Advanced Micro Devices Inc. (NASDAQ:AMD)

The financial data over the reported years illustrates several key trends regarding the intangible assets and goodwill of the company.

Developed Technology

This asset category shows a significant presence starting from December 30, 2023, with a value of $12,360 million which increases steadily to $13,390 million in 2024 and further to $13,408 million. This suggests recent investments or acquisitions leading to enhanced technology assets.

Customer Relationships

The value remains constant at $12,324 million from December 30, 2023, through December 28, 2024, indicating stable customer-related intangible assets during this period without significant growth or impairment.

Customer Backlog

Values for customer backlog are stable at $809 million from December 30, 2023, to the end of 2024, again reflecting steady business pipeline considerations without notable variation.

Corporate Trade Name and Product Trademarks

Corporate trade name holds a value of $65 million consistently, while product trademarks remain at $914 million during the same period, showing no change, which suggests these brand-related assets are maintained at a constant book value.

Intangible Assets Subject to Amortization

The gross carrying amount of intangible assets subject to amortization rises from $26,472 million in 2022 to $27,520 million in 2024, showing growth in these assets.

However, accumulated amortization increases substantially from negative $3,548 million in 2022 to negative $8,752 million in 2024, reflecting consistent amortization expense over the years.

As a result, the net carrying amount of these amortizable intangible assets decreases from $22,924 million in 2022 to $18,768 million in 2024, suggesting the amortization expense is outpacing the additions to these assets.

In-process Research and Development (IPR&D) not subject to amortization

The value of IPR&D drops sharply from $1,194 million in 2022 to $220 million in 2023, and further declines to $162 million in 2024. This downward trend suggests either completion, impairment, or reclassification of research projects originally in process.

Acquisition-Related Intangible Assets

This category sees a decrease from $24,118 million in 2022 to $18,930 million in 2024, indicating amortization or asset disposition impacts following acquisitions.

Goodwill

Goodwill remains stable at $289 million in 2020 and 2021 but increases dramatically to $24,177 million in 2022, followed by modest increases to $24,262 million in 2023 and $24,839 million in 2024. This sharp increase aligns with significant acquisitions or reorganizations during 2022.

Acquisition-related Intangible Assets and Goodwill Combined

The combined value of acquisition-related intangible assets and goodwill experiences a substantial rise from $289 million in 2021 to $48,295 million in 2022, then decreases steadily to $45,625 million in 2023 and $43,769 million in 2024. This pattern indicates a major one-time increase likely due to acquisition activity in 2022, followed by amortization and impairment reducing the net carrying amount over subsequent years.

Overall, the data reflects significant acquisition activity in 2022, enhancing goodwill and acquisition-related intangible assets markedly, followed by amortization and write-downs reducing net intangible asset values. Developed technology assets show growth in recent years, while some research-related intangible assets are diminishing. Stable values in customer relationships, backlog, trade names, and trademarks suggest consistency in core intangible business relationships and branding.

The financial data reveals notable shifts in asset and equity values over the five-year period, reflecting significant corporate events or adjustments.

Total Assets

The reported total assets increased steadily from 8,962 million USD in 2020 to 12,419 million USD in 2021, followed by a substantial jump to 67,580 million USD in 2022. The growth then plateaued slightly, with values of 67,885 million USD in 2023 and 69,226 million USD projected for 2024. The adjusted total assets, which exclude goodwill or apply other adjustments, follow a similar pattern but at lower absolute values. They rose from 8,673 million USD in 2020 to 12,130 million USD in 2021, then surged to 43,403 million USD in 2022 and experienced modest increases to 44,623 million USD in 2023 and 44,387 million USD in 2024. This indicates that a significant portion of the reported asset increase in 2022 is attributable to goodwill or intangible assets.

Stockholders’ Equity

Reported stockholders’ equity showed consistent growth from 5,837 million USD in 2020 to 7,497 million USD in 2021. A pronounced increase occurred in 2022, with equity rising to 54,750 million USD, maintaining an upward trend in the subsequent years, reaching 55,892 million USD in 2023 and an estimated 57,568 million USD in 2024. Adjusted equity values are lower but mirror this trend: from 5,548 million USD in 2020 to 7,208 million USD in 2021, followed by a significant jump to 30,573 million USD in 2022, then gradual increases to 31,630 million USD in 2023 and 32,729 million USD forecasted for 2024. The divergence between reported and adjusted equity values, especially pronounced in 2022, emphasizes the impact of goodwill or similar adjustments on the reported figures.

Overall, the data suggests that the period around 2022 marked a transformative phase, likely involving major acquisitions or revaluations, leading to substantial increases in both assets and equity. The disparity between reported and adjusted measures highlights the significance of intangible assets on the company’s financial position. For the years following 2022, growth rates moderate but maintain positive momentum, indicating stabilization after the major upward shift.

Total Asset Turnover

The reported total asset turnover ratio exhibited a strong performance in 2020 and 2021, reaching 1.09 and 1.32 respectively, indicating efficient use of assets in generating revenue during this period. However, this ratio declined sharply in 2022 to 0.35 and remained relatively low in 2023 and 2024, with slight incremental improvement to 0.37. The adjusted total asset turnover, which accounts for goodwill adjustments, followed a similar pattern but showed somewhat higher values during the period of decline, suggesting a better asset efficiency after adjustment. Overall, asset turnover showed a marked decrease beginning in 2022, with only modest recovery thereafter.

Financial Leverage

Reported financial leverage increased from 1.54 in 2020 to 1.66 in 2021, reflecting a growing use of debt or other liabilities relative to equity. Subsequently, the ratio decreased substantially to 1.23 in 2022 and further stabilized around 1.2 in the subsequent years. Adjusted financial leverage displayed higher values during the latter half of the period, declining from 1.68 in 2021 to 1.36 in 2024, indicating that accounting for goodwill yields moderately higher leverage ratios but with a similar downward trend. This trend signifies a reduction in financial leverage starting in 2022 and stabilization at a lower level through 2024.

Return on Equity (ROE)

Reported ROE was robust in 2020 and 2021, with values exceeding 40%, indicating strong profitability relative to shareholder equity. However, there was a dramatic decline in 2022 to 2.41%, followed by further decreases in 2023 to 1.53%, with a minor recovery to 2.85% in 2024. The adjusted ROE followed a comparable trajectory but showed marginally higher figures in the years of decline, from 44.88% in 2020 down to 5.01% in 2024, indicating a similar but slightly mitigated performance when adjusting for goodwill. Overall, ROE plummeted after 2021 and failed to regain former levels during the years reviewed.

Return on Assets (ROA)

The reported ROA demonstrated strong profitability in 2020 and 2021 at 27.78% and 25.46%, respectively. A steep decrease occurred in 2022, dropping to 1.95%, followed by a further slight decline and slight rebound in 2024 to 2.37%. Adjusted ROA, which considers goodwill, presented slightly higher returns during the declining period, indicating 3.7% in 2024 compared to the reported 2.37%. The overall pattern reveals declining asset profitability from 2022 onward with no significant recovery to prior high levels.

Summary of Trends

The data reveals a consistent pattern where key efficiency and profitability metrics (total asset turnover, ROE, and ROA) were strong in 2020 and 2021 but experienced sharp declines starting in 2022 that persisted through 2024. Financial leverage initially increased but then decreased significantly after 2021, stabilizing at lower levels. Adjusted figures, which exclude goodwill impacts, consistently indicate somewhat better performance than reported figures in the years following 2021 but still reflect the overall downward trend. The decline in asset turnover and returns suggests challenges in generating revenue and profits from assets and equity post-2021, while decreasing financial leverage may reflect a more conservative capital structure during this period. The partial recovery in some adjusted ratios by 2024 could suggest initial signs of operational improvement or better asset utilization post-adjustment, though these remain substantially below earlier peak levels.

The reported total assets of the company exhibited a significant increase over the period analyzed. Starting from US$ 8,962 million in 2020, assets rose moderately to US$ 12,419 million in 2021 before experiencing a sharp surge to US$ 67,580 million in 2022. The figures then plateaued slightly, reaching US$ 67,885 million in 2023 and increasing marginally to US$ 69,226 million in 2024.

When considering the adjusted total assets, which exclude goodwill, a somewhat similar pattern is observed, albeit on a lower scale. Starting at US$ 8,673 million in 2020, adjusted assets increased to US$ 12,130 million in 2021, followed by a substantial jump to US$ 43,403 million in 2022. The values then stabilized somewhat, climbing to US$ 43,623 million in 2023 and US$ 44,387 million in 2024.

In terms of efficiency metrics, the reported total asset turnover ratio displayed a decline over the same timeframe. It started at 1.09 in 2020, increased to a peak of 1.32 in 2021, then dropped significantly to 0.35 in 2022. The ratio remained relatively steady thereafter, at 0.33 in 2023 and climbing slightly to 0.37 in 2024.

The adjusted total asset turnover ratio followed a similar trend but consistently presented higher values compared to the reported figures. Beginning at 1.13 in 2020, peaking at 1.35 in 2021, the ratio then declined to 0.54 in 2022. It remained steady around this level with 0.52 in 2023 and improved slightly to 0.58 in 2024.

Asset Base Growth

The company experienced a dramatic expansion in its asset base, particularly between 2021 and 2022, which is evident in both reported and adjusted total assets.

Goodwill Impact

The larger gap between reported and adjusted total assets from 2022 onwards indicates an increase in goodwill or intangible assets.

Asset Turnover Decline

Despite asset growth, the asset turnover ratios decreased markedly after 2021, suggesting that asset utilization efficiency declined during the expansion phase.

Adjusted Turnover Higher

Adjusted asset turnover ratios exceed reported ratios consistently, implying that goodwill adjustments lead to more favorable asset utilization metrics.

Recent Stability

From 2022 to 2024, both asset values and turnover ratios stabilized, with minor improvements in turnover ratios indicating a tentative recovery in efficient asset use.

Total Assets

The reported total assets increased significantly from US$8,962 million in 2020 to US$69,226 million in 2024, with a notable surge between 2021 and 2022. The adjusted total assets follow a similar upward trajectory but at lower absolute values, rising from US$8,673 million in 2020 to US$44,387 million in 2024. This suggests substantial goodwill or intangible assets included in the reported figures, especially evident in 2022 where the gap between reported and adjusted assets widens considerably.

Stockholders’ Equity

Reported stockholders’ equity saw an increase from US$5,837 million in 2020 to US$57,568 million in 2024, with the most considerable jump occurring from 2021 to 2022. The adjusted stockholders’ equity also increased but at a lower scale, from US$5,548 million in 2020 to US$32,729 million in 2024. The difference between reported and adjusted equity mirrors the pattern observed in total assets, indicating that a significant portion of equity growth stems from goodwill or other intangible assets.

Financial Leverage

Reported financial leverage ratios declined gradually from 1.54 in 2020 to 1.20 in 2024, indicating a reduction in the proportion of total assets financed by liabilities when considering reported figures. However, the adjusted financial leverage remains consistently higher across the years, starting at 1.56 in 2020 and decreasing slightly to 1.36 by 2024. This adjusted leverage ratio suggests that when excluding goodwill or certain intangibles, the company maintains a higher reliance on liabilities relative to equity than the reported figures alone would imply.

Overall Insights

The data reveal substantial growth in both assets and equity over the analyzed period, with the largest increases occurring between 2021 and 2022. Adjusted values indicate the presence of significant intangible assets impacting reported totals, especially evident in the post-2021 period. While leverage ratios show a declining trend, adjusted figures imply a more conservative view with relatively higher leverage. This points to an underlying capital structure that is somewhat more leveraged when intangible assets are excluded from the valuation.

Stockholders’ Equity

The reported stockholders' equity shows a significant increase from 5,837 million USD in 2020 to 54,750 million USD in 2022, followed by a stable but minor growth reaching 57,568 million USD in 2024. The adjusted stockholders’ equity follows a similar trend but with lower absolute values, increasing from 5,548 million USD in 2020 to 30,573 million USD in 2022, then gradually rising to 32,729 million USD by 2024. This indicates a substantial rise in equity around 2022 with more moderate growth afterward, and the adjustment for goodwill notably reduces the equity values throughout the period.

Return on Equity (ROE)

The reported ROE exhibits very high levels of above 40% in 2020 and 2021, then experiences a sharp decline to around 2.4% in 2022, and remains low through 2024, showing modest fluctuations between 1.53% and 2.85%. The adjusted ROE follows the same pattern, starting even higher at 44.88% in 2020 and 43.87% in 2021, then dropping significantly to 4.32% in 2022 and tapering off with slight increases to 5.01% by 2024. This pattern suggests an exceptional profitability period in the early years followed by a drastic reduction in returns, stabilizing at a much lower level in subsequent years after adjusting for goodwill.

Overall Analysis

There is evidence of significant changes around 2022 when both reported and adjusted stockholders' equity increase dramatically, likely due to notable events impacting the balance sheet. Despite this surge in equity, the ROE indicators reveal that profitability relative to equity diminished sharply beginning in 2022, indicating that the increase in equity was not matched by proportional increases in net income or operational performance. The adjustments for goodwill consistently lower equity values and ROE percentages, but the overall trends remain consistent. The company’s financial structure exhibits a shift to higher asset base but with comparatively reduced efficiency in generating equity returns in the more recent years.

The financial data reveals substantial growth in total assets over the five-year period, followed by a notable adjustment impact. Reported total assets increased significantly from 8,962 million US dollars in 2020 to 69,226 million in 2024. However, the adjusted total assets, which likely exclude goodwill or similar intangible assets, show a more moderated increase from 8,673 million to 44,387 million over the same period.

Comparing reported and adjusted figures, the divergence between the two asset measures widened markedly starting from 2022, indicating a significant increase in goodwill or intangible assets recorded on the balance sheet. This suggests that the company may have engaged in substantial acquisitions or revaluations contributing to the elevated reported assets but excluded in the adjusted measures.

Regarding profitability as measured by return on assets (ROA), both reported and adjusted ROA declined sharply after 2021. Reported ROA dropped from 27.78% in 2020 and 25.46% in 2021 to just 1.95% in 2022, reaching a low of 1.26% in 2023 before a modest recovery to 2.37% in 2024. Adjusted ROA follows a similar pattern but consistently records slightly higher percentages than reported ROA in the later years, indicating that excluding goodwill or other adjustments improves the profitability ratio somewhat.

The significant decline in ROA from 2022 onward suggests reduced profitability relative to asset size, possibly due to the large increase in assets not translating into proportional net income gains. The slight recovery in 2024 may indicate early signs of improved operational performance or asset utilization.

Overall, the data highlights substantial asset growth with a considerable component likely related to goodwill or intangible assets increasing from 2022. This growth did not immediately translate into improved return on assets, which fell sharply and only showed tentative signs of recovery by 2024.

Total Assets

Strong increase overall, with reported assets growing faster than adjusted assets starting in 2022.

Goodwill/Intangible Assets Impact

Marked divergence between reported and adjusted assets after 2021 implies increased goodwill or intangible asset recognition.

Return on Assets (ROA)

Sharp decline in both reported and adjusted ROA from 2022 onward, with adjusted ROA slightly higher, indicating better profitability excluding goodwill impacts.

Profitability Trend

Decreased profitability relative to asset base post-2021, with only minimal recovery by 2024.