AMD Q2 earnings beat expectations after Intel falters with 7nm delay

AMD today announced its earnings for the second quarter of its 2020 financial year. In all, the company reported $1.93 billion in revenue, which is up 26 percent from the same period last year. Operating income landed at $173 million, while net income came in at $157 million.

"We delivered strong second quarter results, led by record notebook and server processor sales as Ryzen and EPYC revenue more than doubled from a year ago," said Dr. Lisa Su, AMD president and CEO, in a press release. "Despite some macroeconomic uncertainty, we are raising our full-year revenue outlook as we enter our next phase of growth driven by the acceleration of our business in multiple markets."

AMD says that its revenue bump was largely driven by its computing and graphics segment. That segment accounted for $1.37 billion in revenue, which was up 45 percent over the same period last year. However, it was down five percent compared to Q1 2020 because of lower GPU sales.

"As in Q1, AMD set records in CCG with the highest client processor revenue in 12 years, driving 45% growth and doubling Ryzen notebook revenue," said Moor Insights & Strategy president and principal analyst Patrick Moorhead. "In fact, this was the highest notebook revenues ever. I believe both these records were driven by the company's increased competitiveness in notebooks, particularly with its Ryzen Mobile 4000 platform, which, in Q2, was selling in for back to school designs."

On the enterprise side, AMD says revenue was down by four percent compared to Q2 2019, coming in at $565 million. AMD says it saw lower semi-custom product sales that were "largely offset by higher EPYC processor sales."

The latest earnings report comes as AMD has seen its momentum continue to grow. The company is coming off of the launch of its 3rd Gen Ryzen 3000XT series of desktop processors, a new set of capable Ryzen PRO 4000 series laptop processors, and growth in the enterprise segment with its EPYC processors.

It also comes days after Intel announced it would delay its 7nm CPU launch by six months, falling further behind AMD. AMD's stock enjoyed a bump following the news, passing Intel's stock price for the first time since 2006. Intel this week announced significant leadership changes likely related to the 7nm delay.

Moving forward, AMD says it expects revenue for the third quarter to land around $2.55 billion, which would be up around 42 percent over Q3 2019. This growth is expected to come from Ryzen, EPYC, and "next generation semi-custom products" sales. Total 2020 revenue is expected to grow by 32 percent backed by PC, gaming, and data center performance.