AMD Announces Strong Q3 2023 Results

AMD (NASDAQ:AMD) has reported revenue of $5.8 billion for the third quarter of 2023, with a gross margin of 47%. The company achieved 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.

AMD Chair and CEO Dr. Lisa Su commented, "We delivered strong revenue and earnings growth driven by demand for our Ryzen 7000 series PC processors and record server processor sales. 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."

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

Quarterly Segment Summary

The Data Center segment revenue was $1.6 billion, remaining flat year-over-year. The growth in 4th Gen AMD EPYC CPU sales was offset by a decline in adaptive System-on-Chip (SoC) data center products. However, revenue increased 21% sequentially due to increased customer adoption of 4th Gen AMD EPYC CPUs during the quarter. AMD Instinct MI300A and MI300X GPUs are expected to enter volume production in the fourth quarter to support deployments with several leading HPC, cloud, and AI customers.

The Client segment revenue was $1.5 billion, representing a 42% year-over-year increase driven primarily by higher Ryzen mobile processor sales. Revenue also grew 46% sequentially due to increased sales of AMD Ryzen 7000 Series CPUs.

The Gaming segment revenue was $1.5 billion, down 8% year-over-year, primarily due to a decline in semi-custom revenue. However, there was an increase in AMD Radeon GPU sales, which partially offset the decline. Revenue declined 5% sequentially due to lower semi-custom sales.

The Embedded segment revenue was $1.2 billion, down 5% year-over-year primarily due to a decrease in revenue in the communications market. Revenue also decreased 15% sequentially due to an inventory correction at customers in several end markets.

Recent PR Highlights

AMD has achieved significant milestones in various areas:

  • Cloud adoption of AMD EPYC processors continues to grow, with nearly 100 new instances from Microsoft Azure, AWS, Oracle, and others available for preview and general access.
  • AMD expanded its 4th Gen EPYC CPU portfolio with the launch of the AMD EPYC 8004 Series processors, designed for exceptional energy efficiency and performance in cloud services, intelligent edge, and telco.
  • AMD made acquisitions to strengthen its AI software capabilities, including open-source AI software expert Nod.ai and AI software leader Mipsology.
  • AMD has expanded its AMD Ryzen processor lineup, introducing new processors such as the AMD Ryzen Threadripper PRO 7000 WX-Series and Ryzen Threadripper 7000 processors.
  • AMD has extended its leadership in radiation-tolerant, space-grade compute solutions with the announcement of the Versal AI Edge XQRVE2302.
  • AMD has launched new graphics processors and software features, including the flagship laptop graphics processor AMD Radeon RX 7900M and the Radeon RX 7800 XT and Radeon RX 7700 XT graphics cards.
  • AMD has published its annual Corporate Responsibility Report, detailing progress across various focus areas.
  • AMD has announced plans to invest approximately $400 million over the next five years to expand research, development, and engineering operations in India.

Current Outlook

For the fourth quarter of 2023, AMD expects revenue to be approximately $6.1 billion, with a non-GAAP gross margin of approximately 51.5%. This represents a year-over-year growth of approximately 9% and sequential growth of approximately 5%.