Advanced Micro Devices Inc. (NASDAQ:AMD)

The composition of goodwill and intangible assets exhibits significant shifts over the observed period. A substantial increase in goodwill is apparent, rising from 289 million in 2021 to 25,126 million in 2025. This growth is accompanied by a corresponding increase in acquisition-related intangible assets, indicating a strategy of growth through acquisitions.

Goodwill

Goodwill experienced a dramatic surge between 2021 and 2022, increasing to 24,177 million. Subsequent annual increases, while substantial, are more moderate, reaching 25,126 million in 2025. This suggests the most significant acquisitions impacting goodwill occurred prior to 2023.

Developed Technology

Developed technology is a significant component of intangible assets, growing from 12,360 million in 2022 to 13,599 million in 2025. The growth rate appears relatively consistent throughout the period.

Customer Relationships & Product Trademarks

Customer relationships and product trademarks remain constant throughout the period at 12,324 million and 914 million respectively. This indicates these assets are not subject to significant change through new acquisitions or internal development.

Amortization

Intangible assets subject to amortization show a growing net carrying amount initially, peaking in 2022 at 22,924 million, followed by a consistent decline to 16,705 million in 2025. This decline is directly attributable to increasing accumulated amortization, which more than offsets the gross carrying amount increases. Accumulated amortization increased significantly each year, from -3,548 million in 2022 to -10,132 million in 2025.

In-process Research and Development (IPR&D)

IPR&D not subject to amortization shows initial recognition in 2022 at 1,194 million, followed by a substantial decrease to 220 million in 2023 and 162 million in 2024. No value is reported for 2025, suggesting completion or impairment of these projects.

Acquisition-Related Assets

Acquisition-related intangible assets demonstrate a similar trend to goodwill, decreasing from 24,118 million in 2022 to 16,705 million in 2025. This decrease aligns with the increasing accumulated amortization and potentially reflects the realization of value from acquired intangible assets.

Total Acquisition-Related

The combined value of acquisition-related intangible assets and goodwill decreased from 48,295 million in 2022 to 41,831 million in 2025. This overall reduction suggests a potential shift in strategy or the realization of value from prior acquisitions, coupled with the impact of amortization.

The data indicates a significant reliance on acquisitions for growth, evidenced by the substantial goodwill and acquisition-related intangible asset balances. The increasing accumulated amortization suggests a systematic recognition of the cost of these intangible assets over their useful lives. The decline in IPR&D may indicate a change in research and development strategy or the completion of specific projects.

The information presents a comparison between reported and adjusted financial figures for total assets and stockholders’ equity over a five-year period. The adjustments appear to relate to the removal of goodwill and associated intangible assets, resulting in significantly lower adjusted values. A substantial increase in reported total assets is evident between 2021 and 2022, followed by more moderate growth in subsequent years. Reported stockholders’ equity mirrors this trend, exhibiting a large increase initially and then a steadier rise. However, the adjusted figures demonstrate a different pattern, with more consistent, though smaller, increases over the entire period.

Total Assets – Reported vs. Adjusted

Reported total assets increased dramatically from US$12,419 million in 2021 to US$67,580 million in 2022, then grew at a decreasing rate to US$76,926 million in 2025. The adjusted total assets, however, show a more moderate growth pattern, starting at US$12,130 million in 2021 and reaching US$51,800 million in 2025. The difference between reported and adjusted total assets widens considerably from 2022 onwards, indicating a growing impact from the removed goodwill and intangibles. The largest absolute difference is observed in 2025, at US$25,126 million.

Stockholders’ Equity – Reported vs. Adjusted

Reported stockholders’ equity follows a similar trajectory to total assets, with a large increase from US$7,497 million in 2021 to US$54,750 million in 2022, and subsequent growth to US$62,999 million in 2025. Adjusted stockholders’ equity also increases, but at a slower pace, moving from US$7,208 million in 2021 to US$37,873 million in 2025. The gap between reported and adjusted stockholders’ equity also expands over time, mirroring the trend in total assets. The largest absolute difference in stockholders’ equity is also observed in 2025, at US$25,126 million.

The consistent divergence between reported and adjusted figures suggests that goodwill and intangible assets constituted a significant portion of the reported asset base and equity in the later years. The removal of these items results in a substantially different financial picture, potentially impacting key financial ratios and metrics used for performance evaluation. The adjusted figures may provide a more conservative and potentially realistic view of the company’s underlying financial position.

Growth Rates

The growth rate of reported total assets is significantly higher in 2022 compared to subsequent years. The adjusted total assets exhibit a more consistent growth rate throughout the period. A similar pattern is observed for stockholders’ equity. This suggests that the initial surge in reported figures was largely driven by factors related to the goodwill and intangible assets that were later removed in the adjustments.

In summary, the presented information highlights the substantial impact of goodwill and intangible assets on the reported financial position. The adjustments reveal a significantly smaller asset base and equity position, suggesting a potential overstatement of these figures in the initial reporting periods. The consistent widening of the gap between reported and adjusted values underscores the importance of understanding the nature and magnitude of these adjustments when analyzing the company’s financial performance.

The financial metrics demonstrate a notable impact from adjusting for goodwill. Generally, removing goodwill from the asset base results in improved efficiency and profitability ratios, though financial leverage also increases. The period between 2021 and 2025 exhibits distinct shifts in these adjusted figures compared to their reported counterparts.

Total Asset Turnover

Reported total asset turnover decreased significantly from 1.32 in 2021 to 0.35 in 2022, remaining relatively stable between 0.33 and 0.45 through 2025. In contrast, the adjusted total asset turnover shows a more moderate decline initially, increasing from 0.54 in 2022 to 0.67 in 2025. This suggests that a substantial portion of the initial decrease in asset turnover was attributable to the inclusion of goodwill. The adjusted ratio indicates a more consistent, albeit still modest, improvement in asset utilization over the period.

Financial Leverage

Reported financial leverage decreased from 1.66 in 2021 to 1.20-1.23 between 2022 and 2024, with a slight increase to 1.22 in 2025. The adjusted financial leverage, however, consistently exceeds the reported leverage, starting at 1.42 in 2022 and stabilizing around 1.36-1.38 from 2023 to 2025. This indicates that excluding goodwill reveals a higher degree of financial risk, as the asset base is reduced while debt remains constant.

Return on Equity (ROE)

Reported ROE experienced a dramatic decline from 42.18% in 2021 to 2.41% in 2022, with a gradual recovery to 6.88% by 2025. The adjusted ROE, while also declining from 2021 to 2022, demonstrates a less severe drop and a more pronounced upward trend, reaching 11.45% in 2025. This highlights the significant influence of goodwill on reported equity and suggests that underlying operational profitability is stronger when goodwill is excluded from the calculation.

Return on Assets (ROA)

Similar to ROE, reported ROA decreased substantially from 25.46% in 2021 to 1.95% in 2022, followed by a gradual increase to 5.64% in 2025. The adjusted ROA shows a less drastic initial decline and a more consistent, though still moderate, improvement, reaching 8.37% in 2025. This pattern reinforces the observation that goodwill significantly impacts reported asset values and, consequently, ROA. The adjusted ROA provides a clearer picture of the core business’s profitability relative to its operating assets.

In summary, the adjustments for goodwill consistently reveal a more favorable picture of operational performance, particularly in terms of asset turnover, ROE, and ROA. However, the adjusted financial leverage indicates a higher level of financial risk when goodwill is excluded. These findings suggest that while goodwill contributed to higher reported asset values and initial profitability metrics, its removal provides a more transparent view of the underlying business performance and risk profile.

An examination of the financial information reveals notable trends in asset turnover metrics between 2021 and 2025. Reported total assets experienced substantial growth over the period, while adjusted total assets demonstrate a more moderate increase. This difference impacts the interpretation of asset turnover ratios.

Reported Total Asset Turnover

The reported total asset turnover ratio began at 1.32 in 2021, then decreased significantly to 0.35 in 2022 and 0.33 in 2023. A slight recovery to 0.37 was observed in 2024, followed by an increase to 0.45 in 2025. This suggests an initial decline in the efficiency with which reported assets are used to generate sales, followed by a gradual improvement, though remaining below the 2021 level.

Adjusted Total Asset Turnover

The adjusted total asset turnover ratio exhibited a different pattern. Starting at 1.35 in 2021, it decreased to 0.54 in 2022 and 0.52 in 2023. Subsequent years showed consistent increases, reaching 0.58 in 2024 and 0.67 in 2025. This indicates that when considering adjustments to total assets, the efficiency of asset utilization has generally improved over the five-year period.

The divergence between the reported and adjusted ratios suggests that the composition of assets is changing, and the adjustments made to total assets are impacting the assessment of operational efficiency. The substantial increase in reported total assets, particularly in 2022, appears to be disproportionate to the growth in sales, leading to the initial decline in the reported turnover ratio. The adjusted ratio, which excludes certain asset components, provides a potentially more refined view of core operational performance, demonstrating a positive trend.

Asset Base Changes

Reported total assets increased from US$12,419 million in 2021 to US$76,926 million in 2025, representing a significant expansion of the asset base. Adjusted total assets grew from US$12,130 million to US$51,800 million over the same period, indicating a more controlled expansion when certain items are excluded. The difference between reported and adjusted assets widened considerably over time.

In conclusion, while the reported asset turnover ratio initially declined and showed only modest recovery, the adjusted asset turnover ratio demonstrated a consistent upward trend. This suggests that the company’s core operational efficiency is improving, but the overall reported performance is influenced by changes in the composition of its total asset base.

An examination of the financial information reveals trends in both reported and adjusted asset and equity figures, subsequently impacting calculated financial leverage ratios. Reported total assets demonstrate substantial growth over the five-year period, increasing from US$12,419 million in 2021 to US$76,926 million in 2025. Reported stockholders’ equity also exhibits a significant upward trend, rising from US$7,497 million to US$62,999 million over the same timeframe. However, adjusted total assets and adjusted stockholders’ equity present a more moderate growth pattern.

Adjusted Total Assets

Adjusted total assets begin at US$12,130 million in 2021 and increase to US$51,800 million by 2025. While positive, the growth rate is considerably lower than that of reported total assets, suggesting a notable difference between the two figures attributable to the adjustments made. The rate of increase appears relatively consistent year-over-year.

Adjusted Stockholders’ Equity

Adjusted stockholders’ equity follows a similar pattern, starting at US$7,208 million in 2021 and reaching US$37,873 million in 2025. The growth is positive but less pronounced than the growth in reported stockholders’ equity. This indicates that adjustments are reducing the reported equity base.

Reported Financial Leverage

Reported financial leverage decreases from 1.66 in 2021 to 1.23 in 2022, then remains relatively stable, fluctuating between 1.20 and 1.23 for the subsequent years. This suggests a decreasing reliance on debt financing relative to reported equity, followed by a period of stabilization.

Adjusted Financial Leverage

Adjusted financial leverage begins at 1.68 in 2021 and declines to 1.37 in 2025. The decrease is not linear, with a more substantial reduction observed between 2021 and 2022. While the adjusted leverage ratio is consistently higher than the reported ratio, the trend indicates a decreasing reliance on debt when considering the adjustments made to assets and equity. The adjusted leverage ratio demonstrates a more consistent downward trend than the reported leverage ratio.

The divergence between reported and adjusted figures suggests the presence of significant goodwill or intangible assets that are being accounted for in the reported totals but are excluded in the adjusted calculations. The adjustments consistently result in lower asset and equity values, and consequently, higher financial leverage ratios. The relatively stable reported financial leverage, contrasted with the declining adjusted financial leverage, highlights the impact of these adjustments on the overall assessment of the company’s financial risk profile.

Analysis reveals significant fluctuations in reported and adjusted stockholders’ equity, impacting reported and adjusted return on equity (ROE) over the five-year period. A notable divergence exists between the reported and adjusted equity figures, influencing the respective ROE calculations.

Stockholders’ Equity

Reported stockholders’ equity demonstrates substantial growth from 2021 to 2022, increasing from US$7,497 million to US$54,750 million. Subsequent growth is more moderate, reaching US$62,999 million by 2025. Adjusted stockholders’ equity follows a similar pattern, though with lower absolute values. The largest increase in adjusted equity also occurs between 2021 and 2022, moving from US$7,208 million to US$30,573 million, and continues to grow to US$37,873 million in 2025. The difference between reported and adjusted equity widens considerably in 2022 and remains substantial throughout the period, suggesting a significant impact from items requiring adjustment.

Reported Return on Equity (ROE)

Reported ROE exhibits a dramatic decline following the high value of 42.18% in 2021. It falls to 2.41% in 2022 and further to 1.53% in 2023. A modest recovery is observed in 2024, reaching 2.85%, followed by a more pronounced increase to 6.88% in 2025. This volatility appears directly correlated with the changes in reported stockholders’ equity.

Adjusted Return on Equity (ROE)

Adjusted ROE presents a more stable, though still fluctuating, trend. It increases from 43.87% in 2021 to 4.32% in 2022, mirroring the initial decline in reported ROE, but to a lesser extent. Adjusted ROE then rises to 2.70% in 2023, 5.01% in 2024, and reaches 11.45% in 2025. The adjusted ROE consistently exceeds the reported ROE from 2022 onwards, indicating that the adjustments made to stockholders’ equity positively impact profitability metrics. The increase in adjusted ROE in 2025 is particularly noteworthy.

Relationship between Reported and Adjusted ROE

The divergence between reported and adjusted ROE highlights the importance of considering equity adjustments. The substantial difference in 2022 and beyond suggests that intangible assets or other balance sheet items are significantly affecting the reported equity position. The upward trend in adjusted ROE, particularly in the later years, indicates that these adjustments are revealing a more favorable underlying profitability picture than the reported figures alone would suggest.

The reported and adjusted total assets demonstrate significant growth over the observed period. Reported total assets increased substantially from 2021 to 2022, then exhibited more moderate growth through 2025. Adjusted total assets followed a similar pattern, though the initial increase was less pronounced and the overall magnitude of growth was smaller than that of reported total assets. A comparison of reported and adjusted ROA reveals differences in profitability metrics when accounting for adjustments to total assets.

Reported Return on Assets (ROA)

Reported ROA peaked in 2021 at 25.46% before declining to 1.95% in 2022. A further decrease to 1.26% occurred in 2023, followed by a modest recovery to 2.37% in 2024. The most recent year, 2025, shows a substantial increase to 5.64%. This indicates considerable volatility in profitability as measured by reported assets.

Adjusted Return on Assets (ROA)

Adjusted ROA also experienced a decline from 2021 to 2023, moving from 26.07% to 1.96%. Similar to the reported ROA, 2024 saw a recovery, increasing to 3.70%. The largest increase occurred in 2025, reaching 8.37%. The adjusted ROA consistently remained above the reported ROA for each year except 2021, suggesting that the adjustments to total assets positively impact the profitability metric.

Trend Comparison

Both reported and adjusted ROA exhibit similar trends, with a sharp decline in 2022 and 2023 followed by recovery in 2024 and 2025. However, the adjusted ROA consistently demonstrates a higher value than the reported ROA, indicating that the adjustments made to total assets result in a more favorable profitability assessment. The magnitude of the increase in ROA from 2024 to 2025 is greater for the adjusted ROA, suggesting a growing impact from these adjustments.

The divergence between reported and adjusted ROA suggests that a significant portion of the reported total assets may be related to items that do not contribute directly to profitability, such as goodwill or intangible assets. The increasing adjusted ROA relative to reported ROA over time warrants further investigation into the nature and impact of these adjustments.