AMD Reports Q3 2023 Financial Results, Gives Soft Q4 Guidance

AMD hopes to generate about $400 million in sales from its graphics processing units for AI workloads in the fourth quarter2023, which will result in a rise to $2 billion in fiscal 2024.

American semiconductor company Advanced Micro Devices Inc (NASDAQ: AMD) has reported its financial results for Q3 of 2023. The company showed strong performance, beating analysts’ expectations. However, for Q4 2023, the forecast is not that bright, as AMD is expecting its sales to slow down.

AMD Q3 2023: Highlights

For the third quarter, AMD generated a revenue of $5.8 billion, while the forecast was $5.7 billion, and adjusted earnings per share of $0.70, versus 68 cents expected. Further, AMD reported a gross margin of 47%, operating income of $224 million, net income of $299 million, and diluted earnings per share of $0.18.

The revenue for the quarter has grown by 4% year over year, the growth has been driven by record server CPU revenue and strong Ryzen 7000 series PC processor sales. When releasing Ryzen, the company was responding to a strong customer demand for this processor, and it paid off. Based on the demand, the company expanded its AMD Ryzen processor lineup, delivering more performance and capabilities for enthusiasts, gamers, and creators.

AMD 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 centre 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 hyper-scale, enterprise and AI customers.”

Speaking of the AMD units separately, the Data Center division generated $1.6 billion in revenue, Client segment revenue totaled $1.5 billion – up 42% year-over-year driven due to higher Ryzen mobile processor sales, Gaming unit revenue was $1.5 billion, and Embedded segment delivered $1.2 billion.

During the AMD earnings call, Dr Lisa Su highlighted AI acquisition deals closed by the company in the third quarter and mentioned improvements in AMD’s AI software suite. In particular, AMD completed the acquisitions of an open-source AI software startup, and an AI software leader Mipsology. Besides, the company launched a list of new products including the AMD Alveo™ UL3524 accelerator card for AI-enabled trading strategies, the Radeon RX 7800 XT and Radeon RX 7700 XT graphics cards for higher performance and better user experience, and more.

Q4 Guidance

Despite great performance in the third quarter, AMD is very moderate about Q4 results. The company’s revenue forecast for the fourth quarter of 2023 is approximately $6.1 billion, which 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%. Meanwhile, LSEG analysts are expecting a revenue of $6.37 billion for the chip-maker.

AMD CEO also hopes to generate about $400 million in sales from its graphics processing units for AI workloads in the fourth quarter alone, which will result in a rise to $2 billion in fiscal 2024.

Dr Lisa Su said:

“The way to think about it is, in the fourth quarter, we said revenue would be approximately $400 million, and that’s mostly HPC. As we go into the first quarter, we actually expect revenue to be approximately similar in that $400 million range, and that will be mostly AI, so with a very small piece being HPC.”

Following the earnings report, AMD closed the session 2.41% up yesterday, at $98.50. AMD’s market cap totals $155.4 billion, years-to-date, AMD shares are 52.08% up.

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Darya Rudz

Darya is a crypto enthusiast who strongly believes in the future of blockchain. Being a hospitality professional, she is interested in finding the ways blockchain can change different industries and bring our life to a different level.

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