Key Metrics
- Total Revenue: $6,819 million (18% yoy, 17% qoq)
- Data Center Revenue: $3,549 million (122% yoy, 25% qoq)
- Client Revenue: $1,881 million (29% yoy, 26% qoq)
- Gaming Revenue: $462 million (-69% yoy, -29% qoq)
- Embedded Revenue: $927 million (-25% yoy, +8% qoq)
- Non-GAAP Gross Margin: 54% (+250 bps yoy)
- Operating Income (GAAP): $1,724 million (25% operating margin)
- Data Center Operating Income: $1,041 million
- Client Operating Income: $276 million
- Gaming Operating Income: $12 million
- Embedded Operating Income: $372 million
- Adjusted Free Cash Flow: $496 million
Forward guidance
- Q4 2024 Revenue Guidance: Expected to be approximately $7.5 billion, plus or minus $300 million, up 22% year-over-year.
- Data Center GPU Revenue: Now expected to exceed $5 billion in 2024, up from previous guidance of $4.5 billion.
- Gross Margin Guidance: Q4 non-GAAP gross margin expected to be approximately 54%.
- Operating Expenses Guidance: Q4 non-GAAP operating expenses expected to be approximately $2.05 billion.
- Effective Tax Rate: Non-GAAP effective tax rate expected to be 13% for Q4.
- Diluted Share Count: Expected to be approximately 1.64 billion shares for Q4.
- Client Segment Growth: Anticipated continued growth in the Client segment driven by strong demand for Ryzen processors, with significant launches planned.
Key takeaways
- Positives:
- Dr. Lisa Su highlighted "record Instinct and EPYC product sales" driving an 18% year-over-year revenue increase to $6.8 billion, indicating strong demand in the Data Center segment, which saw a 122% revenue increase to $3.5 billion.
- The company gained server CPU share, with cloud providers expanding their use of EPYC CPUs, as evidenced by Meta deploying over 1.5 million EPYC CPUs, showcasing significant enterprise adoption.
- The launch of the next-generation Turin family is expected to enhance performance and TCO leadership, with over 130 enterprise platforms in development, indicating strong future growth potential.
- The acquisition of ZT Systems is expected to accelerate AI infrastructure deployment, with positive customer feedback on the integration, enhancing AMD's competitive position in AI.
- Client segment revenue grew 29% year-over-year, driven by strong demand for Ryzen processors, with expectations of further growth as businesses refresh aging PCs.
- Negatives:
- Gaming segment revenue declined 69% year-over-year, attributed to reduced channel inventory from Microsoft and Sony, indicating potential weakness in consumer demand.
- Embedded segment revenue decreased 25% year-over-year, with ongoing softness in the industrial market, suggesting challenges in this area.
- Dr. Su noted that while the Data Center GPU business is strong, the market remains tight, indicating potential supply chain constraints as they ramp up production.
- Jean Hu mentioned that the client business is more consumer-weighted, which may face seasonal declines, raising concerns about sustainability in growth amidst broader market weakness.
Peer Summary
- Data Center Demand: Intel noted strong operational performance, with Gelsinger stating, "We delivered Q3 revenue above the midpoint of our guidance," indicating sector resilience despite challenges. NVIDIA reported a 122% year-on-year revenue increase, driven by demand for AI applications, suggesting robust growth in data center investments.
- Gaming Market Weakness: AMD's gaming revenue declined significantly, which aligns with NVIDIA's acknowledgment of competitive pressures in China, indicating potential softness in consumer demand for gaming products.
- Automotive Sector Growth: Texas Instruments highlighted strong automotive market growth in China, with Ilan stating, "Our automotive revenue in China is at an all-new-time high," suggesting a positive trend in automotive semiconductor demand.
- Memory and Storage Dynamics: Micron reported record-high revenues in NAND and storage, with Mehrotra emphasizing, "Memory is essential to extend the frontier of AI capability," indicating a growing intersection of memory solutions with AI advancements.
- Supply Chain and Inventory Concerns: Multiple competitors, including Micron and Texas Instruments, noted rising inventory levels, with Micron acknowledging, "We were seeing some customers had... inventory build," suggesting potential overstock issues across the sector.
