As Q1 earnings season continues to roll along, on deck today is AMD, who is getting the privilege of reporting some very positive earnings for the first three months of 2021. Firing on all cylinders – CPU, GPU, and semi-custom – AMD’s numerous product launches over the last several months are now paying major dividends for the company, as everything AMD is in high demand. And indeed, AMD is the poster child for the current chip crunch, as the company is making everything it can and even after selling over 3.4 billion dollars’ worth of chips in Q1, it’s still not enough.

For the first quarter of 2021, AMD reported $3.45B in revenue, making for another staggering jump over a year-ago quarter for AMD, when the company made just $1.79B in what was their best first quarter in a decade. For 2021 it’s now all about setting (and beating) records for the company, as evidenced by the 93% leap in year-over-year revenue.

AMD’s big run-up in revenue is also reflected in the company’s other metrics; along with that revenue AMD’s net income has grown by 243% year-over-year, now reaching $555M. And if not for an unusual, one-off tax benefit for AMD last quarter, Q1’21 would be AMD’s most profitable quarter ever – and indeed is on a non-GAAP basis. Meanwhile AMD’s gross margin is holding at 46%, steady versus Q4 and up one percentage point versus the year-ago quarter.

AMD Q1 2021 Financial Results (GAAP)
  Q1'2021 Q1'2020 Q4'2020 Y/Y Q/Q
Revenue $3.45B $1.79B $3.2B +93% +6%
Gross Margin 46% 46% 45% Flat +1pp
Operating Income $662M $177M $570M +274% +16%
Net Income $555M $162M $1781M* +243% -69%
Earnings Per Share $0.45 $0.14 $1.45 +221% -69%

One more the flag bearer for AMD is their Computing and Graphics segment, which encompasses their desktop and notebook CPU sales, as well as their GPU sales. That division booked $2.1B in revenue for the quarter, $662M (46%) more than Q1 2020. Accordingly, the segment’s operating income is (once more) up significantly as well, going from $262M a year ago to $485M this year.

As always, AMD doesn’t provide a detailed breakout of information from this segment, but they have provided some selective information on revenue and average selling prices (ASPs). Overall, client CPU sales were quite strong; according to AMD Ryzen processor sales are up overall, as are ASPs, on both a quarterly and yearly basis. The big wins appear to be coming from premium devices such as ultra-thin laptops and gaming devices, especially as notebook revenue is up once again, setting a sixth consecutive record for AMD. On which note, according to AMD their Ryzen 5000 mobile (Cezanne) revenue has ramped up twice as fast as the mobile 4000 series (Renoir), underscoring AMD’s continuing push into mobile.

Meanwhile the company is reporting similarly good news from their GPU business. Sales and ASPs are up due to the launch and ongoing sales of various Radeon RX 6000 products. Overall, AMD’s Radeon RX 6000 revenue has more than doubled versus Q4, as the company scrambles to make as many GPUs as it can in a very GPU-starved market.

AMD Q1 2021 Reporting Segments
  Q1'2021 Q1'2020 Q4'2020
Computing and Graphics
Revenue $2100M $1438M $1960M
Operating Income $485M $262M $420M
Enterprise, Embedded and Semi-Custom
Revenue $1345M $348M $1284M
Operating Income $277M -$26M $243M

Meanwhile AMD’s Enterprise, Embedded, and Semi-Custom segment has seen an explosion of growth of its own over the past year, thanks to the launch of AMD’s third-gen EPYC (Milan) processors, as well as the 9th generation consoles. This segment of the company booked $1.35B in revenue, $997M (286%) more than what they pulled in for Q1’20. It’s such a strong performance that it’s even up on a quarterly basis, more than offsetting the usual seasonal decline in semi-custom sales that occurs in Q1.

The big jump in revenue also means that the segment is well into the black on an operating income basis, a major improvement over Q1’20 where AMD lost money on the segment. $277M on $1345M in revenue is not quite as strong as what AMD’s computing segment pulls off, but this is a long-standing artifact of bundling AMD’s low-margin semi-custom business with its high-margin (and ever increasing) enterprise CPU business.

Overall, semi-custom sales were down slightly for Q1’21 versus Q4’20 (“by a single digit percentage”), which was more than offset by increased EPYC processor sales, thanks to the launch of AMD’s third-generation (Milan) EPYC processors. On the latter, AMD had another record quarter, as EPYC processor sales have more than doubled on a year-over-year basis and a “double-digit percentage” on a quarterly basis.

On a side note, if there’s any single metric in AMD’s latest earnings announcement that underscores just how much things have turned around for a company that nearly went bankrupt half a decade ago, it’s the company’s cash balance: AMD is sitting on $3.1B in cash, cash equivalents and short-term investments. Conversely, long-term debt is down to $313M. At this point AMD is in a stronger financial position than they ever have been before.

Looking forward, AMD’s expectations for the quarter and for the rest of the year are as equally lofty as the preceding quarters. Demand for AMD chips still outpaces supply in most segments thanks to the ongoing chip crunch and substrate supply issues, so AMD has yet to fully tap the current market, let alone prepare for any further growth in product demand. Consequently, AMD is projecting some very rosy figures for Q2’21 and for the full year. The company expects to book $3.6B (+/- $100M) in revenue for Q2, which if it comes to pass will be an 86% jump over Q2’20. Meanwhile AMD has revised their full year 2021 projections, and are now expecting total revenue to increase by 50% versus their $9.8B FY2020.

As for AMD’s product lineup, while the company is now decidedly early-to-mid cycle on its CPU products, today’s earnings release does have some interesting GPU news. First up, AMD is still in the middle of launching its complete Navi 2x stack of GPUs and associated video cards. Along with continuing that launch on the desktop, the first mobile Radeon RX 6000 products are slated to launch later this quarter. And in the HPC space, AMD is expecting to ramp their next-generation Radeon Instinct products in the second half of the year, which will be going into the forthcoming Frontier supercomputer, among other projects.

Source: AMD

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  • mode_13h - Thursday, April 29, 2021 - link

    It's a good question, but it applies to almost everyone, right now!
  • Farfolomew - Friday, April 30, 2021 - link

    It applies to everyone a little bit, sure. But AMD was always going to run into a massive bottleneck in 2020 with the new consoles, new Radeon, new mobile Ryzen (4000 parts), and new Zen3 all being produced on TSMC 7nm. This was a logjam coming well before COVID hit.

    Ian recently did a piece where he predicted AMD needed to buy ~60k wafers from TSMC just to produce the PS5 CPUs alone. Add X-Box SOCs into that and that's like well over 100K wafers. If the demand for those dry up and they can divert those wafers to Ryzen/Radeon silicon, it will be very exciting to see how it affects the market vis a vis Intel and NVidia product costs.
  • mode_13h - Saturday, May 1, 2021 - link

    Is it AMD buying them, or Sony & MS? Either way, I doubt it comes out of some "AMD allocation".
  • yeeeeman - Thursday, April 29, 2021 - link

    Amd is in a weird situation where they are too small for such a big success.
  • Linustechtips12#6900xt - Thursday, April 29, 2021 - link

    Nah its just circumstantial or however u spell that
  • mode_13h - Thursday, April 29, 2021 - link

    If they re-invest it wisely and make smart acquisitions, they'll do fine.
  • Farfolomew - Friday, April 30, 2021 - link

    I kind of agree; they have arguably the best product in the market, but can't produce it. Imagine if Apple touted their latest and greatest iPhone with world-class silicon, but no one could buy it. Say what you will about Apple and Intel, but I never worry about not being able to buy their products.
  • mode_13h - Saturday, May 1, 2021 - link

    > they have arguably the best product in the market, but can't produce it.

    Uhhh... yes they sure can! What they're struggling with is keeping up with demand. That's different, even if it feels the same to a would-be customer.

    > Say what you will about Apple and Intel, but I never worry about not being able to buy their products.

    Have you been under a rock? Over the past few years, Intel has had massive availability problems off-and-on, and from top-to-bottom of their product stack! At one point, Intel's Cascade Lake Xeons were so backordered that they actually told their sales channel to recommend customers buy AMD EPYC!! That's insane!

    By comparison, Apple's availability hiccups are more minor and limited, but their products have gotten backordered at launch, on several occasions. I'm not an Apple fan, so it could be the case that they've gotten those issues all sorted out, but it's also the case that a new iPhone model is no longer a must-have, the way they once were.
  • Tom Sunday - Tuesday, May 11, 2021 - link

    A few of us last year dumped a lot of their 401K, RMD's and hobled together available cash laying around into AMD. Cashing in big time also thanks to the many AMD fans stretched around the many tech-sites. Happy times and virtually doubling our money in about 8-months time. Now I would hate to see AMD stock going over $100 a share. Which I believe with Alder Lake coming to this 2021 theater soon will be a hard reach given the lingering AMD product maturity, technical and badly executed production problems. Wall Street already calling it unsurmountable AMD headwinds. With this I wonder if Intel in their 2022 4th quarter earnings report will afford us another grab at quick cash? Or for me a low milage cash-grab for a Mercedes AMG GT and another Breitling Super Chronomat? Hope that my ship will come in again!
  • mode_13h - Tuesday, May 11, 2021 - link

    Enjoy feeling like a genius, because you won't be right every time. I'm glad the "few of you" didn't lose big chunks of your 401(k)'s.

    As you can probably guess, I've lost money buying individual stocks. However, the main thing that taught me is that I don't have the patience or passion to develop a genuine aptitude for it. And while aptitude is no guarantee of success, the lack of it is a recipe for failure.

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