Advanced Micro Devices, Inc.

Hello, and welcome to the AMD fourth quarter and full year 2021 financial results conference call. At this time, all participants are in listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It's now my pleasure to turn the call over to Laura Graves, Corporate Vice President of Investor Relations. Laura, please go ahead.

Thank you and welcome to AMD's fourth quarter and fiscal year-end 2021 financial results conference call. By now, you should have had the opportunity to review a copy of our earnings release and accompanying slideware. If you have 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 Dan McNamara, Senior Vice President and General Manager of Server, will attend the virtual Susquehanna Financial Group 11th Annual Technology Conference on Thursday, March 3rd. Our first quarter 2022 quiet time is expected to begin at the close of business on Friday, March 11th, and AMD will host its 2022 Financial Analyst Day on Thursday, June 9th. Today's discussions contain 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 the results to differ. 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 the slides posted on our website. Now with that, I will hand the call over to Lisa. Lisa?

Thank you, Laura, and good afternoon to all those listening in today. 2021 was an outstanding year for AMD. as we exceeded our aggressive growth goals and delivered another record year. Each of our businesses grew significantly and set new annual revenue records, highlighted by data center revenue more than doubling year over year. Annual revenue grew 68% to a record $16.4 billion, and we expanded gross margin for the sixth straight year. We also delivered record net income in EPS, both of which more than doubled year-over-year. Looking at the fourth quarter, we ended the year exceptionally strong with our sixth straight quarter of greater than 45% year-over-year revenue growth. Fourth quarter revenue grew 49% from a year ago to a record $4.8 billion. We expanded gross margin by more than five percentage points and doubled operating income year-over-year. Turning to our computing and graphics segment, revenue increased 32% year-over-year to $2.6 billion, driven by growth in both Ryzen and Radeon processor sales. Record client computing revenue grew by a double-digit percentage from a year ago, led by record notebook sales. We saw strong demand for premium AMD notebooks and their higher-end desktop CPUs in the quarter, as Ryzen 5000 processor unit shipments grew by a double-digit percentage sequentially. As a result, we believe we gained client processor revenue share for the seventh straight quarter. We launched our Ryzen 6000 series notebook CPUs at CES last month, featuring our new Zen 3 Plus Core, that further extends the leadership compute, gaming, and battery life capabilities of our mobile processors. We increased the number of premium gaming and commercial design wins from Acer, Asus, Dell, HP, Lenovo, and other major PC providers to more than 200, including more than 20 AMD Advantage notebooks that combine Ryzen CPUs, Radeon GPUs, and Radeon software to deliver the ultimate gaming experience. We also provided the first public demonstration of our upcoming Ryzen 7000 desktop processors at CES. Ryzen 7000 series desktop CPUs provide a significant performance increase compared to our current Ryzen processors by combining our high-performance 5nm Zen 4 core with our next-generation memory and I.O. technologies in the new AM5 sockets. There's a lot of excitement in the market for our next-gen Ryzen desktop processors, and we're on track to launch in the second half of 2022. In graphics, revenue more than doubled year-over-year for the third straight quarter. Radeon 6000 series GPU unit shipments and revenue both grew by double-digit percentages sequentially, led by strong demand across our RDNA2 desktop family. At CES, we announced that we expanded our Radeon 6000 series GPU portfolio with our first mainstream RDNA2 desktop GPU, priced at $199. We also introduced new mobile GPUs that deliver up to 20% more performance than our prior generation, and our first mobile graphics chips for thin and light gaming notebooks. Data center graphics revenue more than doubled year over year, driven largely by HPC wins for our latest Instinct MI200 accelerators. We are seeing growing customer engagements for our data center GPUs based on the leadership AI and HPC performance of our new MI200 accelerators, highlighted by multiple supercomputing wins and an expanded set of platforms on track to launch from Atos, Dell, HP, Lenovo, Supermicro, and others, starting later this quarter. Turning to our enterprise embedded in semi-custom segment, revenue increased 75% year-over-year to $2.2 billion, driven by record epic processor and semi-custom sales. Semi-custom sales increased year-over-year as the current game console cycle continues outpacing all prior generations. We expect revenue to grow this year driven by continued strong demand for the latest Microsoft and Sony consoles. Turning to server, we had another outstanding quarter. Revenue more than doubled year over year and increased by a double-digit percentage sequentially driven by demand across both cloud and enterprise customers. In cloud, revenue more than doubled year over year as the largest providers expanded internal deployments and more than 130 new AMD-powered instances launched from Amazon Web Services, Alibaba, Google, IBM, Microsoft Azure, and others. Microsoft Azure previewed a new HPC instance powered by our third-gen EPYC processors with 3D stacked memory that delivers up to 80% more performance than currently available instances. Our differentiated 3D stacking technology further extends the leadership performance of EPIC processors in technical computing workloads like EDA, fluid dynamics, and complex simulations. We started volume production of EPIC processors with 3D stacked memory earlier this quarter in advance of OEM platform launches with all our major server partners. In enterprise, revenue doubled year-over-year, driven by the ongoing ramp of more than 100 third-gen EPIC platforms available from Dell, HP Enterprise, Lenovo, Supermicro, Cisco, and others. In HPC, EPIC processor adoption was highlighted by the number of AMD-powered supercomputers on the November Top 500 Fastest Supercomputers list, tripling year-over-year to 73. Epic processors also dominated the green 500 list and are now powering eight of the top 10 most efficient supercomputers in the world. Turning to our overall data center business, we made outstanding progress in the last year. We exited 2021 with data center revenue contributing a mid 20 percentage of overall revenue, And we expect 2022 to be another year of significant growth based on the strong customer demand signals for our current and next-generation products. In November, we provided first details of our next-generation EPYC processor, codenamed Genoa, that will feature up to 96 Zen4 cores and next-generation memory and I.O. technologies, including breakthrough memory expansion capabilities. Customer excitement for Genoa is extremely high, as it extends our performance leadership across a broad range of workloads. We also announced the addition of Bergamo to our server roadmap, featuring a version of our Zen 4 core called Zen 4C that has been specifically optimized for cloud-native computing. Bergamo is a high-core-count, power-efficient CPU that can be used in the same platforms as Genoa. It will feature up to 128 CPU cores and deliver significant performance and power efficiency advantages for cloud workloads. We are sampling Genoa processors to customers now and are on track to launch later this year with Bergamo shipments planned to follow in the first half of 2023. Turning to our Xilinx acquisition, we were pleased to announce that China's State Administration for Market Regulation approved the transaction on January 27th. The only remaining regulatory approval required is FTC approval of our HSR refiling, and we expect to close the transaction in the first quarter of 2022. I am more excited than ever about the benefits of the acquisition for both AMD and Xilinx stakeholders. Customer excitement is also high as they look forward to the opportunity to deepen their strategic engagements with AMD based on our expanded technology and solutions portfolio. In summary, I am incredibly proud of our performance in 2021. Our record annual results highlight our strong execution over multiple years to establish the technical, operational, and strategic foundation to position AMD as a high-performance computing leader. Each of our businesses performed extremely well in 2021, with growth significantly ahead of the long-term financial model we outlined at our Financial Analyst Day in 2020. I want to take a moment to recognize and thank the AMD employees whose passion, dedication, and execution have enabled this success. Turning to 2022, demand for our products is very strong, and we look forward to another year of significant growth and share gain as we ramp our current products and launch our next wave of Zen 4 CPUs and RDNA 3 GPUs. We have also made significant investments to secure the capacity needed to support our growth in 2022 and beyond. Looking out over the long term, we are confident in our ability to continue growing significantly faster than the market based on our expanded roadmap investments and the deep relationships we have established with a broad set of customers who view AMD as a strategic enabler of their success. Now I'd like to turn the call over to Devinder to provide some additional color on our fourth quarter and full year financial performance. Devinder?