AMD reports record revenue but Q4 forecast disappoints

Advanced Micro Devices reported record revenue of $6.8 billion for the third fiscal quarter, up 18% from a year ago. But the shares fell due to a disappointing forecast for the fourth quarter.

AMD saw record data center segment revenue of $3.5 billion in the quarter, up 122% from a year ago. It was driven by record Epyc CPU and Instinct GPU revenues.

Client revenue in the quarter was $1.9 billion, up 29% from a year ago. That was driven by strong demand for Zen 5 Ryzen processors.

The weak part was the gaming segment, which saw revenue of $462 million, down 69% from a year ago due to lower semi-custom revenue. That revenue mainly comes from sales from game console revenues.

Embedded segment revenue of $927 million, down 25% from a year ago as customers continued to normalize inventory levels. Non-GAAP gross margins were 54%, up 3 percentage points from a year ago thanks to success in the data center. Net income was $1.5 billion, up 33%.

AMD estimated Q4 revenue will be $7.5 billion, plus or minus $300 million. It cited supply chain constraints hurting the overall ability to meet demand.

“We delivered strong third quarter financial results with record revenue led by higher sales of EPYC and Instinct data center products and robust demand for our Ryzen PC processors,” said AMD CEO Lisa Su, in a statement. “Looking forward, we see significant growth opportunities across our data center, client and embedded businesses driven by the insatiable demand for more compute.”

“We are pleased with our execution in the third quarter, delivering strong year-over-year expansion in gross margin and earnings per share,” said AMD CFO Jean Hu, in a statement. “We are on-track to deliver record annual revenue for 2024 based on significant growth in our Data Center and Client segments.”

If there’s anything to put AMD’s success in perspective, it’s only to look over at its rival Intel to see how tough a time it is having now.