AMD had another banner quarter this year, surging past analyst expectations. The company reported $3.85 billion in revenue for Q2 2021, up 99 percent from $1.932B in Q2 2020. Sales increased 12 percent from Q1’s $3.45B. That’s solid growth, but it’s also more in line with seasonality.
The company reported a 48 percent gross profit margin, up four percentage points since Q1. The growth in gross margin and in revenue was driven by higher demand for all of AMD’s products, but a tilt towards the top end helped AMD earn more. Operating income increased by 1.26x quarter-on-quarter. Net income was $710 million, up from $555 million last quarter and $157 million last year.
There’s no reference to GPU sales setting any records — AMD doesn’t seem to be shipping very many GPUs, though availability has improved since the Xbox Series S|X and PlayStation 5 launches — but the company notes that average selling prices (ASPs) have improved.
AMD’s segment earnings have ballooned, but its Enterprise, Embedded, and Semi-Custom segment has done particularly well. AMD benefits from two different advantages in this segment. First, adoption of AMD Rome and Milan continues to be strong. Second, the PlayStation 5 and Xbox Series S|X continue to sell very well. The company is also down to just $313 million in debt. We’re a far cry from where AMD was ten years ago.
Full-year growth is expected at 60 percent thanks to strong performance in all business segments. This is up considerably from January when AMD predicted growth of 37 percent. Annual non-GAAP gross margin is expected to be 48 percent. Recent data from companies like Puget Systems shows that AMD now has ~60 percent share in their workstation business. Puget, of course, is just one company, but it speaks to the overall appeal and growth of AMD’s businesses.
Strong semiconductor performance is the norm right now and it’d be difficult for any company to lose money in an environment where everything it builds vanishes off store shelves as quickly as it arrives. AMD also reports that shareholders have approved its acquisition of Xilinx, so that’s expected to move ahead accordingly. The c0mpany expects component availability to continue to improve through the end of the year and into 2022.
Intel fired back at AMD with Ice Lake-SP earlier this year and the larger chip vendor will get a second shot when it launches Alder Lake. The new platform is expected to combine smaller hybrid cores with big cores and to achieve better efficiency and performance per watt in the process. Early rumors on Alder Lake performance are all over the place, but they collectively suggest a CPU that’s either much more competitive with AMD or significantly faster, depending on which rumors you pick.
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