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AMD 2017 Financial Analyst Day Summary

Core Content

AMD's 2017 Financial Analyst Day presentation outlines the company's strategic direction, technological advancements, and financial outlook. The document emphasizes AMD's commitment to innovation, growth, and profitability across multiple markets, including PCs, immersive platforms, and datacenters.

Main Points

1. Forward-Looking Statements

• The presentation includes forward-looking statements regarding AMD's strategy, product roadmap, financial goals, and market opportunities.
• These statements are subject to risks and uncertainties and should be read in conjunction with AMD's SEC filings.

2. Non-GAAP Financial Measures

• AMD provides non-GAAP financial measures such as gross margin, operating expenses, net loss, and EBITDA.
• These measures are not a substitute for GAAP financial results and are reconciled in the appendices.

3. Company Heritage

• AMD has a history of technological firsts:
  • First to break the 1GHz barrier
  • First to break the teraflop performance barrier
  • World's first APUs
  • World’s first $199 VR GPU solution
  • World's first x86-64 bit architecture
  • First to break the 1GHz GPU barrier

4. Market Focus and TAM

• PCs: $28B TAM, with 250+ million annual shipments. Premium desktops and notebooks account for 75% of market revenue.
• Immersive Platforms: $15B TAM, driven by high-end gaming, VR, and AR. Expected to grow at 7%+ CAGR through 2020.
• Datacenter: $21B TAM, fueled by exponential data growth and the need for compute and graphics solutions. Machine learning is the fastest-growing segment.

5. Technology Enablers

• CPUs/APUs: High-performance, optimized for compute and graphics.
• GPUs/SOCs: High-performance GPUs and SoCs, with optimized software and industry-standard APIs.
• Security and TCO: Emphasis on enterprise-class security and optimized total cost of ownership (TCO).

6. Product Roadmap

• Polaris Architecture: Used in high-end gaming consoles and graphics cards.
• Zen Architecture: Next-generation CPU architecture, with Ryzen™ CPU family.
• Radeon Vega: Designed for immersive computing, offering ~25 Teraflops of performance and optimized MIOpen libraries for deep learning.
• Naples Processor: A new high-performance datacenter processor with:
  • Up to 32 CPU cores
  • 21.3 GB/s per channel memory bandwidth (DDR4-2667 x 8)
  • 64 PCI Express lanes per socket

7. Growth Commitments

• 2015: Stabilize the business, prioritize investments.
• 2016: Grow revenue, gain profitable market share, strengthen balance sheet.
• 2017: Launch strong new products, expand margin and revenue, drive profitability.

8. 2016 Accomplishments

• Annual revenue growth of 7%
  • Computing and Graphics: 9% growth
  • Embedded and Semi-Custom: 5% growth
• Strengthened balance sheet with a $1.26B cash balance and reduced debt
• Gained market share in GPUs (+5.2%) and mobile (+2.8%)

9. Product Leadership

• Focus on performance, performance-per-watt, and software optimization.
• Premium product portfolio for better revenue mix and margin expansion.

10. Gross Margin Expansion

• Expected to expand non-GAAP gross margin to over 40% by 2018 and over 44% by 2020.
• Growth through higher ASPs and richer product mix.

11. Long-Term Financial Model

• Revenue growth with double-digit % CAGR.
• Non-GAAP gross margin expected to reach ~40-44%.
• Earnings per share (EPS) projected to be >$0.75.
• Commitment to long-term shareholder value, consistent profitability, and a strong balance sheet.

Key Information

• AMD's strategy emphasizes high-performance technologies, great products, ambitious goals, and focused execution.
• The company is positioned to disrupt and lead in the datacenter market with its x86 CPUs and GPU compute solutions.
• Radeon Instinct MI-25 is highlighted as a high-performance GPU for machine intelligence and deep learning.
• AMD is the only provider of both high-performance compute and graphics solutions for datacenters.
• Naples is a high-performance datacenter processor with significant improvements in cores, memory bandwidth, and I/O lanes.
• AMD has established partnerships with major companies such as Sony, Microsoft, Alienware, Lenovo, Google Cloud Platform, and others.

Strategic Goals

• Graphics: Focus on gaming, machine intelligence, and immersive platforms.
• Compute: Emphasize high-performance platforms, from consumer to professional.
• Datacenter: Drive growth through heterogeneous computing, balanced performance, flexibility, and security.

Financial Outlook

• 2017 Financial Priorities: Launch strong new products, expand margin and revenue, and drive profitability.
• 2018 and Beyond: Commitment to double-digit revenue growth, margin expansion, and consistent profitability.
• Long-Term Financial Model: Targeting a strong balance sheet, improved TCO, and leadership in key markets.

Disclaimer

• The information in this document is for informational purposes only and is subject to change without notice.
• Timelines, roadmaps, and product release dates are subject to change.
• All product names and codenames are trademarks or registered trademarks of AMD or other companies.
• AMD makes no warranties or representations regarding the accuracy or completeness of the information provided.