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AMD Q2 2021 earnings results tout 99% revenue growth from 2020

It was a very good quarter for AMD, as it prepares to make further contributions to Tesla and Valve.

Ozzie Mejia

July 27, 2021 1:50 PM

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AMD (NASDAQ: AMD) has posted their latest earnings report and the outlook for the computer hardware manufacturer appears to be trending positive. In fact, things appear to be twice as good as they were last year, according to revenue results. Let's jump into this report for more details.

Here is the AMD Q2 2021 earnings report.

AMD Q2 2021 Earnings Release

Highlights

Cash

• Cash, cash equivalents, and short-term investments were at $3.79 billion at the end of Q2 2021.
• Cash from operations in Q2 2021 is at $952 million versus $243 million in Q2 2020.
• Free cash flow is at a record $888 million in Q2 2021 versus $152 million from Q2 2020 and up from $832 million in Q1 2021.

Profitability

• $831 million operating income in Q2 2021 versus $173 million in Q2 2020 and $662 million in Q1 2021.
• Non-GAAP operating income in Q2 2021 is at $924 million versus $233 million in Q2 2020 and $762 million in Q1 2021.
• Gross margin in Q2 2021 is up 48 percent, up 4 percentage points from Q2 2020 and two percentage points from Q1 2021.

Operations

• AMD released new high-performance computing systems that utilize the AMD EPYC processors.
• AMD announced the AMD Advantage Design Framework in an effort to bring top-of-the-line gaming experiences to laptops.
• The AMD Zen CPUs and AMD RDNA 2 GPUs expanded into new markets.

Current outlook

AMD’s outlook statements are based on current expectations. The following statements are forward-looking and actual results could differ materially depending on market conditions and the factors set forth under “Cautionary Statement” below.

For the third quarter of 2021, AMD expects revenue to be approximately $4.1 billion, plus or minus $100 million, an increase of approximately 46 percent year-over-year and approximately 6 percent quarter-over-quarter. The year-over-year increase is expected to be driven by growth across all businesses. The quarter-over-quarter increase is expected to be primarily driven by growth in AMD’s data center and gaming businesses. AMD expects nonGAAP gross margin to be approximately 48 percent in the third quarter of 2021.

For the full year 2021, AMD now expects revenue growth of approximately 60 percent, up from prior guidance of approximately 50 percent, driven by strong growth across all businesses. AMD now expects non-GAAP gross margin to be approximately 48 percent for the full year 2021, up from prior guidance of approximately 47 percent.

Things are looking positive for AMD at the moment with the company reporting $3.85 billion in revenue, which is a massive 99 percent increase year-over-year. The CPU and GPU segment revenue reported in at $2.25 million, which is up 65 percent year-over-year. The higher revenue was cited as the primary driver of increasing operating income.

AMD's successes come in the wake of stockholders approving the company's acquisition of Xilinx. The tech giant will also look to launch a $4 billion share repurchase program, which will be funded through cash generated from operations. AMD will remain busy in the months ahead, with Tuesday's report citing that AMD Ryzen Embedded Processors and AMD RDNA 2-based GPUs will power the infotainment system contained in the Tesla Model S and Model X vehicles. In addition to that, AMD noted that a semi-custom AMD processor will power the upcoming Valve Steam Deck.

It should be noted that AMD's earnings report came with a lengthy cautionary statement for the future, noting that Q3 2021 earnings could be impacted by continuing world events, including the COVID-19 pandemic. Investors are also cautioned about component availability, Intel Corporation's dominance of the microprocessor market, and reliance on third-parties to create products in a timely manner.

For more on AMD and what's coming from the tech company, be sure to browse the AMD topic.

This article is only meant for educational purposes, and should not be taken as investment advice. Please consider your own investment time horizon, risk tolerance, and consult with a financial advisor before acting on this information.

Full Disclosure:

At the time of this article, Shacknews primary shareholder Asif A. Khan, his family members, and his company Virtue LLC had the following positions:

Long GameStop via GME shares

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Ozzie Mejia

Senior Editor

Ozzie has been playing video games since picking up his first NES controller at age 5. He has been into games ever since, only briefly stepping away during his college years. But he was pulled back in after spending years in QA circles for both THQ and Activision, mostly spending time helping to push forward the Guitar Hero series at its peak. Ozzie has become a big fan of platformers, puzzle games, shooters, and RPGs, just to name a few genres, but he’s also a huge sucker for anything with a good, compelling narrative behind it. Because what are video games if you can't enjoy a good story with a fresh Cherry Coke?