ADVANCED MICRO DEVICES INC
For the period ended Sep 28, 2024. Filed Oct 30, 2024.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Sep 28, 2024 · Filed Oct 30, 2024
AMD$449.04+11.0%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-06-29; filed 2024-07-31.
0000002488-24-000123
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-09-28; filed 2024-10-30.
0000002488-24-000163
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 78 previous paragraphs and 83 current paragraphs.
39 unchanged; 38 reworded; 6 added; 1 removed; 0 previous and 0 current paragraphs rearranged.
Tables are not compared: 4 previous and 4 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (6)
Current report
As part of the next step in our AI strategy, on August 9, 2024, we completed the acquisition of Silo AI, an AI lab based in Finland in an all-cash transaction of $665 million, which resulted in a net purchase consideration of $553 million. The acquisition of Silo AI expands our ability to accelerate development and deployment of AI models on AMD hardware. Silo AI financial results, which were immaterial, were included in our statement of operations from the date of acquisition primarily within the Data Center segment.
Current report
On August 17, 2024, we entered into an agreement to acquire ZT Systems, a provider of AI and general-purpose compute infrastructure for hyperscale computing companies, in a cash and stock transaction valued at approximately $4.9 billion (the Acquisition). Upon closing of the Acquisition, we will pay approximately $3.4 billion in cash and 8,335,852 shares of the Company’s common stock and to the extent certain conditions are met, we will pay an additional $300 million of cash and up to 740,963 shares of the Company’s common stock. The Acquisition is expected to close in the first half of fiscal year 2025, subject to certain regulatory approvals and other customary closing conditions. We intend to seek a strategic partner to acquire ZT Systems' manufacturing business.
Current report
Client net revenue of $1.9 billion for the three months ended September 28, 2024 increased by 29%, compared to net revenue of $1.5 billion for the prior year period. The increase was primarily driven by a 25% increase in unit shipments and a 3% increase in average selling price of AMD Ryzen desktop and mobile processors driven by strong demand for “Zen 5” AMD Ryzen processors.
Current report
Income Taxes
Current report
During the three months ended September 28, 2024, we paid $548 million for Silo AI, net of cash acquired, using available cash.
Current report
On August 17, 2024, we agreed to acquire ZT Systems (the Acquisition). Upon closing of the Acquisition, we will pay approximately $3.4 billion in cash and 8,335,852 shares of the Company’s common stock and to the extent certain conditions are met, we will pay an additional $300 million of cash and up to 740,963 shares of the Company’s common stock. The Acquisition is expected to close in the first half of fiscal year 2025, subject to certain regulatory approvals and other customary closing conditions. We intend to seek a strategic partner to acquire ZT Systems' manufacturing business.
Removed paragraphs (1)
Previous report
Income Tax Provision (Benefit)
Reworded paragraphs (38)
Previous wording
The statements in this report include forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on current expectations and beliefs and involve numerous risks and uncertainties that could cause actual results to differ materially from expectations. These forward-looking statements speak only as of the date hereof or as of the dates indicated in the statements and should not be relied upon as predictions of future events, as we cannot assure you that the events or circumstances reflected in these statements will be achieved or will occur. You can identify forward-looking statements by the use of forward-looking terminology including “believes,” “expects,” “may,” “will,” “should,” “seeks,” “intends,” “plans,” “pro forma,” “estimates,” “anticipates,” or the negative of these words and phrases, other variations of these words and phrases or comparable terminology. The forward-looking statements relate to, among other things: possible impact of future accounting rules on AMD’s condensed consolidated financial statements; demand for AMD’s products; AMD’s strategy and expected benefits; the growth, change and competitive landscape of the markets in which AMD participates; international sales will continue to be a significant portion of total sales in the foreseeable future; that AMD’s cash, cash equivalents and short-term investment balances, together with the availability under that certain revolving credit facility made available to AMD and certain of its subsidiaries, our commercial paper program, and our cash flows from operations will be sufficient to fund AMD’s operations including capital expenditures and purchase commitments over the next 12 months and beyond; AMD’s ability to access capital markets; AMD’s ability to obtain sufficient external financing on favorable terms, or at all; AMD’s expectation that based on management’s current knowledge, the potential liability related to AMD’s current litigation will not have a material adverse effect on its financial positions, results of operation or cash flows; anticipated ongoing and increased costs related to enhancing and implementing information security controls; all unbilled accounts receivables are expected to be billed and collected within 12 months; revenue allocated to remaining performance obligations that are unsatisfied which will be recognized in the next 12 months; a small number of customers will continue to account for a substantial part of AMD’s revenue in the future; the expected implications from the development of the legal and regulatory environment relating to emerging technologies, such as AI; AMD’s ability to achieve its corporate responsibility initiatives; expected future AI trends and developments; AMD’s acquisition of Silo AI Oy is expected to close in the second half of fiscal year 2024; and AMD expects to fund stock repurchases through cash generated from operations. For a discussio…
Excerpt shortened here; the source contains the full paragraph.
Current wording
The statements in this report include forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on current expectations and beliefs and involve numerous risks and uncertainties that could cause actual results to differ materially from expectations. These forward-looking statements speak only as of the date hereof or as of the dates indicated in the statements and should not be relied upon as predictions of future events, as we cannot assure you that the events or circumstances reflected in these statements will be achieved or will occur. You can identify forward-looking statements by the use of forward-looking terminology including “believes,” “expects,” “may,” “will,” “should,” “seeks,” “intends,” “plans,” “pro forma,” “estimates,” “anticipates,” or the negative of these words and phrases, other variations of these words and phrases or comparable terminology. The forward-looking statements relate to, among other things: possible impact of future accounting rules on AMD’s condensed consolidated financial statements; demand for AMD’s products; AMD’s strategy and expected benefits; the growth, change and competitive landscape of the markets in which AMD participates; the expectation that international sales will continue to be a significant portion of total sales in the foreseeable future; the expectation that AMD’s cash, cash equivalents and short-term investment balances, together with the availability under that certain revolving credit facility made available to AMD and certain of its subsidiaries, our commercial paper program, and our cash flows from operations will be sufficient to fund AMD’s operations including capital expenditures, purchase commitments and acquisitions over the next 12 months and beyond; AMD’s ability to access capital markets; AMD’s ability to obtain sufficient external financing on favorable terms, or at all; AMD’s expectation that based on management’s current knowledge, the potential liability related to AMD’s current litigation will not have a material adverse effect on its financial positions, results of operation or cash flows; anticipated ongoing and increased costs related to enhancing and implementing information security controls; AMD’s expectation that all unbilled accounts receivables are expected to be billed and collected within 12 months; that revenue allocated to remaining performance obligations that are unsatisfied which will be recognized in the next 12 months and that a small number of customers will continue to account for a substantial part of AMD’s revenue in the future; the expected implications from the development of the legal and regulatory environment relating to emerging technologies, such as AI; AMD’s ability to achieve its corporate responsibility initiatives; expected future AI trends and developments; the expected benefits of AMD’s acquisition of Silo AI Oy (Silo AI); AMD’s anticipated acquisition of ZT…
Excerpt shortened here; the source contains the full paragraph.
Previous wording
In this section, we will describe the general financial condition and the results of operations of Advanced Micro Devices, Inc. and its wholly-owned subsidiaries (collectively, “us,” “our” or “AMD”), including a discussion of our results of operations for the three and six months ended June 29, 2024 compared to the prior year period and an analysis of changes in our financial condition.
Current wording
In this section, we will describe the general financial condition and the results of operations of Advanced Micro Devices, Inc. and its wholly-owned subsidiaries (collectively, “us,” “our” or “AMD”), including a discussion of our results of operations for the three and nine months ended September 28, 2024 compared to the prior year period and an analysis of changes in our financial condition.
Previous wording
Net revenue for the three months ended June 29, 2024 was $5.8 billion, a 9% increase compared to the prior year period. The increase in net revenue was driven by an increase in Data Center segment revenue primarily driven by the steep ramp of AMD Instinct™ GPU shipments and strong growth in 4th Gen AMD EPYC™ CPU sales, and an increase in Client segment revenue primarily driven by higher sales of AMD Ryzen™ processors, partially offset by a decrease in Gaming segment revenue primarily due to lower semi-custom revenue, and a decrease in Embedded segment revenue due to customers continuing to normalize their inventory levels.
Current wording
Net revenue for the three months ended September 28, 2024 was $6.8 billion, an 18% increase compared to the prior year period. The increase in net revenue was driven by an increase in Data Center segment revenue primarily driven by the strong ramp of AMD Instinct™ GPU shipments and growth in AMD EPYC™ CPU sales, and an increase in Client segment revenue primarily driven by strong demand for “Zen 5” AMD Ryzen™ processors, partially offset by a decrease in Gaming segment revenue primarily due to lower semi-custom revenue, and a decrease in Embedded segment revenue as customers continued to normalize their inventory levels.
Previous wording
Gross margin for the three months ended June 29, 2024 was 49% compared to gross margin of 46% for the prior year period. The increase in gross margin was primarily driven by higher Data Center segment revenue.
Current wording
Gross margin for the three months ended September 28, 2024 was 50% compared to gross margin of 47% for the prior year period. The increase in gross margin was primarily driven by higher Data Center segment revenue.
Previous wording
Operating income for the three months ended June 29, 2024 was $269 million compared to operating loss of $20 million for the prior year period. Net income for the three months ended June 29, 2024 was $265 million compared to net income of $27 million for the prior year period. The increase in operating and net income was primarily driven by higher revenue and gross margin, and lower amortization of acquisition-related intangible assets, partially offset by increased operating expenses.
Current wording
Operating income for the three months ended September 28, 2024 was $724 million compared to operating income of $224 million for the prior year period. Net income for the three months ended September 28, 2024 was $771 million compared to net income of $299 million for the prior year period. The increase in operating and net income was primarily driven by higher revenue and gross margin, and lower amortization of acquisition-related intangible assets, partially offset by increased operating expenses.
Previous wording
As of June 29, 2024, our cash, cash equivalents and short-term investments were $5.3 billion compared to $5.8 billion as of December 30, 2023. During the three and six months ended June 29, 2024, we generated $593 million and $1.1 billion of cash, respectively, from operating activities, and we returned $352 million and $356 million, respectively, to shareholders through the repurchase of common stock under our Repurchase Program. During the quarter, we also used available cash to repay $750 million of debt that matured in June 2024.
Current wording
As of September 28, 2024, our cash, cash equivalents and short-term investments were $4.5 billion compared to $5.8 billion as of December 30, 2023. During the three and nine months ended September 28, 2024, we generated $628 million and $1.7 billion of cash, respectively, from operating activities, and we returned $250 million and $606 million, respectively, to shareholders through the repurchase of common stock under our Repurchase Program.
Previous wording
Management believes there have been no significant changes for the three and six months ended June 29, 2024 to the items that we disclosed as our critical accounting estimates in the Management’s Discussion and Analysis of Financial Condition and Results of Operations section of our Annual Report on Form 10-K for the fiscal year ended December 30, 2023.
Current wording
Management believes there have been no significant changes for the three and nine months ended September 28, 2024 to the items that we disclosed as our critical accounting estimates in the Management’s Discussion and Analysis of Financial Condition and Results of Operations section of our Annual Report on Form 10-K for the fiscal year ended December 30, 2023.
Previous wording
Data Center net revenue of $2.8 billion for the three months ended June 29, 2024 increased by 115%, compared to net revenue of $1.3 billion for the prior year period. Data Center net revenue of $5.2 billion for the six months ended June 29, 2024 increased by 98%, compared to net revenue of $2.6 billion for the prior year period. The increase in both periods was primarily driven by the steep ramp of AMD Instinct GPU shipments and strong growth in 4th Gen AMD EPYC CPU sales.
Current wording
Data Center net revenue of $3.5 billion for the three months ended September 28, 2024 increased by 122%, compared to net revenue of $1.6 billion for the prior year period. Data Center net revenue of $8.7 billion for the nine months ended September 28, 2024 increased by 107%, compared to net revenue of $4.2 billion for the prior year period. The increase in both periods was primarily driven by the strong ramp of AMD Instinct GPU shipments and growth in AMD EPYC CPU sales.
Previous wording
Data Center operating income was $743 million for the three months ended June 29, 2024, compared to operating income of $147 million for the prior year period. Data Center operating income was $1.3 billion for the six months ended June 29, 2024, compared to operating income of $295 million for the prior year period. The increase in operating income in both periods was primarily driven by higher revenue.
Current wording
Data Center operating income was $1.0 billion for the three months ended September 28, 2024, compared to operating income of $306 million for the prior year period. Data Center operating income was $2.3 billion for the nine months ended September 28, 2024, compared to operating income of $601 million for the prior year period. The increase in operating income in both periods was primarily driven by higher revenue, partially offset by higher operating expenses.
Previous wording
Client net revenue of $1.5 billion for the three months ended June 29, 2024 increased by 49%, compared to net revenue of $1.0 billion for the prior year period, primarily driven by a 34% increase in unit shipments and a 12% increase in average selling price of Ryzen mobile and desktop processors. Client net revenue of $2.9 billion for the six months ended June 29, 2024 increased by 65%, compared to net revenue of $1.7 billion for the prior year period, primarily driven by a 44% increase in unit shipments and a 14% increase in average selling price of Ryzen mobile and desktop processors. The increase in both periods was driven by a recovery from weak PC market conditions and inventory corrections across the PC supply chain experienced in the first half of fiscal year 2023.
Current wording
Client net revenue of $4.7 billion for the nine months ended September 28, 2024 increased by 49%, compared to net revenue of $3.2 billion for the prior year period, primarily driven by a 36% increase in unit shipments and a 9% increase in average selling price of AMD Ryzen mobile and desktop processors. The increase was driven by an improvement from weak PC market conditions and inventory corrections across the PC supply chain experienced in the first half of fiscal year 2023.
Previous wording
Client operating income was $89 million for the three months ended June 29, 2024, compared to operating loss of $69 million for the prior year period. Client operating income was $175 million for the six months ended June 29, 2024, compared to operating loss of $241 million for the prior year period. The increase in operating income in both periods was primarily driven by higher revenue, partially offset by higher operating expenses.
Current wording
Client operating income was $276 million for the three months ended September 28, 2024, compared to operating income of $140 million for the prior year period. Client operating income was $451 million for the nine months ended September 28, 2024, compared to operating loss of $101 million for the prior year period. The increase in operating income in both periods was primarily driven by higher revenue, partially offset by higher operating expenses.
Previous wording
Gaming net revenue of $648 million for the three months ended June 29, 2024 decreased by 59%, compared to net revenue of $1.6 billion for the prior year period. Gaming net revenue of $1.6 billion for the six months ended June 29, 2024 decreased by 53%, compared to net revenue of $3.3 billion for the prior year period. The decrease in both periods was primarily due to lower semi-custom revenue.
Current wording
Gaming net revenue of $462 million for the three months ended September 28, 2024 decreased by 69%, compared to net revenue of $1.5 billion for the prior year period. Gaming net revenue of $2.0 billion for the nine months ended September 28, 2024 decreased by 58%, compared to net revenue of $4.8 billion for the prior year period. The decrease in both periods was primarily due to lower semi-custom revenue.
Previous wording
Gaming operating income was $77 million for the three months ended June 29, 2024, compared to operating income of $225 million for the prior year period. Gaming operating income was $228 million for the six months ended June 29, 2024, compared to operating income of $539 million for the prior year period. The decrease in operating income in both periods was primarily due to lower revenue.
Current wording
Gaming operating income was $12 million for the three months ended September 28, 2024, compared to operating income of $208 million for the prior year period. Gaming operating income was $240 million for the nine months ended September 28, 2024, compared to operating income of $747 million for the prior year period. The decrease in operating income in both periods was primarily due to lower revenue.
Previous wording
Embedded net revenue of $861 million for the three months ended June 29, 2024 decreased by 41%, compared to net revenue of $1.5 billion for the prior year period. Embedded net revenue of $1.7 billion for the six months ended June 29, 2024 decreased by 43%, compared to net revenue of $3.0 billion for the prior year period. The decrease in both periods was primarily due to customers continuing to normalize their inventory levels.
Current wording
Embedded net revenue of $927 million for the three months ended September 28, 2024 decreased by 25%, compared to net revenue of $1.2 billion for the prior year period. Embedded net revenue of $2.6 billion for the nine months ended September 28, 2024 decreased by 38%, compared to net revenue of $4.3 billion for the prior year period. Net revenue decreased in both periods as customers continued to normalize their inventory levels.
Previous wording
Embedded operating income was $345 million for the three months ended June 29, 2024, compared to operating income of $757 million for the prior year period. Embedded operating income was $687 million for the six months ended June 29, 2024, compared to operating income of $1.6 billion for the prior year period. The decrease in operating income in both periods was primarily due to lower revenue.
Current wording
Embedded operating income was $372 million for the three months ended September 28, 2024, compared to operating income of $612 million for the prior year period. Embedded operating income was $1.1 billion for the nine months ended September 28, 2024, compared to operating income of $2.2 billion for the prior year period. The decrease in operating income in both periods was primarily due to lower revenue.
Previous wording
All Other operating loss of $985 million for the three months ended June 29, 2024 primarily consisted of $603 million of amortization of acquisition-related intangibles and $346 million of stock-based compensation expense. All Other operating loss of $1.1 billion for the prior year period primarily consisted of $693 million of amortization of acquisition-related intangibles and $348 million of stock-based compensation expense.
Current wording
All Other operating loss of $977 million for the three months ended September 28, 2024 primarily consisted of $585 million of amortization of acquisition-related intangibles and $351 million of stock-based compensation expense. All Other operating loss of $1.0 billion for the prior year period primarily consisted of $660 million of amortization of acquisition-related intangibles and $353 million of stock-based compensation expense.
Previous wording
All Other operating loss of $2.1 billion for the six months ended June 29, 2024 primarily consisted of $1.2 billion of amortization of acquisition-related intangibles and $717 million of stock-based compensation expense. All Other operating loss of $2.3 billion for the prior year period primarily consisted of $1.5 billion of amortization of acquisition-related intangibles and $657 million of stock-based compensation expense.
Current wording
All Other operating loss of $3.0 billion for the nine months ended September 28, 2024 primarily consisted of $1.8 billion of amortization of acquisition-related intangibles and $1.1 billion of stock-based compensation expense. All Other operating loss of $3.4 billion for the prior year period primarily consisted of $2.2 billion of amortization of acquisition-related intangibles and $1.0 billion of stock-based compensation expense.
Previous wording
International sales as a percentage of net revenue were 60% and 66% for the three months ended June 29, 2024 and July 1, 2023, respectively. International sales as a percentage of net revenue were 60% and 67% for the six months ended June 29, 2024 and July 1, 2023, respectively. We expect that international sales will continue to be a significant portion of total sales in the foreseeable future. Substantially all of our sales transactions were denominated in U.S. dollars.
Current wording
International sales as a percentage of net revenue were 72% and 68% for the three months ended September 28, 2024 and September 30, 2023, respectively. International sales as a percentage of net revenue were 65% and 67% for the nine months ended September 28, 2024 and September 30, 2023, respectively. We expect that international sales will continue to be a significant portion of total sales in the foreseeable future. Substantially all of our sales transactions were denominated in U.S. dollars.
Previous wording
Gross margin was 49% and 46% for the three months ended June 29, 2024 and July 1, 2023, respectively. Gross margin was 48% and 45% for the six months ended June 29, 2024 and July 1, 2023, respectively. The increase in both periods was primarily driven by higher Data Center segment revenue.
Current wording
Gross margin was 50% and 47% for the three months ended September 28, 2024 and September 30, 2023, respectively. Gross margin was 49% and 46% for the nine months ended September 28, 2024 and September 30, 2023, respectively. The increase in both periods was primarily driven by higher Data Center segment revenue.
Previous wording
Research and development expenses of $1.6 billion for the three months ended June 29, 2024 increased by $140 million, or 10%, compared to $1.4 billion for the prior year period. Research and development expenses of $3.1 billion for the six months ended June 29, 2024 increased by $254 million, or 9%, compared to $2.9 billion for the prior year period. The increase in both periods was primarily due to higher employee-related costs from an increase in headcount in support of our continued focus on our AI strategy.
Current wording
Research and development expenses of $1.6 billion for the three months ended September 28, 2024 increased by $129 million, or 9%, compared to $1.5 billion for the prior year period. Research and development expenses of $4.7 billion for the nine months ended September 28, 2024 increased by $383 million, or 9%, compared to $4.4 billion for the prior year period. The increase in both periods was primarily due to higher employee-related costs from an increase in headcount in support of our continued focus on our AI strategy.
Previous wording
Marketing, general and administrative expenses of $650 million for the three months ended June 29, 2024 increased by $103 million, or 19%, compared to $547 million for the prior year period. Marketing, general and administrative expenses of $1.3 billion for the six months ended June 29, 2024 increased by $138 million, or 12%, compared to $1.1 billion for the prior year period. The increase in both periods was primarily due to an increase in go-to market activities.
Current wording
Marketing, general and administrative expenses of $721 million for the three months ended September 28, 2024 increased by $145 million, or 25%, compared to $576 million for the prior year period. Marketing, general and administrative expenses of $2.0 billion for the nine months ended September 28, 2024 increased by $283 million, or 17%, compared to $1.7 billion for the prior year period. The increase in both periods was primarily due to an increase in go-to-market activities driven by revenue growth.
Previous wording
Amortization of acquisition-related intangibles of $603 million for the three months ended June 29, 2024 decreased by $90 million, or 13%, compared to $693 million for the prior year period. Amortization of acquisition-related intangibles of $1.2 billion for the six months ended June 29, 2024 decreased by $291 million, or 19%, compared to $1.5 billion for the prior year period. The decrease was primarily due to certain acquisition-related intangibles that were fully amortized in the prior fiscal year.
Current wording
Amortization of acquisition-related intangibles of $585 million for the three months ended September 28, 2024 decreased by $75 million, or 11%, compared to $660 million for the prior year period. Amortization of acquisition-related intangibles of $1.8 billion for the nine months ended September 28, 2024 decreased by $366 million, or 17%, compared to $2.2 billion for the prior year period. The decrease was primarily due to certain acquisition-related intangibles that were fully amortized in the prior fiscal year.
Previous wording
Interest expense for the three and six months ended June 29, 2024 was $25 million and $50 million, respectively, compared to $28 million and $53 million, respectively, for the prior year period. Our 2.95% Notes with a principal amount of $750 million were repaid in June 2024.
Current wording
Interest expense for the three and nine months ended September 28, 2024 was $23 million and $73 million, respectively, compared to $26 million and $79 million, respectively, for the prior year period. Our 2.95% Notes with a principal amount of $750 million were repaid in June 2024.
Previous wording
Other income (expense), net for the three and six months ended June 29, 2024 was $55 million and $108 million, respectively. Other income (expense), net for the prior year period was $46 million and $89 million, respectively. The increase was primarily driven by interest income from higher interest rates.
Current wording
Other income (expense), net for the three and nine months ended September 28, 2024 was $36 million and $144 million, respectively. Other income (expense), net for the prior year period was $59 million and $148 million, respectively. The decrease for the three months period was primarily due to lower interest income from lower balances held in short-term investments compared to the prior period.
Previous wording
For the three months and six months ended July 1, 2023, we recorded an income tax benefit of $23 million and $10 million representing an effective tax rate of (511.4)% and 8.0%, respectively. The difference between the U.S. federal statutory tax rate of 21% and our estimated annual effective tax rate was primarily due to the income tax benefit from FDII and R&D tax credits. The tax benefit for the three months ended July 1, 2023 reflected a discrete tax benefit of $34 million that had a disproportionate impact on the effective tax rate because the pre-tax income was close to breakeven for the period. The tax benefit for the six months ended July 1, 2023 reflected a discrete tax benefit of $12 million which was not material to the total expense or the effective tax rate.
Current wording
For the three and nine months ended September 28, 2024, we recorded an income tax benefit of $27 million and $38 million representing an effective tax rate of (3.6)% and (3.3)%, respectively. The difference between the U.S. federal statutory tax rate of 21% and our estimated annual effective tax rate was primarily due to the income tax benefit from foreign-derived intangible income (FDII) and research and development (R&D) tax credits, partially offset by the tax rate detriment from foreign earnings. The tax benefit for the three and nine months ended September 28, 2024 reflected discrete tax benefits of $28 million and $68 million, respectively, primarily related to tax effects of stock-based compensation partially offset by the interest and penalties accrued for uncertain tax positions.
Previous wording
For the three and six months ended June 29, 2024, we recorded an income tax provision of $41 million and income tax benefit of $11 million representing an effective tax rate of 13.4% and (2.9)%, respectively. The difference between the U.S. federal statutory tax rate of 21% and our estimated annual effective tax rate was primarily due to the income tax benefit from foreign-derived intangible income (FDII) and research and development (R&D) tax credits. The tax provision for the three months ended June 29, 2024 reflected a discrete tax expense of $21 million, primarily related to interest and penalties accrued for uncertain tax positions, partially offset by the tax effects of stock-based compensation. The tax benefit for the six months ended June 29, 2024 reflected a discrete tax benefit of $40 million, primarily related to stock-based compensation.
Current wording
For the three months and nine months ended September 30, 2023, we recorded an income tax benefit of $39 million and $49 million representing an effective tax rate of (15.2)% and (35.8)%, respectively. The difference between the U.S. federal statutory tax rate of 21% and our estimated annual effective tax rate was primarily due to the income tax benefit from FDII and R&D tax credits. The tax benefit for the three months ended September 30, 2023 reflected a discrete tax benefit of $17 million, primarily related to tax effects of stock-based compensation. The tax benefit for the nine months ended September 30, 2023 reflected a discrete tax benefit of $29 million, primarily related to tax effects of stock-based compensation partially offset by the interest and penalties accrued for uncertain tax positions.
Previous wording
As of June 29, 2024 and December 30, 2023, our cash, cash equivalents and short-term investments were $5.3 billion and $5.8 billion, respectively. The percentage of cash, cash equivalents and short-term investments held domestically as of June 29, 2024 and December 30, 2023 were 88% and 77%, respectively.
Current wording
As of September 28, 2024 and December 30, 2023, our cash, cash equivalents and short-term investments were $4.5 billion and $5.8 billion, respectively. The percentage of cash, cash equivalents and short-term investments held domestically as of September 28, 2024 and December 30, 2023 were 85% and 77%, respectively.
Previous wording
Our operating, investing and financing activities for the six months ended June 29, 2024 compared to the prior year period are as described below:
Current wording
Our operating, investing and financing activities for the nine months ended September 28, 2024 compared to the prior year period are as described below:
Previous wording
We have $3.0 billion available under an unsecured revolving credit facility that expires on April 29, 2027. We also have $3.0 billion available under our commercial paper program.
Current wording
We have $3.0 billion available under an unsecured revolving credit facility that expires on April 29, 2027. We also have $3.0 billion available under a commercial paper program.
Previous wording
As of June 29, 2024, our principal debt obligations were $1.75 billion. Our 2.95% Notes with a principal amount of $750 million were repaid in June 2024 and our remaining debt will mature starting in 2030.
Current wording
As of September 28, 2024, our principal debt obligations were $1.8 billion. Our 2.95% Notes with a principal amount of $750 million were repaid in June 2024 and our remaining debt will mature starting in 2030.
Previous wording
As of June 29, 2024, we had unconditional purchase commitments of approximately $3.9 billion, of which $3.1 billion are for the remainder of fiscal year 2024. On an ongoing basis, we work with our suppliers on the timing of payments and deliveries of purchase commitments, taking into account business conditions.
Current wording
As of September 28, 2024, we had unconditional purchase commitments of approximately $4.3 billion, of which $2.5 billion are for the remainder of fiscal year 2024. On an ongoing basis, we work with our suppliers on the timing of payments and deliveries of purchase commitments, taking into account business conditions.
Previous wording
We believe our cash, cash equivalents, short-term investments and cash flows from operations along with our revolving credit facility and commercial paper program will be sufficient to fund operations, including capital expenditures, and purchase commitments, over the next 12 months and beyond. We believe we will be able to access the capital markets should we require additional funds. However, we cannot assure that such funds will be available on favorable terms, or at all.
Current wording
We believe our cash, cash equivalents, short-term investments and cash flows from operations along with our revolving credit facility and commercial paper program will be sufficient to fund operations, capital expenditures, purchase commitments and acquisitions over the next 12 months and beyond. We believe we will be able to access the capital markets should we require additional funds. However, we cannot assure that such funds will be available on favorable terms, or at all.
Previous wording
Net cash provided by operating activities was $1.1 billion in the six months ended June 29, 2024, primarily due to our net income of $388 million, adjusted for non-cash and non-operating charges of $2.1 billion and net cash outflows of $1.4 billion from changes in our operating assets and liabilities. The primary drivers of the change in operating assets and liabilities was a $710 million increase in inventory primarily to support the continued ramp of Data Center and Client products in advanced process nodes, and a $373 million increase in accounts receivable due to timing of customer payments.
Current wording
Net cash provided by operating activities was $1.7 billion in the nine months ended September 28, 2024, primarily due to our net income of $1.2 billion, adjusted for non-cash and non-operating charges of $2.6 billion and net cash outflows of $2.0 billion from changes in our operating assets and liabilities. The primary drivers of the change in operating assets and liabilities were a $1.9 billion increase in accounts receivable due to the timing of customer payments and higher revenue, a $1.1 billion increase in inventory primarily to support the continued ramp of Data Center products in advanced process technology nodes and $1.0 billion of tax payments.
Previous wording
Net cash provided by operating activities was $865 million in the six months ended July 1, 2023, primarily due to our net loss of $112 million, adjusted for non-cash and non-operating charges of $1.9 billion and net cash outflows of $1.0 billion from changes in our operating assets and liabilities. The primary driver of the change in operating assets and liabilities was a $796 million increase in inventory primarily to support the continued ramp of Data Center and Client products in advanced process technology nodes, and a $237 million increase in prepaid expenses and other assets primarily driven by the purchase of technology licenses, partially offset by a $309 million increase in accounts payable due to the timing of payments.
Current wording
Net cash provided by operating activities was $1.3 billion in the nine months ended September 30, 2023, primarily due to our net income of $187 million, adjusted for non-cash and non-operating charges of $2.9 billion and net cash outflows of $1.8 billion from changes in our operating assets and liabilities. The primary drivers of the change in operating assets and liabilities were a $929 million increase in accounts receivable driven primarily by higher revenue in the last month of the quarter ended September 30, 2023 compared to the last month of the quarter ended December 31, 2022, and a $674 million increase in inventory primarily to support the continued ramp of Data Center and Client products in advanced process technology nodes.
Previous wording
Net cash provided by investing activities was $251 million for the six months ended June 29, 2024 which primarily consisted of $1.2 billion of proceeds from the maturity and sale of short-term investments, partially offset by cash used in the purchases of short-term investments of $565 million and purchases of property and equipment of $296 million.
Current wording
Net cash provided by investing activities was $113 million for the nine months ended September 28, 2024 which primarily consisted of $1.9 billion of proceeds from the maturity and sale of short-term investments, partially offset by cash used in the purchases of short-term investments of $707 million, cash used in acquisition, net of cash acquired of $548 million, and purchases of property and equipment of $428 million.
Previous wording
Net cash used in investing activities was $1.7 billion for the six months ended July 1, 2023 which primarily consisted of cash used in the purchases of short-term investments of $2.8 billion and purchases of property and equipment of $283 million, partially offset by $1.4 billion of proceeds from the maturity and sale of short-term investments.
Current wording
Net cash used in investing activities was $1.6 billion for the nine months ended September 30, 2023 which primarily consisted of cash used in the purchases of short-term investments of $3.3 billion and purchases of property and equipment of $407 million, partially offset by $2.2 billion of proceeds from the maturity and sale of short-term investments.
Previous wording
Net cash used in financing activities was $1.2 billion for the six months ended June 29, 2024, which primarily consisted of repayment of the 2.95% Notes of $750 million, common stock repurchase of $356 million, and repurchases for tax withholding on employee equity plans of $226 million.
Current wording
Net cash used in financing activities was $1.9 billion for the nine months ended September 28, 2024, which primarily consisted of repayment of the 2.95% Notes of $750 million, stock repurchases for tax withholding on employee equity plans of $686 million, and common stock repurchase of $606 million.
Previous wording
Net cash used in financing activities was $184 million for the six months ended July 1, 2023, which primarily consisted of common stock repurchases of $241 million and repurchases for tax withholding on employee equity plans of $87 million, partially offset by a cash inflow of $144 million from issuance of common stock under our employee equity plans.
Current wording
Net cash used in financing activities was $987 million for the nine months ended September 30, 2023, which primarily consisted of common stock repurchases of $752 million and stock repurchases for tax withholding on employee equity plans of $382 million, partially offset by a cash inflow of $148 million from issuance of common stock under our employee equity plans.