Advanced Micro Devices (AMD) 28 Jul 202020 Q2 Earnings call transcript

Hello and welcome to the AMD Second Quarter 2020 Conference call. At this time, all participants are in a listen-only mode. [Operator Instructions] A question-and-answer session will follow the formal presentation.

As a reminder, this conference is being recorded. It is now my pleasure to turn the call over to Ruth Cotter, Senior Vice President, Marketing Human Resources and Investor Relations for AMD. Ms. ahead. go please Cotter,

and welcome By Second had now a earnings to and results the XXXX conference review release our of call. you copy to you Quarter AMD's financial opportunity slides. Thank should have

Financial If Vice on on of Investor and found call can Officer Officer the and call conference Devinder reviewed President, are you've our amd.com. Su, Relations and our Participants Chief replayed is our these President website. not This website they a be will documents, and AMD's Chief via today's page Senior Dr. on Kumar, webcast Treasurer. Lisa Executive live be

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to cause of expected that our current differ Today's statements business information actual involve more our the XXXX quarter to addition, risks release from in time could begin statements such we current the uncertainties current beliefs, of the refer results quiet press that on on forward-looking make. expectations. of to statement speak based In the as related cautionary risks and as may at date discussion our materially Please any for expectations close on is only XXth third the forward-looking Friday to September. contains and assumptions and

and metrics We most release to will measures in refer posted are amd.com. comparable referenced to non-GAAP on reconciled financial today's website directly GAAP their press financial slides measure our during this financial the non-GAAP call, primarily

Lisa. the like with call to I'd over hand that, Lisa? to Now

all to those afternoon good and Ruth today. listening you, Thank in

our strategy. last financial years, consistently partnerships strengthened balance growth ramped maps, and on edge long-term expanded customers, technologies sheet. executed the have operational set of deep to we five road the significantly built products technical, leading We manufacturing our in established and an with product For drive foundation required multiple our

Our results how are through increased revenue guidance full-year strong consistent second successfully we quarter execution. our and demonstrate our business scaling

in grew processor Looking We XX% in processors. for mobile significantly billion, revenue revenue year-over-year EPYC by $X.XX and resulting businesses server at accelerated than driven second the and strong leadership doubling more to quarter, processor server Ryzen and our our year-over-year. demand quarter, the client

met we market quarter share Importantly, our than XX% of second double-digit products server goal, more for our processor Datacenter as accounted revenue.

offset year-over-year to highest XX% Ryzen and the our XX Increased graphics market than quarter. second PC in working years. Graphics and growth processor strong segment, client Turning Computing lower to sales quarter our delivered more from increased to $X.XX resulted in billion, COVID-XX a in processor home in due We sales. revenue as revenue than schooling more

processor and significantly. strong competition. quarter, to longer compared from the Multiple sequentially X,XXX party Desktop largely notebook drove our and of our resulting richer more a Sales year-over-year, gains. life, than mobile superior while have as both percentage revenue year and in a of unit mix. Ryzen in mobile, increased growth a as revenue battery consistently driven ASP growing was for processors ASP straight double-digit by demand by XXth market decreased unit In highlighted increased higher sales deliver Although, had quarter that revenue. we Series shipment latest our latest share record processors the Ryzen our third sequentially quarterly shipments and processors grew our we end significantly reviewers believe in anticipated, as processor notebook doubling ago performance

Ryzen of result mobile strong There processor notebooks processor pleased now a in our revenue than XX the report faster history. power I'm this are any Ryzen that has to XXXX performance, ramped XXXX in As market.

expect increase Series second powered than the launch and desktop of was mobile Lenovo to second first and premium GPU declined XX by gaming lower as by than HP their commercial and continue as ultrathin notebooks multiple OEMs. Graphics, strong business sales processor channel revenue half notebooks year-over-year, Ryzen second ramp more of consumer In processors for year We offset in accelerating the wave quarter more mobile double-digit sales. our PRO-XXXX in the

by GPUs, revenue series shipments GPU GPU Apple GPU center reduction gaming desktop by year-over-year, the and Radeon RDNA was professional of mobile GPUs. launches year-over-year. lower driven a our our revenue M decreased were new Dell the sellout notebooks, growth highlighted channel quarter. XXXX Data Mobile While featuring accelerated in of

and to our the computing next expect revenue CDNA the second increase visual ramp half we launch new as year, machine We workloads. center and learning exascale cloud-based in of wins GPU architecture for additional generation optimized data

processor revenue Semi-Custom our increased console our segment, and year-over-year in milestone the production important revenue. due next revenue as decreased an sales. we lower product by and passed driven Turning quarterly began semi-custom, to $XXX shipments generation initial Embedded semi-custom record of Enterprise, server sales SOCs. XX%, to game and million second Sequentially, semi-custom of X% we quarter increased In

X ramp second new production X holiday launches of to semi-custom PlayStation growth the strong series Xbox and we We support consoles. expect half as the

to to processors Turning since our server, building growth. has launching been drive a long-term foundation focus solid EPYC on our

our as AI as retail and to based support in high the video hardware driving dual solutions, processor broad, we TAM cloud, for has enterprise launching server cloud, multiple broad adoption milestone on is additions hyperconverged this powered HPC from number their ramped processor processors selecting of Tencent significant significantly We VMs infrastructure collaboration strategy up power users. into unique volume both Dell online providers. it power leading And Our added so widespread and EPYC high EPYC volume announced used that being introducing XX% new support platforms more power hyperscale of EPYC Computing AMD processors exclusively manufacturing Microsoft customers our they across of availability the that millions far launch industry services. in achieved enhanced while share used and compute by internal In to the generation year. multiple passed include by EPYC office a In multiple instances. EPYC million machines and customers. cloud to goal, instances. with second double-digit EPYC adoption grounded virtual to unit we in available publicly enterprise, ramped encrypt servers Lenovo quarter production platforms. latest XXX Google DGX power and their more infrastructure socket financial, applications their based than monthly is have and than have data confidential processed. its optimized AWS processors AMD processors to increased Recent being announced expanded HPE ECX global were quarter,

the University, secured based announcing and institutions on as performance of Gen by also powered and Purdue wins well new scalability HPC EPYC with We second leading offerings as Public including new processors. research leadership cloud-based all Oracle processors. EPYC Amazon, and Microsoft CERN, HPC Indiana include wins highlights IBM,

in the want processor and our In focus closing, this second unprecedented execution EPYC in continue gaining platforms our are for with volume to the remain of server we Gen ZENX on on as as to half thank ramp year. expect continue and to to share the second delivering year. additional server and We to late the cloud begin Milan generation next featuring on employees our partners We our deployments I business pleased during strong time momentum track shipping commitments. this

very there strong While uncertainty resilient. some pockets continues softness, to our portfolio and markets are demand be of product macroeconomic is and our

last products. on the next as multiple growth of focused proud ZEN about are made share track am remain XXXX. to over we front CPUs We market business our on $XX growth to our AMD our next a launch the generation and gaining I half the of long-term the opportunities in X we high-performance our and for to more accelerating on growth in We year, RDNA shipments in driven by of progress of the that markets. placing our deliver late driven second enter portfolio initial of I'm product GPUs current very phase years, are consistently have strong track us trajectory. billion excited in few the even by across on

We are our to added goal extend our pursue a we make leadership as significantly capabilities, market resources best-in-class further and ambitious AMD investing to IP have franchise. and to go growth

the over Now to second to I'd financial call color our on Devinder quarter additional like Devinder? performance. some turn provide to

afternoon We introduced market very good and quarter the the COVID-XX everyone. executed leading Lisa financial you, results, delivered we share. second CPU gained strong products and backdrop, well. industry Thank Amidst

growth. on our results and ability increased to our drive full-year quarter we revenue long-term second guidance continue as financial to commitments, deliver The highlight consistently

growth. basis ago, up year driven was points XX% processor the investments XXX primarily million, in expenses up billion, from quarter. X% $XXX $X.XX and strong and year a by ago, share prior ago EPYC $XXX Ryzen client income year sales. per the million primarily to more and to XX%, growth server revenue from million, a compared per was processor to Year-over-year driven a due year compared compared share were ago. ago a revenue quarter ongoing $XXX margin million, Gross Operating and Operating was $XXX $XXX a Second was ago, diluted by earnings from from up margin income year sales. by to a $XXX business. $X.XX per from a million X% increased Operating as doubled XX% driven year $X.XX year ago. up than share million year-over-year Net were to to

year-over-year million, and XX% $XX segment Graphics compared Embedded lower higher were which X% by million significant million, by Now ago. and was driven Semi-Custom Ryzen income up revenue million of X% segment offset operating $XXX X% turning compared processor Graphics Computing $XX million of down an $X.XX year-over-year, to EESC revenue operating was to sales. was operating income results. revenue, business semi-custom EPYC a a growth Enterprise, of segment or Computing largely segment to due to segment revenue XX% year of $XXX year income $XX the was sales, or ago. sales. billion, in a revenue and processor

in the $X.X balance which equivalents product from very the billion, Turning third positive. new quarter which million first launches. flow year of up sheet, cash resulted quarter line credit, cash billion, repaid and in the performance year been million am quarter. ramp $X.X Inventory from half cash flow the of or free in cash revolving the $XXX totaled second was in pleased anticipation quarter. half in and with XX% was Free including revenue our to was our second of XXXX the the first the of I in the $XXX the prior of the cash fully quarter,

environment COVID-XX outlook customer global economic to is quarter current XXXX. the for turn and the the now on third of outlook based me current and expectations signals. backdrop Let demand contemplates Today's

We by are and increase and to to sales approximately plus expect The minus billion be semi-custom million, sequential $XXX or approximately expected higher XX% next-generation be XX% increases driven $X.XX year-over-year revenue approximately year-over-year an and and products. Ryzen EPYC Processor of sequentially.

operating we quarter non-GAAP to margin million, approximately In other addition, to be taxes non-GAAP expenses diluted be billion XXXX, approximately interest count XX%, for million to third approximately expense, the shares. and be QX and the be to approximately X.XX is gross expected expect $XX share non-GAAP in $XXX

products. of For now data expect growth the XX% strength center and annual XXXX, PC revenue we gaming our driven the full-year of higher by approximately

continues uncertainty We to have approximately economic prior for demand the two continue opportunities of of strong the to points full year. there from expect product multiple COVID-XX, markets. with year, XX% we significant ahead up us to closing, In across be due global gross while margin

accelerate for We it generate are in back and turn margins cash. gross to a Ruth momentum, the financial our significant good With question-and-answer position Ruth? session. that, to I'll expand

operator you, session. audience for please Devinder Thank and poll question-and-answer the the

[Operator coming today Lipacis Instructions] Mark Our Jefferies. from first question is from

now Your line is live.

question for Lisa. A

week your said buy last roadmaps and a that your You've view customers is and buy hoping of after that roadmaps of particularly but was a biggest X-nanometer the change CPUs competition does your in competitive your the to as - tell about part going they noted compares your you. environment they don't us process. forward, that past Thank in I you pushed how competitor your could servers - it

Hi, Mark. Yeah, for thanks the question.

edge the the last and So on deliver look, customers, when talk understand performance road to road consistent about our sure strategy. improvements that we is our we for And pushing map it's ensuring very we focused ensuring map over leading years that they we've that a promise. of couple that performance have and our the been we

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on March So to our road Analyst we in we - road very focused our and feel good map, to we Financial at be we maps. Day continue about our just our maps road updated executing

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today Vivek Our next Bank of is America. coming Arya question from from

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current all and went my sever last congratulations of timeframe, XXXX growth really from big back think and my strong one, when that was first Lisa, taking question for X% just would different in the in for headwinds. X-year how I the customer the a XXXX was XX% it's of What market share the the Thanks to from now? on puts AMD similar to to when approach willingness market kind that market your environment will time despite their it adopt you so a whether from to or or and what period. share or perspective platform. the competitive for take piece, is your to How contrast experience kind right and are takes those

Yes, thanks for question. the sure, Vivek,

performance. market for at server we've look right think leading said roadmap. good now, pushing our We roadmap our very the a is us. When strategic we're high the very for look, edge so So demand is there - feel I I about

we have our executed think to I well roadmap.

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did expecting factors macroeconomic Yes, you at like visibility full-year or weakness update actually of the better of changed What we there last second days, due see so guidance. in when the in that. of we we the now we is sort half When year. other might second related to we be what's that were to COVID-XX half the some things into XX were over talking sort April, look

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guidance. reasons the the are for those So

margins? on Anything gross

On to on about mix, Oh, gross question sorry, I lot your server. certainly is I'm yes. certainly margin. was think depends on depends accretive that that a Server margins,

I more tends the be bit PC of half focused. in second year to think the consumer-focused notebook the a business, and

of And there. the the relation to some mix margin. so that's said then And that are decretive we consoles

quarter going consoles, We the be for second expect half that it's very of will will the be be consoles although the very quarter. fourth still year. - strong And in to a lower strong third strong

to at the puts is are we and right for the So mix there, guide takes the that but about feel annual XX%. those

Our Matt from Ramsey Cowen from today coming and question is next Company.

is now line live. Your

wanted record gave sales. of double about might market have to the about pretty anticipated you into feeling your like how and what's traction the there the ask if you some half? be some and you in you. the days ago X,XXX. talk I for to market are and Thank back wonder the more so trends notebook enterprise XX of Lisa, but than of in comments second particularly then about the the the momentum PC the quarter for the I might stronger to notebook client you And business market notebook just maybe far half, pull back the remarkable and

Sure, Matt.

in business What particularly portfolio the strong has desktops we overall phenomena the extremely At and has COVID-XX our PC I second that seen see PC We've the adoption. quarter So market saw us but for from a shift desktop as as Ryzen same notebooks. well. the to strong and second was notebook done was the and increased think the type time, was X,XXX strong we strong market half. the down us into were for the PC look we expected,

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consumer, And in had so been we see underrepresented. we see we previously which strength gaming notebooks, strength in

we as a quite nice commercial well. the good as ramp education is market well commercial strong as around and pipeline have PCs, We see do

us. for performed So PC you put I business together and the think that well has

business last the expectations is and maybe if As a the quarters gaming channel. for over as into expect could And for piece data less size you follow-up few you business. what center does a your GPU Thanks. new I'm the opportunities improvements Navi of maybe frequently later a a in big little gaming opportunities about been put this year that's just are you asked what interested from perspective versus launch and the might context

Yes.

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good. think gaming overall So I is

product We transition. the of are process in a

X or late big call are launch this We on to RDNA RDNA We're X about as the it architecture. Navi excited year. track you

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we into that year into this go think next I so here contributor later be more and year. a will as And of

next coming Sur from is from JPMorgan. Your question Harlan today

line Your now is live.

half double-digit and end share penetration on to out thinking team next XX be EPYC, of see this pipeline Milan job Lisa given Good back EPYC of design the the thinking XX roll just broadening market win targets you your the we a quarterly over are should of in the hit and execution. just customer market or gains with the year, how about further percentage share out months? how and to Good the

Harlan. Sure,

of now about product server optimistic market, positioning our to that been much of advantage are EPYC. making ready frankly the our we customers in take and through sure doing Rome up look, what So, were is we've

in we have cloud saw the in quarter half some so first And around volume. started particularly year, the good in here of the nice some traction that to second accounts top ramp

to there of platforms the half we Rome. are As with forward year, coming the second look more

as are We and in cloud we well. have OEM that launched of the have a process being number platforms of additional platforms

Milan. strong shipping Milan start think a to our So Milan this going labs. be of good well expect that looking with on the the later We're growth customers working next year. half Rome we and our I second of year, as We're year. to continue into is about as this in to is driver excited

if really it's I see today, opportunity to I we're to again over the continue So and our next, more pleased are server XX say, journey a is think think where we way multiyear we we than a there would about months. the significant to is this with opportunity. execute for a well business But XX but us as

Absolutely. a an at survey annual CIO do follow-up, And then J.P. here as Morgan. we

or using the years, thinking thinking most that these CIOs, interest a For asking of and quite about Lisa of perspective two your then increase we about June, CIOs I now? in - enterprise what's team are that for guess survey the rapidly. is saw growing number level and we've EPYC interpretation past been on-prem. mix Global is the for platforms actually that what is year-over-year to in you AMD we use sort adoption the actual from EPYC sense are mind based an XX% from share And the is question our of on-prem, to did three planning seeing recent AMD years to my three your

thought good Yes, and actually Harlan was saw that I data I data. it

from And the of making diverse bit we the a is that the and But of customers. comes availability of factors. OEM enterprise ensuring very platforms - done a feet different Enterprise we're then just talking from the the the have progress of these partners platforms on that would where business some are are ecosystem also what that is number I a we and with directly now have in set So ISVs. on say our to and We've quite street partnerships that basically the we in market. first

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Our next Morgan coming is Joe Moore today from Stanley. question from

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As of talk at Can enterprise consumer can away terms the a about enterprise prospects making us is on bit this point your skewed and I you question, side. business? in progress previous business for sense much penetrating give say PC your little how client there you're much from how a you to

question. no Joe, Sure

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prove meaningfully up give that as upside much coming Can segments. half? segment, Great. fairly and is your you just press upside move on as year that through numbers console the been there's the in us across back what's seems bunch conservative the for your from a revised by color balanced follow-up, million could And and there happening we units getting several a yet builds about Nikkei then of console

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Our Rasgon Research. question coming Bernstein Stacy from is today from

line Your now is live.

up your another is follow freeing And foundry on what supply your than like. demand in partners this are look situation and way, to you at the to capacity point, rather raise capacity that put is is any capacity wanted related look I point, like? capacity maybe situation that full-year up at of supply what

Yes, Stacy. sure,

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bit demand half a think say we visibility our half. the is would hard I the what see Stacy, first from have in increasing it's that we some I customers generalize Yes, to and versus second

thing customers who about main our lower. are platforms. think you have bit it, of for said us The and I We some little a it's the ramping

out in be And the very to to I particular bit and an will a overall and the so digestion will depending built first half. how down, but would in customer-dependent say a customers would some grow they I second phenomena. and some customers half not be little on up see sure I'm opportunity it's point much we

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to infrastructure in see a infrastructure. continuing I there think need for invest and we is people

today Rakers is coming Our Fargo. next from Aaron Wells from question

Your line is now live.

how curious - you participate rock up the business. update wanted on And I your look opportunities of opportunities, talked to in how I to kind about do should past we thinking know quarter. the platform opened center the do how as data ability are for the data forward. from you the the ask and product software expect AI opportunities what the or of you going gauge on I'm GPU CDNA any you of on or a that kind just Congratulations business. cloud to has center about you have about perspective? in some GPU

Yes, sure. Aaron.

of second I it's was revenue think a the GPU center for So business - expect second modestly. a lower but up growth us. year This the sort I quarter mid-term in year-on-year, mentioned that data to is half vector look, we go the it

around in I strong think gaming, anchor wins as good cloud the good have we sort our and of Capitan is, and supercomputing El very the sort across VDI design - instances, supercomputing of design type wins we HPC, have wins. Frontier in cloud view

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to And we of expansion. progressed, a I'm that follow-up, how quick the ability in that a support then market? server CPU organization limiting you've factor in your to the just curious a of as in kind roadmap. ramping invested has of EPYC at this How lot talked about some been support has all just

have, CPUs, the a Yes, we efforts been it I time. What think teams. the there on both to qualification server just customers, as continuing very our takes our a customer part well time. in There we've support of that is invest. with takes sort own of - process is We're sort as pleased of

to So if we're look you at OpEx, our invest. continuing

but to infrastructure, support not market building the out is One for enterprise that key of just sales go the and overall business. just areas

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UBS. today Our Timothy from is next question coming Arcuri from

live. Your now is line

of maybe a the bit month to speak past that all, it's willing the to little Lisa, Can your or it Thanks. I felt six wanted you incrementally become more customers tenure probably more since the them weeks products. manufacturing ask you at changed has to adoption some to conversations, in have two issues. apparent customer competitors months the or even guess, I having

say, don't mean, to of six kind four would is I I weeks a time. short I think Yes,

where back would seen say And feel of our I we little think I couple are of we couple seen? we over I - performance a up products quarters past what have very seen positioned. have quarters, they've over is what and bit good about our capability and the think past the

going look, I data to on consistent can and what think we're count also of roadmap those each we've show us points. you is, said you for

I on that the point year. here and why is ships very for later us think point ensuring focused we're this Milan important an that that's

roadmap point, Zen is. customers already we've long-term the eager engaging are customers, started think X what I to general the understand very

would feel cloud, the us customers every that we on day. But a in of it's are well feel are, I to what we from customers think trying we not about sort and across notion terms what of there very say open so pull us a we workloads thing,, And that customers of are where the where across execute roadmap number it's OEM of is positioned. is, engage it's a more to accomplish, short-term is enterprise, to with the

terms data guess any be - potential there build your like are help. highlighted you've software before in to center, recently, of talent, in Thank I us has you. that And I improved that a attract bottleneck engineers can number give you to that capabilities. ability metrics might you the then sort of your And think software also out to anything in of hired terms of can you've

Yes.

you're versus a So data center statement. about a software, GPU talking of statement CPU I if GPU think it's more

I our we built actually very software, ISPs stuff and in think but do feel well applications think I that well. the our is work tools actually that's that some that the is There of all tune and pretty with optimize to going we some out. CPU infrastructure

GPU, As yes, it mindshare. more think there to center relates the I is data

the think GPU I data our in center software side our GPU supercomputing and the really capabilities. wins of profile helped the have capabilities raise

good building doing applications from this very in position vertical about are sort again of think And I we a and out our multiple So standpoint, is there. that well.

our So strategic progress. very to datacenter, a we in of making but we're business, part good it continue invest the is

coming Markets. question from Steves RBC next is Mitch Capital from Our

now Your line is live.

of little a and of I bit focus a different comparing topic, wanted xXX kind to ARM. on

sure saw it. ARM its announcement because you I'm use Intel real that based no historically with own displacing reason why ARM-based Apple was there developer an guys the So you and around chip couldn't really the chip

any future. threat the competitive I well. becoming in service So a or potential Intel think market risk the do xXX guys there ARM-based how about you is and guess How would as impact that

Apple's comments terms have ecosystem? you do in ARM based any entrant on in an So of potential developing that

versus going own what are who Apple to people in it in ARM MAC space. Yeah, are announced space their be would processor xXX, the as I as the no, where is I feel think who xXX. offer are the develop it's the is, well some I I quite still more about is? PC what I we some this in confident the about performance believe capabilities market, And think both you ecosystem overall not chips, and predominantly there own sense, do that market you server offer, are their still there that think building datacenter what do say

are offerings I get, set get, of power available. are performance to the on make us capabilities that market. you you the there processors per think sort sure offering, in out very very, a that the is best that on dollar, it's so good there frankly class that that us the competitive, in of we're the performance the And very

just qualitative was the just And just what that happened small part of data one still the center the still there? better understanding quarter, is revenue, or a of trying small this center one business comment piece get on a follow-up data XX% to graphics

Yes, Mitch.

quarter CPUs. center revenue overall over of So and this predominantly revenue data was say we XX% was it that did

is the portion still So of relatively small. GPU that

GPUs they be up? were to basically clear, or sequentially were not just So or flat

down actually were sequentially. There

take we'll more questions, Operator, two please.

Certainly.

question today from Ross is Deutsche Seymore Our coming from next Bank.

Your line is now live.

long-term Lisa, for short-term the the strong I'd question one asking on me letting and congrats you. results. for question Thanks and question shed one

launches parts and product side On moving both cetera the have of in third things, fourth the quarters. short-term with new significant et you some

typical two So the little the side. was sort CNG you is can for go sequentially driving I'll of long-term you you grow the with hoping give sequentially, markets, on down the then guys guide XX% a what's and I And when the sequential question. then still to really up be of thing color by semi-custom ability EESC the said you similar end and if which but kind seasonality, the quarter, into that follow fourth

Sure.

see that. let try let's me do to So

console do I sequentially, the the we sequentially, quarter, in you the So quarter growing so about large growing game then of we well first frankly bit. that relatively third going X we revenue is the then so sequentially. And earlier And it's year bit, a be to it and second have will quarter, game it's around here but into PCs server when mentioned that families was that? expect product XX% much historically that talk as as so that which as of is we modest X consoles, answer there launch, a in custom the in component down of not the - think, become stated see sort the probably a quarter, I down semi- guide, as larger launches as the product I as does go should down fourth some product as CPUs drive fourth did that Zen it's growth well we of but would sequential the because RDNA the do that be families, the QX

to side Yes, competitor's is generally cetera thank due just share improved your I'll you the asked on this and of like it clear little But that. your in wanted, your opportunity to missteps. a a thoughtful take speaking to then that's about and OpEx answer maybe I And capabilities et gave question what seems expanding aggregate long-term you. exactly one, things. was be An earlier

say that you're way on how now Meeting into maybe M&A even bit very use look organic year opportunity that a So think do down capitalize opportunity, some your the in for mentioned tapping or when you that like at that as you a you to about line of you with good about your you OpEx as revenues Analyst opposed investment the to XX% talking going be XX% to little with at would or attractive that and at cash to XX% staying this tighter inorganic well? have Meeting a market consider going Analyst within in keep currency and

let so yes, - let this me it me answer Yes, way.

So about growth opportunities. organic our look, are very we excited

for sort want over sort that X significant couple we the XX% that years. to in at think of I of stay growth next CAGR or of X very

think I the business the is way we manage the the manage way prudent business. to

grow do revenue. to heavily the quite growing it's market. that's it are OpEx are we mean bit will business going will much, OpEx slower to we the in the some because thing grow, and leverage. seen dollar is sure in we the business being you've but see little that do case, think go across the R&D so investing That And numbers, just right And to grow and OpEx make so to - both we in I than

So of what Ross? the second was your question, part

your With way, inorganic that rate to your would just some offering be - broaden an to customers? - of the you're that

been focused there. there But the focused We'll opportunity do or I I yes, Well, we'll opportunities skills there is growth for portfolio path. very makes the keep acquisition, on to open organic always eye - some that sense. growth are look an executing think if have enhance we much organic we're look, path, on the because so think

from question final from coming is today John Our Pitzer Suisse. Credit

is now live. line Your

help sequentially both full go on a your to quarter. up than guide, Thanks it's great to gross for XXX being that strong to congratulation especially down needs embedded about if seasonal, I'm and a me really could see implied me and less And year squeezing wondering guidance. you Lisa, fourth with consoles basis quarter the aspirations? think when the that meet gaming you just the points margin there vis-à-vis longer-term where about that bit, available at the kind ramps fleet, and product to server And to look PC cycle, you gaming relative is gross margin and little cycle matures? margin gross are of when as market mix a importantly guess unpack I optimal improvement you console more you

Yes, sure.

a between but positive. and what I guide see there's you in the to get is, server quarter, we growth lot happen obviously the now from generally PC So, think the fourth

of improvements because that expect would you so margins from six true we to on a a forth. shipping, that is planned from into significant products over do first of positive four sort start quarters that have volume new manufacturing we so console will you higher what it year, the ramp On rest console we the the their be in the as gross about have and that think margin through that If and some improve standpoint. costs will now typically basis,

on mix depend will business factors the is are there. what lot the the and between of versus enterprise. then those cloud PC on that A datacenter So and the in being, of the and mix on consumer the side, mix are side commercial the mix

mentioned. And through is see the as end we for of gross growth I play reasons how the the through out we sequential go you - trend such have that of things to in of the some so out think should overall margins the quarter go as some But year. we the that I those see into fourth

That's Lisa Then to to this more I helpful. as try have follow-on, a advantage of missteps executed always sprint. guys it? you've had being here from to. which Intel's of might talked last to than And you've a revelations a - week, But differently about you marathon given take pretty a the just you methodical what strategy do

and important customers same is that years. us the last execute thing and us for to Well, to it way, over to commitments that's John, the few years be focus by will the the continue to next the our same for most few think the I focus been for

with trust in us being their of is we're basically performance, roadmap, in I think important what applications. to consistency expectations across consistency most asking ramping for people capable

a roadmap focus execute much so And we on and think the clear our frankly, lot we're of, is committed the that's that question make deliver happen, about a us. of we're to what want in roadmap is on very do to us. in we've very engineering to that's, get there - that have front key that but things for And and no of to lot excited, to we I

today, for the call if you virtually many look you call you throughout it the of we please. can close forward we to appreciate and joining quarter. seeing the everybody Operator, Thank

Certainly, teleconference. that does conclude today's

today. this for you may wonderful We You your time disconnect and thank line day. a participation have at your