Real Money’s Eric Jhonsa covers AMD’s second-quarter earnings report and conference call with management.
AMD bulls are hoping share gains and cloud momentum will more than offset any headwinds from softening consumer tech spending as the company reports on Tuesday afternoon.
Among analysts polled by FactSet, the consensus is for AMD to report Q2 revenue of $6.53 billion (up 70% annually due to both organic growth and the Xilinx acquisition) and non-GAAP EPS of $1.03.
AMD typically provides quarterly and full-year sales guidance in its reports. The company’s Q3 revenue consensus stands at $6.84 billion, and its full-year revenue consensus stands at $26.21 billion (roughly matching the company’s May 3 guidance for approximately 60% full-year sales growth, or mid-30s growth on an organic basis).
Eric Jhonsa, Real Money’s tech columnist, will be live-blogging AMD’s Q2 report, which is expected after Tuesday’s close, along with an earnings call scheduled for 5 P.M. Eastern Time.
Please refresh your browser for updates.
4:50 PM ET: Thanks to the Xilinx deal, AMD recorded $1.02B worth of amortization expenses related to acquired intangible assets during Q2. That was one reason GAAP EPS came in at just $0.27 (non-GAAP EPS was $1.05).
4:42 PM ET: R&D spend accounted for more than 2/3 of AMD’s Q2 operating expenses: Due to both organic spending growth and Xilinx/Pensando, it totaled $1.3B on a GAAP basis in Q2, up from $659M a year earlier.
GAAP marketing and G&A spend totaled $592M, up from $341M a year ago.
4:38 PM ET: As a reminder, AMD’s earnings call is set to start at 5PM ET. I’ll be covering.
4:36 PM ET: Due to both organic spending growth and Xilinx/Pensando, AMD’s non-GAAP operating expenses rose 72% Y/Y to $1.56B, matching its guidance.
For Q3, AMD is guiding for non-GAAP opex of $1.64B.
4:34 PM ET: AMD’s Q2 segment numbers. All four segments were solidly profitable in Q2. Embedded (mostly Xilinx) has the highest op. margin, followed by Data Center (driven by Epyc CPU sales). Gaming has the lowest op. margin.
4:30 PM ET: Nvidia’s shares are down 1.4% AH following AMD’s report. Intel, which has hammered post-earnings last week due to disappointing results/guidance, is up 0.3%.
4:28 PM ET: AMD spent $920M on buybacks in Q2. That compares with $1.9B worth of buybacks in Q1.
The buyback spend nearly matched Q2 free cash flow of $906M. AMD ended Q2 with $6B in cash and $2.8B in debt.
4:24 PM ET: AMD’s Q2 slide deck is up. Here’s the company’s formal guidance.
4:20 PM ET: Shares are now down 3% AH. The Q3 guide seems to be weighing on shares, but many investors are likely pleased to see the full-year guidance reiteration. Earnings call commentary about the puts and takes behind AMD’s sales guidance (presumably, softer PC demand is a headwind) will be closely watched.
4:17 PM ET: Overall, revenue rose 70% Y/Y due to both organic growth and Xilinx. The Q3 ($6.7B, +/- $200M) guide implies ~55% revenue growth.
Separately, AMD previously indicated its guidance for ~60% full-year growth (just reiterated) implies mid-30s organic revenue growth.
4:15 PM ET: Q2 revenue by segment:
Data Center +83% Y/Y to $1.5B
Client +25% to $2.2B
Gaming +32% to $1.7B
Embedded +2228% (due to the Xilinx deal) to $1.3B
Data Center revenue includes some contributions from Xilinx and Pensando. But the lion’s share of the revenue comes from AMD’s server CPUs and GPUs.
4:10 PM ET: Q2 non-GAAP gross margin was 54%, up 640bps Y/Y and in-line with guidance. AMD also expects a ~54% GM in Q3 and reiterates guidance for a ~54% full-year GM.
4:08 PM ET: AMD guides for Q3 revenue of $6.7B, below a $6.84B consensus. However, it reiterates full-year revenue growth guidance of ~60% .
Shares are down 4.8% after-hours.
4:06 PM ET: Results are out. Q2 revenue of $6.55B is slightly above a $6.53B consensus. Likewise, non-GAAP EPS of $1.05 is slightly above a $1.03 consensus.
4:05 PM ET: With markets on edge about PC and graphics card demand, any commentary shares about demand trends for its PC CPU and gaming GPU businesses will get close attention.
On the flip side, all signs indicate server CPU demand from cloud giants (the proverbial hyperscalers) remains healthy. And AMD has indicated it expects game console SoC orders to remain strong into 2023.
4:00 PM ET: AMD closed up 2.6%. The Q2 report should be out soon.
3:57 PM ET: The Q2 report will be the first one to feature AMD’s new (post-Xilinx-acquisition) reporting structure. Sales will now be broken out into 4 segments: Data Center, Client, Gaming and Embedded.
3:55 PM ET: AMD shares are going into earnings down 31% YTD, amid broader tech-stock selling pressure. But they have rallied a bit in recent weeks, and are up 2.8% today to $99.47 ahead of earnings.
3:51 PM ET: AMD tends to report a little after the market’s close. The Q1 report was posted at 4:10 PM ET.
3:49 PM ET: The FactSet consensus is for AMD to report Q2 revenue of $6.53B and non-GAAP EPS of $1.03.
AMD’s Q3 and full-year sales guidance will get close attention. The Q3 revenue consensus is $6.84B, and the company guided in May for ~60% full-year sales growth. This outlook was reiterated at AMD’s June analyst day event.
3:46 PM ET: Hi, this is Eric Jhonsa. I’ll be live-blogging AMD’s earnings report and call.
