AMD Conference Call CEO Prepared Remarks

AMD's CEO, Dr. Lisa Su, started the financial call with the following report:

2019 marked another major milestone in our multi-year journey. We delivered record annual revenue of $6.73 billion and significantly increased both gross margin and net income as we successfully introduced and ramped the strongest product portfolio in our 50-year history. We grew client and server processor annual revenue by $1.5 billion in 2019, driven largely by the strong demand for our 7nm Ryzen and EPYC processors powered by our “Zen 2” processor core. Looking at the fourth quarter, we ended the year very strong with quarterly revenue increasing 50 percent year-over-year to a record $2.13 billion while also significantly increasing net income.

Computing and Graphics Segment

Fourth quarter revenue increased 69 percent year-over-year to $1.66 billion. Ryzen processor adoption accelerated sharply in 2019, helping to drive significant double-digit percentage increases in client processor annual unit shipments, ASP and revenue. We ended 2019 with our highest quarterly client processor unit shipments in more than six years based on strong demand for Ryzen desktop and mobile processors. In desktop, we had a very strong holiday period as our 2nd and 3rd generation Ryzen processors consistently held top sales spots at the largest global etailers and retailers. We launched our Ryzen 3950X processor and the 24 and 32 core versions of our 3rd generation Ryzen Threadripper processors in November. Our 16-core Ryzen 3950X processor is the world’s fastest mainstream desktop processor, while our latest Threadripper CPUs offer unmatched performance for the high-end desktop market. In January, we expanded our leadership position in the HEDT market with the launch of our flagship 64-core Ryzen Threadripper processor which is the world’s highest performance desktop processor.

In mobile, we had our eighth straight quarter of strong double-digit percentage year-over-year revenue growth as we expanded the number of AMD-powered laptops available from major OEMs. We began shipping our Ryzen 4000 mobile processors powered by our “Zen 2” core at the end of the fourth quarter. These new processors double the performance-per-watt of our prior generation and deliver leadership single threaded, multithreaded and graphics performance for thin and light notebooks, while enabling the industry’s first ultrathin laptops with 8 cores. Initial systems featuring the Ryzen 4000 processors are expected to launch later this quarter and more than 100 AMD-based consumer and commercial laptops are planned for 2020 from Acer, Asus, Dell, HP, Lenovo and other major OEMs.

In graphics, fourth quarter unit shipments grew by a strong double-digit percentage year-over-year, driven by sales of our Radeon RX 5000 series GPUs featuring our new RDNA architecture. We further expanded our portfolio of RDNA GPUs with the introductions of the 5500XT and 5600XT desktop graphics cards, highlighted by strong third-party reviews that clearly establish the 5600XT as the most powerful gaming GPU available for under $300. We launched our RadeonTM 5000M mobile GPUs in the quarter as well, and we are seeing solid design win momentum based on their strong performance and power efficiency. The first laptops powered by the new GPUs are available now – including the recently updated Apple MacBook Pro – and we expect many more notebooks featuring our Radeon 5000M GPUs to launch throughout 2020.

Data center GPU revenue increased sequentially driven by cloud VDI and game streaming deployments. We announced a major update to our open source GPU computing software stack in the fourth quarter featuring performance optimizations, expanded development tools and support for the most popular machine learning frameworks. We continue making strategic software investments to make it easier for developers to tap into the full capabilities of our Radeon Instinct accelerators for HPC and AI applications. For the year, data center GPU revenue grew by a strong double-digit percentage as we continued to make progress growing our presence in this important part of the market.

Enterprise, Embedded and Semi-Custom Segment

Revenue of $465 million increased 7 percent year-over-year as EPYC processor revenue growth offset declines in semi-custom revenue. Semi-custom sales continued to soften in the quarter in advance of the next-generation console launches from Sony and Microsoft planned this year. For 2020, we expect first quarter semi-custom revenue to be negligible and the ramp of next-generation semi-custom products to start in the second quarter with revenue to be heavily weighted towards the second half of the year.

In server, revenue grew by a strong double-digit percentage as unit shipments and ASP increased sequentially driven by demand for our 2nd Gen EPYC processors. Our 2nd gen EPYC processors are ramping significantly faster than the first generation as we see particularly strong pull for our higher core count models where our performance and TCO advantages are the most significant. Cloud adoption with the largest providers continues to accelerate, driven by the expanding use of EPYC processors to power their critical internal workloads as well as a significant increase in the number of AMD-powered instances publicly available. Shipments to cloud providers increased sequentially by a significant double-digit percentage to support expanding buildouts at Amazon, Google, Microsoft, Oracle and Tencent. Microsoft announced the availability of four new virtual machines and AWS announced two new EC2instances powered by 2nd Gen EPYC processors. In the enterprise, Dell began shipping their full portfolio of servers powered by our latest EPYC processors. We have doubled the number of EPYC processor platforms in market to more than 100 offerings in the quarter. These new platforms are driving increased enterprise customer engagements, broadening our sales pipeline considerably. In HPC, we secured multiple large wins in the quarter based on our unmatched performance and scalability, highlighted by French, German and UK national supercomputing center deployments as well as the San Diego Supercomputing center.

We are pleased with the significant traction and momentum in our server business and remain on track to achieve our goal of double-digit percentage unit share by mid-year based on the growing demand for our 2nd Gen EPYC processors.

Summary

I am very proud of our 2019 accomplishments as the successful ramps of our latest Ryzen, Radeon and EPYC processors resulted in record annual revenue and substantial increases in gross margin and net income. I want to take a moment to recognize the more than eleven thousand AMDers around the world whose focus and determination enabled us to achieve these results.

We enter 2020 well positioned to continue gaining share across the PC, gaming and server markets based on having an unmatched portfolio of leadership products spanning from desktops to laptops, data centers and game consoles. With more than twenty 7nm designs in production or development, we are very excited about our next wave of products that can accelerate our growth in 2020 and beyond.

We are still in the early stages of our journey and remain focused on meeting our commitments as we establish AMD as the high-performance computing and graphics leader.

AMD's FY2019 Financial Report AMD Conference Call CFO Prepared Remarks
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  • TheJian - Sunday, February 2, 2020 - link

    LOL. It means a lot. Not everything as there are a TON of numbers you should be looking at if you're serious or care about losses. The PE today tells me run for the hills with a bad year prediction that won't drop it. They should be at ~65 PE today with this Q report, and heading for teens with next Q or two as they ramp higher margin stuff (64c hedt/servers will do it). But it looks like they may be planning ramps of console crap instead of REAL chips ;) So single or barely double digit crap instead of REAL margin products that make REAL NET INCOME. TTM of 200m NET on 6B Rev in your best product year in a decade should have all of management fired...LOL. Your $500 console isn't worth squat compared to a 7K chip (even that massively priced wrong), so why do you keep chasing poor people AMD?

    Stop reading tech sites for stock analysis. READ STOCK sites. Problem solved. Make sure it's not just some dumb contributor (like me getting paid nothing, knowing nothing about me?...LOL Trust but VERIFY everything in money), instead of someone REAL with credentials and years of a record you can look at. If you want to make money in semi, you should probably have access to something like JPR/MPR or you will be doing a lot more work than needed (or translate a lot of asian stuff). 100K in NVDA today will get you 20K free in the next year. JPR at $5K is cheap if you do it with a few people from say, your work, who also trade stocks or MPR for a year at $1500 ($375 split 4 ways with co-workers). Never mind if you knew what you were doing a few years ago and bought at ~12-22 like we did (but ran way early...ROFL)...Heck nvida was $150 in the last 6 months multiple times and over 1/2 off a year ago again. PE and a few other numbers are all you needed to run at the highs ~year ago. NVDA/MU/AMD should all be stocks people run in and out of every few years if numbers allow it. They all basically long term channel all the time. Between the 3 of them you can be in or out of something making wads yearly. They usually don't all run in tandem for more than a short period of time. Look at a 5yr-10yr chart on all of them. If you're reading tech sites (product into) and stock sites (reports etc!), it is easy to make money on these and many more every few years in not yearly (they all have cycles to some extent easily seen. and they all have hype stories too). IE, NV about to release new gen on new fab tech and profit already reversed and will likely reach old net levels this Q and set records from here on for a bit at least (AMD has to answer with big navi and win or no stopping the train). If you thought it was worth $290 before it's not hard to see $300 coming this time. I'll say likely more in a few weeks probably as I do expect a record, but wouldn't be on it this time. The next Q will have 3 months of 7nm in it probably (piling up launch chips now no doubt), and we will see a record for net income. I'll be shocked if we don't see $300 by Q1 or before next year (I expect more, but will wait for product info before saying buy on that). Only a war or nature can derail this IMHO.

    Watch for NV's PE to go to teens shortly as NET income goes back to records. I predict a record for the quarter after next (if not this coming Q). Sell AMD (last week...LOL) and buy NVDA. Collect 20%+ in a year or less. You're welcome. AMD will lose to whatever NV puts out on 7nm watt/heat/noise and perf wise, so clear for a year from NVDA. Intel not on the map until maybe rev 3. Rev 1 Intel is already dead on arrival...LOL. See linus facepalm vid recently about their gpu. Raja is not capable of making a gpu that beats NV engineers (or money?, both?). AMD keeps choosing HBM which kills every big consumer card margin also. If you choose expensive and useless, you make nothing. NV went GDDR5x and rockets to record quarters because it was EASY to make, in quantity, and fast enough for victory without risks of shortages or costs! SMART. AMD should not be using HBM unless the product actually warrants the use for REAL. If the competition is beating you with cheaper stuff you're doing it wrong (stop using HBM on anything consumer!). Repeating said mistake should=FIRED.

    Again, not saying PE is everything, just one of many things you should be looking at. If you think it is absolutely meaningless, you should not be buying stocks. You only need a few numbers with that PE in this case to tell you RUN like mad from AMD (for a while? LOL), they don't deserve current valuation with future predictions they made for a year! In a year I'll be wondering why you are at 200+PE still apparently. I'll have to see if the next round of products are priced FAR better before I go back into AMD. If they had not priced so dumb for the last year, this whole report would have been massively different and so would the PE, and the stock would not dive on your Q report.

    It moves for a reason, lots of them if you know what you're looking at and it isn't hard to predict given all the data you have per Q on companies today (and their competition). I'm reading text not even in my language much of the time for shipping info, fab info, etc etc. You can literally read to death on any stock these days. If you pick badly today 90% of the time it's lack of homework. No trailing stop on NVDA for a while (290? maybe then depending on AMD response to NVDA march gpus) :) I expect 7nm to push NV well above 1.2B net for a Q shortly, and that will cause $300 on that report or weeks after. Nothing to stop new records coming and teens PE ratio. AMD on the other hand, all baked in, according to themselves. You can see it in the questions too...But, but, margin, uh, er, console, uh, all new products, uh, what, why, how...uhmmm....? Where 1B Q net? NV pulls 1B a quarter now on GPU only (tegra makes nothing still), do the math on AMD. You are pricing wrong. NO, looking at Intel, market share for all, you are retarded AMD. The guy should have just asked if you are mentally handicapped or something yammering "how could you F this up?" as he walks off. :) Fire your "modeler" for pricing. Revenue up 30% next year, but pricing? You added 2B in revenue the last 2yrs and gained nearly NOTHING in NET INCOME. Last 3yrs and TTM 209m last 3yrs 337,000, 43,000, -497,000. Why the drop TTM? Aren't you ramping all your new stuff? WTF?

    I'm going to have to see some price hikes at this point or the next rev pricing leaked. I feel like they'll be worth current value (well, last weeks value) in a year. So not much point in the next 12 months when I can make 20% in NV easily etc. Maybe I change that opinion as we find out what is going to happen with apple's share of TSMC 7nm silicon in more details. Sold most MU until the Q report too. If they don't guide much higher (back to old levels) they will get hit on the report for a recovery that STILL hasn't come quite yet. It's coming (mass profits again) but you can only promise and not deliver a few times before they make you pay even if the reality is changing just around the corner. Big fund managers do this on purpose every chance they get and jump right back in after they tank it and force small runs on a stock so to speak. Long termers like me just ride that crap out usually.

    Sorry to disappoint you. I have never worked in fast food. That is a job for teenagers, illegals and people with no skills.

    You don't seem to understand what a stockholder is. Naked rage? Weirdo? Raping their customer would be charging massively more than the competition. In this case we literally have the ceo saying they are charging below market value. You are a retard if you don't get the point here.

    You don't seem to understand "what the market will bear" and that it is exactly what ALL companies are trying to guess if run by good management. If you are "raping" your customers, by definition you would not SELL a product to many people correct? Only the people who could “afford” to get raped would buy correct? It sounds like you are just sad you're poor and a probably working in fast food and have to beg for cheaper prices :) Start following my stock advice and you'll get FREE PC parts. Like the guy with the FREE CAR in this comment section. He's not complaining about the cpu prices, as it's free anyway along with his next 6 cars apparently (nice work!). Why are you still paying for parts? LOL.

    IE, if Intel was raping customers, they would not set record quarter after record quarter correct? I mean, who buys rape? You don't seem to understand the point of owning stock...ROFL.

    Wow, no point in calling you ignorant. You are straight up stupid. You think I'm weird for commenting ABOUT the stock, on a stock report mind you, while YOU just attack me and act like the article and the data I put out doesn't even exist :) Don't think you're stupid? OK. Yeah, stupid is, as stupid does. But I just believe you're stupid period :)

    Someone like you leads to 20T in debt. Someone like me leads to profit, as close to what they market will bear as I can get :) PERIOD. That is your job as a company leader. The market should dictate how "NICE" you need to be, not your dumb CEO. I didn't say rip people off, I said charge what you are WORTH or change your product mix. You are just too dumb to get it.

    Dumping junk is not ripping people off. Switching to a higher margin mix is just good business if silicon is short. Stop working at a fast food joint and none of these prices are raping you. I can afford Titan's every year (waste of money, but I can) and I'm not rich; at least not my definition of it anyway. Do you buy stock to lose money? Again, stupid. At least learn to debate:
    Google paul graham's hierarchy of disagreement. Wake me when you learn to debate.
    https://en.wikipedia.org/wiki/Paul_Graham_(program...
    For the lazy among us, and fast food managers too. Ah wait, they are by definition lazy, as in too lazy to find better work or skills. I want to be a fast food manager when I grow up...Said nobody.

    You're giving smart people a bad name...Wait, you didn't claim to be one. OK, all forgiven. So no comment on the data then...Your loss if you ignore it. I lobbed a grenade to see if anyone could stop it from blowing up, yet you didn't get it. Consider my post a trump tweet, or "trial balloon" against my data. He floats a balloon to start a conversation about important stuff, then moves to where he really wanted us to go to begin with as people get it. Smart traders realize what just happened (hopefully gain insight from it, good or bad). Thanks to all for removing any FUD I had about selling...LOL. If you follow my posts (here and elsewhere, stock sites etc), you have been making money time after time. PERIOD.

    Jeez, we have presidential candidates (and all fake news, MM) calling the current president a nazi, racist, murderer, comparing him to actual mass murderers, and every other name in the book, unfit for office and on and on. All of this despite the highest economy ever, lowest unemployment for all, highest stock market ever, TWO trade deals nobody could get done, moved embassy, recognized Israel, fighting Iran/China/Russia with ECONOMY rather than war etc etc. But you have a problem with harping on dumb CEO's when a bad report warrants it (I'm not alone, it went down for a reason)? ROFLMAO. SJW's crack me up. For the record though, I'd rather trump make everyone pissed and America rich (I get richer then too), than make everyone happy and USA broke so you can feel good as I couldn’t care less about your feelings. Need a safe space now? LOL. So tight (WTF? So 12yr old) to see all these SJW's attack me and have NOTHING to say about data (in or out of the article...).

    I made money. Did you? Not even trying? Why are you here? Go back to reading reviews, this is a quarterly report for stock holders. You just keep working, I'll keep trying to make my money work for me so I can avoid being you. ;) I'll take weird over dumb. I'll take rape over bankruptcy too :) I can recover from rape, not so sure about the bankruptcy. If I have money I can afford therapy for the rape right? ROFL. Some SJW just blew a gasket...One less SJW? Yippee. Back to stock hunting, and bartiromo about to come on :) You've wasted enough of my time and I can type 50
    +wpm (60+ on a good day).
    Reply
  • Korguz - Monday, February 3, 2020 - link

    what the heck did this all say ????? Reply
  • Spunjji - Monday, February 3, 2020 - link

    It said he loves the Trump and doesn't brain good. Reply
  • Spunjji - Monday, February 3, 2020 - link

    What an asbolute pile. Some highlights for those who understandably don't want to wade through this junk:

    "...they may be planning ramps of console crap instead of REAL chips..."
    "...why do you keep chasing poor people AMD?"
    "Sorry to disappoint you. I have never worked in fast food. That is a job for teenagers, illegals and people with no skills."
    "You are a retard if you don't get the point here."
    "I can afford Titan's every year (waste of money, but I can)..."
    "You're giving smart people a bad name...Wait, you didn't claim to be one. OK, all forgiven."
    "Consider my post a trump tweet, or "trial balloon" against my data."
    "Jeez, we have presidential candidates (and all fake news, MM) calling the current president a nazi, racist, murderer..."
    "I can recover from rape, not so sure about the bankruptcy."

    In short, standard Trump supporter: unwarranted confidence in own intelligence, inability to stay on topic, thinks bragging about being awesome is the same as being awesome, thinks being offensive is the same as being smart, projecting like IMAX.

    My favourite bit was where he came to a tech site to rant about stocks and then told people not to come to tech sites for stock info. A++ goonery.
    Reply
  • ballsystemlord - Sunday, February 9, 2020 - link

    Thanks for the summation, Spunjji. I find you to be correct.
    Incidentally, TheJian, if someone doesn't start "chasing poor people" then poor people will not have computers. And I at least value that moral quality of AMD, which they are sadly loosing over time. :cry:
    Reply
  • Zoolook - Wednesday, January 29, 2020 - link

    AMD could be the largest TSMC customer on 7nm in 2020.
    Apple, HS and Qcomm has moved on to 5nm for new chips so their volumes will shift away from N7P and N7FF+.
    Reply
  • TheJian - Sunday, February 2, 2020 - link

    Agreed, I think AMD will be #1 on 7nm at tsmc this year (well at the end that is). I just hope all the silicon goes to higher margin kit, rather than single or barely double digit crap (console like junk). No point in wasting silicon on $100-125 parts that make you $10-15 if you're a player like AMD vs. NV/Intel. You should be making the high margin parts only until it doesn't sell (see Intel), then make junk to add to your bottom line because that is all that is left.

    I really wish AMD had passed on console like NV, and for the same reasons (let Intel or someone else take that crap on). IT robs from your CORE R&D. It did exactly what NV said it would; killed AMD profits for years, cost fabs, land, engineers, etc. They gave it all up to claim a console victory or two that keeps stealing R&D design after design...They could have been a contender in the cpu race years ago (instead of basically giving up for 5-6yrs), and should not have been dominated by NV for ages either. I hope they choose wisely for the new silicon. They claim gpus/cpus (not socs/apu junk), but we'll see.

    $52+ last week. Hope people sold. Likely more down for most stocks as anti-trumpers try to kill his market over this virus crap, fake impeachment etc. Good to be in safer stocks (with no debt) with room to run and good report coming (nvda for example for a while, no loyalty to either stock...should hit 300+ easily in 12mo, likely far less time). I think NVDA will set a record this Q or next and head to 300 again. Easy money if you don't mind the virus ride. The Flu kills ~2500 a year in usa, so miles from this still but that won't stop trump haters from trying to down the market as usual on anything they can. Middle class got 40% on their 401k but dems keep trying to take it down or give it away before you get it. They give it to illegals, welfare, free college, etc etc...Whatever they can do to bankrupt you and put you on welfare for life is their goal (and voting for said welfare for life). Too bad 1/2 the public still watches fake news, although more appear to be waking up as ratings for impeachment etc show complete tanking for dems. Even the debates have terrible ratings.
    Reply
  • Spunjji - Monday, February 3, 2020 - link

    "I really wish AMD had passed on console like NV"
    They didn't "pass" on it - they lost the business because of their constant gouging.

    "Likely more down for most stocks as anti-trumpers try to kill his market over this virus crap, fake impeachment etc."
    LOL

    "Middle class got 40% on their 401k but dems keep trying to take it down or give it away before you get it. They give it to illegals, welfare, free college, etc etc..."
    Can an admin get a ban on this assclown now, please? He's very obviously just here to spread disinformation.
    Reply
  • Lord of the Bored - Wednesday, January 29, 2020 - link

    Please take your antipsychotics.
    You're fired.
    Reply
  • haghands - Thursday, January 30, 2020 - link

    He really needed this job man. Think of the kids. Oh god I hope he doesn't have kids lol. Reply

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