Analysis of Reportable Segments
Advanced Micro Devices Inc. operates in 4 segments: Data Center; Client; Gaming; and Embedded.
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- Income Statement
- Cash Flow Statement
- Common-Size Balance Sheet: Liabilities and Stockholders’ Equity
- Analysis of Short-term (Operating) Activity Ratios
- Price to FCFE (P/FCFE)
- Capital Asset Pricing Model (CAPM)
- Selected Financial Data since 2005
- Return on Equity (ROE) since 2005
- Debt to Equity since 2005
- Analysis of Revenues
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Segment Profit Margin
Advanced Micro Devices Inc., profit margin by reportable segment
| Dec 28, 2024 | Dec 30, 2023 | Dec 31, 2022 | Dec 25, 2021 | Dec 26, 2020 | |
|---|---|---|---|---|---|
| Data Center | |||||
| Client | |||||
| Gaming | |||||
| Embedded |
Based on: 10-K (reporting date: 2024-12-28), 10-K (reporting date: 2023-12-30), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-25), 10-K (reporting date: 2020-12-26).
- Data Center Segment Profit Margin
- The profit margin for the Data Center segment exhibits a generally positive trajectory over the period. Starting at 11.75% in 2020, it significantly increased to 26.83% in 2021, further rising to 30.58% in 2022. However, in 2023, there is a noticeable decline to 19.5%, followed by a recovery to 27.68% in 2024. This indicates some volatility but overall improvement compared to the initial period.
- Client Segment Profit Margin
- The Client segment’s profit margin demonstrates a downward trend with considerable fluctuation. It begins at a relatively high level of 30.99% in 2020 and slightly decreases to 30.32% in 2021. Thereafter, a sharp decline occurs, dropping to 19.19% in 2022 and turning negative to -0.99% in 2023. The margin partially recovers in 2024 to 12.72%, though it remains well below earlier levels, indicating challenges impacting profitability in this segment.
- Gaming Segment Profit Margin
- The Gaming segment shows improvement in profitability despite starting from a negative margin. The margin was -5.03% in 2020 but rose substantially to 16.66% in 2021. It maintained positive margins thereafter, albeit with a slight decline to 14% in 2022, followed by moderate increases to 15.63% in 2023 and a gradual reduction to 11.18% in 2024. The trend suggests stabilization with profitable operations after initial losses.
- Embedded Segment Profit Margin
- The Embedded segment profit margin reflects strong and increasing profitability, especially after 2020. It began with a negative margin of -7.69% in 2020 but surged dramatically to 17.89% in 2021. This upward momentum continued, reaching a peak of 49.47% in 2022. Margins remained high with a slight decline to 49.39% in 2023 and then moderated to 39.95% in 2024. The overall trend points to robust and sustained profitability in this segment.
Segment Profit Margin: Data Center
Advanced Micro Devices Inc.; Data Center; segment profit margin calculation
| Dec 28, 2024 | Dec 30, 2023 | Dec 31, 2022 | Dec 25, 2021 | Dec 26, 2020 | |
|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||
| Operating income (loss) | |||||
| Net revenue | |||||
| Segment Profitability Ratio | |||||
| Segment profit margin1 | |||||
Based on: 10-K (reporting date: 2024-12-28), 10-K (reporting date: 2023-12-30), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-25), 10-K (reporting date: 2020-12-26).
1 2024 Calculation
Segment profit margin = 100 × Operating income (loss) ÷ Net revenue
= 100 × ÷ =
- Operating Income (Loss)
- The operating income displayed a significant upward trend overall during the observed period. Starting at $198 million in 2020, it escalated sharply to $991 million in 2021, marking a more than fourfold increase. This upward trajectory continued in 2022, reaching $1,848 million. However, in 2023, a decline occurred, with operating income dropping to $1,267 million. The year 2024 saw a strong recovery, with operating income rebounding significantly to $3,482 million, the highest in the five-year span.
- Net Revenue
- There was a consistent and robust growth in net revenue over the entire period. Net revenue started at $1,685 million in 2020 and more than doubled to $3,694 million by the end of 2021. The growth momentum continued with revenues increasing to $6,043 million in 2022 and $6,496 million in 2023. The year 2024 experienced a remarkable acceleration in revenue, nearly doubling the previous year's figure to reach $12,579 million. This reflects strong and expanding sales momentum within the segment.
- Segment Profit Margin
- The segment profit margin showed overall improvement but with noticeable fluctuations. Beginning at 11.75% in 2020, the margin rose substantially to 26.83% in 2021 and further increased to 30.58% in 2022, indicating enhanced profitability and operational efficiency. However, this was followed by a decline to 19.5% in 2023, suggesting either increased costs or price pressures during that year. In 2024, the margin recovered to 27.68%, pointing towards improved profitability relative to revenue once again.
Segment Profit Margin: Client
Advanced Micro Devices Inc.; Client; segment profit margin calculation
| Dec 28, 2024 | Dec 30, 2023 | Dec 31, 2022 | Dec 25, 2021 | Dec 26, 2020 | |
|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||
| Operating income (loss) | |||||
| Net revenue | |||||
| Segment Profitability Ratio | |||||
| Segment profit margin1 | |||||
Based on: 10-K (reporting date: 2024-12-28), 10-K (reporting date: 2023-12-30), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-25), 10-K (reporting date: 2020-12-26).
1 2024 Calculation
Segment profit margin = 100 × Operating income (loss) ÷ Net revenue
= 100 × ÷ =
- Net Revenue
- Net revenue showed an overall upward trajectory from 2020 through 2024, increasing from $5,189 million in 2020 to $7,054 million in 2024. However, this growth was not linear, as there was a decline observed in 2023 where revenue dropped to $4,651 million before rebounding significantly in 2024.
- Operating Income (Loss)
- Operating income experienced fluctuations over the analyzed period. Starting at $1,608 million in 2020, it rose to a peak of $2,088 million in 2021 before declining to $1,190 million in 2022. In 2023, operating income slipped into a loss of $46 million, marking a significant downturn. The figure recovered in 2024 to $897 million but remained below the previous peak levels seen in 2020 and 2021.
- Segment Profit Margin
- The segment profit margin largely mirrored the trends in operating income, starting strong at 30.99% in 2020 and slightly decreasing to 30.32% in 2021. A notable decline occurred in 2022, falling to 19.19%, with the margin turning negative to -0.99% in 2023, corresponding with the operating loss that year. By 2024, the segment profit margin recovered to 12.72%, indicating partial recovery but still substantially lower than earlier years.
- General Observations
- The data reveals a period of strong financial performance in 2020 and 2021, followed by volatility and challenges beginning in 2022 and peaking in 2023 with a loss in operating income and negative segment profitability. Although 2024 shows signs of recovery in both revenue and profitability, the operating income and segment profit margin remain below the high levels seen earlier, suggesting an ongoing period of business adjustment or external pressures during the most recent years.
Segment Profit Margin: Gaming
Advanced Micro Devices Inc.; Gaming; segment profit margin calculation
| Dec 28, 2024 | Dec 30, 2023 | Dec 31, 2022 | Dec 25, 2021 | Dec 26, 2020 | |
|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||
| Operating income (loss) | |||||
| Net revenue | |||||
| Segment Profitability Ratio | |||||
| Segment profit margin1 | |||||
Based on: 10-K (reporting date: 2024-12-28), 10-K (reporting date: 2023-12-30), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-25), 10-K (reporting date: 2020-12-26).
1 2024 Calculation
Segment profit margin = 100 × Operating income (loss) ÷ Net revenue
= 100 × ÷ =
The segment data over the analyzed five-year period reveals several important trends related to financial performance.
- Operating Income (Loss)
- The operating income showed a dramatic improvement from a significant loss of US$138 million in 2020 to a positive US$290 million in 2024. This upward trend reflects a substantial turnaround in operational profitability, with operating income turning positive and generally increasing each year except for a slight dip from 2022 to 2023.
- Net Revenue
- Net revenue experienced strong growth from 2020 through 2022, peaking at US$6.805 billion in 2022. However, following this peak, revenue declined substantially to US$2.595 billion by 2024, indicating a notable contraction in sales or volume during the final two years of the period.
- Segment Profit Margin (%)
- The segment profit margin improved from a negative margin of -5.03% in 2020 to positive margins ranging from 11.18% to 16.66% in subsequent years. The peak margin occurred in 2021 at 16.66%, followed by a modest overall decline to 11.18% in 2024. Despite the decreasing margin since 2021, profitability remained positive, signaling effective cost management and operational efficiency relative to revenue.
In summary, the segment demonstrated a strong recovery and profitability improvement starting in 2021, with operating income and profit margins rising sharply from negative to positive values. However, after peaking in 2022, revenue declined significantly, which was accompanied by a slight decrease in profit margins and operating income in the final years. This pattern suggests potential challenges in sustaining revenue growth, although margin control and profitability were maintained at positive levels throughout the period.
Segment Profit Margin: Embedded
Advanced Micro Devices Inc.; Embedded; segment profit margin calculation
| Dec 28, 2024 | Dec 30, 2023 | Dec 31, 2022 | Dec 25, 2021 | Dec 26, 2020 | |
|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||
| Operating income (loss) | |||||
| Net revenue | |||||
| Segment Profitability Ratio | |||||
| Segment profit margin1 | |||||
Based on: 10-K (reporting date: 2024-12-28), 10-K (reporting date: 2023-12-30), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-25), 10-K (reporting date: 2020-12-26).
1 2024 Calculation
Segment profit margin = 100 × Operating income (loss) ÷ Net revenue
= 100 × ÷ =
The financial data reveals a notable evolution in operational and revenue performance over the five-year period. Operating income (loss) showed a significant improvement, transitioning from a negative figure in 2020 to a substantial positive value starting in 2021, with a peak in 2023 before decreasing in 2024. Net revenue followed a consistent upward trend until 2023 when it reached its highest value, then experienced a decline in 2024. The segment profit margin exhibited substantial growth through 2022 and 2023, indicating enhanced profitability, but this margin decreased in 2024, reflecting reduced efficiency or increased costs relative to revenue.
- Operating Income (Loss)
- Initially, there was an operating loss of 11 million US dollars in 2020. This shifted to a profit of 44 million in 2021, followed by a sharp increase to over 2 billion in both 2022 and 2023, before declining to 1.4 billion in 2024.
- Net Revenue
- The net revenue expanded markedly from 143 million US dollars in 2020 to a peak of 5.3 billion in 2023. However, it dropped to approximately 3.6 billion in 2024, representing a significant contraction after years of growth.
- Segment Profit Margin
- The segment profit margin moved from a negative 7.69% in 2020 to strong positive margins exceeding 49% during 2022 and 2023. In 2024, the margin decreased to just under 40%, indicating less profitability relative to revenue than in previous years, albeit remaining robust overall.
Overall, the data indicates a period of rapid revenue and profit growth culminating in 2023, followed by a moderate downturn in both sales and profitability in 2024. This suggests potential challenges in sustaining previous growth levels or changes in market conditions or cost structure that impacted operating efficiency in the most recent period.
Net revenue
Advanced Micro Devices Inc., net revenue by reportable segment
US$ in millions
| Dec 28, 2024 | Dec 30, 2023 | Dec 31, 2022 | Dec 25, 2021 | Dec 26, 2020 | |
|---|---|---|---|---|---|
| Data Center | |||||
| Client | |||||
| Gaming | |||||
| Embedded | |||||
| Total |
Based on: 10-K (reporting date: 2024-12-28), 10-K (reporting date: 2023-12-30), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-25), 10-K (reporting date: 2020-12-26).
- Data Center Segment
- The Data Center segment experienced consistent and substantial growth over the observed periods. Revenue more than doubled between 2020 and 2021, increasing from approximately 1.7 billion to 3.7 billion US dollars. This upward trend continued significantly, reaching 6.0 billion in 2022 and 6.5 billion in 2023. Notably, the segment nearly doubled again by the end of 2024, posting revenue of approximately 12.6 billion US dollars. This indicates strong and accelerating demand in this segment.
- Client Segment
- The Client segment showed an initial increase from around 5.2 billion US dollars in 2020 to nearly 6.9 billion in 2021. However, this was followed by a decline to 6.2 billion in 2022 and a further downturn to approximately 4.7 billion in 2023. The segment rebounded somewhat by 2024, reaching about 7.1 billion. Overall, this segment demonstrates volatility with a decline in the middle years but partial recovery in the latest period.
- Gaming Segment
- The Gaming segment displayed strong growth from 2.7 billion US dollars in 2020 to 5.6 billion in 2021, then continued growing to a peak of 6.8 billion in 2022. However, revenues decreased in the subsequent years, falling to 6.2 billion in 2023 and substantially dropping to about 2.6 billion in 2024. This pattern suggests a peak in demand followed by a sharp decline, potentially reflecting market saturation or increased competition.
- Embedded Segment
- The Embedded segment reported comparatively low revenue in 2020 and 2021, at under 250 million US dollars. In 2022, the segment experienced a remarkable surge to 4.6 billion, followed by further growth to 5.3 billion in 2023. However, the segment saw a decrease in 2024, dropping to around 3.6 billion. This indicates a rapid expansion phase followed by a contraction, implying possible volatility or shifting strategic focus.
- Total Revenue
- Total net revenue exhibited a strong upward trajectory from 9.8 billion US dollars in 2020 to 16.4 billion in 2021, then climbing further to 23.6 billion in 2022. A slight decline occurred in 2023 with 22.7 billion, but total revenue rebounded to reach 25.8 billion by 2024. This suggests overall growth despite fluctuations in individual segments, driven primarily by the robust performance of the Data Center segment and initial expansions in Embedded and Gaming.
Operating income (loss)
Advanced Micro Devices Inc., operating income (loss) by reportable segment
US$ in millions
| Dec 28, 2024 | Dec 30, 2023 | Dec 31, 2022 | Dec 25, 2021 | Dec 26, 2020 | |
|---|---|---|---|---|---|
| Data Center | |||||
| Client | |||||
| Gaming | |||||
| Embedded | |||||
| All Other | |||||
| Total |
Based on: 10-K (reporting date: 2024-12-28), 10-K (reporting date: 2023-12-30), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-25), 10-K (reporting date: 2020-12-26).
The operating income data across reportable segments reveals distinct fluctuations over the five-year period examined. The total operating income demonstrates variability, starting at 1,369 million USD in 2020, peaking at 3,648 million USD in 2021, then significantly declining to 1,264 million USD in 2022, further dropping to 401 million USD in 2023, before recovering somewhat to 1,900 million USD in 2024.
- Data Center Segment
- This segment shows a general upward trend with some volatility. Income increased dramatically from 198 million USD in 2020 to 991 million USD in 2021 and further to 1,848 million USD in 2022. However, it declined to 1,267 million USD in 2023, before rising substantially to 3,482 million USD in 2024, indicating significant growth and possibly higher demand or improved profitability in the latest period.
- Client Segment
- The client segment initially grew from 1,608 million USD in 2020 to 2,088 million USD in 2021 but then faced a considerable contraction, plummeting to 1,190 million USD in 2022. The trend worsened in 2023 with a negative operating income of -46 million USD, signaling operating losses, before partially rebounding to 897 million USD in 2024. This pattern suggests struggles in maintaining profitability, with a partial recovery towards the end of the period.
- Gaming Segment
- The gaming segment shows a strong turnaround. It had a negative income of -138 million USD in 2020 but improved substantially to 934 million USD in 2021, maintaining similar income levels in 2022 (953 million USD) and 2023 (971 million USD). However, the income decreased considerably to 290 million USD in 2024. Despite the 2024 decline, the segment overall reversed losses into profitability and sustained it for several years.
- Embedded Segment
- This segment experienced substantial growth throughout the period. Commencing with a small negative operating income of -11 million USD in 2020, it showed marked improvements, escalating to 44 million USD in 2021 and then surging to 2,252 million USD in 2022. Continued growth to 2,628 million USD was followed by a decrease to 1,421 million USD in 2024. The segment appears to have developed into a major contributor to overall operating income, despite the recent downward movement.
- All Other Segment
- This segment consistently represents an operating loss and deteriorated significantly over the period. Starting with a loss of -288 million USD in 2020, losses deepened to -409 million USD in 2021, followed by a sharp increase in losses to -4,979 million USD in 2022. Although the losses slightly decreased in 2023 (-4,419 million USD) and 2024 (-4,190 million USD), this segment remains a material drag on overall profitability.
In summary, the data discloses that the company’s profitability is increasingly reliant on specific segments such as Data Center and Embedded, both showing strong growth despite some volatility. The Client segment shows mixed results with recent losses but signs of partial recovery. The Gaming segment transformed from loss to profit but faces downward pressure in the most recent period. The persistent large losses in the All Other category notably offset gains in other segments and indicate an area for focus to improve overall financial performance.