Advanced Micro Devices, Inc. (NASDAQ:AMD) Q3 2020 Earnings Conference Call - Final Transcript
Oct 27, 2020 • 05:00 pm ET
Thanks. [Operator Instructions] Your first question today is coming from Matt Ramsay from Cowen. Your line is now live.
Thank you very much. Good morning, everybody. I know a lot of folks will probably say congratulations, but Lisa, Victor, I really mean it from our end. I think a great outcome from all -- everybody, stakeholders. I guess for my first question. Lisa, on the deal, I noticed in the slides that you guys put together, obviously, a pro forma model that combines the companies as of the end of the third quarter. But you also mentioned, as you did at your Analyst Day back in February, a 20% growth CAGR for the business. I wonder if that might apply to the two companies after you put them together post-close, and how confident you are in that growth rate given that in the recent times maybe Xilinx growth has been a little bit slower than the core AMD business growth. But obviously, there is revenue synergy potential as well. So any comments there would be helpful. Thank you.
Dr. Lisa Su
Yeah, absolutely, Matt. Thanks for the question. So first of all, we feel -- we're really excited about today. We feel great about our base business. I think you can see that in the strength of our results in the third quarter and our full-year updated guidance. That strategy is playing out very well as we expected with very strong products driving market momentum. All -- as we look forward, at our financial Analyst Day, we talked about 20% CAGR as the right target for our company. I think all of that stays on track.
We are a high-growth business and we want to remain a high-growth business. I think Xilinx brings a lot of opportunities that are additive to that model, when you look at the markets and the capabilities and just the margins and the free cash flow generation. So 20% CAGR is the right target for the combined business. I think we feel very good about the organic growth and we feel very good about the growth initiatives that Victor has started.
Now, thank you. Thank you for clearing that up. I appreciate it. My question on sort of the results in the core business. You guys put up server revenue sales that more than doubled year-over-year. Your competitor had some -- a rather interesting set of results, some pretty disappointing results, I think, from their enterprise and government segments, and they guided for their combined data-centric business. I know that's not exactly the same as server, but they guided for that to be down, I think, 25% year-over-year in the fourth quarter.
You guys have some momentum, you're going to launch Milan. And I think you mentioned in the release some progress on the enterprise side as well. But maybe, Lisa, you could back up and give us your context of where the server market is overall right now and how it might mean -- what it might mean