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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  • TesseractOrion - Wednesday, July 26, 2017 - link

    Hurr Durr vomited this crap: "Oh, and people buy Intel instead of IBM because the latter is literally a shambling zombie led by a womyn. With entirely predictable results."

    What an amazingly thoughtful and unbiased, technically literate critique! He must've gone to Trump University....
    Reply
  • deltaFx2 - Wednesday, July 26, 2017 - link

    Your 3570 is marginally worse than whatever equivalent 6/7 gen intel CPU too. And the graphics as as third-tier as it always was; third, because it can't go any lower. AMD was bad on the bulldozer architecture and a bulk 28nm process that leaked far more than Finfet. Both of those are history. Zen is especially efficient at the 2-3 GHz range (power starts going off the rails over 3.7GHz). So, yeah, as a package, Ryzen Mobile as a package is *better* than anything Intel has, if they can match or beat power, which seems likely. Reply
  • stockolicious - Saturday, July 29, 2017 - link

    "It`s hardly the dominance worth pursuing when deciding factor is "who can make this piece of crap cheapest"."
    in a way that is a deciding factor - Intels and AMD's products are commodities - they are not brands - their chips go into products and are not products themself. AMD is taking a step into stopping the myth that is the "Intel Brand" - the commercials and slogans wont stop the fact that they make chips and that is it. Nobody cares what kind of ARM chip is in an Ipad - they just want to enjoy their "Juicy fruit" device.
    Reply
  • zodiacfml - Wednesday, July 26, 2017 - link

    Yep. AMD's APUs couldn't come fast enough. AMD's products has slight edge now over Intel's probably for more than a year in desktops. I wonder when they will release mobile parts as Intel might release Cannonlake at the end of the year. Reply
  • serendip - Wednesday, July 26, 2017 - link

    It's a long shot but I'm hoping for an Atom-class Zen APU to show up someday. The market for small, low to mid-end Windows tablet still exists but Intel dropped out of it by killing most Apollo Lake SKUs. Reply
  • Threska - Sunday, July 30, 2017 - link

    NASs are a market, especially with them going past just being for storage. Reply
  • Jumangi - Wednesday, July 26, 2017 - link

    Hopefully Ryzen based server sales will start to show up as that's where they can make some serious cash. Reply
  • Dionisiaco - Wednesday, July 26, 2017 - link

    at amd the accountants be like, go check the printer its seems we are out of red ink again. Reply
  • webdoctors - Wednesday, July 26, 2017 - link

    The 2% increase in margins from last year is great news, shame they're still losing money. I expected them to dominate the market in DIYs/desktops since the Ryzen series seems to be great value at mid and high tier segments.

    The real MVPs are the accountants that are able to keep them afloat while they've bled money the last 5/10? years. The one good thing about cheap credit and 0% interest rates are these borderline companies still being able to stay in business.
    Reply
  • HomeworldFound - Thursday, July 27, 2017 - link

    It's wonderful to see a competitive alternative, but even better where you really don't have to worry about picking the wrong option. Reply

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