AMD announces 2023Q4 and full-year financial results

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AMD announced its fourth-quarter and annual financial results for 2023. While revenues generally met expectations, a weaker-than-anticipated outlook for the first quarter of 2024 and a less optimistic view of AI chip sales prospects led to a significant post-market decline in stock prices.

For Q4 2023, AMD reported revenues of $6.168 billion, a 10.2% increase over the previous year and a 6% increase from the previous quarter. Net profits soared to $667 million, a staggering 123% from the previous quarter. The gross margin stood at 47%, consistent with the previous quarter and up from 43% the previous year. Earnings per share rose 4000% year-over-year and 128% from the previous quarter to $0.41.

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The Data Center division saw revenues of $2.3 billion, a 38% year-over-year increase, primarily due to strong growth in Instinct series compute cards and fourth-generation EPYC server processors. The Client division reported revenues of $1.5 billion, a 62% year-over-year increase, largely due to sales growth in Ryzen 7000 series processors. Gaming division revenues were $1.4 billion, a 17% year-over-year decline, primarily due to decreased semi-custom business revenue, partially offset by increased Radeon GPU sales. Embedded division revenues were $1.1 billion, a 24% year-over-year decline, mainly due to inventory adjustments by customers.

AMD’s full-year 2023 revenue was $22.68 billion, a 3% decline from 2022. The gross margin increased by 1 percentage point to 46%. Net profit was $854 million, below 2022’s $1.3 billion, and earnings per share were $0.53, also below 2022’s $0.84.

For Q1 2024, AMD expects revenue of around $5.4 billion, with a margin of error of $300 million, slightly below market expectations. The non-GAAP gross margin is expected to be around 52%. CEO Dr. Lisa Su forecasts AI chip sales to reach $3.5 billion in 2024, higher than the previous $2 billion projection. However, the market was unimpressed, as research institutions had predicted even higher figures, up to $8 billion.

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