As a part of this morning’s announcement from AMD that the corporate can be shopping for FPGA maker Xilinx for $35 billion in inventory, the corporate additionally launched its Q3 earnings report alongside the buyout information. An atypical earnings launch to say the least, an early-morning launch allowed AMD buyers and others to get a have a look at the very newest in AMD’s financials whereas additionally digesting the choice to make use of the corporate’s sizable market capitalization to purchase one other firm – and finally to assist AMD justify why they’re in such a very good place now to make the transaction. Coming on the heels of a document Q2 for the corporate, AMD closed out the third quarter of the 12 months setting income information as soon as once more all of the whereas trebling its income.
For the third quarter of 2020, AMD reported $2.8B in income, a 56% bounce over the identical quarter a 12 months in the past. As a consequence, AMD has as soon as once more set new income information for the corporate, posting each their greatest Q3 ever, and their greatest single quarter interval. Driving this was additional development in each of AMD’s main segments, with every little thing from client CPU gross sales to EPYC and semi-custom gross sales reported as being on the rise.
| AMD Q3 2020 Financial Results (GAAP) | |||||
| Q3’2020 | Q3’2019 | Q2’2020 | |||
| Revenue | $2.8B | $1.8B | $1.93B | ||
| Gross Margin | 44% | 43% | 44% | ||
| Operating Income | $449M | $186M | $173M | ||
| Net Income | $390M | $120M | $157M | ||
| Earnings Per Share | $0.32 | $0.11 | $0.13 | ||
Most eye-popping, maybe, has been AMD’s web revenue, which greater than trebled over the year-ago quarter. For Q3’20, AMD booked $390M in GAAP web revenue, a 225% enhance that dwarfs the $120M they took residence at this level final 12 months. Even on a quarterly foundation AMD’s revenues and income have been up considerably throughout the board, with AMD once more greater than doubling its web revenue versus Q2. In reality the one side of AMD’s financials not exhibiting vital development in the mean time is AMD’s gross margin, which at 44% is simply up 1% over final 12 months. According to the corporate, GM development is being restricted by comparatively low margin semi-custom gross sales, with the PS5/XSX ramp-up counterbalancing the rise in CPU gross sales.
Breaking down the numbers by phase, AMD’s Computing and Graphics phase loved a robust quarter based mostly largely on a rise in Ryzen processor gross sales. Overall the phase booked $1.67B in income, which is up 31% over the year-ago quarter. Carrying the phase have been sizable will increase in each AMD’s desktop and pocket book CPU shipments, with AMD reporting double-digit development in each and setting a brand new document for pocket book processor shipments. AMD’s graphics division was the odd man out, nonetheless; the run-up to the RX 6000 sequence implies that graphics income was down versus Q3’19.
| AMD Q3 2020 Computing and Graphics | |||||
| Q3’2020 | Q3’2019 | Q2’2020 | |||
| Revenue | $1667M | $1276M | $1367M | ||
| Operating Income | $384M | $179M | $200M | ||
As for product common promoting costs (ASPs), AMD is reporting that each consumer processor and graphics ASPs have taken successful on a yearly foundation. Graphics ASPs have been down as a result of AMD’s current-generation RX 5000 merchandise approaching the tip of their lifecycle, whereas CPU ASPs declined as a result of larger gross sales of cell chips, which have a tendency to hold decrease costs. Both of those ought to change for AMD within the subsequent quarter, because the launch of Zen three and the Radeon RX 6000 sequence will put a contemporary spherical of merchandise in the marketplace that may fetch larger costs.
Meanwhile, AMD’s Enterprise, Embedded, and Semi-Custom phase noticed one other better quarter with Q3, with shipments of every little thing from EPYC processors to console SoCs on the rise. With the previous, AMD has continued to develop its market share within the server area, and on the…
