• Guest, The rules for the P & N subforum have been updated to prohibit "ad hominem" or personal attacks against other posters. See the full details in the post "Politics and News Rules & Guidelines."

News AMD Q3 Earnings Results

Hitman928

Diamond Member
Apr 15, 2012
3,753
4,286
136
EPS is $0.75, beat by $0.14
Revenue is $4.31B, beat by $200M
Q4 revenue projection is $4.5B, above $4.25B estimates.
Q4 GM projection is 49.5%

For the full year 2021, AMD now expects revenue to grow approximately 65 percent driven by growth across all businesses, up from prior guidance of 60 percent growth. AMD expects non-GAAP gross margin to be approximately 48 percent for the full year 2021.


More to come.
 

Hitman928

Diamond Member
Apr 15, 2012
3,753
4,286
136
Some highlights from the report:
  • Revenue was $4.3 billion, up 54 percent year-over-year and 12 percent quarter-over-quarter driven by higher revenue in both the Computing and Graphics segment and Enterprise, Embedded and Semi-Custom segment.
  • Gross margin was 48 percent, up over 400 basis points year-over-year and up 80 basis points quarter-over-quarter. The year-over-year and quarter-over-quarter increases were primarily driven by a richer mix of EPYC™, Ryzen™ and Radeon™ processor sales.
  • Computing and Graphics segment revenue was $2.4 billion, up 44 percent year-over-year and 7 percent quarter-over-quarter. The year-over-year and quarter-over-quarter increases were driven by higher Ryzen, Radeon and AMD Instinct processor sales.
    • Client processor average selling price (ASP) grew year-over-year and quarter-over-quarter driven by a richer mix of Ryzen processor sales.
    • GPU ASP grew year-over-year and quarter-over-quarter driven by high-end Radeon graphics product sales and AMD Instinct data center GPU sales.
  • Enterprise, Embedded and Semi-Custom segment revenue was $1.9 billion, up 69 percent year-over-year and 20 percent quarter-over-quarter. The increases were driven by higher EPYC processor and semi-custom product sales.
Statement on 4Q
  • For the fourth quarter 2021, AMD expects revenue to be approximately $4.5 billion, plus or minus $100 million, an increase of approximately 39 percent year-over-year and approximately 4 percent quarter-over-quarter. The year-over-year increase is expected to be driven by growth across all businesses. The quarter-over-quarter increase is expected to be driven by higher server and semi-custom revenue.
 

Gideon

Golden Member
Nov 27, 2007
1,476
2,998
136
There s something that is not pleasant to read when it comes to that wasted money :
Yeah and it's expected to continue. I get that they want to pump their valuation before the Xilinx merger, but that's their entire quarter revenue's worth.

There's got to be a better place to put at least a portion of that cash. I'm sure there are plenty of software companies they could acquire that would help their gaming efforts, linux integration ... you name it
 

Abwx

Diamond Member
Apr 2, 2011
9,307
1,224
126
Yeah and it's expected to continue. I get that they want to pump their valuation before the Xilinx merger, but that's their entire quarter revenue's worth.

There's got to be a better place to put at least a portion of that cash. I'm sure there are plenty of software companies they could acquire that would help their gaming efforts, linux integration ... you name it
That s enough money to fund say Zen 5 from scratch to QS, another quarter like this and they can forget about being perf competitive on the mid term.
 

amrnuke

Golden Member
Apr 24, 2019
1,169
1,739
106
Yeah and it's expected to continue. I get that they want to pump their valuation before the Xilinx merger, but that's their entire quarter revenue's worth.

There's got to be a better place to put at least a portion of that cash. I'm sure there are plenty of software companies they could acquire that would help their gaming efforts, linux integration ... you name it
Just curious why you think AMD bought back stock in order to increase their EPS or P/E or valuation before the merger?
 

Hitman928

Diamond Member
Apr 15, 2012
3,753
4,286
136
Highlights from the earnings call:

  • In Q3, Milan overtook Rome in sales and is now the majority of revenue in data center.
  • Epyc revenue continues to be more cloud weighted but progress being made in enterprise.
  • Xilinx merger still on track to close by EOY.
  • Data center now mid-20% of overall revenue.
Will post more as I have time to read through it.
 

KompuKare

Senior member
Jul 28, 2009
689
225
116
So like 1.1 billion total? Kind of lame if you think about it when Intel gained an additional 600 million in DCG revenue over last year.
So if that entire division was $1.9 billion, then all the consoles were at most $800 million.
Using up all those scarce TSMC 7nm wafers for so little revenue is crazy.

I suspect AMD are keen to hide how little the console make them, but is there enough information there for us to try and deduce some figures?

Something like taking that $800 million and dividing it by the combined numbers for PS5 and both the Xbox'es for the quarter?
 

itsmydamnation

Platinum Member
Feb 6, 2011
2,263
1,958
136
So if that entire division was $1.9 billion, then all the consoles were at most $800 million.
Using up all those scarce TSMC 7nm wafers for so little revenue is crazy.

I suspect AMD are keen to hide how little the console make them, but is there enough information there for us to try and deduce some figures?

Something like taking that $800 million and dividing it by the combined numbers for PS5 and both the Xbox'es for the quarter?
i wouldn't be surprised if margin on consoles is like 30%.
But the thing about it is they contribute to overall R&D and pay for there own design , so its low risk , the only reason it looks so bad right now is because we are at a never seen before capacity squeeze.

if these types of squeeze continue into the future post COIVD expect future console negs to look quite different.
 

VirtualLarry

No Lifer
Aug 25, 2001
52,238
7,054
126
Does anyone else feel that, relative to industry-standard icons like Intel and NVidia, 48% gross margin is not so good? It's getting better, and that's a Good Thing, and AMD is no longer seen as just the "budget brand" with Ryzen (although, danger here if Alder Lake takes the performance crown), but 48% just seems a tad low compared to their competitors. Is it the console APU / SoC sales that are dragging that number down? (I get it that console design wins are Good for the "AMD ecosystem" as far as developers go.)
 
  • Like
Reactions: Tlh97 and KompuKare

Saylick

Golden Member
Sep 10, 2012
1,102
1,078
136
Does anyone else feel that, relative to industry-standard icons like Intel and NVidia, 48% gross margin is not so good? It's getting better, and that's a Good Thing, and AMD is no longer seen as just the "budget brand" with Ryzen (although, danger here if Alder Lake takes the performance crown), but 48% just seems a tad low compared to their competitors. Is it the console APU / SoC sales that are dragging that number down? (I get it that console design wins are Good for the "AMD ecosystem" as far as developers go.)
It's definitely lower than Intel and Nvidia, and it's largely due to them having to historically offer products with better perf per dollar and/or lower margins in order to take market share. In pretty much every earnings report, analysts have poked AMD about their low and slowly increasing margin rate, but like you said they are trying to raise it by increasing the average sale price across the board and to increase the mix of sales towards products with naturally higher margins, e.g. enterprise and server. While they are killing it on the server side of things, it is harder for them to increase the ASP for consumer products because a lot of people still see AMD as the budget king and/or see AMD just as competition just so that they can buy Intel/Nvidia products at reasonable prices. This effect was evident after the launch of Zen 3, where a lot of people who liked the budget-friendliness of Zen 2 were turned off from the higher prices of Zen 3, which I don't think is warranted given that Zen 3 unquestionably took the crown from Intel, including the last bastion for Intel CPUs which was gaming performance. Intel appears to be raising their prices for Alderlake to match AMD, and there's rumors that the next generation of GPUs from all three vendors will be even more expensive. Due to every player offering more expensive products, I think it's fair to say that the days of low margin are going to be behind AMD for the foreseeable future.
 

prtskg

Senior member
Oct 26, 2015
258
91
101
Yeah and it's expected to continue. I get that they want to pump their valuation before the Xilinx merger, but that's their entire quarter revenue's worth.

There's got to be a better place to put at least a portion of that cash. I'm sure there are plenty of software companies they could acquire that would help their gaming efforts, linux integration ... you name it
Since Xilinx purchase is going to happen through stocks, will AMD have to buy some % of stocks for that to happen? Those bought by AMD as a company will be given to Xilinx, right? A certain % can also be paid through increasing amount of stocks.
 

amrnuke

Golden Member
Apr 24, 2019
1,169
1,739
106
Since Xilinx purchase is going to happen through stocks, will AMD have to buy some % of stocks for that to happen? Those bought by AMD as a company will be given to Xilinx, right? A certain % can also be paid through increasing amount of stocks.
It's a share conversion - XLNX is purchased from each investor for (if it closed today) $211.86 worth of AMD stock. From an accounting standpoint it affects the books, but in real terms AMD isn't just shelling out the (current valuation) $52.3B.

(As an aside, and I am not providing investment advice -- at the current trading prices, if the acquisition goes through, the valuation of each XLNX share will increase 23% once they're converted to AMD shares. If that happens by the end of the year, that's a nice boost!)
 

TheELF

Diamond Member
Dec 22, 2012
3,424
443
126
i wouldn't be surprised if margin on consoles is like 30%.
But the thing about it is they contribute to overall R&D and pay for there own design , so its low risk , the only reason it looks so bad right now is because we are at a never seen before capacity squeeze.

if these types of squeeze continue into the future post COIVD expect future console negs to look quite different.
Yes in deed, if AMD asks for more money while intel comes out with Xe, big.bigger, with opening fab to 3rd party and with having a much better supply it might look very different but not necessarily in favor of AMD.
Intel might even swallow all the R&D money to develop a console SOC just to be a dick to AMD.
As long as they keep performance per core/thread and GPU performance the same there would be zero need to change anything else other than maybe some driver support.
 

Hitman928

Diamond Member
Apr 15, 2012
3,753
4,286
136
i wouldn't be surprised if margin on consoles is like 30%.
But the thing about it is they contribute to overall R&D and pay for there own design , so its low risk , the only reason it looks so bad right now is because we are at a never seen before capacity squeeze.

if these types of squeeze continue into the future post COIVD expect future console negs to look quite different.
I'd be surprised if the console chip margin is as high as 30%. It's probably more around 20%, but as you said, the up front R&D costs are largely paid for so AMD doesn't have to recuperate the development costs through the margins like they do for other chips.

If AMD hits their 4Q GM projections of 49.5%, they'll only be a few percent below Intel moving forward as they are projecting between 51% - 53% gross margins for the foreseeable future. The problem for Intel is they not only have to recuperate their chip R&D through their gross margins, but they have to pay for all of their fab R&D as well which is a huge expense. AMD doesn't have to do this as the fab R&D is paid for by TSMC. Nvidia is in its own league right now margin wise as they are at around peak Intel gross margins but again, without the need to pay for their own fab expenses.

AMD's gross margins are being held down by two things, console chips and a decent chunk of revenue still coming in from pre-Zen chips. Each quarter, less and less pre-Zen chips are made and more server revenue is brought in which is slowly growing their overall gross margin. Ryzen lines have great margins for them and Epyc margins are excellent, but with the supply crunch and contract commitments they have to fulfill with consoles and OEMs, they can only make so much of their higher margin parts with the current supply crunch. AMD is trying to increase supply and that supply will pretty much all go to Epyc at this point, but it will only be a small percent increase from their current volume as there just isn't the production capacity available to increase by any more. My projection is that once AMD moves (and actually ramps to volume) on 5 nm, you'll see a pretty big jump in both revenue and margins as their lead products will now be on 5 nm but they will still sell a ton of volume on 7 nm. Overall that will allow them to increase their volume significantly, especially for higher margin products.
 
Last edited:

Hitman928

Diamond Member
Apr 15, 2012
3,753
4,286
136
Yes in deed, if AMD asks for more money while intel comes out with Xe, big.bigger, with opening fab to 3rd party and with having a much better supply it might look very different but not necessarily in favor of AMD.
Intel might even swallow all the R&D money to develop a console SOC just to be a dick to AMD.
As long as they keep performance per core/thread and GPU performance the same there would be zero need to change anything else other than maybe some driver support.
AMD has a very good relationship with MS gaming dep't and Sony. Intel burned a bridge with MS with the original Xbox. Maybe it was long enough ago now that it's water under the bridge, but Intel doesn't exactly have the best reputation when it comes to deals like this. I would be shocked if Intel would be able to take the console business from AMD even if they wanted it (which I doubt they do). Maybe if Intel would promise them a certain amount of wafers on their most advanced node and that volume was significantly more than AMD could get through TSMC that could sway the console makers, but given the current state of things, I highly doubt Intel would be in a position to do this either.
 
Last edited:

Tuna-Fish

Golden Member
Mar 4, 2011
1,077
706
136
If not, then what a waste. Would be better off issuing dividends.
Why?

Dividends and stock buybacks are equivalent in every way except tax consequences, which currently favor buybacks for many investors. It's one thing to complain a company should have spent money for growth instead of returning it to the investors, but complaining about the method they did the latter is just incomprehensible to me.
 

TheELF

Diamond Member
Dec 22, 2012
3,424
443
126
AMD has a very good relationship with MS gaming dep't and Sony. Intel burned a bridge with MS with the original Xbox. Maybe it was long enough ago now that it's water under the bridge, but Intel doesn't exactly have the best reputation when it comes to deals like this. I would be shocked if Intel would be able to take the console business from AMD even if they wanted it (which I doubt they do). Maybe if Intel would promise them a certain amount of wafers on their most advanced node and that volume was significantly more than AMD could get through TSMC that could sway the console makers, but given the current state of things, I highly doubt Intel would be in a position to do this either.
Why would consoles need the latest node? They didn't even get the latest ZEN gen when it was already out.

If intel needs customers for their new fab business, even if it is just to advertise with them, then they might just do it(agree to a low price) for that alone.
Also intel could do a 2C/6c CPU and increase gaming performance due to much much higher single thread, that would be relatively cheap for intel and even on 14nm it would be good enough since the e cores would use much less power than full cores, if the Xe could keep up it would be a good package.


Intel burned a bridge with MS with the original Xbox.
Why, because they did supply the CPU in as large a quantity as MS asked for?
Maybe some engineers are still sour about it because they planned everything for AMD but why would MS as an company care?
Also everybody seems to think that wintel is a thing and that would be a, by far, bigger bond and then there is xbox as an service because that's where MS seems to be steering towards, everything running on windows on mostly intel systems anyway.
 

ASK THE COMMUNITY