AMD Rides Skyrocketing Ryzen 7000 Sales And Record EPYC Orders To Beat Earnings Estimates
We might be in the midst of a lingering PC sales slump but you wouldn't necessarily know it by looking at AMD's latest earnings report. AMD posted financial results for its third quarter of 2023, which reflected a 4% year-over-year and 8% quarterly gain in revenue to $5.8 billion. This pushed its profit to $299 million for the quarter, which is up 353% year-over-year and a whopping 1,007% from the previous quarter.
In a prepared statement, AMD CEO Dr. Lisa Su credited record server CPU sales and demand for the company's Ryzen 7000 series CPUs for the overall strong quarter.
"We delivered strong revenue and earnings growth driven by demand for our Ryzen 7000 series PC processors and record server processor sales," Dr. Lisa Su said. "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."
Ryzen and EPYC chip sales played a key role in offsetting losses in certain categories. For example, AMD's Data Center segment was flat year-over-year at $1.6 billion, and up 21% sequentially. AMD says customer adoption of its 4th generation EPYC "Siena" processors accelerated during the quarter, which made up for a decline in adaptive system-on-chip (SoC) product sales. And looking ahead, AMD says its Instinct MI300A and MI300X GPUs are on track for volume production in the fourth quarter.
Meanwhile, AMD's client segment skyrocket 42% year-over-year and 46% sequentially to $1.5 billion. AMD says this was primarily driven by higher mobile Ryzen processor sales. The strong performance helped offset an 8% year-over-year decline in AMD's Gaming segment, which also contributed $1.5 billion to the pile.
"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."
In the end, AMD beat earnings estimates and continues to weather a soft PC market as a whole. It will be interesting to see how things go in the next several quarters as AI continues to gain traction.
"We all see the growth in generative AI workloads. And the fact is we're just at the very early innings of people truly adopting it for enterprise business productivity applications. So, I think we are big believers in the strength of the market," Dr. Su said during an earnings call.
Dr. Su went on to call the market for AI "huge" and said there's room for "multiple winners." She also made clear that AMD intends to compete with Intel and NVIDIA without specifically calling out either firm. What she did say, however, is that AMD is "playing to win" while underscoring MI300 as a "great product."
AMD also stated in its earnings report that it expects revenue to be around $6.1 billion next quarter, give or take $300 million.