Advanced Micro Devices, Inc. (NASDAQ:AMD) Q2 2018 Earnings Conference Call - Final Transcript

Jul 25, 2018 • 05:30 pm ET


Advanced Micro Devices, Inc. (NASDAQ:AMD) Q2 2018 Earnings Conference Call - Final Transcript


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Thank you, and welcome to AMD's Second Quarter 2018 Conference Call. By now, you should have had the opportunity to review a copy of our earnings release and slides. If you have not reviewed these documents, they can be found on the Investor Relations page of AMD's website,

Participants on today's conference call are: Dr. Lisa Su, President and Chief Executive Officer; and Devinder Kumar, our Senior Vice President, Chief Financial Officer and Treasurer.

This is a live call and will be replayed via webcast on our website. I would like to highlight a couple of important dates for you. Jim Anderson, Senior Vice President and General Manager of Computing and Graphics, and Ruth Cotter, Senior Vice President of HR, Worldwide Marketing and Investor Relations, will attend the Jefferies 2018 Semiconductor, Hardware and Communications Infrastructure Summit on August 28. Also, Devinder Kumar, Senior Vice President and Chief Financial Officer, will present at the Deutsche Bank Technology Conference on September 12. And our 2018 third quarter quiet time will begin at the close of business on Friday, September 14, 2018.

(Forward-Looking Cautionary Statements)

We will refer primarily to non-GAAP financial metrics during this call, except for revenue, gross margin and segment operational results, which are reported on a GAAP basis. The non-GAAP financial measures referenced are reconciled to their most directly comparable GAAP financial measure in the press release posted on our website. Please refer to cautionary statements in today's press release for more information. You will also find detailed discussions about our risk factors in our filings with the SEC, and, in particular, AMD's quarterly report on Form 10-Q for the quarter ended March 31, 2018.

Now with that, I will hand the call over to Lisa. Lisa?

Lisa Su

Thank you, Laura, and good afternoon to all those listening in today. We ended the first half of 2018 strong, delivering our fourth consecutive quarter of double-digit year-over-year revenue growth, driven by increased demand for our high-performance products.

Second quarter revenue of $1.76 billion grew 53% year-over-year, and gross margin improved more than 3 percentage points, resulting in our highest quarterly net income in 7 years. We are very pleased with the year-over-year financial performance across both of our business segments as we continue to gain share driven by strong customer adoption of our new products in the PC, gaming and data center markets.

Looking at our Computing and Graphics segment, second quarter CG segment revenue increased 64% year-over-year, driven by strong demand for our Radeon GPUs and a significant ramp of our Ryzen mobile processors. Ryzen unit shipments grew strong double-digit sequentially, as Ryzen mobile processor shipments more than doubled in the quarter. Acer, Asus, Dell, HP, Huawei, Lenovo and Samsung launched dozens of Ryzen processor-based notebooks, which position us well to continue growing Ryzen mobile sales heading into the back-to-school and holiday seasons.

In the commercial PC market, we launched our Ryzen PRO commercial mobile APUs in the quarter. For the first time in our history, all 3 major commercial