Advanced Micro Devices (AMD) 27 Oct 202020 Q3 Earnings call transcript

Greetings and welcome to the AMD Third Quarter 2020 and Xilinx Acquisition Conference Call. [Operator Instructions] 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. Ruth, please go ahead.

Thank you, and good morning everyone joining our call today. call conference our on are Dr. Participants of our our Senior Su, and Peng, Executive President Officer and Kumar, Devinder Victor Officer Chief and Officer; Executive President Vice Treasurer; Chief and Lisa Xilinx. President, Financial Chief This webcast our via be on live is website, call a will replayed and amd.com. content-rich call this morning. you a We've for

materials, XXXX outlining our Xilinx detailed including slideware, details acquisition of you So for acquisition. copy results, I to refer presentation of financial a and including other of the helpful announcement ir.amd.com the website our a third quarter our

we today's uncertainties refer Before more and assumptions cautionary release discussion that cause forward-looking each statements and press on to information as begin, we speak in actual any to of expectations. date, risks expectations the involve that may materially beliefs, results statement forward-looking current could contains as please note for such, current the differ related from risks to that based our statements and only make. Please on current

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

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

all those significant Thank you, and establish in. industry's good morning in high-performance Today marks the Ruth, a our as listening to milestone AMD to journey computing leader.

I'd start with to like our into going Xilinx, financial strategic on details results. strong of Before acquisition our very

our XX% record to Ryzen, resulting for processors. third doubling the in Our with by grew quarter, in more revenue Semi-Custom driven and strong $X.X and year-over-year business than net accelerated quarterly year-over-year. EPYC Revenue billion, demand income EPS

XX% billion sales Ryzen offset processor graphic more as third Turning quarter to segment, higher and our revenue year-over-year sales. of lower than $X.XX Computing grew Graphics

and total is business year-over-year by shipments grew both basis. and strong unit client and Our increased on performing double-digit extremely a percentage, sequential processor a Desktop ASPs notebook well. processor

share client believe doubled for quarter. In revenue unit and a for OEM a mobile, for As shipments the processor records gained processor we year-over-year. result, quarterly straight record we as notebook client set CPU revenue and we set quarterly XXth both sell-through

in in been AMD-based major underrepresented. and education, number We have the presence gaming, In in has XXX strongest the significant based More segments we Ryzen notebooks on commercial our year-over-year than XXXX of the for are processor notebooks commercial, we and battery launched we like OEMs our business as notebook have expand traditionally and processors. AMD-based have where life our momentum history. performance Pro superior of doubled portfolio building

third and large-scale the X,XXX, by has desktop team deployments Earlier upcoming be automotive, Zen multiple would Ryzen X incredibly we this CPU announced of Fortune I'm core. quarter highlighted what Zen Our was our winning to proud feature our with progress X. our processors newest first with banking in achieved pharmaceutical the companies. month,

We have every Per nearly Instructions the Clock to compared aspect XX% significantly in Zen core enhanced of increase deliver to X. a

Pro. M led year-over-year, quarter. percentage Mobile this we demand by next and launched leadership result, XXXX to are Ryzen workloads launch year the a biggest as grew powering sales increased in our we original creative landscape series PC absolute processors productivity by Apple's and a Graphics, the revenue our generation deliver for drive desktop Radeon processor As In shift the across over performance GPU declined and sequentially positioned XXXX gaming, Pro Radeon prepare XXXX. GPUs Ryzen double-digit in year, solid since to MacBook our

increases delivers are significant performance X generational We architecture in this per about graphics later RDNA week our very watt. and that performance excited both launching

based GPU far built the revenue graphics of GPUs high most Data year-over-year return next X cloud-based market. end we on powered Our visual the Radeon RDNA cards ever gaming have computing the and wins. AMD generation new RX by XXXX will center by and graphics to increased powerful sequentially are

Our well XXX announced Radeon deliver LUMI supercomputer, the wins Recently Australia's include performance. peak supercomputer in new HPC most petaflops as accelerators of powerful to continue is Instinct as over expected gaining the in market. momentum Finland that

PlayStation Semi-Custom growth Turning $X.XX revenue Semi-Custom, year-over-year, XXX% Enterprise, the based we Semi-Custom billion and console game Semi-Custom to of of Series and In strong now driven SoCs and Server shipments November both demand. shipments on increase of S X and Series by in in the launches support revenue segment, ramped next consoles. sales. expect production increased fourth our Embedded to Xbox our processor and quarter generation X We the strong to and sequentially

general processor their publicly-available across EPYC offerings and zones and exclusively second-gen including continue In third adoption launched XX% to EDA, EPYC based EPYC of powered instances. performance their the quarter, financial the both better and processors. for data Enterprise more services, nine across and in than the out Azure second-gen their multiple internal competitive record and center Fortune their set Microsoft EPYC advantages quarter to AMD by as sales expanded by percentage the customer regions a Amazon key year-over-year, accelerate growing XXXX added driven on multiple than services as grew automotive revenue We availability new data Server, cloud, second-gen well. Google enterprise deployments processors a offerings. infrastructures to wins In of instances analytic double-digit Turning processors. cloud by customers AMD XX adoption. rolled doubled TCO quarterly expanded availability announced Server high-performance largest virtual confidential performance processor verticals, and and new deliver we that hyperscale sequentially cloud machines powered and

processors next and HPC shipments quarter. cloud this generation volume customers begin select our to to track on server Milan X are with Zen We of

platform X very XXXX. Milan of high. follow interest availability Tier first OEM Customer quarter in in is expect to the We

results the We summary, are seeing or well-positioned EPYC than processors. new continued on of for believe based share more XXX OEM and hyperscale in our broader our HPC they In quarter refreshed acceleration our we and wins, business. fourth customers engage the launch deeper than Milan outlook We expanding demonstrate quarter in Milan and to and supercomputing did, platforms prior gains development. strong third for second-gen cloud strong are engagements, the our

to drive successfully CPUs, executing data leading best-in-class share gains next GPUs growth for XXXX Zen and and X GPUs, markets. confident gaming in are can X beyond. CPUs, our differentiated We generation on solutions We based CDNA our edge delivering further center drive feel the growth PC, RDNA strategy very and accelerators and and

to let's transaction. Now, turn the

computing computing, for enables experiences major which the increasingly of seeing services. are the end the out of shaping edge, number every the next center devices, nearly and or in Looking host we of high-performance cloud, over intelligent new is the future. a trend the Whether growing across decade, at high-performance increasing demand at

next leg ideal our and outline for the strategic new While the are the That most acquisition we to for growing the our high-performance are Together, continually demand match in a evolving today, adaptive of we excited largest see computing Xilinx why, in those the with and will choice capabilities world emerging, remain CPUs leader of GPUs for Xilinx. workloads. create partner is and I'm algorithms advancing important journey computing that the is AMD. accelerate critical and where always companies. for industry's engines can standards will devices technology

a provider the successfully Xilinx one software extend of leader. market As to hardware and is multi-generation the Xilinx technology executing number leader. FPGAs that roadmaps adaptive they industry's is SoCs, and are leadership.

themselves markets. a In as of technology growing also environments, high-speed strategic in partner across design, and a Beyond FPGAs innovation partnerships and as set associated they and design has X.X XG serdes industry their well defense, advanced signal integration mixed built deep automotive, have industry-leading capabilities SoC set datacenter, diverse Xilinx X-D stacks and software core to verticals. has as key and broad industrial, targeted of established a aerospace IO, silicon Xilinx software packaging, communications, in RF, leaders. strategic for

model free Lastly gross profile long business a product the lifecycles Xilinx characterized flow with has very cash significant strong margin and by best-in-class generation.

laser-focused as production IP we ramp on architectures, of packaging adoption and SoC Xilinx to similar. packaging, developing across and there multi-generation together, In advanced will modular Xilinx designs, high-volume benefits. GPUs, adaptive process manufacturing leadership and and considerable AMD and portfolio are the strongest financial in market AMD CPUs, products the in bring Both very FPGAs spanning we slows. die adaptive are high-performance will important product advanced set be infrastructure. based the of computing offer Law technology Xilinx's networking stacking and AMD's industry significant X-D This technology As product while workloads to highly Moore's on accelerating products. In are manufacturing, leadership smart early SoCs. to enable software-defined diverse and learnings a and increasingly nodes us able actually demonstrated portfolios is leadership becoming a technologies. emerging products to And and approach our will from take leadership of leading-edge technologies from complementary, AI development companies position, that are X.X-D has our apply

the software hardware, level. offerings our Looking we and together build stack, to teams the perspective, the opportunities combine efforts, computing a see into unified source a our at in the will we By cover technology markets platform optimized and we combining bring capability stronger beyond system and and two to most to open world. world-class the market even scale customers with engineering solutions. From products important accelerate

combined $XX of billion TAM. $XXX attractive on building TAM, very billion billion, with a AMD's TAM of $XX We an will additional have Xilinx dollar

that invested a adoption the with technologies, our force data significant center. have world's edge, for acquisition the organic significant will the center, billion telecom, and accretive timeframe, levels Xilinx's on markets, drive role SmartNIC the be also significant longer To leadership look data are see with a gaining our also hyperscalers. In stronger we hyperscale Together, and strong foundation global momentum where and a customers we leading enterprise products powerful build powering computing processors processors We're in revenue our the can drivers Xilinx leaders, in wins Xilinx domain CPU expertise offer synergy As industry-leading generation, accelerated center software and significantly cash strategic a solutions relationships compute with notably for the growth three is we will all and in GPU powering data we opportunity exascale have presence with our be SmartNIC with cloud five-year that and of address computers. to streams largest In and term strong has untapped with supercomputing most the our in EPYC at opportunities expected of AMD's playing now next-generation with storage better growth. providers. networking while nation instance, largely industrial can capabilities revenue EPYC the Financially, we to EPS $X margins, engines to we market workloads. industry diversifies unlock solutions processors. performance to Telecom, to combine additional has accelerators, stacks including free products, on the and networking delivering and where have an our market to Ericsson, flow today, Samsung critical immediately flexible path where growth.

Finally, I about would to talk culture. like

common the vision joining AMD deal culture, the has shared best several For a business will as From that leadership AMD close collaborated standpoint, years, AMD them AMD the we the closes. team. extremely with unequivocally for focused can after and I've Victor a chance to with President to high-performance be leadership to team Both have a Xilinx had take on innovation, to one the Victor he initiatives welcome and Xilinx strategic and responsible I'm collaborating industry Xilinx share of is thrilled adaptive Xilinx and that the say deeply future, can last customers. of I'm computing I and a his the and the partner in family. in the and know where growth execution get and as and happy I

I'd of quarter color third details our the and provide call additional some performance financial the Devinder? over Devinder some to like turn to on Now, acquisition. to specific

Lisa. you, Thank

start me with results. first third Let our quarter

XX% share, marketing margin million Third point Gross by a by drive server compensation-related was Semi-Custom variable driven income growth higher was diluted higher year per double ago, percentage year R&D billion, to or in Ryzen ago, very was driven up expenses a accelerated share and a year from income driven to Operating than increases million per was new ago, ago. doubled and we $XXX significantly the as from a $X.X client by sales business quarter ago, a sales. in ago, processor was the $XXX and Operating million, per investments compared EPYC of earnings up year $X.XX and million, revenue. from and ramp X the from Net market XX%, $XXX by $XXX more XXX% $XXX share processor year year-over-year than $X.XX and more driven $XXX year million revenue our up future to primarily XXX% strong a up million expense. or SoCs.

notes of by sheet. quarter, We Total Conversion and reduced million. line principal million short-term $XXX debt cash and charge including end Turning totaled issuance senior million $XXX $XX a in to count. million quarter. notes. $XXX cash billion. diluted resulted convertible revolving the and was $X.X $XXX was the GAAP principal shares the Cash, million of million share the balance million equivalents of senior $XXX credit the the investments of our non-cash impact flow at no with of debt in $XX Free to outstanding of

addition, our investor financial outflow. rating senior reflecting unsecured quarter, our was service In grade third strong investment results Moody's in to credit the raised and by

current guidance. is based Let quarter outlook expectations. me turn to on the Today's fourth

minus increase $XXX to We million, approximately an year-over-year, sequentially. and XX% expect revenue be plus X% of billion $X approximately or

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

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

year, margin to of the from for prior year. the percentage expect gross point continue one XX% up We approximately full

Now I'd turn to to like today's announcement.

transaction business definitive agreement best-in-class Xilinx signed have $XX model billion. very This a product life long a and a We transaction from characterized strategic at has in cycles, compelling margins, to acquire The be to to accretive is significantly and EPS strong is to all generation, flow, a perspective. financial and strong free and to AMD's by expected immediately deliver a Xilinx acquisition model. industry-leading growth. additive cash is the expected are margins, which gross cash flow operating combined to financial company continue valued of

closing believe cash In two would within billion cost gross and flow. the the annualized $XXX we profit billion, free of approximately Based on an margin trailing the XX% revenue of months, XX savings we companies months X.X XX% on of approximately transaction. addition, can basis $XX.X million have achieve had approximately XX of operating of combined generated of overall

the both capital Turning profile. with of as $X.X be a to an cash leverage the with a times. the is structure. gross and basis, low billion $X.X will debt total of the most investment combined and On combined The balance strong sheet leverage X.XX billion recent balance of of companies, company grade the very is quarter

fronts. shareholders each on currently required XX two the $XXX based me common structure. cover for the be operate by conditions. AMD end would XXXX Now let is approximately transaction will the on exciting of and pro calendar AMD's Xilinx shareholders. X.XXXX This day of represents receive customary X. acquisition day and an expect other many some including XX% and for and shares remain details independently. to AMD We Xilinx. subject the separate for share to close forma approvals shareholders, for ownership for the then, The Today year XX% Until of closing Xilinx per companies At of period up AMD close, will trading to Xilinx October approximately share Vitis of

are and We market financial pleased with our momentum. very

of improved Our continues strong revenue strong products growth, margin profitability. and to drive lineup expansion

additive of is acquisition Our in is synergy over our the to to model longer revenue expected financial Xilinx result term. opportunities meaningful and

Let me for Peng over Victor? CEO, to now it some Xilinx Victor turn remarks.

Devinder. Thanks

that about and semiconductor shareholders. connected providing will our ability this accelerate the our start premier year high the of solutions. most Lisa's opportunities computing devices, enthusiasm and many the need define to data, companies, and unstructured combination for of and rapid customers, the of growth the of AI embedded by employees applications computing together our plethora exponential expansion our two more the and product me solutions. Let echoing of efficient for The performance computing are for by portfolio AMD comprehensive with will new Xilinx data-intensive driving create

engineering with of intelligent to solutions our point. expertise largest deploy together Our edge products from to portfolio market and differentiated industry-leading enable and capabilities, data center customers market will to power our smallest to a range This wide product the the extended faster. will the applications end

the computing. through Our vision people's performance high lives same companies share transforming for

time cultures the innovation, the and excellence combined collaboration our new a and of era opportunities second great when long-term accelerating a the on employees. this closes. very have transaction with my personal As joining more Lisa And of is this Xilinx execution exposure much just the me. Xilinx business we given this this excited the lead chapter business The for grow thrilling company I'm opportunity couldn't to larger and receive creation to value exciting AMD that make to mentioned, about they for new that computing. of do an similar a for the growth future note, shareholders, Xilinx's and will diversification to team broader, benefits provides transaction a significant be

very our I together. So great companies bringing to look much forward

it now me turn to Let Lisa. back

we Thanks business third the quarter. Victor. our with very To sum pleased are up, acceleration of in the

on this We annual trajectory. are revenue confident to year track and deliver have more our never in been growth significant

significant for of stakeholders Xilinx the company. potential who future acquisition upside combined the and value for creation growth Xilinx from AMD shareholders strategic is compelling benefit with of Our all and will

We ambitious Xilinx match in of for have With always goals. markets questions products, Ruth? customers set AMD go an of and acquisition been that, next let's world-class talent. a very step is combining journey. The natural IT to ideal complementary our with highly a differentiated please. Xilinx is our in and

you audience on to you. one, today's one could the you, Lisa. quarter the audience for And pertains to and of it Thank that news as Thank stick And two request please. questions, questions if acquisition. poll Kevin, the we third the

Instructions] from today from is question first coming Our Ramsay Cowen. [Operator Matt

is line live. Your now

Victor folks it who but from our mean will probably I of Lisa, lot really a I know end. congratulations say

the revenue Lisa, the guess of your XX% outcome great put model But quarter. I at noticed stakeholders. two to for growth everybody, also recent a you the in than in wonder growth mentioned in companies business. core confident as the the I together, that of but that a February apply obviously, has Analyst did Xilinx as you is the obviously, slides the you put all as forma synergy well. I combines my together I first in from growth, the on little a pro think guys companies given that deal, maybe rate Day that CAGR the back are been a potential question, third them end slower might you that growth how and business bit you there times if post-close AMD after

helpful. comments any be there would So Thank you.

absolutely. Yes, question. Matt, for thanks the

all, first So excited we today. feel our about really about business. feel of base we're We great

our very think you the we of well and momentum. with out can strength the products expected driving strong see guidance, quarter market third is full-year strategy updated very I playing results that in in that our as

look our we CAGR Day our we forward as As the for right company. at about Financial talked target XX% Analyst

think of stays I that all track. on

a growth high to are We business high remain we want a growth business. and

brings think and you the generation. at opportunities I free Xilinx look in model, are of flow additive markets and them the the cash when to margins the just that a capabilities lot that

that XX% CAGR feel the organic right we initiatives is think growth about combined very about I we the a growth the So very Victor target has the good started. good business, for feel and

My sales doubled that that clearing server revenue for results sort I you appreciate on Thank in year-over-year. the more core question than put business, the up Yes. guys you up, of it.

enterprise of guided think had segments, but I data to pretty set I competitor and business. the quarter. down not they disappointing they for some results, I same the and be for their Your XX% in that's guided exactly think their that from government combined fourth interesting rather server, centric as know some year-over-year results

you side market and quarter. Lisa, right to your might release server give what some fourth your you. launch some have and the and on Milan, context enterprise up might get us maybe, going But guys for the Thank I revenue back - of is mean mean how in now where the overall think as you into You it the well. momentum mentioned it progress you're

Sure, Matt.

us. quarter, data server business performed a enterprise hyperscalers year-over-year as as momentum in is double-digit particularly very you well said important see cloud in We We from good very on here to look as sequential the double business. well standpoint, third the across the So growth. center side the the

launch We platforms continue third in the here have more that quarter. to

is forward look from overall a center As say center that we good. actually I would data environment, data environment the

preparing we very message. to in launch would to starting Milan into first shipments some platforms customer Milan cloud, it's I fourth the quarter. And say customers well as much a are here As terms we HPC quarter. quarter, this go the as are to in specific launch of OEMs

we the customers are going cloud are Rome our is thing from to But Rome quarter. ramp the of excites demand transition for desktop as Several continue very us environment is the Milan Some Milan. overall, to we see of our previewed preparing good expected. Zen in for our to is that server TCO just on products. performance It's also that fourth and X but into benefits strong. we in performance coming very, side, that and we translation the benefits some believe strong

So, go again well we the But, to more the business I be overall, and us. we strategic that talking very performs think yes forward quarter. to center data as about for continues - through look

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

live. Your line is now

on core you're main strong or I'll of half my Could PCs - much results. first on EPYC help focus and so. the that is and I my growth for and by sales of of created the nearly million and question, is how question $XXX I'm business. significant the think about actually just this surprise. semi-custom ahead areas and curious us this level guide servers dissect Thanks mean what GPU, from raising coming congratulations I taking a and quantify second for Lisa you

Yes.

question. So, the for Vivek thanks

Our well. very doing is core business

strong. you at components that some environment if - is of market PC think of the look I the

Ryzen well. at XXXX notebooks I doing this that you trends, helped schools from very has that, our from the all certainly very, home, home look series If work year. are On think of top

we in like So before - gaming present hadn't we and seeing areas that that been traction commercial. are strong

big one element. that's So

year. are and and ramping are the quite up here for second demand been our consoles Those coming performed also launches anticipated of that business game in half well. strong, server shortly, highly our very are the has has We that

will gaming Radeon see grow - us asked series. the XXXX you start sequentially graphics we see You quarter our will with fourth in about as here the launch graphics

have a we lot of say of will to improved, combination cycles. product closely We've environment gotten a also stronger. demand So can product that of situation momentum just our ensure I has with also our we supply is as that that suppliers has our worked much satisfy as possible.

all And the the so elements those strong are half. for second of

And for my follow-up Lisa.

share XX-ish TAM soon, the Milan at identified. you're now more or launching Ice You the get XX% Does that You're the percent of server is launching your mentioned difficult? mark Lake. you their have competitor easier next

or hand-to-hand every a So How Thank the easier do difficult you. again become journey the for we quarter outside from your of looks server lot think more as and combat XX% the why? it business about the like next from in business. server here

would it Vivek. I Well, say this way

progress amount the tremendous I server business. think a we have made of in

when and will I think seen leadership across the enterprise we've as done us, road the think TCO that map, at is - Milan strong even that if we we need to with and our count there be mantra cloud, can has very, performance customers Rome and us. broad on we've adoption our very well well We HPC. better have been in as you you you look

is traction Rome. the for than think from Milan stronger I

to you'll server single you'll as think our faster portfolio. adoption, cloud performance see I round but really as work see hard possible, with I broader with broader we customers some talked about the fast continue you'll that enterprise ramp And adoption. out I platforms. improvements threaded think the see of to think Especially we Zen X, cloud

I to we're focused and well. very So as the as will continue company data a center think on that be combined

Goldman question Toshiya today coming Hari is from next Sachs. from Our

now Your line is live.

the follow-up Thanks both get wanted some to within taking to first your on congrats as Xilinx. the markets of teams. the question for to a and question view I Lisa,

set his first the you're and core and in but the question and of markets, We've Victor data got about how mentioned for to that you businesses, they're XX% then thinking data comfortable of XG past the for coms the some center the follow-up? You CAGR how opportunity terms in five with over couple heard and combined the year rate response years to about I've sort thinking of from growth in three center their the business. a team of core are

Thanks Toshiya. sure the Yes, question. for

when at we think gaming about the feel I business very in very, center. look across markets good AMD clearly, core So and the our PC through core data we our business, core growth

I very strong. think product portfolio the is

think, chosen to as Xilinx add we we the As strategic portfolio, both I center data our focus.

I think center the very us. made team and for have in that the are Victor the investments Xilinx strategic investments data

Xilinx strength, the We have GPU and very CPU capability the accelerator brings and strategic technology. SmartNIC

that's think I the company. a strong growth combined vector for

in are and help can so in and and those the also of attractive the aerospace industrial communications, technology that use in has base all and AMD GPUs, very sort the have there. leadership market think in presence markets I some markets bring those markets, automotive, defense, the Xilinx and broader the think in to I ability of that CPUs

I I clear opportunities, I both businesses So, lot a of want are executing first very that though, together. intend There And way. well. to be it are foremost, think to Victor and keep and

revenue the strong. And to see opportunities as think synergy as look we I bring five three together. timeframe the businesses are these do into base portfolios of profiles we year So both significant we growth then, very out

secured a already exiting the on in business part kind see to the in competitors just yourselves client this guiding server client you where the Thank from both you've follow-up of the do you and feel wins more a see yourselves guiding server the what market share XXXX design in CPU that both business based on what year? lending middle do trends where And on quick market and And share as you you you're on importantly, based XXXX? Where in your like. do to business the based then guys perspective business you. for exiting - of and QX or

say markets. gain believe, based third would a in do and half share journey. for think, on the is view our year. always in is I both what I second We this our Well, said we'll the I've performance quarter And

us So, is to continue to for execute the key very well.

I think, and to our our is there the continue well. to momentum customer delight execute customers is goal - and definitely

I that making journey continue progress for that. we'll we're share do to think So gain on do and

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

line now Your live. is

magnitude For of maybe that The guidance, question pull-forward dynamics. the in thinking you’re business up given my you kind as market work the from can keep XX% pressure QX the first year. PC Especially of just home you or comes - half should of potential that company How next do question we year-over-year. from the growth under trajectory? about more think into

up So you think. we morning I Stacy early made this sorry wake

No worries, worries. no

think question. demand look, So us there's for environment right a It's now. very strong no I

of - the we specific be AMD is that, early to some of bit As first into we is also gains look phenomena there very half specific But about product that little year. seeing. believe will say the XXXX. we're is but here, what It's I a market there

up into and strength never been I I coming of better. platforms the if see we look new XXXX. think what our notebook And portfolio that has are at the

first our excited about with year recent Ryzen’s really the console products I think of desktop very the that, is XXXX strong. we're This launch of cycle. our

is console the first the cycle So bit year. different in a little

EPYC. then launching the middle demand I there see in and and right Milan we're very, some think very you’ll of strong

a year, we now. the We'll product bit of just think into about is portfolio finish we is dynamics doing and good XXXX. quarterly right there growth feel market little but more our I as this the into get prospects there then is think I up what So,

you, Got it, that's thank helpful.

that CPU this I so was that for issues It company would Altera? can what you successful do lessons have what tried buying you somebody has tried a vision Xilinx obviously not point. your How have competitor before a might your question, had the as is been view from Intel the you Xilinx from my well. they've And to learned an So different, terribly what potentially gave with with deal? maybe say FPGA maybe with

few it's a and been I you Look, about market comments. grown Victor the actually the few a comments this absolutely, very years. continued market grow. sure is how their Their think some and has Stacy, share look Xilinx have to time different then, I'll last I'm mean has business leader. at we've I make Yes a situation few if over thinking will for

I executing well. are think both really companies

is So why I why now now you base our mean, good very ask businesses. feel actually we about

in the think product we the technology complementary the they're of But then sort center say and sort TSMC. and mean leading-edge is integration. strategy, of data have a right. We We standpoint. from XD around leader environment have have partnered both at I we're of look both also both that users. of leaned design X.X this are Xilinx businesses and important our - some and technology very with where into I complementary modular the a market focus around and intersections really some they people

open invested in source. and software both We’re

are very I he we road I very we our think So common I see a then I'm we're really, that we synergies strongly. both I on that are And last this I'll and me the aligned maps see you'll see mention covers love journey. heart. at And Victor happy and is, lot the and very, engineers really the both of vision, there of technology is are the think a joining We execute. think point have cultures sort that as are under

M&A I as then joint what's this and see a is haven't Stacy. a unique the in we match us think industry Xilinx. mean - we the I have big that's, of think for think, been We're know, sake. industry what we I actually the for can different vision And for I as companies. better I we that's opportunity there and for you do bold our doing such is M&A no not M&A. mean on what

Victor, to you some So comments. want add

well Yes, I put very Lisa. think you it

this different And guess, the I fact just that that transaction. Lisa into think than as I'll I is completely lean said.

say team. And about vision it's over only We about. underlying that teamwork do clearly, some I innovating see and company very to transformations the super cultures, is technologies also sure to you'll to really execution and I'm, we And the that I in really Yes, endpoint both within personally Lisa strong talked the even of and make for with at with that for so. very very fore customers. I and have excited the have all so. create culture We’ll focused We're I bring what time, customers. center. focused with back all for integrate in that well. I’m about we the joining AMD think Xilinx I'm similar this think would and And on the on excited going value tremendous edge very And and common But happening, the applications. are data not

is Our Lipacis coming next Mark from today from question Jefferies.

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Mark. sure, Yes

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environment that accelerate market. the software the the a we common of usage to idea those solutions share think I is so in important to try

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together think And there at is with great two to of technology right you for of some I handle endpoints a this is that's really customize even the cloud. a that's seamlessly putting the edge, and comprehensive is Because where to Xilinx then things of think, heavy are the the that that in I optimizations very different, fast makes powerful. workloads can the lot combination lot customizations think powerful software of of and some the very AMD powerful of and And about response, tailored it's workloads things, AMD. also what of whether a solutions, fact those out compute-intensive but solution. want and really the I we real-time the the course

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over. do, on integration the methodology are this right is on Sure, workloads. Xilinx the been team you very compute also get Mark. Look, I area. think the triplet thinking thing and to for advanced right the it's We've because probably days of monolithic right this

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Joe. sure. Yes,

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Suisse. Credit Pitzer John today question from from coming next is Your

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Yes. Sure, John.

in the third ramped quarter. here we the heavily business certainly console So

our sequentially as go quarter. XX%. the increase margin XX% margins in guidance we into to at fourth see from I We think we were right

are I of think there. there aspects couple

we have So growing business the sequentially. do console

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your plays that broader your side, the on to the AMD distribution That's that straight I'd on to the channel, specifically the kind both deal is And fairly view is center and around auto rationale And with the there opportunity auto back forward get business. obvious. helpful. wireless on incremental of necessarily and Xilinx? buckets auto love going for and wireline industrial core deal, in the core not then data today is something you within side Xilinx which guys silicon

Yes, John. absolutely,

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absolutely there and is there there things. opportunity I think so, that certainly And

support some course, customers. learning and decades of more and those the have go - business to learned to auto through help we've Of how that two than can forth servicing we back mutual market and the

great I opportunity us a have. for the long-term think Yes a absolutely, automotive Victor. That's point with we is that technology

Helpful guys, again. and congratulations

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

Certainly.

Hans from next coming Rosenblatt question Securities. Mosesmann from is Our

Your line is now live.

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Yes thanks, Hans.

our strong it has than planned. So, was certainly half very stronger originally been we second and look

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planning are XXXX, go for As into we I think we success.

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Your question final from Rakers Aaron Wells is coming from today Fargo.

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to comments. reached closing over any Thank question-and-answer you. further We the of like I'd turn floor for or back end session. our

look all acquisition. two Yes across forward look for now, amount so to we to a of our tremendous bringing business together. I just was We going forward - I companies say, today. and covered the really to thanks joining material these know

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teleconference. That Thank today's conclude you. does

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