AMD Reports Third Quarter 2023 Financial Results, Revenue Up 4% YoY

[TheLostSwede]

AMD (NASDAQ:AMD) today announced revenue for the third quarter of 2023 of $5.8 billion, gross margin of 47%, operating income of $224 million, net income of $299 million and diluted earnings per share of $0.18. On a non-GAAP basis, gross margin was 51%, operating income was $1.3 billion, net income was $1.1 billion and diluted earnings per share was $0.70.

"We delivered strong revenue and earnings growth driven by demand for our Ryzen 7000 series PC processors and record server processor sales," said AMD Chair and CEO Dr. Lisa Su. "Our data center business is on a significant growth trajectory based on the strength of our EPYC CPU portfolio and the ramp of Instinct MI300 accelerator shipments to support multiple deployments with hyperscale, enterprise and AI customers."




"We executed well in the third quarter, delivering year-over-year growth in revenue, gross margin and earnings per share," said AMD EVP, CFO and Treasurer Jean Hu. "In the fourth quarter, we expect to see strong growth in Data Center and continued momentum in Client, partially offset by lower sales in the Gaming segment and additional softening of demand in the embedded markets."

Quarterly Segment Summary

• Data Center segment revenue was $1.6 billion, flat year-over-year, as growth in 4th Gen AMD EPYC CPU sales was offset by a decline in adaptive System-on-Chip (SoC) data center products.
  • Revenue increased 21% sequentially as customer adoption of 4th Gen AMD EPYC CPUs accelerated during the quarter.
  • AMD Instinct MI300A and MI300X GPUs are on track for volume production in the fourth quarter to support deployments with several leading HPC, cloud and AI customers.
• Client segment revenue was $1.5 billion, up 42% year-over-year driven primarily by higher Ryzen mobile processor sales.
  • Revenue grew 46% sequentially driven by an increase in AMD Ryzen 7000 Series CPU sales.
• Gaming segment revenue was $1.5 billion, down 8% year-over-year, primarily due to a decline in semi-custom revenue, partially offset by an increase in AMD Radeon GPU sales.
  • Revenue declined 5% sequentially due to lower semi-custom sales.
• Embedded segment revenue was $1.2 billion, down 5% year-over-year primarily due to a decrease in revenue in the communications market.
  • Revenue decreased 15% sequentially due to inventory correction at customers in several end markets.

Recent PR Highlights

• Cloud adoption of AMD EPYC processors continues to grow significantly, with nearly 100 new instances from Microsoft Azure, AWS, Oracle and others available for preview and general access, including new AWS instances powered by 4th Gen AMD EPYC CPUs that deliver leadership performance and energy efficiency.
• AMD expanded the 4th Gen EPYC CPU portfolio with the launch of the AMD EPYC 8004 Series processors, purpose built to deliver exceptional energy efficiency and performance for cloud services, intelligent edge and telco.
• AMD made significant progress powering pervasive AI across the cloud, edge and end point devices:
  • AMD completed the acquisition of open-source AI software expert Nod.ai, expanding the company's open AI software capabilities. Nod.ai has developed an industry-leading software technology that accelerates the deployment of AI solutions optimized for AMD Instinct data center accelerators, Ryzen AI processors, EPYC processors, Versal SoCs and Radeon GPUs.
  • AMD acquired AI software leader Mipsology. With proven expertise delivering AI software and solutions running on top of AMD adaptive computing silicon, the Mipsology team will help develop the full AMD AI software stack and expand the open ecosystem of software tools, libraries and models.
  • AI startup Lamini unveiled that it has been running production-ready Large Language Models (LLMs) exclusively on AMD Instinct accelerators, enabling enterprise customers to deploy LLMs finetuned for their specific data across hundreds of AMD Instinct MI250 GPUs with only three lines of code.
• AMD expanded its AMD Ryzen processor lineup, delivering more performance and capabilities for enthusiasts, gamers and creators:
  • AMD announced the AMD Ryzen Threadripper PRO 7000 WX-Series and Ryzen Threadripper 7000 processors, delivering outstanding performance for the most demanding desktop platforms. Ryzen Threadripper PRO 7000 WX-Series processors will be available later this year to DIY customers, SI partners and through OEM partners including Dell Technologies, HP and Lenovo.
  • AMD launched new Ryzen 7045HX3D Series mobile processors, the first mobile processor with AMD 3D V-Cache technology, and the world's fastest mobile gaming processor.
  • AMD launched the AMD Ryzen 5 5600X3D processor, delivering incredible gaming performance with AMD 3D V-cache technology.
• Leadership AMD adaptive and embedded computing products are enabling new capabilities in key markets:
  • AMD extended its leadership in radiation-tolerant, space-grade compute solutions with the announcement of the Versal AI Edge XQRVE2302, the second device in the Versal adaptive SoC portfolio to be qualified for space flight.
  • AMD announced the AMD Alveo UL3524 accelerator card, a new fintech accelerator designed for electronic trading applications and AI-enabled trading strategies.
  • AMD announced the AMD Kria K24 System-on-Module (SOM) and KD240 Drives Starter Kit, offering power-efficient compute in a small form factor for cost-sensitive industrial and commercial edge applications.
• New AMD graphics processors and software features are enabling incredible experiences for gamers and professionals:
  • AMD introduced the flagship laptop graphics processor, AMD Radeon RX 7900M, the fastest AMD Radeon GPU ever developed for laptops, delivering desktop-class performance for gaming and content creation.
  • AMD launched the Radeon RX 7800 XT and Radeon RX 7700 XT graphics cards, optimized to deliver incredibly high-performance, high-refresh 1440p gaming experiences for demanding AAA and esports titles.
  • AMD launched FidelityFX Super Resolution 3 in Forspoken and Immortals of Aveum, featuring new frame generation technology that delivers massive performance improvements over both native resolution and temporal upscaling.
  • AMD launched the latest version of the AMD Software: Adrenalin Edition application featuring AMD HYPR-RX technology, allowing AMD Radeon Super Resolution and AMD Radeon Boost technologies to work together to deliver greater performance.
  • AMD launched the Radeon PRO W7600 and Radeon PRO W7500 workstation graphics cards, engineered to tackle workloads across a range of professional industries.
• AMD published its annual Corporate Responsibility Report, detailing 2022 progress across focus areas spanning digital impact, environmental sustainability, supply chain responsibility, and diversity, belonging and inclusion.
• AMD announced plans to invest approximately $400 million over the next five years to expand research, development and engineering operations in India, including the addition of approximately 3,000 new engineering roles by the end of 2028.

Current Outlook
AMD's outlook statements are based on current expectations. The following statements are forward-looking and actual results could differ materially depending on market conditions and the factors set forth under "Cautionary Statement" below.

For the fourth quarter of 2023, AMD expects revenue to be approximately $6.1 billion, plus or minus $300 million. At the mid-point of the revenue range, this represents year-over-year growth of approximately 9% and sequential growth of approximately 5%. Non-GAAP gross margin is expected to be approximately 51.5%.

View at TechPowerUp Main Site | Source

 

[TheLostSwede]

The stock market didn't like what AMD delivered...

 

[Denver]

AMD is like a kraken, it has arms (IP) to reach almost any market. They have a lot of ground to gain in AI and internet infrastructure.

 

[dir_d]

They are still up if you look at month long, so not so bad, they just need to use Xlinx and the RTG side more efficiently. Overall i think AMD is spread too thin.

edit

What i mean by spread too thin is, AMD does well when they focus in a market but they seem to let everything else fall in the way side. They are focused in the enterprise sector and its doing well but everything else is falling apart.

 

[TheLostSwede]

They are still up if you look at month long, so not so bad, they just need to use Xlinx and the RTG side more efficiently. Overall i think AMD is spread too thin.

They're fighting too many battles. It would appear that they need to invest a lot more in getting additional staff, but no sensible company would do that in the current economic climate.

 

[P4-630]

Jensen Huang should buy some stock...

 

[Denver]

They're fighting too many battles. It would appear that they need to invest a lot more in getting additional staff, but no sensible company would do that in the current economic climate.

I see it more as an advantage that few companies have (Samsung), when one ARM suffers a bad season another compensates for it and mitigates the problem. Furthermore, the different IPs can work in harmony together.

 

[TheLostSwede]

I see it more as an advantage that few companies have (Samsung), when one ARM suffers a bad season another compensates for it and mitigates the problem. Furthermore, the different IPs can work in harmony together.

But if you spread your limited resources too thin, all "arms" as you put it, can end up suffering. It's a big risk to spread out so thin as AMD has done.
If you look at Intel, Pat has been very busy trimming all the fat, which may or may not work. The investors don't seem to impressed so far though.

 

[mb194dc]

Not growing fast enough to justify their stock valuation. Barely any growth in real terms at all.

 

[Tek-Check]

The stock market didn't like what AMD delivered...
View attachment 319706

Stock market did not appreciate today slow recovery in tech sector, diversity of AMD's products and what is in pipeline. Stock market twitched.

What i mean by spread too thin is, AMD does well when they focus in a market but they seem to let everything else fall in the way side. They are focused in the enterprise sector and its doing well but everything else is falling apart.

What exactly is "falling apart"? Please point the item in this Q3 report.

But if you spread your limited resources too thin, all "arms" as you put it, can end up suffering. It's a big risk to spread out so thin as AMD has done.
If you look at Intel, Pat has been very busy trimming all the fat, which may or may not work. The investors don't seem to impressed so far though.

AMD has nothing to trim at the moment, as they haven't grown as big as Intel or Nvidia in the first place. They have secured server market long-term growth and revenues, which has been a priority in last 5 years. They will be approaching astonishing 30% of server share shortly, in such a short time period, from almost 0%. It's not headline grabbing like AI is, but they are digging deep over there. They are prepping a new long-term invetment in large Indian telecom market with Xilinx modules, and MI300 series will be rolling out towards Xmas.

In client segment, they will secure next gen consoles, so another long-term deal, desktop is steady due to wider macroeconomic situation, but it's slowly recovering. In mobile, they are experimenting with groups of products to learn where to ger more aggressive next year, in GPUs is almost a miracle what they can achieve with such a small team. They are present, less or more prominently, in several segments. To be even more successful, they do not need to be dominant in any one segment. It's a different model of business.

All in all, their position is multiple times stronger than just three years ago, in pre-pandemic world. There is no doubt about it.

 

[kane nas]

The stock market didn't like what AMD delivered...
View attachment 319706

 

[kane nas]

They are still up if you look at month long, so not so bad, they just need to use Xlinx and the RTG side more efficiently. Overall i think AMD is spread too thin.

edit

What i mean by spread too thin is, AMD does well when they focus in a market but they seem to let everything else fall in the way side. They are focused in the enterprise sector and its doing well but everything else is falling apart.

 

[Philaphlous]

AMD is going to be on sale now...not a bad time to buy...well tomorrow that is...

 

[kapone32]

Stock market did not appreciate today slow recovery in tech sector, diversity of AMD's products and what is in pipeline. Stock market twitched.


What exactly is "falling apart"? Please point the item in this Q3 report.


AMD has nothing to trim at the moment, as they haven't grown as big as Intel or Nvidia in the first place. They have secured server market long-term growth and revenues, which has been a priority in last 5 years. They will be approaching astonishing 30% of server share shortly, in such a short time period, from almost 0%. It's not headline grabbing like AI is, but they are digging deep over there. They are prepping a new long-term invetment in large Indian telecom market with Xilinx modules, and MI300 series will be rolling out towards Xmas.

In client segment, they will secure next gen consoles, so another long-term deal, desktop is steady due to wider macroeconomic situation, but it's slowly recovering. In mobile, they are experimenting with groups of products to learn where to ger more aggressive next year, in GPUs is almost a miracle what they can achieve with such a small team. They are present, less or more prominently, in several segments. To be even more successful, they do not need to be dominant in any one segment. It's a different model of business.

All in all, their position is multiple times stronger than just three years ago, in pre-pandemic world. There is no doubt about it.

Where AMD is killing it is in the Handheld space. There are so many Companies using Ryzen APUs that we may not see them on Desktop until 2024. They are also making inroads in the laptop space but need more inventory. Where I live a 4090 laptop is $6000 and a 4050 laptop is $1600 so there is plenty of room to play. I expect some phone maker to work with AMD to make a smartphone that you can actually Game on as that seems like the next logical step. Could be why Qualcomm and ARM are jumping back into the mix.

 

[Daven]

Always remember to wait for short sellers to finish up.

 

[mahirzukic2]

The stock market didn't like what AMD delivered...
View attachment 319706

That is after hours trading. That doesn't count for practically anything.

Like I said, it doesn't matter, that's the off time trading.

 

[Gungar]

Not growing fast enough to justify their stock valuation. Barely any growth in real terms at all.

None of the 100 most valuable companies in the stock market justify their stock valuation.

 

[Imouto]

The stock market didn't like what AMD delivered...
View attachment 319706

To think that this guy writes for this site.

 

[stimpy88]

Jensen Huang should buy some stock...

Sis does anything he asks for. Why would he need to buy stock?

 

[john_]

Either AMD doesn't know how to grab all the opportunities that are presented to them and convert them to money, or they are having huge difficulties securing enough wafers from TSMC.

 

[TheLostSwede]

AMD has nothing to trim at the moment, as they haven't grown as big as Intel or Nvidia in the first place. They have secured server market long-term growth and revenues, which has been a priority in last 5 years. They will be approaching astonishing 30% of server share shortly, in such a short time period, from almost 0%. It's not headline grabbing like AI is, but they are digging deep over there. They are prepping a new long-term invetment in large Indian telecom market with Xilinx modules, and MI300 series will be rolling out towards Xmas.

In client segment, they will secure next gen consoles, so another long-term deal, desktop is steady due to wider macroeconomic situation, but it's slowly recovering. In mobile, they are experimenting with groups of products to learn where to ger more aggressive next year, in GPUs is almost a miracle what they can achieve with such a small team. They are present, less or more prominently, in several segments. To be even more successful, they do not need to be dominant in any one segment. It's a different model of business.

All in all, their position is multiple times stronger than just three years ago, in pre-pandemic world. There is no doubt about it.

I don't believe I said they do either, quite the opposite if they want to remain in all the markets they are currently trying to stay relevant in.
However, they might want to focus a bit more on the core business, as they're starting to upset their customers due to their inability to deliver some products, which is never good for long term business.

Always remember to wait for short sellers to finish up.
View attachment 319761

Yeah, I posted this news post at 21:09 local time and I wasn't going to stay up and see what happened...

That is after hours trading. That doesn't count for practically anything.

Like I said, it doesn't matter, that's the off time trading.

But it was a direct reaction, showing that some investors lost faith in AMD immediately, which shows how fickle the market is.

 

[Imouto]

But it was a direct reaction, showing that some investors lost faith in AMD immediately, which shows how fickle the market is.

It shows nothing. And no one of any relevance lost faith in AMD as shown in the current +7%.

You jumped the gun and your bet was exposed as a poor trolling attempt. I'd expect better from a "News Editor".

 

[john_]

However, they might want to focus a bit more on the core business, as they're starting to upset their customers due to their inability to deliver some products, which is never good for long term business.

That's the road to bankruptcy. If they focus on CPUs for laptops and handhelds for example, Intel only needs to pass to 5nm and improve it's graphics to annihilate AMD. They need to target more markets. Remain in gaming, push in AI, not lose time to take advantage of Xilinx products, explore the possibility of ARM SOCs and even more.

Yeah, I posted this news post at 21:09 local time and I wasn't going to stay up and see what happened...

You probably where pretty certain about how the stock price will move. You wouldn't have posted it otherwise.
They seem to love it now

AMD was always the most volatile stock of the three, with the other two meaning Intel and Nvidia. Because investors where always fearing the news that will signal AMD's demise. MI300 failing to get orders or having some serious bugs, or Microsoft for example choosing to go Intel or Nvidia for it's next console, that could be a reason for AMD to see it's share price dropping significantly. Even global news seem to affect AMD more than others.

But for now, it seems that those reading on the next quarter guidance and selling, are just losing the big picture. Which is the guidance for the 1st quarter of 2024. The 1st quarter is the worst, but if it includes hundreds of millions of MI300 sales, it could be a game changer. So big investors buy here at around $100 hopping to see $150 in 6 months. If their prediction doesn't materialize, they will probably manage to sell at the same levels that the share price is today just days/weeks before everyone else sees the trouble coming. They do have extra information and analytics that gives them the opportunity to react before the others.

If you look at Intel, Pat has been very busy trimming all the fat, which may or may not work. The investors don't seem to impressed so far though.

Su did that when she became president. Abandoned AM1 and little cores like Temash, cut the ARM based Opteron, kept going with GCN in GPUs, focused on Ryzen and EPYC.
But they do have money now. They can and they should explore more markets. The reason buying Xilinx was that. Offer more complete solutions, explore more markets.
AMD working with India telecom gear makers on telecom tech, Telecom News, ET Telecom

 

[Wirko]

But they do have money now. They can and they should explore more markets.

And secure enough wafers (as you've suggested earlier). It seems that they should also invest in TSMC, by financing the manufacturing equipment or in some other way, I don't know what is customary in this industry.