AMD posted its Q2 earnings report this morning, shattering records and sending shares sky-high. The overall revenue for Q2 2020 was up by 26% to $1.93 billion (from $1.53B) YoY and 8% compared to last quarter. The operating income increased from $59 million to $173 million YoY while the net income also saw a massive boost, going from $35 million to $157 million YoY. The earnings per share grew by more than 4x to $0.13 from just $0.03 in Q2 2019.
| AMD Q2 2020 Financial Results (GAAP) | |||
|---|---|---|---|
| Q2’2020 | Q2’2019 | Q1’2020 | |
| Revenue | $1.93B | $1.53B | $1.79B |
| Gross Margin | 44% | 41% | 46% |
| Operating Income | $173M | $59M | $177M |
| Net Income | $157M | $35M | $162M |
| Earnings Per Share | $0.13 | $0.03 | $0.14 |
As usual, the bulk of the revenue came from the Computing and Graphics Division. This includes sales of mobile and desktop CPUs as well as GPUs. Compared to last year, the revenue was up by a massive 45% (YoY) while the operating income increased from just $22 million to $200 million, an increase of nearly 10x!
| AMD Q2 2020 Computing and Graphics | |||
|---|---|---|---|
| Q2’2020 | Q2’2019 | Q1’2020 | |
| Revenue | $1367M | $940M | $1438M |
| Operating Income | $200M | $22M | $262M |
Compared to last fiscal, both the revenue and operating revenue were slightly lower as users braced for the launch of the newer Zen 3 and Navi 2x GPUs in the coming months. Regardless, it’s the Radeon Technologies Group (RTG) that was responsible for the quarterly drop in revenue. Although AMD didn’t break down the individual figures, it was noted that the average selling price (ASP) was down on both a YoY as well as quarterly bases due to lower channel sales. While the latter is justified, it’s quite surprising to know that the yearly ASP dropped for RTG as well.
| AMD Q2 2020 Enterprise, Embedded and Semi-Custom | |||
|---|---|---|---|
| Q2’2020 | Q2’2019 | Q1’2020 | |
| Revenue | $565M | $591M | $348M |
| Operating Income | $33M | $89M | -$26M |
Lastly, the Enterprise, Embedded and Semi-Custom Division also had a decent Q2, even though the yearly revenue dropped by quite a bit. That was made up for by the increase in quarterly revenue, most notably the operating income which went from -$26 million to $33 million. In comparison, the Q2 2019 operating revenue was about 3x as much at $89 million.
In terms of the market share, AMD finally managed to capture a double-Digit figure market share in the server market, thanks to a increase of 2x in the YoY revenue from the sales of Epyc CPUs.
The overall drop in revenue for the division came from lower sales of semi-custom devices including consoles and embedded systems. With the launch of the next-gen Xbox One X and PS5 consoles later this year, these figures should increase significantly for Q3 and Q4.
As for the Q3 earnings outlook, AMD is expecting an increase of 32% in revenue YoY and a gross margin of around 45%. The impending launch of the Ryzen 4000 “Vermeer” CPUs paired with the RDNA 2 based Navi 2x GPUs should help consolidate its position in both the consumer and server markets. Both lineups are expected to launch in Q4 2020.
