AMD unveiled its third-quarter financial results for 2023
AMD unveiled its third-quarter financial results for 2023 today, presenting a mixed bag with varying revenue streams and challenges across its diverse business segments. While the revenue and net profit met projections, the outlook for the fourth quarter fell short of market expectations.
Dr. Lisa Su, AMD’s Chief Executive Officer, conveyed that due to the demand for Ryzen 7000 series processors and record sales of EPYC server processors, the company witnessed robust revenue and profit growth. Jean Hu, AMD’s Executive Vice President, Chief Financial Officer, and Treasurer, lauded AMD’s stellar performance in the third quarter, observing year-on-year growth in revenue, gross margin, and earnings per share. She anticipates strong growth in data center operations in the fourth quarter and a continued positive trajectory in the client business. However, a decline in gaming segment sales and a languid demand in the embedded market are set to offset some of this growth.
For the third quarter of 2023, AMD posted revenue of $5.8 billion, a 4% year-on-year increase from the previous year’s $5.564 billion, and an 8% sequential growth from the last quarter’s $5.359 billion. The net profit stood at $299 million, marking a staggering 353% surge from the previous year’s $66 million, and a whopping 1007% sequential growth from the previous quarter’s $27 million. The gross margin was 47%, up from 42% year-on-year and a percentage point higher than the last quarter’s 46%. The diluted earnings per share amounted to $0.18, a 350% year-on-year rise from $0.04, and an 800% sequential growth from $0.02.
The data center division reported revenues of $1.6 billion, staying consistent with the previous year and witnessing a 2% sequential growth. Growth in EPYC server processor sales was offset by a decline in SoC data center product sales. The client business generated $1.5 billion in revenue, a 42% year-on-year growth, and a 46% sequential uptick, primarily fueled by Ryzen processor sales. The gaming segment garnered $1.5 billion, an 8% decline year-on-year and a 5% sequential decrease, mainly attributed to a drop in semi-custom business, partially compensated by the growth in Radeon GPU sales. The embedded business segment secured $1.2 billion in revenue, down 5% year-on-year and 15% sequentially, due to reduced earnings from the communication market and inventory adjustments by end customers.
For the fourth quarter of 2023, AMD forecasts revenues of approximately $6.1 billion, with a leeway of $300 million either way. This suggests that AMD’s revenue will continue its upward trend in the fourth quarter of 2023. However, AMD’s projection is somewhat more conservative than the market’s anticipated $6.4 billion. Moreover, AMD expects a non-GAAP gross margin of around 51.5%.
