At the closing of today’s trading, Advanced Micro Devices, Inc. (AMD) released its earnings report for the third quarter of 2022. The business generated $5.6 billion in revenue, representing robust 29% annual growth at a time when the personal computer market is experiencing an inflationary slump.
The results were in line with AMD’s preliminary guidance provided at the beginning of October. More importantly, AMD’s non-GAAP earnings and cash flows all showed healthy growth, showing that the company is on strong ground even though the GAAP results showed an operational loss following its acquisition of Xilinx.
The operating and free cash flows of the company are the main findings from AMD’s most recent quarterly earnings. Before we do that, though, a glance at its revenue statement reveals that the projections made at the beginning of October came true. In addition to a 40% yearly decline in its client segment, which reports revenue from sales of personal computers and notebook products, it had predicted that AMD would generate $5.6 billion in revenue and $1.5 billion in operating expenses in the coming year.
The results supported this and showed that, when expenses related to AMD’s purchase of Xilinx are included, the company reported a net operating loss of $64 million for the quarter.
But when these are excluded from the non-GAAP numbers, it becomes clear that AMD’s operating income increased by 20% a year and was $1.2 billion. The amount of money that remains in a company’s coffers after the costs of its goods and other expenses, including salaries, are deducted from its revenue or net sales is known as operational income.
In terms of net income, AMD reported $1.1 billion in non-GAAP income and $66 million in GAAP income, representing a 23% gain and a staggering 93% annual reduction, respectively. The GAAP statistic represents the real earnings per share that are available to users after a quarter, but the non-GAAP number is used to analyze performance. AMD reported GAAP EPS of 4 cents and non-GAAP EPS of 67 cents, respectively.
Regarding cash flow, AMD generated $842 million in free cash flow and $965 million in cash flow from operations during the quarter. These increased by 15% and 10% annually from the comparable quarters’ $849 million and $764 million levels from the previous year, respectively. The operating cash flow is the amount that the company generates from operations after depreciation and other non-cash expenses have been taken into account.
If the costs associated with the Xilinx agreement are subtracted, AMD’s gross margin—the proportion of total revenues that its cost of goods reflects—also increased annually. The more expensive data center and enterprise products brought in more money per unit sold as a result. As expected by AMD, the non-GAAP operating margin was 50%.
Looking ahead, AMD projects sales of $5.5 billion for the current quarter and $23.5 billion for the entire 2022 fiscal year. The company’s revenue for the fourth quarter of 2021 was $4.8 billion, and its total revenue for the year was $16 billion, representing a startling yearly rise of 68%.
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