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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  • Yojimbo - Tuesday, July 25, 2017 - link

    The way AMD segments their revenue drives me crazy. What do data centers have to do with consoles? Why aren't we allowed to resolve PC GPU revenue separately from PC CPU revenue? I don't think we really know how much of their revenue gain was from Ryzen, which, if it is responsible for the strong revenue numbers, would represent a fundamental strengthening of the company, and how much was because of cryptocurrency, which is most likely just a one or two quarter event. Reply
  • zepi - Wednesday, July 26, 2017 - link

    I think it is on purpose to make it difficult for competitors to know how well they are doing and to guess their margins and costs of production. Reply
  • Yojimbo - Wednesday, July 26, 2017 - link

    I don't think it has anything to do with their competitors. AMD's competitors know how AMD are doing insofar that the competitors know how they themselves are doing in the market as a whole, which is what is important, anyway. It's entirely to do with investors, particularly smaller investors who can't afford the detailed research reports. But just a general obfuscation or delay in the resolution of the true state of their business seems to be AMD's goal.

    That seems to be their tactic with the strength of their upcoming graphics architectures , too. When did we start hearing about Vega from AMD? It was before Polaris came out. And we heard about all the great improvements Vega would brings and how it would return AMD to a strong position in the high end of the GPU market and how it would compete in the data center. They put it on a graphic situated at the beginning of 2017. They hyped it up, even showing it off in careful demos in November or December of 2016. Then they finally said it would launch in Q2 of 2017. Now here it is, finally launching in August of 2017, smack in the middle of Q3, not looking like it's going to live up to their hard promises much less their hype. How long until they start talking about Navi?
    Reply
  • MonkeyPaw - Tuesday, July 25, 2017 - link

    The next step is some sort of Ryzen APU to go in laptops. AMD already has design wins for the last 4 MS and Sony consoles, and I expect that dominance to continue since they can produce the most powerful APU with their IP. So far, Ryzen, EPYC and Threadripper do nothing for the everyday consumer looking for a mobile offering. Reply
  • Droblesa - Tuesday, July 25, 2017 - link

    The next APU is code Named Raven Ridge. It will have 1 Ryzen CCX and 11 Vega Cores. It will be interesting for Laptops come in the 2H of the year.

    http://wccftech.com/amd-pinnacle-ridge-raven-ridge...
    Reply
  • Hurr Durr - Wednesday, July 26, 2017 - link

    It`s hardly the dominance worth pursuing when deciding factor is "who can make this piece of crap cheapest". Reply
  • deltaFx2 - Wednesday, July 26, 2017 - link

    ""who can make this piece of crap cheapest" Why do you think people buy Intel servers instead of IBM? IBM has higher performance than Intel over a wide swathe of workloads. Intel makes them cheaper and more power efficient. That's largely why. That's why x86 dominates the server landscape and not RISC.

    And, AMD does integrated GPUs way better than Intel. It's a no-contest there. The cores are now only marginally better than AMDs. Most of the PC TAM is in laptops, so the Ryzen APU is where the money is even if the margins aren't what they once were.
    Reply
  • Hurr Durr - Wednesday, July 26, 2017 - link

    Marginally as in one core in my five year old 3570 is dangerously close to one core in R7? Okay sure, AMD was always a second-tier solution, so no surprises here, and it was _especially_ visible in laptops.

    Oh, and people buy Intel instead of IBM because the latter is literally a shambling zombie led by a womyn. With entirely predictable results.
    Reply
  • Cooe - Wednesday, July 26, 2017 - link

    Lol I upgraded from a 3570K cranked to the ceiling (4.6GHz) to a Ryzen 7 1700 (4.0GHz) and you are completely talking out your ass. Ryzen is WAAAY faster than Ivy Bridge in just about every way measurable, single-threaded performance per clock (aka IPC) is VASTLY superior (win some, loss some with Broadwell/-E) and with more than 4x the threads and 3x the cache, is more than 2x as fast (!!!!) multi-threaded. For example, despite being clocked a whopping 600MHz faster than my Ryzen, it's single-threaded performance is no better (pretty close to equal), but loses by a factor of around 2.5x in total, multi-threaded performance. That's MASSIVE. My performance in every single CPU intensive thing I do has absolutely skyrocketed, I can multi-task like you're system couldn't even believe (I witnessed my 3570K and it's 4-measly threads get overloaded CONSTANTLY). Plus, I'm on a way more modern platform that will be supported for like 3-4+ years for cheap, swap in CPU upgrades, not 1 then ditched. Heck, even if the only thing you care about is games, even in games where they do preform similarly (which is shrinking and shrinking as 4-threads is quickly becoming a SERIOUS bottleneck), the actual gaming experience on Ryzen is SOOOO far superior it's kinda crazy. This effect has been studying extensively, 4-thread CPU's are rapidly becoming thread constrained in an 8-core console world. This leads to "thread-hitching" (small frame-rate hitchs whenever a games idle-threads and active-threads have to be swapped to/from a CPU core), and much lower fps minimum's, 1% averages, and worse frame-times, even if the frame-rate counter is on average showing a similar number. You would get the same effect going to an i5 to an i7, but the point remains, 4-thread CPU's are a dying breed for gaming, just as they're a dying bread for anyone who does real work with their computers. 4-threads, no matter how fast you clock them, just aren't enough to cut the mustard for any kind of significant, modern workload. But, hey, whatever you have to tell yourself to make your old hardware look better :). (And I'm not hating the hardware, in it's day the 3570K was a great chip, and it's had a remarkable lifespan (along with the 2500K), but the older i5's are seriously starting to become thread-constrained. Unlike the newest i5's can't make up some of that loss with like 15-20% faster IPC (IB->KL), and like 15% faster clocks, though honestly, I wouldn't recommend a 4-thread chip to anyone at this point (for a primary use desktop) no matter how fast the threads are. Reply
  • grefot - Monday, August 07, 2017 - link

    Synthetic benchmarks clearly show that even an i5 2500K, over 6 years old at this point, is faster at single and 4-threaded workloads than the top of the line Ryzen SKUs if both are overclocked to the max. AMD made an impressive IPC jump, but they barely reach 3.9/4.0Ghz. Sandy bridge at 4.8 to 5.0Ghz is not a rarity with proper cooling, and 4.5Ghz is possible even with a stock cooler.

    It's funny how the people most vocal about Ryzen, the gamer fanboys, profit the least from its strengths. They would be much better off buying old i5s on the cheap and overclocking them, saves you from having to spend a fortune on DDR4 as well. Ryzen is much better suited for programmers, CAD artists and other professionals.
    Reply

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