amd-20210925

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 25, 2021


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number 001-07882

ADVANCED MICRO DEVICES, INC.

(Exact name of registrant as specified in its charter)


Delaware									94-1692300
(State or other jurisdiction of incorporation or organization)									(I.R.S. Employer Identification No.)

2485 Augustine Drive

Santa Clara, California 95054

(Address of principal executive offices)

(408) 749-4000

Registrant’s telephone number, including area code

N/A

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $0.01 par value	AMD	The Nasdaq Global Select Market

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 (the Exchange Act) during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☑ No ¨

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☑ No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See definition of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☑

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

Indicate by check mark whether the registrant is a shell company (as defined by Rule 12b-2 of the Exchange Act). Yes ☐ No ☑

Indicate the number of shares outstanding of the registrant’s common stock, $0.01 par value, as of October 22, 2021: 1,207,610,455

Table of Contents

INDEX


		Page No.
Part I Financial Information
Item 1	Condensed Consolidated Financial Statements (Unaudited)
	Condensed Consolidated Statements of Operations	3
	Condensed Consolidated Statements of Comprehensive Income	4
	Condensed Consolidated Balance Sheets	5
	Condensed Consolidated Statements of Cash Flows	6
	Condensed Consolidated Statements of Stockholders’ Equity	8
	Notes to Condensed Consolidated Financial Statements	9
Item 2	Management’s Discussion and Analysis of Financial Condition and Results of Operations	19
Item 3	Quantitative and Qualitative Disclosures about Market Risk	26
Item 4	Controls and Procedures	26
Part II Other Information

Item 1	Legal Proceedings	27
Item 1A	Risk Factors	27
Item 2	Unregistered Sales of Equity Securities and Use of Proceeds	48
Item 6	Exhibits	49
Signature		50

Table of Contents

PART I. FINANCIAL INFORMATION


ITEM 1.			CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Advanced Micro Devices, Inc.

Condensed Consolidated Statements of Operations

(Unaudited)


	Three Months Ended				Nine Months Ended
	September 25, 2021		September 26, 2020		September 25, 2021		September 26, 2020
	(In millions, except per share amounts)
Net revenue	$	4,313	$	2,801	$	11,608	$	6,519
Cost of sales	2,227		1,571		6,105		3,623
Gross profit	2,086		1,230		5,503		2,896

Research and development	765		508		2,034		1,410
Marketing, general and administrative	376		273		1,036		687

Licensing gain	(3)		—		(8)		—
Operating income	948		449		2,441		799

Interest expense	(7)		(11)		(26)		(38)
Other income (expense), net	62		(37)		51		(32)
Income before income taxes and equity income	1,003		401		2,466		729

Income tax provision	82		12		284		22
Equity income in investee	2		1		6		2
Net income	$	923	$	390	$	2,188	$	709

Earnings per share
Basic	$	0.76	$	0.33	$	1.80	$	0.60
Diluted	$	0.75	$	0.32	$	1.78	$	0.59
Shares used in per share calculation
Basic	1,214		1,184		1,214		1,176
Diluted	1,230		1,215		1,231		1,208

See accompanying notes.

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Advanced Micro Devices, Inc.

Condensed Consolidated Statements of Comprehensive Income

(Unaudited)


	Three Months Ended				Nine Months Ended
	September 25, 2021		September 26, 2020		September 25, 2021		September 26, 2020
	(In millions)
Net income	$	923	$	390	$	2,188	$	709
Other comprehensive income (loss), net of tax:
Net change in unrealized gains (losses) on cash flow hedges	(7)		9		(17)		5
Total comprehensive income	$	916	$	399	$	2,171	$	714

See accompanying notes.

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Advanced Micro Devices, Inc.

Condensed Consolidated Balance Sheets

(Unaudited)


	September 25, 2021		December 26, 2020
	(In millions, except par value amounts)
ASSETS
Current assets:
Cash and cash equivalents	$	2,440	$	1,595
Short-term investments	1,168		695
Accounts receivable, net	2,224		2,066
Inventories	1,902		1,399
Receivables from related parties	5		10
Prepaid expenses and other current assets	249		378

Total current assets	7,988		6,143
Property and equipment, net	717		641
Operating lease right-of-use assets	284		208
Goodwill	289		289
Investment: equity method	69		63
Deferred tax assets	1,036		1,245
Other non-current assets	770		373
Total assets	$	11,153	$	8,962
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	1,048	$	468
Payables to related parties	36		78
Accrued liabilities	2,048		1,796
Short-term debt, net	312		—
Other current liabilities	120		75
Total current liabilities	3,564		2,417
Long-term debt, net	1		330
Long-term operating lease liabilities	269		201
Other long-term liabilities	183		177
Commitments and Contingencies (See Note 12)
Stockholders’ equity:
Capital stock:
Common stock, par value $0.01; shares authorized: 2,250; shares issued: 1,230 and 1,217; shares outstanding: 1,212 and 1,211	12		12
Additional paid-in capital	10,905		10,544
Treasury stock, at cost (shares held: 18 and 6)	(1,356)		(131)
Accumulated deficit	(2,425)		(4,605)
Accumulated other comprehensive income	—		17
Total stockholders’ equity	7,136		5,837
Total liabilities and stockholders’ equity	$	11,153	$	8,962

See accompanying notes.

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Advanced Micro Devices, Inc.

Condensed Consolidated Statements of Cash Flows

(Unaudited)


	Nine Months Ended
	September 25, 2021		September 26, 2020
	(In millions)
Cash flows from operating activities:
Net income	$	2,188	$	709
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	289		222
Stock-based compensation	267		195
Amortization of debt discount and issuance costs	4		12
Amortization of operating lease right-of-use assets	40		31
Loss on debt conversion	7		38
Loss on sale or disposal of property and equipment	19		28
Deferred income taxes	201		1
(Gains) losses on equity investments, net	(52)		(1)
Other	(6)		12
Changes in operating assets and liabilities:
Accounts receivable, net	(158)		(287)
Inventories	(

SEC Form 10-Q filed by Advanced Micro Devices, Inc.