Revenue for the quarter was up 93% from last year to $3.5 billion, GAAP profit was $555 million, up 243% from last year.
AMD announced revenue for the first quarter of 2021 of $3.45 billion, operating income of $662 million, net income of $555 million.
“Our business continued to accelerate in the first quarter driven by the best product portfolio in our history, strong execution and robust market demand,” said Dr. Lisa Su, AMD president and CEO. “We had outstanding year-over-year revenue growth across all of our businesses and data center revenue more than doubled. Our increased full-year guidance highlights the strong growth we expect across our business based on increasing adoption of our high-performance computing products and expanding customer relationships.”
Gross margin was 46%, flat year-over-year and up 1 percentage point quarter-over-quarter. The quarter-over-quarter increase was driven by a greater mix of Ryzen, Radeon, and Epyc processor sales.
Operating income was $662 million compared to operating income of $177 million a year ago and $570 million in the prior quarter. Operating income improvements were primarily driven by higher revenue.
Net income was $555 million compared to net income of $162 million a year ago and $1.78 billion in the prior quarter, which included an income tax benefit of $1.30 billion associated with a valuation allowance release.
Graphics Group
Revenue for the Computing and Graphics segment was $2.10 billion, up 46% year-over-year and 7% quarter-over-quarter primarily driven by Ryzen processor and Radeon graphics product sales growth.
The average selling price (ASP) for client processors grew year-over-year and quarter-over-quarter driven by a richer mix of Ryzen desktop and notebook processor sales.
GPU ASP was higher year-over-year and quarter-over-quarter driven by high-end Radeon graphics products.
Operating income was $485 million compared to $262 million a year ago and $420 million in the prior quarter.
Enterprise, Embedded, and Semi-Custom
Revenue in the Enterprise, Embedded, and Semi-Custom segment was $1.35 billion, up 286% year-over-year and 5% quarter-over-quarter. The year-over-year increase was driven by higher semi-custom product sales and Epyc processor revenue. The quarter-over-quarter increase was driven by higher Epyc processor sales partially offset by lower semi-custom product sales.
Operating income was $277 million compared to an operating loss of $26 million a year ago and operating income of $243 million in the prior quarter. The year-over-year and quarter-over-quarter increases were primarily driven by higher revenue.
AMD reported an operating loss of $100 million in “other” revenues compared to operating losses of $59 million a year ago and $93 million in the prior quarter.
Margin
Gross margin was 46%, flat year-over-year and up 1 percentage point quarter-over-quarter. The quarter-over-quarter increase was driven by a greater mix of Ryzen, Radeon, and Epyc processor sales.
AMD announced the AMD Epyc 7003 series processors claiming the AMD Epyc 7763 to be the world’s highest performance server processor.
AMD says the processors provide up to two times better performance in high-performance computing (HPC), cloud, and enterprise workloads compared to the competition, all with leadership security features. A broad set of partners announced offerings based on the new Epyc 7003 series processors.
Outlook
For the second quarter of 2021, AMD expects revenue to be approximately $3.6 billion, plus or minus $100 million, an increase of approximately 86% year-over-year and 4% quarter-over-quarter. The year-over-year increase is expected to be driven by growth in all businesses. The quarter-over-quarter increase is expected to be primarily driven by growth in data center and gaming. AMD expects non-GAAP gross margin to be approximately 47% in the second quarter of 2021.
For the full year 2021, AMD now expects revenue growth of approximately 50% over 2020 driven by growth in all businesses, up from prior guidance of approximately 37% annual growth.
In early April, AMD and Xilinx announced that stockholders voted to approve their respective proposals relating to the pending acquisition of Xilinx by AMD. AMD agreed to buy programmable chip maker Xilinx last October in a $35 billion deal to diversify its product portfolio and aid its ambitions in data centers and other arenas.
What do we think?
One of the key metrics for AMD is gross margin. AMD has struggled over the years to get their gross margin in line with Intel or Nvidia. That could be corrected overnight if the company simply charged more. They don’t have to charge more than the competition, just a little more than they are now charging which is below the competition. The prospects for AMD to raise tier prices is good. They have two solid results of delivering first-class products and its time they priced them appropriately.
