AMD Quarterly Earnings Report Q2 FY 2019
by Brett Howse on July 31, 2019 12:20 AM EST- Posted in
- CPUs
- AMD
- Financial Results
AMD announced their second quarter earnings for the 2019 fiscal year, and the company’s revenue was $1.53 billion for the quarter. This is down 13% from the same quarter last year. Gross margin improved from 37% to 41% year-over-year. Operating income was $59 million, down from $153 million a year ago, and net income was down $81 million to $35 million. This resulted in earnings-per-share of $0.03.
| AMD Q2 2019 Financial Results (GAAP) | |||||
| Q2'2019 | Q1'2019 | Q2'2018 | |||
| Revenue | $1531M | $1272M | $1756M | ||
| Gross Margin | 41% | 41% | 37% | ||
| Operating Income | $59M | $38M | $153M | ||
| Net Income | $35M | $16M | $116M | ||
| Earnings Per Share | $0.03 | $0.01 | $0.12 | ||
Although AMD was in the black for yet another quarter, this is certainly a dip that AMD does not expect to last. Their forecast for Q3 2019 is a 9% year-over-year increase in revenue to $1.8 billion, and they’ve recently launched new products that could help them achieve those goals.
| AMD Q2 2019 Computing and Graphics | |||||
| Q2'2019 | Q1'2019 | Q2'2018 | |||
| Revenue | $940M | $831M | $1086M | ||
| Operating Income | $22M | $16M | $117M | ||
Looking back at Q2 though, Computing and Graphics revenue was down 13% to $940 million, and AMD attributes this drop to lower graphics channel sales. This drop was slightly offset though by higher client CPU and datacenter GPU sales. Also good for AMD and their investors is that their average selling price for client processors has increased thanks to more Ryzen sales, and GPU average selling price has also increased thanks to datacenter GPU sales. The Computing and Graphics segment had an operating income of $22 million for the quarter, compared to $117 million a year ago.
| AMD Q2 2019 Enterprise, Embedded and Semi-Custom | |||||
| Q2'2019 | Q1'2019 | Q2'2018 | |||
| Revenue | $591M | $441M | $670M | ||
| Operating Income | $89M | $68M | $69M | ||
AMD’s other major segment is their Enterprise, Embedded, and Semi-Custom, and this product group also saw revenues fall 12% to $591 million for the quarter. AMD attributes this drop to lower semi-custom product revenue, which you can more or less read as console sales, and that makes sense since the current generation consoles are reaching the end of their life, but both Microsoft and Sony have both committed to AMD platforms for their next generation consoles, so expect this segment’s fortunes to get a bit better soon. Operating income was $89 million for this group, which was up from $69 million last year. The higher operating income is thanks to higher EPYC processor sales, which is also a great sign for this segment.
Although this quarter’s revenue certainly saw a dip, AMD did just launch their latest third generation Ryzen this month, which wouldn’t be reported in their Q2 earnings which ended June 29th. As we saw in our review, this is a great step forward for AMD’s processor designs, and they have also launched their Navi based GPUs in July, so it makes some sense to see a dip prior to a major product launch. We’ll keep our eye on their results for Q3, but as previously mentioned they are expecting this to be a short-term drop, and with their new product lineup, that seems like a safe bet.
Source: AMD Investor Relations
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5080 - Wednesday, July 31, 2019 - link
A new Ryzen on 7nm for notebooks can't come fast enough for AMD. The desktop market is just too small now to make any significant market gains.neblogai - Wednesday, July 31, 2019 - link
AMD are gaining market share in laptops fast already. It is just that laptop market is hard to break into, and AMD are quite passive in it- they are trying to just sell chips. Instead, they should be investing into building their own speed/quality standards and a good name in it, that could later carry and advertise them.Still, as long as AMD sell APUs cheaper than Intel, and offer some driver support- market share will continue to grow. Picasso APUs are great (but official tuning utilities, and stock settings on most laptops are not; unofficial Ryzen Controller fixes most of that). Of course, Renoir will be even better. But I'm not sure users will be benefiting from it, if it is pricier, and is placed in same poor laptop designs.
HStewart - Saturday, August 3, 2019 - link
I have an honest question, does anybody actually own AMD notebook, but is out just to sway customer my impression of AMD ( maybe mostly fans ) is that all gaming and nothing but hate everywhere else against Intel. To me this attitude does not help AMD but actually hurts them.I would not blame this one the vendor - but blamed it on demand. Plus stuff like lake of Thunderbolt 3 does not help.
Korguz - Tuesday, August 6, 2019 - link
yes.. i own 2 of them. and your impression is probably more bias, then wrong.TB3 ?? ever consider that this may not be a feature that most need, or want ?
Xyler94 - Tuesday, August 6, 2019 - link
How often do you actually use Thunderbolt?I bought my dad an AMD powered laptop for christmas, because it was a great deal, performed amazingly, and had an NVMe SSD. The same laptop in Intel would have been too much for me to afford (He also only browses the internet with it). It's an incredible device with great battery life.
webdoctors - Wednesday, July 31, 2019 - link
IF AMD got $10 every time someone said they're turning the corner and next quarter will be better, they could double their revenue, hahaha.They're on the THIRD generation of Ryzen CPUs, they should be pumping up margins and raking in the dough by now...I don't see anytime in the future they'll have a better lineup than right now.
RSAUser - Thursday, August 1, 2019 - link
They won't up the margins as they would rather sell more CPUs.Where margins are good is laptops, but AMD is not competitive there.
ballsystemlord - Wednesday, July 31, 2019 - link
Your hope for AMD's ryzen sales may prove short lived. AMD has traditionally favored the value and value/enthusiast communities. The introduction of TR allowed them to get into the high market segment. With the price of the Radeon VII at $700 [2] and the price of 3950X at $750 [1] I, and I'm certain many other customers, are feeling betrayed.A GPU contains the physical chip, VRM, connectors, PCB, memory, and more. A CPU is just the CPU and a small PCB with a few small components.
I bought my 6 core Phenom II 1090T (which I'm still running on), for < $200. "The last thing we would dream of doing is complain about pricing on these [AMD Thuban core] parts." -- Anand Lal Shimpi [3]
I'm uncertain what AMD is trying to pull on us, be it that 5nm and 3nm will also double in price and therefore they have to get us used to it, or simply that AMD/Lisa Sue is feeling greedy these days, but I will not buy it.
I wanted to, but the pricing is unconscionable, I might as well get a TR and a TR has more PCIe connections, and thus is currently more useful in the way of expansion and Ethernet.
[1]: https://www.anandtech.com/show/14605/the-and-ryzen...
[2]: https://www.anandtech.com/show/13923/the-amd-radeo...
[3]: https://www.anandtech.com/print/3675/tigerdirect-o...
RSAUser - Thursday, August 1, 2019 - link
None of us are feeling betrayed, the 3000 series Ryzen is amazing, the 3600 has got to be one of the best value for money in a very long time, it feels like recommending the 2600K again when people ask.ballsystemlord - Saturday, August 3, 2019 - link
Yes, it is amazing, but I was commenting on the lack of amazing pricing, not amazing performance. I saved up the cash for the top end only to find out that the top end has risen from $329[1] to $749[2]! 227.657% of 2700X, yikes!!!Since when is a doubling in price good for the consumer?
[1]: https://www.anandtech.com/show/12625/amd-second-ge...
[2]: https://www.anandtech.com/show/14605/the-and-ryzen...