News AMD 1Q2024 Earnings

[Hitman928]

Summary:

Solid quarter overall for AMD. Client sales are back up to normal levels after the large pull back last year. Console revenue is still way down and FPGA sales are down hard as well. Data center had a record quarter thanks to MI300 sales and increased Epyc sales. AMD is also projecting growth through next quarter and an optimistic view through the end of the year. Will have to wait for the earnings call to see if and how the forecast for MI300 revenue has changed.

• Advanced Micro Devices press release (NASDAQ:AMD): Q1 Non-GAAP EPS of $0.62 beats by $0.01.
• Revenue of $5.47B (+2.2% Y/Y) beats by $20M.
• Record Data Center segment revenue of $2.3 billion was up 80% year-over-year driven by growth in both AMD Instinct™ GPUs and 4th Gen AMD EPYC™ CPUs. Revenue increased 2% sequentially driven by the first full quarter of AMD Instinct GPU sales, partially offset by a seasonal decline in server CPU sales.
• Client segment revenue was $1.4 billion, up 85% year-over-year driven primarily by AMD Ryzen™ 8000 Series processor sales. Revenue decreased 6% sequentially.
• Gaming segment revenue was $922 million, down 48% year-over-year and 33% sequentially due to a decrease in semi-custom revenue and lower AMD Radeon™ GPU sales.
• Embedded segment revenue was $846 million, down 46% year-over-year and 20% sequentially as customers continued to manage their inventory levels.
• For the second quarter of 2024, AMD expects revenue to be approximately $5.7 billion, plus or minus $300 million vs. $5.69B consensus. At the mid-point of the revenue range, this represents year-over-year growth of approximately 6% and sequential growth of approximately 4%. Non-GAAP gross margin is expected to be approximately 53%.

Advanced Micro Devices Non-GAAP EPS of $0.62 beats by $0.01, revenue of $5.47B beats by $20M (NASDAQ:AMD)

Advanced Micro Devices (AMD) reported higher-than-expected Q1 earnings and revenue.

seekingalpha.com

https://ir.amd.com/news-events/press-releases/detail/1192/amd-reports-first-quarter-2024-financial-results

 

[Hitman928]

Earnings released, will update OP as I process it. Seems like a solid quarter for AMD and decent forecast.

 

[Henry swagger]

Net income is down in client.. tsmc wafers must be expensive

 

[trivik12]

Why is gross margin up only 3% despite datacenter revenue up like 80% !!! GPUs and Xilinx revenue is down big. I remember Xilinx as stand alone company delivering 1B revenue. Client side I can understand being meh.

But more color into MI300x adoption will help for sure. if they increase their projected revenue for DC GPU it will recover again.

Otherwise its all Nvidia when it comes to minting money. Their Quarterly top line is now > Intel + AMD !!!

 

[Hitman928]

Net income is down in client.. tsmc wafers must be expensive

It's up Y/Y? If you mean Q/Q, then Q1 is almost always lower on the client side. . .

 

[Hitman928]

Why is gross margin up only 3% despite datacenter revenue up like 80% !!! GPUs and Xilinx revenue is down big. I remember Xilinx as stand alone company delivering 1B revenue. Client side I can understand being meh.

But more color into MI300x adoption will help for sure. if they increase their projected revenue for DC GPU it will recover again.

Otherwise its all Nvidia when it comes to minting money. Their Quarterly top line is now > Intel + AMD !!!

FPGA revenue is way down and that is high margin stuff as well, should account for a lot of it while MI300 is still ramping.

Edit: Previously AMD said that the MI300 revenue for the year was back half weighted, so the vast majority of its revenue is still to come in later quarters. The big question is if their total projected number has changed at all.

 

[Abwx]

Why is gross margin up only 3% despite datacenter revenue up like 80% !!! GPUs and Xilinx revenue is down big. I remember Xilinx as stand alone company delivering 1B revenue. Client side I can understand being meh.

But more color into MI300x adoption will help for sure. if they increase their projected revenue for DC GPU it will recover again.

Otherwise its all Nvidia when it comes to minting money. Their Quarterly top line is now > Intel + AMD !!!

Xilinx was at about 0.78b/quarter in 2021 just before they merged with AMD.

 

[trivik12]

Xilinx was at about 0.78b/quarter in 2021 just before they merged with AMD.

Their last Q as independent they delivered 879 million. But you are right that they never hit 1B. But is AMD embedded just Xilinx or they have additional revenue. They were at 1.5B year ago.

 

[Hitman928]

Their last Q as independent they delivered 879 million. But you are right that they never hit 1B. But is AMD embedded just Xilinx or they have additional revenue. They were at 1.5B year ago.

Embedded used to include semi-custom revenue (almost entirely consoles) but that has been changed now and embedded is by and large FPGA related (console and similar semi-custom revenue is now in gaming).

 

[Saylick]

lol, looks like Xilinx giveth and taketh away. For the last few quarters, the FPGA sales were keeping the overall balance sheet in the black when client sales slumped, and now it's other segments making up for the dip in FPGA sales.

 

[adroc_thurston]

lol, looks like Xilinx giveth and taketh away. For the last few quarters, the FPGA sales were keeping the overall balance sheet in the black when client sales slumped, and now it's other segments making up for the dip in FPGA sales.

it's an overall embedded industry slump.

 

[Abwx]

Their last Q as independent they delivered 879 million. But you are right that they never hit 1B. But is AMD embedded just Xilinx or they have additional revenue. They were at 1.5B year ago.

Embedded include specific CPUs and APUs that are sold among others to medical gear manufacturers, and also car manufacturers like Tesla, but not consoles semi custom for Sony/Msft wich are in the gaming segment and are at the end of their lifecycle, hence the lower numbers for the gaming segment.

Merging with Xilinx was one of the most insightfull move from AMD, it did cost them nothing contrary to Intel who sunked bns in Altera, wich by the way is down 58% Q/Q, so it seems that the FPGA market as a whole is timely in a recession.

As for Xiling revenue it was 3.15bn for 2021, so the 879M was just a better quarter than average.

 

[ondma]

Earnings released, will update OP as I process it. Seems like a solid quarter for AMD and decent forecast.

Stock is down about 5% after hours though. Kind of surprising since to my untrained eye the earnings didnt seem that bad. Maybe the weakness in AI relative to nVidia is hurting them.

 

[Saylick]

Stock is down about 5% after hours though. Kind of surprising since to my untrained eye the earnings didnt seem that bad. Maybe the weakness in AI relative to nVidia is hurting them.

Yeah, it's all relative to the competition now since a rising tide lifts all ships. If Wallstreet sees that your boat isn't being lifted as high as others, they'll tank you for it.

 

[Ghostsonplanets]

Gaming and embedded slump really did AMD no favors. Semi-Custom will need to carried hard by the PS5 and future PS5 Pro because Xbox is a lost cause. I don't know if this happened, but they should have pitched hard for a custom SoC for Nintendo. That's an easy 100M+ chips sold over 5 - 8 years. But it's hard to break Switch business from Nvidia, specially due to library compatibility.

At least AMD probably got the contract for Xbox Next. So it's a guaranteed revenue source in the coming years.

 

[gdansk]

Not awful but AMD's market valuation is always built on them beating expectations. The fundamentals aren't there.

Did they say anything specific about MI300 sales? That's probably all the street cares about.

 

[Abwx]

There are several concerns here when adding Intel s numbers to these ones.

First is that Intel still hold 57% of the server market despite notably inferior products, it means that Intel manage to lure customers with whatever mean they use, and methink that it s surely not by branding technical advantages.

Second, and that s the worse, is that AMD was holding 20% of the client market in Q1
2023 and for Q1 2024 it s only 15%, yet their product portfolio as never been as strong since in early 2023 all they had in the mobile market, that account for 60% of PC sales, was RMB.

Since then they released Phoenix wich is unrivaled till this day and yet they lost 5 pts of marketshare, there s something at play here that has nothing to do with the quality of the products, and this should be adressed by AMD because if a technical advantage yield a negative result it means that there s anti competitive practices as only explanations.

 

[Ghostsonplanets]

Not awful but AMD's market valuation is always built on them beating expectations. The fundamentals aren't there.

Did they say anything specific about MI300 sales? That's probably all the street cares about.

> Record data center GPU sales with MI300 surpassing $1B in cumulative sales since Q4'23 launch.

 

[Ghostsonplanets]

> 150 ISVs on track to be developing for AMD AI PCs by the end of 2024

> Next-gen "Strix Point" processors on track to launch second half 2024

 

[Saylick]

Not awful but AMD's market valuation is always built on them beating expectations. The fundamentals aren't there.

Did they say anything specific about MI300 sales? That's probably all the street cares about.

AMD upped guidance to 4B from 3.5B for MI300 I think. Given that Nvidia is raking in the cash, I guess analysts weren't impressed.

There are several concerns here when adding Intel s numbers to these ones.

First is that Intel still hold 57% of the server market despite notably inferior products, it means that Intel manage to lure customers with whatever mean they use, and methink that it s surely not by branding technical advantages.

Second, and that s the worse, is that AMD was holding 20% of the client market in Q1
2023 and for Q1 2024 it s only 15%, yet their product portfolio as never been as strong since in early 2023 all they had in the mobile market, that account for 60% of PC sales, was RMB.

Since then they released Phoenix wich is unrivaled till this day and yet they lost 5 pts of marketshare, there s something at play here that has nothing to do with the quality of the products, and this should be adressed by AMD because if a technical advantage yield a negative result it means that there s anti competitive practices as only explanations.

That's the problem with tackling incumbents is that customers aren't going to switch overnight. Intel has a big advantage in terms of OEM relationships, which are built on the backbone of being able to deliver supply of chips, regardless of how mediocre against the competition, in high volume. Dell and the lot of them would rather design their platform for one vendor, even if their newest chips are only 5% faster than before, rather than developing a new platform for the competitor's better chip because there likely isn't going to be as great of a return on investment for those development costs due to the lower volume.

Unfortunately, Lisa Su is a pretty conservative CEO in comparison to JHH. She doesn't want to be burned by oversupply, so she doesn't take advantage of reserve manufacturing capacity, when it was available, to make more products. In today's AI boom, reserve manufacturing capacity is pretty much nonexistent.

 

[Kepler_L2]

Gaming and embedded slump really did AMD no favors. Semi-Custom will need to carried hard by the PS5 and future PS5 Pro because Xbox is a lost cause. I don't know if this happened, but they should have pitched hard for a custom SoC for Nintendo. That's an easy 100M+ chips sold over 5 - 8 years. But it's hard to break Switch business from Nvidia, specially due to library compatibility.

At least AMD probably got the contract for Xbox Next. So it's a guaranteed revenue source in the coming years.

Xbox was already a small % of gaming revenue, the drop has to be mostly PS5 sales slump.

 

[Abwx]

That's the problem with tackling incumbents is that customers aren't going to switch overnight. Intel has a big advantage in terms of OEM relationships, which are built on the backbone of being able to deliver supply of chips, regardless of how mediocre against the competition, in high volume. Dell and the lot of them would rather design their platform for one vendor, even if their newest chips are only 5% faster than before, rather than developing a new platform for the competitor's better chip because there likely isn't going to be as great of a return on investment for those development costs due to the lower volume.

But they develop AMD plateforms, the logic would imply that they increase the volumes to better amortize the developpement costs, and if there were any supply issue from AMD you wouldnt see Phoenix sold as DIY part or used by those numerous mini PCs and other handhelds without any supply issue, and btw, there was no new plateform required since PHX use the same one as RMB.

Unfortunately, Lisa Su is a pretty conservative CEO in comparison to JHH. She doesn't want to be burned by oversupply, so she doesn't take advantage of reserve manufacturing capacity, when it was available, to make more products. In today's AI boom, reserve manufacturing capacity is pretty much nonexistent.

At some point she should decide to really adress the issues, AMD wont grow anymore as long as they dont adopt an agressive behaviour to tackle their proved to be baseless opponent.

 

[Hitman928]

AMD upped guidance to 4B from 3.5B for MI300 I think. Given that Nvidia is raking in the cash, I guess analysts weren't impressed.

Yep. The increase to $4B was the disappointment for investors. With the numbers NV is getting, the market was hoping to see a bigger raise for AMD. Despite some saying to expect $6B in MI300 sales this year, AMD should have a really accurate idea of how much they are going to sell through the end of the year and I expect those projections to come down significantly now. Short term the stock will take a hit, long term it will depend on how well AMD can build on this momentum into the next round and how the macro environment develops in terms of demand and other competition.

 

[Ghostsonplanets]

Why are AMD op margins so low (1% this Q?).

Xbox was already a small % of gaming revenue, the drop has to be mostly PS5 sales slump.

Right, this checks with Sony having reduced the forecast last quarter from 25M FY24 to 21M FY24 (And I'm not even sure if they'll hit them). Xbox sales are basically a non-factor at this point.

 

[Markfw]

First is that Intel still hold 57% of the server market despite notably inferior products, it means that Intel manage to lure customers with whatever mean they use, and methink that it s surely not by branding technical advantages.

My question is, is that 57% in current sales vs Intel ? or installed base ?