AMD Reports Solid Revenue Growth for Q1 2024
Recently, AMD announced its financial results for the first quarter of 2024, which were somewhat lackluster overall. Although revenue slightly exceeded expectations, profits were less than ideal. Furthermore, the market reacted coldly to AMD’s guidance for the second quarter of 2024, expressing concerns over the apparent lack of acceleration in sales of its AI chips, leading to significant disappointment that resulted in a sharp decline in stock prices in after-hours trading.
In the fourth quarter of 2023, AMD reported revenue of $5.473 billion, a modest year-over-year increase of 2% from $5.353 billion, but an 11% decline from $6.168 billion in the previous quarter. Net profit stood at $667 million, a significant recovery from a loss of $139 million in the same period last year, although this represented an 82% decrease from the previous quarter. The gross margin remained stable at 47%, an improvement from 44% in the same quarter last year. Earnings per share were $0.07, recovering from a loss of $0.09 per share a year ago but down 83% from $0.41 in the preceding quarter.
Revenue from the Data Center division was $2.337 billion, up 80.5% year-over-year and 2% sequentially, primarily due to sales of the Instinct series compute cards, which offset some seasonal declines in server processors. The Client division generated $1.4 billion in revenue, up 85% from last year but down 6% from the previous quarter, mainly driven by increased sales of the Ryzen 8000 series processors. The Gaming division saw revenue of $922 million, a decrease of 48% year-over-year and 33% sequentially, primarily due to declines in semi-custom business revenue and Radeon GPU sales. The Embedded division posted revenue of $846 million, down 46% from last year and 20% sequentially, mainly due to ongoing inventory adjustments by customers.
AMD projected revenue for the first quarter of 2024 to be around $5.7 billion, with a possible variance of $300 million, aligning closely with market expectations. Additionally, the non-GAAP gross margin is expected to be around 53%. Dr. Lisa Su, CEO of AMD, predicted that sales of the Instinct 300 series would reach $4 billion in 2024, exceeding expectations of $3.5 billion from the previous quarter. However, the market was unenthusiastic about this projection, especially given that conservative estimates had already set the bar at $6 billion, indicating a substantial shortfall.
