AMD Q4 2018 Earnings

Call Details

• Call Title: Advanced Micro Devices Q4 2018 Earnings Call
• Date: January 29, 2018 at 10:30 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)
  • Ruth Kotter (Senior Vice President of HR, Worldwide Marketing, and Investor Relations)

Call Summary

Financial Performance

• Fourth quarter revenue was $1.42B, which increased 6% from a year ago.
• Full year 2018 revenue was $6.48B, which increased 23% year-over-year.
• Fourth quarter non-GAAP gross margin was 41%, up 740 basis points from 34% a year ago.
• Full year gross margin was 39%, up 440 basis points from the prior year.
• Fourth quarter net income was $87M compared to $8M in the year-ago quarter.
• Full year net income was $514M, up $411M from $103M a year ago.
• Adjusted EBITDA was $152M in Q4 and trailing 12-month adjusted EBITDA was $803M, more than double year-over-year.
• Inventory was $845M at quarter end, which increased $107M sequentially.

Guidance

• First quarter 2019 revenue is expected to be approximately $1.25B plus or minus $50M, which implies a sequential decrease of approximately 12% and a year-over-year decrease of approximately 24%.
• First quarter non-GAAP gross margin is expected to be approximately 41%.
• First quarter non-GAAP operating expenses are expected to be approximately $480M.
• For first quarter 2019, non-GAAP interest expense, taxes and other are expected to be approximately $25M.
• First quarter 2019 is expected to record a $60M IP licensing gain associated with the TATIC JV, recorded on the licensing gain line of the P&L and not included in gross margin.
• For full year 2019, revenue is expected to grow in the high single-digit percentage range on a year-over-year basis.
• Full year 2019 non-GAAP gross margin is expected to be greater than 41% and non-GAAP operating expenses are expected to be approximately 29% of revenue.
• Full year 2019 non-GAAP tax rate is expected to be approximately 4% of pre-tax income.