Advanced Micro Devices, Inc.

Hello, and welcome to the AMD first quarter 2021 earnings call and webcast. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. As a reminder, this conference is being recorded. It's now my pleasure to turn the call over to Ruth Cotter, Senior Vice President, Worldwide Marketing, Human Resources, and Investor Relations. Please go ahead, Ruth.

Thank you and welcome to AMD's first quarter 2021 financial results conference call. By now, you should have had the opportunity to review a copy of our earnings press release and accompanying sideware. If you've not reviewed these documents yet, they can be found on the investor relations page of AMD.com. Participants on today's conference call are Dr. Lisa Su, our president and chief executive officer, and Devinder Kumar, our executive vice president, chief financial officer, and treasurer. This is a live call and will be replayed via webcast on our website. Before we begin, I would like to note that our annual shareholder meeting will be held on Wednesday, May 19th, as a virtual event accessible from our website. Dr. Lisa Su will provide a keynote presentation at the J.P. Morgan Technology Media and Communications Conference on Monday, May 24th. Dan McNamara, Senior Vice President and General Manager of our server business, We'll attend the Bank of America Global Technology Conference on Wednesday, the 9th of June, and our second quarter, 2021 Quiet Time, is expected to begin at the close of business on Friday, June 11th. Today's discussion contains forward-looking statements based on current beliefs, assumptions, and expectations, speak only as of today, and as such, involve risks and uncertainties that could cause actual results to differ materially from our current expectations. Please refer to the cautionary statement in our press release for more information on factors that could cause actual results to differ materially. We will refer primarily to non-GAAP financial measures during this call. The full non-GAAP to GAAP reconciliations are available in today's press release and slides posted on our website. Now, with that, I'll hand the call over to Lisa. Lisa?

Thank you, Ruth, and good afternoon to all those listening in today. Our business continued to accelerate significantly in the first quarter, driven by the best product portfolio in our history, strong execution, and robust market demand. We delivered our sixth straight quarter of double-digit percentage year-over-year revenue growth and record quarterly revenue and profitability. First quarter revenue increased 93% year-over-year to 3.45 billion, with growth in all of our businesses. Turning to our computing and graphics segment, First quarter revenue increased 46% year-over-year to $2.1 billion, led by growth in both Ryzen and Radeon processor sales. In client computing, revenue grew by a significant double-digit percentage year-over-year and increased sequentially as we set records for client processor revenue and ASP. Against the backdrop of strong overall PC demand, our revenue is growing significantly faster than the market, particularly in the ultra-thin gaming and commercial segments. As a result, we believe we gained client processor revenue share in the quarter. Our revenue share has doubled over the last two years as we have expanded in the premium products. In notebooks, we delivered our sixth straight quarter of record mobile processor revenue based on sustained demand for Ryzen 4000 series processors and the launch of our new Ryzen 5000 series processors. Ryzen mobile 5000 series processor revenue has ramped twice as fast as the prior generation. We expect continued growth in 2021 as the number of notebook platforms powered by our new processors is on track to increase by 50% compared to our prior generation. We're also making good progress in the commercial market, as unit shipments of our Ryzen Pro processors grew by a strong double-digit percentage sequentially. We secured multiple high-volume wins across Fortune 500 aerospace, automotive, electronics, and engineering companies in the quarter. And we're well positioned for further growth as we have tripled our commercial notebook design wins with the largest OEMs this year. In graphics, revenue increased by a strong double digit percentage year over year and sequentially, led by channel sales growth as revenue from our high end Radeon 6000 GPUs more than doubled from the prior quarter. We introduced our Radeon 6700 XT desktop GPU with leadership 1440p gaming performance in March and are on track for the first notebooks featuring our leading edge mobile RDNA2 architecture to launch later this quarter. We expect Radeon 6000 series GPU sales to grow significantly over the coming quarters as we ramp production. Data center graphics revenue grew year over year and sequentially, driven largely by adoption of instinct accelerators across cloud and HPC customers. We are making great progress on our data center GPU roadmaps and expect revenue to grow in the second half of the year as we begin the production ramp of our next generation AMD Instinct GPU to support multiple HPC wins, including Frontier, the first US exascale supercomputer. Frontier will use next generation AMD CPUs, GPUs, and software to deliver unprecedented scientific computing and AI capabilities, creating a blueprint for scientific, cloud, and enterprise customers to enable exascale class computing and AI performance over the coming years. Now turning to our enterprise embedded and semi-custom segments. Revenue increased 286% year-over-year to $1.35 billion, driven by strong growth in both semi-custom and epic processor sales. Semi-custom revenue declined by a single-digit percentage sequentially, which is better than typical seasonality. We expect semi-custom sales to remain strong throughout 2021, driven by significant demand for the latest generation Sony and Microsoft consoles. In server, we delivered another quarter of record server processor revenue as Epic processor sales more than doubled year over year and grew by a strong double digit percentage sequentially. Sales of both our second and third gen Epic processors increased sequentially as growing adoption of our second gen offerings was complemented by third gen Epic processors successfully ramping into production across multiple cloud and enterprise customers. Third gen EPIC processors offer 25% more performance per watt compared to our previous generation and deliver both per socket and per core leadership across database, ERP, data analytics, Java, virtualization, cloud, and supercomputing workloads. Cloud demand was particularly strong in the quarter as tier one providers expanded their EPIC processor deployments to power more of their internal infrastructure and introduced 11 new AMD-powered instances. We expect the number of AMD-powered instances to double by the end of the year to 400, as Microsoft Azure, Amazon, Google, IBM, Oracle, and Tencent significantly expand their offerings with third-gen EPYC processors. For the enterprise, Cisco, Dell, HP Enterprise, Lenovo, and Supermicro all announced plans to expand their AMD-based offerings with more than 100 new third-gen EPYC processor-powered server platforms that deliver superior performance and total cost of ownership. In HPC, we built momentum with new high-volume wins, including the National Center for Atmospheric Research, Sweden's Institute of Science, as well as a unique on-prem and cloud solution for the United Kingdom's National Weather Modeling Service that will be the world's most powerful weather and climate forecasting supercomputer. Taking a step back, I am very pleased with the progress we have made in our data center business over the last several years, as each new EPIC processor generation has ramped significantly faster than the previous generation. We have established AMD as a trusted strategic partner to the largest cloud enterprise and HPC customers based on developing and consistently delivering a leadership multi-generation CPU roadmap. 2021 marks an inflection point in terms of the scale ecosystem support and customer adoption of our Epic and instant processors. In the first quarter, data center product revenue more than doubled year over year and represented a high teens percentage of our overall revenue. We expect data center product revenue to grow significantly as we go through the year, driven by our strong pipeline of new cloud, enterprise, and HPC wins. We significantly accelerated our business in the first quarter and now see higher growth for the year, driven by increased customer adoption for our products, overall market strength, and additional supply from our supply chain partners. We also passed another major milestone with our pending acquisition of Xilinx in the quarter as shareholders voted overwhelmingly to approve the transaction. We remain on track to close the strategic acquisition by the end of the year. In closing, we have entered a high performance computing mega cycle with the strongest products and the deepest customer relationships in our history. Our success is built on delivering a consistent cadence of leadership products. We are increasing our R&D investments and aggressively driving our roadmaps to continue setting the pace of innovation for the industry and deliver best-in-class growth over the coming years. Now I'd like to turn the call over to Devinder to provide some additional color on our first quarter financial performance. Devinder?