AMD Announces 2023Q1 Financial Report
AMD has reported its financial results for the first quarter of 2023, revealing a loss similar to that of competitor Intel, albeit somewhat less severe. This marks the first time since 2019 that AMD has experienced a decline in revenue, with Ryzen processors being particularly affected, highlighting the plight of a significant slump in PC sales.
In an environment of mixed demand, AMD’s revenue and earnings outperformed expectations, and the first quarter performance was strong, according to Dr. Lisa Su, AMD’s CEO. Throughout the quarter, AMD launched multiple products, accelerated its AI roadmap, made significant progress in customer engagement, and executed its data center and embedded business priority strategies.
In the first quarter of 2023, AMD’s revenue totaled $5.353 billion, a 9% decrease compared to the same period last year and a slight decline from the previous quarter’s $5.599 billion. Net losses amounted to $139 million, a substantial 118% drop compared to $786 million during the same period last year. Gross margin stood at 44%, consistent with the previous quarter and down from 48% in the same period last year. Diluted earnings per share were $0.60, representing a 47% year-over-year decline.
Data center division revenue reached $1.295 billion, a 1.5% year-over-year increase, with operating income of $148 million, down 65.3% year-over-year. The client business segment reported revenues of $739 million, down 65.2% year-over-year, indicating consumer-grade Ryzen chip sales were just over a third of the same period last year. Operating losses totaled $172 million, compared to an operating profit of $692 million during the same period last year and a further expansion from the previous quarter’s $152 million loss. Gaming division revenue was $1.757 billion, down 6.3% year-over-year, with operating income of $314 million, down 12.3% year-over-year. The embedded business segment’s revenue reached $1.562 billion, approximately 2.6 times the same period last year, with an operating income of $798 million, around 2.9 times the same period last year.
AMD anticipates revenue of approximately $5.3 billion for the second quarter of 2023, with a fluctuation of $300 million, a year-over-year decline of around 19.1%, and roughly flat quarter-over-quarter. The gross margin is expected to be around 50%. This suggests that AMD’s revenue may continue to decline in the second quarter of 2023; however, AMD believes the worst of the market downturn has passed.