AMD's latest financial results reflect a stabilizing PC market and a surging demand for AI chips. The company has also confirmed that it will deliver its MI300 series in the coming weeks.
AMD released its third quarter results that ended in September on October 31. Its sales grew by 4.22% to US$5.8 billion, and net income for the quarter surged by more than 300% to US$299 million.
AMD CEO Lisa Su said in a press release that AMD delivered strong revenue and earnings growth driven by demand for its Ryzen 7000 series PC processors and record server processor sales. The data center business is on a significant growth trajectory based on the strength of the EPYC CPU portfolio and the ramp of Instinct MI300 accelerator shipments to support multiple deployments with hyperscale, enterprise, and AI customers.
According to AMD's guidance, the fourth-quarter revenue is expected to be between US$5.8 billion and US$6.4 billion, with the mid-point of the revenue representing year-on-year growth of about 9% and quarter-on-quarter growth of about 5%.
Regarding segmental sales, AMD saw its data center sales remain flat at US$1.6 billion, as growth in the 4th generation of EPYC CPU sales was offset by a decline in adaptive SoC data center products. The client segment, AMD's PC chip division, witnessed sales growth of 42% year-on-year thanks to higher Ryzen processor sales.
AMD's gaming sales were down 8% from a year ago. AMD CFO Jean Hu said the result was due to a decrease in semi customer revenue, partially offset by an increase in Radeon GPUs. Embedded segment saw revenue down 5% year-on-year due to a decrease in revenue in the communication market.
According to Hu, the data center segment is expected to see growth by double-digit percentage sequentially, and the client segment is anticipated to see an increase. However, the gaming and embedded segments may witness declining sales by double-digit percentage quarter-on-quarter.
Meanwhile, Su said at the earnings call that AMD expects the data center GPU revenue to be approximately US$400 million in the fourth quarter and exceed US$2 billion in 2024 as revenue ramps throughout the year. AMD is on track to begin production shipments of instinct MI300 in the coming weeks, which is likely to become the fastest product to ramp to a billion dollars in sales in AMD history.
AMD income statement (US$m) | ||||||
Financials | 3Q22 | 4Q22 | 1Q23 | 2Q23 | 3Q23 | YoY for 3Q23 (%) |
Sales | 5565 | 5599 | 5353 | 5359 | 5800 | 4.22 |
Gross profit | 2354 | 2403 | 2359 | 2443 | 2747 | 16.69 |
Operating income | -64 | -149 | -145 | -20 | 224 | -450 |
Net income | 66 | 21 | -139 | 27 | 299 | 353.03 |
Source: AMD, October 2023
AMD sales by segment (US$m) | ||||||
Segment | 3Q22 | 4Q22 | 1Q23 | 2Q23 | 3Q23 | YoY for 3Q23 (%) |
Gaming | 1631 | 1644 | 1757 | 1581 | 1506 | -7.66 |
Embedded | 1303 | 1397 | 1562 | 1459 | 1243 | -4.6 |
Data Center | 1609 | 1655 | 1295 | 1321 | 1598 | -0.68 |
Client | 1022 | 903 | 739 | 998 | 1453 | 42.17 |
Source: AMD, October 2023
