This afternoon, AMD announced their second quarter results for their fiscal year 2017, and the news is promising. AMD still has some work to do in order to get back to profitability, but that work has been helped tremendously by successful product launches earlier this year. Ryzen has shown exciting potential, and a diverse and strong product lineup has helped AMD’s bottom line. For the second quarter, AMD’s revenue was up 19% year-over-year to $1.22 billion, and operating income was $25 million for the quarter. Net income was still in the red with a loss of $16 million, resulting in a loss per share of $0.02 on a GAAP basis. Gross margin was 33%, hovering right around that 35% range that AMD wants to hit for profitability.

AMD Q2 2017 Financial Results (GAAP)
  Q2'2017 Q1'2017 Q2'2016
Revenue $1220M $984M $1030M
Gross Margin 33% 34% 31%
Operating Income +$25M -$29M -$8M
Net Income -$16M -$73M +$69M
Earnings Per Share -$0.02 -$0.08 +$0.08

AMD also releases Non-GAAP results which exclude results such as restructuring charges, debt fees, and stock based compensation. Sometimes Non-GAAP results can help you look at an underlying business when there is restructuring charges affecting results either positively or negatively, but in this quarter for AMD, the Non-GAAP results are almost exclusively the result of not factoring in stock-based compensation which amounted to $24 million. On a Non-GAAP basis, revenue for the quarter was the same $1.22 billion, but operating income is now $49 million, compared to just $3 million a year ago. Net income was $19 million, and earnings-per-share results in $0.02.

AMD Q1 2017 Financial Results (Non-GAAP)
  Q2'2017 Q1'2017 Q2'2016
Revenue $1220M $984M $1030M
Gross Margin 33% 34% 31%
Operating Income +$49M -$6M +$3M
Net Income +$19M -$38M -$40M
Earnings Per Share +$0.02 -$0.04 -$0.05

The year-over-year results may seem a bit skewed, since Q2 2016 was actually a profitable quarter for AMD, but that was due to a $150 million infusion of cash from a joint-venture with Nantong Fujitsu Microelectronics. This quarter doesn’t have any large cash deals involved, and AMD is very close to breaking even, with strong gains across its product line.

The star of the show is undoubtedly Ryzen, and the Computing and Graphics segment had a very strong quarter, with revenues of $659 million, up 51% compared to Q2 last year. AMD attributes this jump to demand for graphics and Ryzen desktop processors. Operating income for the Computing and Graphics group was $7 million, compared to an $81 million loss last year, and much of that was driven due to higher average selling prices for its processors. Although AMD is not yet able to charge the premium of Intel, it can at least charge a lot more than it did for the last generation of CPUs.

AMD Q2 2017 Computing and Graphics
  Q2'2017 Q1'2017 Q2'2016
Revenue $659M $593M $435M
Operating Income +$7M -$15M -$81M

Enterprise, Embedded, and Semi-Custom had a 5% drop in revenue, to $563 million, mostly due to a softening in semi-custom SoC sales. This segment is where AMD’s EPYC CPU line will impact though, so the next couple of quarters should be interesting to see here, with the launch of the Xbox One X, and EPYC.

AMD Q2 2017 Enterprise, Embedded, and Semi-Custom
  Q2'2017 Q1'2017 Q2'2016
Revenue $563M $391M $592M
Operating Income $42M $9M $84M

All Other had an operating loss of $24 million, compared with a loss of $11 million in Q2 2016, with this primarily being stock-based compensation, as well as a $7 million restructuring credit in Q2 2016 helping out that quarter.

AMD has a lot to be excited about, and they’ve delivered a strong product in Ryzen already, which will branch out to enterprise with EPYC where the higher margins are. On the GPU side, Vega has launched as well with workstation graphics cards available now. Add in the custom SoC market that they’ve worked hard to establish, and the future seems just a little bit brighter than before. For Q3, AMD is expecting a 23% increase in revenue compared to this quarter, plus or minus 3%.

Source: AMD Investor Relations

 

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  • austinsguitar - Tuesday, July 25, 2017 - link

    for the first time since athlon x2..... welcome back amd, we missed you <3 Reply
  • emn13 - Wednesday, July 26, 2017 - link

    It's an optimistic time for AMD, but in fairness; this still isn't nearly as good as things looked in the athlon (xp, x2, 64 etc) days. Back then AMD generally outperformed intel in most workloads across most of the market; now - they're competitive, but still generally slower in the still very critical single threaded stuff. Reply
  • ddriver - Wednesday, July 26, 2017 - link

    I don't know if ryzen is making an impact here. Amd has the habit of shuffling results around, over-reporting loss a few quarters so it can every once in a while report more optimistic results.

    Amd finally has high end chips that are competitive and people want to buy, and they are selling at fairly good prices, for both Amd and consumers.

    So I expect to see margins increasing, not decreasing by 1%. Come on Amd - let's see margins at 50%!
    Reply
  • ddriver - Wednesday, July 26, 2017 - link

    My guess is the extra revenue came from the GPUs which are essentially sold out everywhere thanks to the mining craze. Reply
  • stockolicious - Wednesday, July 26, 2017 - link

    Higher ASP's on Ryzen and some effect on GPU - keep in mind the big OEM's just in the past few weeks have put Ryzen on their websites - the first 3 months of a CPU ramp are always slow but Ryzen is selling well - next quarter with OEM help and Threadripper/Vega i think they will provide a bigger beat although GM will be flattish due to all the console chips peaking in Q3. Reply
  • lefty2 - Thursday, July 27, 2017 - link

    They sold out their inventory, but they can't sell anymore than that. Lisa said that they ordered extra wafers for the next quarter to replenish the inventory. So, only a small amount of the extra was from GPU. It was mostly Ryzen. Next quarter we're also going to see a knock on effect as the GPU inventory has to be replenished. Reply
  • Spoelie - Wednesday, July 26, 2017 - link

    Athlon 64 & 64 X2 (2003-2006) was the only time period where AMD had undeniably the performance crown - the other processors you mentioned were "competitive"

    * Athlon vs P3 was usually a wash in terms of IPC and mostly a clockspeed war - (athlon having the grunt and P3 using compiler tricks and "cheats" to gain the upper hand in benchmarks). Reread this for a trip down memory lane http://www.anandtech.com/show/557
    * Athlon XP was underperforming P4 after it matured, but represented a better value.
    Reply
  • PGFan - Wednesday, July 26, 2017 - link

    Back in the 80486 days, AMD had the x486-100, and later the x486-133, which outperformed the Intel counterparts. I believe Intel capped at the 486-66, but maybe had a 75MHz part. Reply
  • Kvaern1 - Thursday, July 27, 2017 - link

    Intel made a 100mhz 486 DX4 and by the time the 100+ mhz AMD 486 CPUs came out Intel's highend had moved on to Pentiums. Reply
  • Lonyo - Wednesday, July 26, 2017 - link

    We are now at a stage where performance is far more often "good enough", so being a bit behind doesn't matter as much. The main weakness is with regard to mobile products where AMD needs to have a presence. Reply

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