Advanced Micro Devices Inc. (NASDAQ:AMD)

The analysis of the quarterly financial ratios over the observed periods reveals several notable trends in operational efficiency and asset utilization.

Net Fixed Asset Turnover

This ratio demonstrates an initial increase from 16.77 to a peak of 23.41 between March 2021 and December 2021, indicating improving efficiency in generating revenue from fixed assets. However, a significant decline occurs in the following quarters, dropping to approximately 13.43 by March 2022 and stabilizing around the 14.0 to 14.5 range through mid-2025. This downward adjustment may suggest increased investment in fixed assets not yet fully leveraged for revenue generation or a relative slowdown in revenue growth compared to fixed asset base expansion.

Total Asset Turnover

This ratio shows a strong initial performance, increasing from 1.14 in March 2021 to 1.33 in September 2021, suggesting enhanced overall asset efficiency. A sharp decline follows, reaching a low near 0.28 by March 2022. Since then, total asset turnover displays a gradual, steady recovery, increasing to 0.40 by June 2025. This pattern could reflect a restructuring or asset base change during 2022, with gradual improvements in asset utilization over subsequent periods.

Equity Turnover

Equity turnover rises steadily from 1.76 in March 2021 to a peak of 2.19 in December 2021, indicating increasing revenue generated per unit of shareholder equity. Subsequently, it falls sharply to 0.34 by March 2022. Post-decline, equity turnover shows consistent improvement, reaching 0.50 by mid-2025. This suggests an initial contraction in the efficiency of equity usage, followed by a recovery phase possibly linked to better profitability or optimized capital structure.

Overall, the data indicate a pattern of strong operational efficiency up to the end of 2021, followed by a marked decline across all turnover ratios early in 2022. The subsequent quarters show stabilization and gradual recovery, although the turnover ratios do not return to their previous peak levels by mid-2025. This cyclical behavior implies potential strategic adjustments or external influences impacting asset and equity utilization efficiencies during the observation period.

Net Revenue Trends

Net revenue exhibited a generally increasing trend over the observed periods, starting from $3,445 million in the first quarter of 2021 and reaching as high as $7,685 million by the second quarter of 2025. There were fluctuations, particularly visible in the latter quarters of 2022 where revenue decreased from $6,550 million in the second quarter to $5,565 million in the third quarter, before stabilizing and subsequently rising again. More recent data indicates strong growth, especially between the first quarter of 2024 at $5,473 million to the peak in the third quarter of 2024 at $6,819 million, followed by continued revenue increases into 2025, although a slight decline was observed in the first quarter of 2025.

Property and Equipment, Net

The net value of property and equipment consistently increased throughout the timeframe, growing from $681 million in early 2021 to $2,128 million by mid-2025. The most pronounced jump is observed between December 2021 and March 2022 where the net property and equipment nearly doubled, rising from $702 million to $1,406 million. This suggests significant capital investment during this period. Additionally, steady incremental growth is evident post-2022, underscoring ongoing asset accumulation or upgrades.

Net Fixed Asset Turnover Ratio

The net fixed asset turnover ratio shows a notable decline in efficiency starting from the early quarters of 2021, where ratios ranged from approximately 16.77 to 23.41, down to lower ratios around the 13 to 15 range in subsequent years. The largest drop aligns with the dramatic increase in property and equipment in 2022, indicating that asset growth outpaced the revenue growth during that phase. From 2022 onward, the ratio stabilizes but remains lower than in the initial periods, fluctuating between roughly 13.9 and 15.6, suggesting the company is generating less revenue per dollar of fixed asset invested compared to earlier periods.

Overall Analysis

The data reveals a strong expansion phase characterized by rapidly increasing property and equipment assets, likely reflecting investments aimed at future capacity or technological advancements. While revenue has grown substantially in absolute terms, the declining asset turnover ratio signals that these new assets have not yet fully translated into proportionally higher revenue, possibly due to scaling periods or integration of assets. The fluctuations in quarterly revenues suggest exposure to demand variability or market conditions affecting sales cycles, though the long-term trajectory remains upward. Continuous investment in fixed assets combined with increasing revenues points to a growth strategy, albeit with temporarily reduced capital efficiency.

Net Revenue

The net revenue shows a general upward trend over the observed periods. Starting at $3,445 million in March 2021, revenue increased steadily, reaching a peak of $7,685 million in June 2025. There is some volatility, with occasional slight declines, such as between June 2022 ($6,550 million) and September 2022 ($5,565 million), and again between June 2025 and the following quarter. However, the overall trajectory remains positive, reflecting significant growth over the four-year span.

Total Assets

Total assets experienced a dramatic increase early in the timeline. From $10,047 million in March 2021, assets rose sharply to $66,915 million by March 2022, indicating a major expansion or acquisition event. Following this surge, asset levels remained relatively stable, fluctuating modestly around the $67,000 million mark through 2023 and 2024, before increasing moderately to $74,820 million by June 2025. This pattern suggests a substantial structural change followed by steady asset base growth.

Total Asset Turnover

The total asset turnover ratio exhibited a declining trend corresponding with the surge in total assets. Initially, it stood between 1.14 and 1.33 during 2021, indicating efficient use of assets for revenue generation. Post asset expansion in 2022, turnover dropped sharply to approximately 0.28, reflecting the significant increase in asset base relative to revenue. Since then, turnover has gradually improved, rising from 0.32 in mid-2022 to 0.40 by June 2025, indicating improving asset utilization as the company manages its larger asset base more effectively.

Overall Insights

The data reflects a period of considerable growth and transformation. The dramatic asset increase in early 2022 suggests a strategic investment or acquisition that expanded the company’s asset base significantly. Although this initially reduced asset turnover, the company appears to have adapted, improving operational efficiency and continuing to increase revenue. Despite some short-term fluctuations in revenue, the longer-term trend is upward, supported by steady improvements in asset utilization. Such trends suggest that the company is effectively scaling its operations and gradually enhancing productivity relative to its expanded asset base.

The analysis of the quarterly financial data reveals several significant trends and patterns in net revenue, stockholders’ equity, and equity turnover over the observed periods.

Net Revenue

Net revenue exhibits a generally upward trajectory with intermittent fluctuations. From March 2021 through June 2022, net revenue rises steadily from approximately $3.45 billion to $6.55 billion, showing strong growth momentum. However, there is a noticeable dip in the third and fourth quarters of 2022 with revenues declining to around $5.57 billion and $5.60 billion, respectively. Revenues stabilize around $5.35 billion in early 2023, followed by a rebound through the end of 2024, peaking at nearly $7.66 billion in December 2024. This represents a robust recovery and further growth, though a slight decline appears again in the early 2025 quarters before rising back toward $7.69 billion in mid-2025. Overall, the company shows a strong capacity to grow revenue with some volatility in late 2022 and early 2023 that gradually corrects over time.

Stockholders' Equity

Stockholders’ equity displays a significant and abrupt increase beginning in March 2022, jumping from approximately $7.5 billion in December 2021 to an elevated level above $55 billion in the first quarter of 2022. This marked change likely indicates a major capital event such as a share issuance, restructuring, or other substantial equity-related transaction. After this sharp rise, equity remains relatively stable, maintaining a range from $54.5 billion to $59.7 billion over the subsequent quarters through mid-2025. The incremental increases within this high range suggest controlled and steady growth or retained earnings accumulation, contributing to a stable equity base over the long term.

Equity Turnover

Equity turnover follows a pattern that correlates strongly with the changes seen in the other metrics. Initial values indicate a healthy growth trend, increasing from 1.76 to a peak of 2.19 in December 2021. This high ratio aligns with the lower equity base and rising revenue profile. Starting in March 2022, the ratio plunges sharply to around 0.34 coinciding with the large increase in equity. In this phase, turnover stabilizes between 0.39 and 0.50 from mid-2022 through mid-2025. While this represents a significantly lower turnover ratio compared to the pre-March 2022 period, the gradual incremental improvement toward 0.50 indicates a slow recovery in operational efficiency relative to the elevated equity base.