AMD Announces Third Quarter 2021 Earnings, Revenue Up 54%

AMD (NASDAQ: AMD) today reported third quarter 2021 revenue of $4.3 billion, operating income of $948 million, net income of $923 million, and diluted earnings per share of $0.75. Non-GAAP operating income was $1.1 billion, net income was $893 million, and earnings per diluted share were $0.73.

AMD President and CEO Dr. Lisa Su said: “AMD achieved another strong third quarter, with revenue increasing 54% and operating income doubling year-over-year. As sales of our data center products increased year-over-year More than doubling, third-generation AMD EPYC processor shipments improved significantly in the quarter. Based ON leading products and consistent execution, our business has grown significantly in 2021, at a faster-than-market rate speed.”

2021 Third Quarter Results

Turnover for the quarter was $4.3 billion, up 54% year-over-year and 12% sequentially, primarily driven by higher turnover in the Computing and Graphics and Enterprise, Embedded and Semi-Custom businesses.

Gross profit was 48%, up 400 basis points year over year and 80 basis points sequentially. Growth was driven by increased sales of EPYC processors, Ryzen processors and Radeon graphics cards.

Operating income for the quarter was $948 million compared to $449 million in the year-ago period and $831 million in the prior quarter. On a non-GAAP basis, operating income for the quarter was $1.1 billion compared to $525 million in the year-ago period and $924 million in the prior quarter. The increase in operating income was mainly attributable to the increase in turnover.

Net income for the quarter was $923 million compared to $390 million in the year-ago quarter and net income of $710 million in the prior quarter. On a non-GAAP basis, net income for the quarter was $893 million compared to $501 million in the year-ago period and $778 million in the prior quarter.

Diluted earnings per share were $0.75 in the quarter, compared to $0.32 in the year-ago quarter and $0.58 in the prior quarter. On a non-GAAP basis, diluted earnings per share were $0.73 in the quarter compared to $0.41 in the year-ago quarter and $0.63 in the prior quarter.

Cash, cash equivalents and short-term investments totaled $3.6 billion at the end of the quarter. The company repurchased more than 7 million shares of common stock for $750 million during the quarter.

Cash flow from operations for the quarter was $849 million compared to $339 million in the year-ago period and $952 million in the prior quarter. In terms of free cash flow, free cash flow for the quarter was $764 million compared to $265 million in the year-ago quarter and $888 million in the previous quarter. Operating cash flow and free cash flow for the third quarter of 2021 included strategic investments in long-term supply chain capabilities to support future topline growth.

Quarterly Divisional Financial Report Summary

Computing and Graphics segment revenue was $2.4 billion, an increase of 44% year-over-year and 7% sequentially, mainly due to increased sales of Ryzen processors, Radeon graphics cards and AMD Instinct accelerators.

Client processor average selling price (ASP) increased year-over-year and quarter-over-quarter, primarily driven by increased Ryzen processor portfolio sales.

GPU average selling prices increased year-over-year and quarter-over-quarter, driven by sales of high-end Radeon graphics products and AMD Instinct data center GPUs.

Operating income for the quarter was $513 million, compared to $384 million in the same period last year and $526 million in the prior quarter, with the year-over-year increase in revenue driven by higher turnover, partially offset by increased operating expenses. The quarter-over-quarter decrease was mainly due to an increase in operating expenses.

The enterprise, embedded and semi-custom business unit’s turnover was $1.9 billion, an increase of 69% year-on-year and a 20% month-on-month increase, mainly due to increased sales of EPYC processors and semi-custom products.

Operating income for the quarter was $542 million, compared to $141 million in the year-ago quarter and $398 million in the prior quarter. Growth was primarily driven by higher turnover and a broader product mix, partially offset by higher operating expenses.

All other operating losses for the quarter were $107 million compared to an operating loss of $76 million in the same period last year and an operating loss of $93 million in the prior quarter.

Recent company performance highlights

In the third quarter, the application of AMD EPYC processors continued to increase.

Argonne National Laboratory (Argonne) has selected AMD EPYC processors to build a new supercomputer called Polaris that helps scientists and developers test and optimize software code and applications to solve a range of AI and engineering science research problems.

Google Cloud has announced a public preview of N2D virtual machines powered by AMD EPYC 7003 series processors.

AMD announced that 2nd Gen AMD EPYC processors and AMD Radeon Pro V520 GPUs will power new Amazon EC2 G4ad instances with the flexibility to provide customers with resources on-demand, independent of physical, hypothetical hardware stock limit.

Cloudflare chose third-generation AMD EPYC processors for its 11th-generation servers to power the company’s DNS network service.

AMD has partnered with Microsoft to power Windows 11 with AMD Ryzen processors and AMD Radeon graphics, bringing users powerful, reliable computing power. More than 175 AMD processors are currently compatible with the Windows 11 operating system, driving great PC and gaming experiences.

The application scope of AMD Ryzen processors has expanded. Lenovo Thinkbook and Thinkpad E series business notebook Ryzen Edition supports the Windows 11 operating system and has begun to ship. In addition, Lenovo also announced the Yoga Slim 7 Carbon and Yoga Slim 7 Pro equipped with Ryzen processors; HP released two AiO devices with Ryzen processors; ASUS announced the Zenbook, Zenbook Pro, ProArt StudioBook and VivoBook based on AMD Ryzen 5000 series processors.

AMD has released the AMD Ryzen 5000G series of desktop processors with Radeon graphics, delivering high-performance integrated graphics and powerful features to meet the needs of performance-demanding gamers, (content) creators and enthusiasts.

AMD introduced the AMD Radeon RX 6600 XT graphics card, designed to deliver higher frame rates, higher fidelity 1080p gaming experiences. With the groundbreaking AMD RDNA 2 gaming architecture, the graphics card leverages AMD Smart Access Memory technology to deliver an average performance boost of up to 11% for many mainstream games.

AMD Announces New Radeon PRO W6000X Series Graphics Cards for Mac Pro, Delivering Superior Performance for Demanding Professional Design and Content Creation Workloads with High-Performance AMD RDNA 2 Architecture, AMD Infinity Cache, and Numerous Advanced Technologies power.

AMD was named to Forbes’ 2021 list of the world’s best employers.

AMD released its 26th annual corporate social responsibility report, highlighting the company’s achievements over the past year and unveiling new goals for 2025 and 2030, including processor energy efficiency that will be used for AI training and high-performance computing applications 30-fold increase by 2025.

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