Revenue was up 52 percent year-over-year thanks to strong sales of the company's Ryzen and EPYC processors. Video card sales on the other hand were down year-over-year but higher than the previous quarter. Exact figures are unknown as AMD doesn't provide a lot of granularity in its earnings reports. Consumer products like Ryzen and Radeon are bundled together in the Computing and Graphics segment reporting, while EPYC gets thrown in with the embedded and custom console chip products in the Enterprise, Embedded and Semi-Custom segment.
Despite the better-than-expected results, AMD is down 3.46 percent in today's stock market trading session. This may primarily be related to the firm's decision to acquire Xilinx in a massive $35 billion all-stock transaction.
AMD (NASDAQ: AMD) today announced record revenue for the third quarter of 2020 of $2.80 billion, operating income of $449 million, net income of $390 million and diluted earnings per share of $0.32. On a non-GAAP* basis, operating income was $525 million, net income was $501 million and diluted earnings per share was $0.41.
“Our business accelerated in the third quarter as strong demand for our PC, gaming and data center products drove record quarterly revenue,” said Dr. Lisa Su, AMD president and CEO. “We reported our fourth straight quarter with greater than 25 percent year-over-year revenue growth, highlighting our significant customer momentum. We are well positioned to continue delivering best-in-class growth as we further extend our leadership product portfolio with the launches of our next generation Ryzen, Radeon and EPYC processors.”
Q3 2020 Results
Revenue was $2.80 billion, up 56 percent year-over-year and 45 percent quarter-over-quarter driven by higher revenue in both the Enterprise, Embedded and Semi-Custom and Computing and Graphics segments. Gross margin was 44 percent, up 1 percentage point year-over-year and flat quarter-over-quarter. The year-over-year increase was primarily driven by EPYC™ and Ryzen™ processor sales. Gross margin was flat quarter-over-quarter as an increase of Ryzen and EPYC processor sales was offset by a higher percentage of semi-custom revenue. Operating income was $449 million compared to $186 million a year ago and $173 million in the prior quarter. Non-GAAP operating income was $525 million compared to $240 million a year ago and $233 million in the prior quarter. Operating income improvements were primarily driven by revenue growth, including an increase in Ryzen and EPYC processor sales and semi-custom product sales. Net income was $390 million compared to $120 million a year ago and $157 million in the prior quarter. Non-GAAP net income was $501 million compared to $219 million a year ago and $216 million in the prior quarter. Diluted earnings per share was $0.32 compared to $0.11 a year ago and $0.13 in the prior quarter. Non-GAAP diluted earnings per share was $0.41 compared to $0.18 a year ago and $0.18 in the prior quarter. Cash, cash equivalents and short-term investments were $1.77 billion at the end of the quarter.
Quarterly Financial Segment Summary
Computing and Graphics segment revenue was $1.67 billion, up 31 percent year-over-year and 22 percent quarter-over-quarter. Revenue was higher year-over-year driven by a significant increase in Ryzen processor sales partially offset by lower graphics revenue. Revenue was higher quarter-over-quarter driven by a significant increase in Ryzen processor sales and an increase in graphics revenue.
Client processor average selling price (ASP) was lower year-over-year due to a higher mix of mobile processor sales. Client processor ASP was higher quarter-over-quarter driven by higher desktop and mobile processor ASPs. GPU ASP was lower year-over-year due to product cycle timing and higher quarter-over-quarter due to product mix. Operating income was $384 million compared to $179 million a year ago and $200 million in the prior quarter. The year-over-year and quarter-over-quarter increases were driven by higher Ryzen revenue.
Enterprise, Embedded and Semi-Custom segment revenue was $1.13 billion, up 116 percent year-over-year and 101 percent quarter-over-quarter. Revenue was higher year-over-year and quarter-over-quarter due to higher semi-custom product sales and increased EPYC processor sales.
Operating income was $141 million compared to $61 million a year ago and $33 million in the prior quarter. The year-over-year and quarter-over-quarter increases were primarily driven by higher revenue.
All Other operating loss was $76 million compared to operating losses of $54 million a year ago and $60 million in the prior quarter.