AMD Q2 2019 Earnings

Call Details

• Call Title: Advanced Micro Devices Q2 2019 Earnings Call
• Date: July 30, 2019 at 9:30 PM UTC
• Management Team:
  • Lisa Su (Chief Executive Officer)
  • Devinder Kumar (Senior Vice President, Chief Financial Officer, and Treasurer)
  • Laura Graves (Vice President, Investor Relations)

Call Summary

Financial Performance

• Revenue was $1.53B, up 20% sequentially and down 13% year-over-year.
• Gross margin was 41%, up 4 percentage points year-over-year.
• Operating income was $111M, down from $186M a year ago, and operating margin was 7% versus 11% a year ago.
• Net income was $92M and diluted EPS was $0.08 compared to $156M and $0.14 a year ago respectively.
• Computing and Graphics revenue was $940M, down 13% year-over-year.
• Enterprise, Embedded and Semi-Custom revenue was $591M, down 12% year-over-year.
• Cash and marketable securities were $1.1B and inventory was $1.0B, up $60M sequentially.
• Free cash flow was negative $28M and cash flow from operations was $30M in Q2.
• Adjusted EBITDA was $163M versus $228M a year ago, with trailing 12-month adjusted EBITDA of $672M and gross leverage of 1.9x.

Guidance

• Third quarter revenue is expected to be approximately $1.8B plus or minus $50M, which the company states is up approximately 9% year-over-year and up 18% sequentially.
• Q3 non-GAAP gross margin is expected to be approximately 43%.
• Q3 non-GAAP operating expenses are expected to be approximately $525M.
• Q3 non-GAAP interest expense, taxes and other are expected to be approximately $30M and diluted share count is expected to be approximately 1.21B shares.
• Full year revenue is now expected to increase mid-single-digit percent versus 2018, representing a change from prior commentary.
• Full year revenue excluding semi-custom is expected to increase approximately 20% year-over-year.
• Full year non-GAAP gross margin is expected to be approximately 42%.
• The full-year outlook now explicitly reflects additional softness in game console demand in the back half of the year.
• The company confirmed an incremental approximately $100M of Samsung-related revenue in 2019 that was not originally in prior guidance and partially offsets semi-custom and China headwinds.