press release. This earnings press release also contains forward-looking non-GAAP gross margin concerning AMD’s financial outlook, which is based on current expectations as of February 1, 2022 and assumptions and beliefs that involve numerous risks and uncertainties. AMD undertakes no intent or obligation to publicly update or revise its outlook statements as a result of new information, future events or otherwise, except as may be required by law.

AMD, the AMD Arrow logo, EPYC, Radeon, Ryzen, Instinct, Threadripper and combinations thereof, are trademarks of Advanced Micro Devices, Inc. Other names are for informational purposes only and used to identify companies and products and may be trademarks of their respective owner.

 
ADVANCED MICRO DEVICES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Millions except per share amounts and percentages) (Unaudited)
     
  Three Months Ended Year Ended
  December 25,
2021		 September 25,
2021		 December 26,
2020		 December 25,
2021		 December 26,
2020
Net revenue $4,826  $4,313  $3,244  $16,434  $9,763 
Cost of sales  2,400   2,227   1,793   8,505   5,416 
Gross profit  2,426   2,086   1,451   7,929   4,347 
Gross margin %  50%  48%  45%  48%  45%
Research and development  811   765   573   2,845   1,983 
Marketing, general and administrative  412   376   308   1,448   995 
Licensing gain  (4)  (3)  —   (12)  — 
Operating income  1,207   948   570   3,648   1,369 
Interest expense  (8)  (7)  (9)  (34)  (47)
Other income (expense), net  4   62   (15)  55   (47)
Income before income taxes and equity income  1,203   1,003   546   3,669   1,275 
Income tax provision  229   82   (1,232)  513   (1,210)
Equity income in investee  —   2   3   6   5 
Net Income $974  $923  $1,781  $3,162  $2,490 
Earnings per share          
Basic $0.81  $0.76  $1.48  $2.61  $2.10 
Diluted $0.80  $0.75  $1.45  $2.57  $2.06 
Shares used in per share calculation          
Basic  1,208   1,214   1,205   1,213   1,184 
Diluted  1,222   1,230   1,226   1,229   1,207 
                     


 
ADVANCED MICRO DEVICES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Millions) (Unaudited)
     
  December 25,
2021		 December 26,
2020
ASSETS    
Current assets:    
Cash and cash equivalents $2,535  $1,595 
Short-term investments  1,073   695 
Accounts receivable, net  2,706   2,066 
Inventories  1,955   1,399 
Receivables from related parties  2   10 
Prepaid expenses and other current assets  312   378 
Total current assets  8,583   6,143 
Property and equipment, net  702   641 
Operating lease right-of-use assets  367   208 
Goodwill  289   289 
Investment: equity method  69   63 
Deferred tax assets  931   1,245 
Other non-current assets  1,478   373 
Total Assets $12,419  $8,962 
     
LIABILITIES AND STOCKHOLDERS' EQUITY    
Current liabilities:    
Accounts payable  1,321   468 
Payables to related parties  85   78 
Accrued liabilities  2,424   1,796 
Short-term debt  312   — 
Other current liabilities  98   75 
Total current liabilities  4,240   2,417 
Long-term debt, net  1   330 
Long-term operating lease liabilities  348   201 
Other long-term liabilities  333   177 
     
Stockholders' equity:    
Capital stock:    
Common stock, par value  12   12 
Additional paid-in capital  11,069   10,544 
Treasury stock, at cost  (2,130)  (131)
Accumulated deficit(1)  (1,451)  (4,605)
Accumulated other comprehensive income  (3)  17 
Total stockholders' equity  $7,497  $5,837 
Total Liabilities and Stockholders' equity  $12,419  $8,962 


(1) During the first quarter of 2021, the Company adopted ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes, using the modified retrospective adoption method, which resulted in $8 million of deferred tax liability associated with book-tax differences in a foreign equity method investment recognized in Accumulated deficit.
   


 
ADVANCED MICRO DEVICES, INC.
SELECTED CASH FLOW INFORMATION
(Millions) (Unaudited)
     
  Three Months Ended Year Ended
  December 25,
2021		 September 25,
2021		 December 26,
2020		 December 25,
2021		 December 26,
2020
Net cash provided by (used in)          
Operating activities $822  $849  $554  $3,521  $1,071 
Investing activities $—  $(83) $(294) $(686) $(952)
Financing activities $(727) $(949) $35  $(1,895) $6 
                     


 
SELECTED CORPORATE DATA
(Millions) (Unaudited)
     
  Three Months Ended Year Ended
  December 25,
2021		 September 25,
2021		 December 26,
2020		 December 25,
2021		 December 26,
2020
Segment and Category Information          
Computing and Graphics(1)          
Net revenue $2,584  $2,398  $1,960  $9,332  $6,432 
Operating income $566  $513  $420  $2,090  $1,266 
Enterprise, Embedded and Semi-Custom(2)          
Net revenue $2,242  $1,915  $1,284  $7,102  $3,331 
Operating income $762  $542  $243  $1,979  $391 
All Other(3)          
Net revenue $—  $—  $—  $—  $— 
Operating loss $(121) $(107) $(93) $(421) $(288)
Total          
Net revenue $4,826  $4,313  $3,244  $16,434  $9,763 
Operating income $1,207  $948  $570  $3,648  $1,369 
           
           
Other Data          
Capital expenditures $86  $85  $74  $301  $294 
Adjusted EBITDA(4) $1,446  $1,152  $753  $4,476  $1,969 
Cash, cash equivalents and short-term investments $3,608  $3,608  $2,290  $3,608  $2,290 
Free cash flow(5) $736  $764  $480  $3,220  $777 
Total assets $12,419  $11,153  $8,962  $12,419  $8,962 
Total debt $313  $313  $330  $313  $330 


(1) The Computing and Graphics segment, which primarily includes desktop and notebook processors and chipsets, discrete and integrated graphics processing units (GPUs), data center and professional GPUs and development services. From time to time, the Company may also sell or license portions of its IP portfolio.
  
(2) The Enterprise, Embedded and Semi-Custom segment, which primarily includes server and embedded processors, semi-custom System-on-Chip (SoC) products, development services and technology for game consoles. From time to time, the Company may also sell or license portions of its IP portfolio.
  
(3) All Other category primarily includes certain expenses and credits that are not allocated to any of the operating segments. Also included in this category is stock-based compensation expense and acquisition-related costs.
  
(4) Reconciliation of GAAP Net Income to Adjusted EBITDA*


  Three Months Ended Year Ended
  December 25,
2021		 September 25,
2021		 December 26,
2020		 December 25,
2021		 December 26,
2020
GAAP net income $974  $923  $1,781  $3,162  $2,490 
Interest expense  8   7   9   34   47 
Other (income) expense, net  (4)  (62)  15   (55)  47 
Income tax provision (benefit)  229   82   (1,232)  513   (1,210)
Equity income in investee  —   (2)  (3)  (6)  (5)
Stock-based compensation  112   99   79   379   274 
Depreciation and amortization  118   97   90   407   312 
Acquisition-related costs  9   8   14   42   14 
Adjusted EBITDA $1,446  $1,152  $753  $4,476  $1,969 


(5) Reconciliation of GAAP Net Cash Provided by Operating Activities to Free Cash Flow**


  Three Months Ended Year Ended
  December 25,
2021		 September 25,
2021		 December 26,
2020		 December 25,
2021		 December 26,
2020
GAAP net cash provided by operating activities $822  $849  $554  $3,521  $1,071 
Operating cash flow margin %  17%  20%  17%  21%  11%
Purchases of property and equipment  (86)  (85)  (74)  (301)  (294)
Free cash flow $736  $764  $480  $3,220  $777 
Free cash flow margin %  15%  18%  15%  20%  8%


* The Company presents “Adjusted EBITDA” as a supplemental measure of its performance. Adjusted EBITDA for the Company is determined by adjusting GAAP net income for interest expense, other income (expense), net, income tax provision, equity income in investee, stock-based compensation, and depreciation and amortization expense. The Company also included acquisition-related costs for the three months ended December 25, 2021, September 25, 2021 and December 26, 2020, and for the year ended December 25, 2021 and December 26, 2020. The Company calculates and presents Adjusted EBITDA because management believes it is of importance to investors and lenders in relation to its overall capital structure and its ability to borrow additional funds. In addition, the Company presents Adjusted EBITDA because it believes this measure assists investors in comparing its performance across reporting periods on a consistent basis by excluding items that the Company does not believe are indicative of its core operating performance. The Company’s calculation of Adjusted EBITDA may or may not be consistent with the calculation of this measure by other companies in the same industry. Investors should not view Adjusted EBITDA as an alternative to the GAAP operating measure of income or GAAP liquidity measures of cash flows from operating, investing and financing activities. In addition, Adjusted EBITDA does not take into account changes in certain assets and liabilities that can affect cash flows.
   
** The Company also presents free cash flow as a supplemental Non-GAAP measure of its performance. Free cash flow is determined by adjusting GAAP net cash provided by operating activities for capital expenditures. The Company calculates and communicates free cash flow in the financial earnings press release because management believes it is of importance to investors to understand the nature of these cash flows. The Company’s calculation of free cash flow may or may not be consistent with the calculation of this measure by other companies in the same industry. Investors should not view free cash flow as an alternative to GAAP liquidity measures of cash flows from operating activities.
   
  The Company has provided reconciliations within the earnings press release of these Non-GAAP financial measures to the most directly comparable GAAP financial measures.

 

Media Contact:
Drew Prairie
AMD Communications
512-602-4425
Email Contact 

Investor Contact:
Laura Graves
AMD Investor Relations
408-749-5467
Email Contact 


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