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AMD Reports Fourth Quarter and Full Year 2023 Financial Results

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AMD reported strong financial results for the fourth quarter and full year of 2023, with revenue reaching $6.2 billion and $22.7 billion respectively. The company's gross margin was 47% and 46% for the fourth quarter and full year, respectively. Operating income for the fourth quarter was $342 million, while net income was $667 million. AMD's non-GAAP gross margin was 51% for the fourth quarter and 50% for the full year. The company's Data Center segment revenue increased by 38% year-over-year, and the Client segment revenue was up 62% year-over-year. However, Gaming segment revenue decreased by 17%, and Embedded segment revenue was down 24% year-over-year. AMD expects revenue to be approximately $5.4 billion for the first quarter of 2024.
Positive
  • AMD reported strong financial results for the fourth quarter and full year of 2023, with revenue reaching $6.2 billion and $22.7 billion respectively.
  • The company's gross margin was 47% and 46% for the fourth quarter and full year, respectively.
  • Operating income for the fourth quarter was $342 million, while net income was $667 million.
  • AMD's non-GAAP gross margin was 51% for the fourth quarter and 50% for the full year.
  • The company's Data Center segment revenue increased by 38% year-over-year, and the Client segment revenue was up 62% year-over-year.
Negative
  • Gaming segment revenue decreased by 17%, and Embedded segment revenue was down 24% year-over-year.
  • AMD expects revenue to be approximately $5.4 billion for the first quarter of 2024.

AMD's Q4 and full-year 2023 financial performance demonstrates a robust increase in revenue and net income, attributed to strong sales in the Data Center segment. The 10% year-over-year growth in Q4 revenue and 21% rise in gross profit for the same period indicate a competitive edge in the semiconductor industry, particularly within high-performance computing and AI sectors. The operating margin expansion from negative to positive territory signifies operational efficiency and a strategic pivot towards high-margin products like the AMD Instinct GPUs and EPYC CPUs. However, the year-over-year decline in annual revenue and net income suggests potential market saturation or competitive pressures in the broader semiconductor market.

Investors should note the downward trend in the Client and Gaming segments, which could be indicative of cyclical downturns or shifts in consumer demand. Conversely, the Embedded segment's annual growth reflects strategic benefits from the Xilinx acquisition, diversifying AMD's portfolio and enhancing its market position in embedded systems. The anticipated decline in semi-custom revenue for Q1 2024 aligns with seasonal trends and may affect short-term performance, but the projected 52% non-GAAP gross margin underscores AMD's focus on profitability.

The semiconductor industry is currently experiencing a transformative phase with the integration of AI changing the computing landscape. AMD's record sales in its Data Center segment, particularly the AMD Instinct GPU and EPYC CPU lines, underscore the company's successful alignment with this trend. The increased demand for data center products is a direct response to the growing need for AI and machine learning capabilities in various industries, positioning AMD favorably against competitors.

AMD's strategic focus on high-performance and AI-driven products is evident through its recent product launches and collaborations. The introduction of the AMD Instinct MI300X accelerators and the progress in expanding its AI software ecosystem, including ROCm™ 6, are pivotal in cementing AMD's role as a key player in the AI hardware market. Additionally, the use of AMD technology in new supercomputers and the company's presence on the Top500 list highlight its technological prowess and could lead to increased institutional demand for AMD's products.

AMD's financial results reflect strategic advancements in the semiconductor space, particularly within high-performance computing (HPC) and AI. The company's focus on data center products like the AMD Instinct GPUs and EPYC CPUs is timely, as the industry shifts towards data-intensive workloads requiring advanced processing capabilities. AMD's continued leadership in supercomputing, as demonstrated by the Frontier supercomputer, indicates strong R&D capabilities and a competitive edge in a market with high barriers to entry.

The integration of AI capabilities in AMD's client products, including the Ryzen 8000G Series desktop processors with an AI NPU, reflects a broader industry trend towards AI-enabled consumer technology. This strategic move could expand AMD's market share in the consumer segment by addressing the growing demand for AI applications in personal computing. However, the decline in the PC market as reported in the Client segment revenue could signal a need for AMD to further innovate or diversify to maintain growth momentum.

SANTA CLARA, Calif., Jan. 30, 2024 (GLOBE NEWSWIRE) -- AMD (NASDAQ:AMD) today announced revenue for the fourth quarter of 2023 of $6.2 billion, gross margin of 47%, operating income of $342 million, net income of $667 million and diluted earnings per share of $0.41. On a non-GAAP(*) basis, gross margin was 51%, operating income was $1.4 billion, net income was $1.2 billion and diluted earnings per share was $0.77.

For the full year 2023, the company reported revenue of $22.7 billion, gross margin of 46%, operating income of $401 million, net income of $854 million and diluted earnings per share of $0.53. On a non-GAAP(*) basis, gross margin was 50%, operating income was $4.9 billion, net income was $4.3 billion and diluted earnings per share was $2.65.

“We finished 2023 strong, with sequential and year-over-year revenue and earnings growth driven by record quarterly AMD Instinct GPU and EPYC CPU sales and higher AMD Ryzen processor sales,” said AMD Chair and CEO Dr. Lisa Su. “Demand for our high-performance data center product portfolio continues to accelerate, positioning us well to deliver strong annual growth in what is an incredibly exciting time as AI re-shapes virtually every part of the computing market.”

 “AMD executed well in 2023 despite a mixed demand environment,” said AMD EVP, CFO and Treasurer Jean Hu. “We drove year-over-year revenue growth in our Data Center and Embedded segments and successfully launched our AMD Instinct MI300 GPUs positioning us for a strong product ramp in 2024.”

GAAP Quarterly Financial Results
 
 Q4 2023Q4 2022Y/YQ3 2023Q/Q
Revenue ($M)$6,168$5,599Up 10%$5,800Up 6%
Gross profit ($M)$2,911$2,403Up 21%$2,747Up 6%
Gross margin47%43%Up 4 ppts47%Flat
Operating expenses ($M)$2,575$2,557Flat$2,533Up 2%
Operating income (loss) ($M)$342$(149)Up 330%$224Up 53%
Operating margin6%(3%)Up 9 ppts4%Up 2 ppts
Net income ($M)$667$21Up 3,076%$299Up 123%
Diluted earnings per share$0.41$0.01Up 4,000%$0.18Up 128%
      


Non-GAAP(*) Quarterly Financial Results
 
 Q4 2023Q4 2022Y/YQ3 2023Q/Q
Revenue ($M)$6,168$5,599Up 10%$5,800Up 6%
Gross profit ($M)$3,133$2,859Up 10%$2,963Up 6%
Gross margin51%51%Flat51%Flat
Operating expenses ($M)$1,727$1,602Up 8%$1,697Up 2%
Operating income ($M)$1,412$1,262Up 12%$1,276Up 11%
Operating margin23%23%Flat22%Up 1 ppt
Net income ($M)$1,249$1,113Up 12%$1,135Up 10%
Diluted earnings per share$0.77$0.69Up 12%$0.70Up 10%
      


Annual Financial Results
 
 GAAPNon-GAAP(*)
 20232022Y/Y20232022Y/Y
Revenue ($M)$22,680$23,601Down 4%$22,680$23,601Down 4%
Gross profit ($M)$10,460$10,603Down 1%$11,436$12,273Down 7%
Gross margin %46%45%Up 1 ppt50%52%Down 2 ppts
Operating expenses ($M)$10,093$9,441Up 7%$6,616$6,030Up 10%
Operating income ($M)$401$1,264Down 68%$4,854$6,345Down 23%
Operating margin %2%5%Down 3 ppts21%27%Down 6 ppts
Net income ($M)$854$1,320Down 35%$4,302$5,504Down 22%
Diluted earnings per share$0.53$0.84Down 37%$2.65$3.50Down 24%
       

Segment Summary

  • Data Center segment revenue in the quarter was $2.3 billion, up 38% year-over-year and 43% sequentially driven by strong growth in AMD Instinct™ GPUs and 4th Gen AMD EPYC™ CPUs.
    • For 2023, Data Center segment revenue was $6.5 billion, an increase of 7% compared to the prior year, driven by strong growth in AMD Instinct GPUs and 4th Gen AMD EPYC CPUs.
  • Client segment revenue was $1.5 billion, up 62% year-over-year driven primarily by an increase in AMD Ryzen™ 7000 Series CPU sales.
    • For 2023, Client segment revenue was $4.7 billion, down 25% compared to the prior year, due to a decline in the PC market.
  • Gaming segment revenue was $1.4 billion, down 17% year-over-year and 9% sequentially, due to a decrease in semi-custom revenue, partially offset by an increase in AMD Radeon™ GPU sales.
    • For 2023, Gaming segment revenue was $6.2 billion, down 9% compared to the prior year primarily due to lower semi-custom sales.
  • Embedded segment revenue was $1.1 billion, down 24% year-over-year and 15% sequentially primarily due to customers reducing their inventory levels.  
    • For 2023, Embedded segment revenue was $5.3 billion, up 17% compared to the prior year, primarily due to the inclusion of a full year of revenue related to the acquisition of Xilinx completed in February 2022.

Recent PR Highlights

  • AMD showcased growing momentum for advanced AMD technology-powered AI solutions from the data center to PCs:
    • AMD announced the general availability of AMD Instinct MI300X accelerators – with industry leading memory bandwidth performance for generative AI – as well as the AMD Instinct MI300A APU that combines AMD CDNA™ 3 and “Zen 4” chiplets to deliver breakthrough performance for HPC and AI workloads.
    • At the “Advancing AI” event, Microsoft, Meta, Oracle, Dell Technologies, HPE, Lenovo, Supermicro, Arista, Broadcom and Cisco showcased how they are leveraging AMD Instinct MI300X accelerators to power cloud and enterprise AI infrastructure.
    • AMD made significant progress expanding its AI software ecosystem, including unveiling the latest version of its open-source ROCm™ 6, software stack optimized for generative AI. AI ecosystem leaders including Databricks, Essential AI, Lamini and OpenAI are leveraging AMD Instinct accelerators to deliver differentiated AI solutions. AMD also extended support for ROCm software to include the AMD Radeon RX 7900 XT GPU, providing even more options for AI developers and researchers to use AMD hardware for their AI work.
    • AMD announced AMD Ryzen 8040 Series mobile processors with an integrated neural processing unit (NPU) on select models for AI. In 2022, AMD was the first company to introduce an x86 processor with an on-chip NPU to accelerate AI workloads with the AMD Ryzen 7040 series mobile processors. The updated NPU in the AMD Ryzen 8040 series delivers up to 1.6x more AI processing performance compared to AMD Ryzen 7040 Series mobile processors. Acer, ASUS, Lenovo, Razer and other PC OEMs introduced new laptops featuring AMD Ryzen 8040 Series processors, with the first systems on-track to go on sale this quarter.
    • At CES 2024, AMD announced the AMD Ryzen 8000G Series desktop processors that are the first desktop PC processors in the industry to include a dedicated AI NPU to power AI capabilities on the PC.
    • At Microsoft Ignite, AMD and Microsoft highlighted how AMD Instinct MI300X accelerators, AMD EPYC CPUs and AMD Ryzen CPUs with AI engines are enabling new services and compute capabilities across cloud and generative AI, confidential computing, cloud computing and AI-capable PCs.
  • AMD showcased continued leadership in supercomputing:
    • Eni announced a new supercomputer, HPC6, powered by AMD EPYC CPUs and AMD Instinct GPUs. When completed, the HPC6 system will be one of the world’s most powerful supercomputers dedicated to industrial applications.
    • AMD EPYC processors and AMD Instinct accelerators now power 140 supercomputers on the latest Top500 list of the world’s fastest computers and eight of the top 10 most energy efficient supercomputers in the world based on the latest Green500 list. The Frontier supercomputer powered by AMD EPYC and AMD Instinct processors remains the fastest supercomputer in the world.
  • AMD extended its 3rd Gen AMD EPYC processor lineup with six new CPUs that deliver excellent value, performance, energy efficiency and security features for mainstream applications.
  • AMD introduced the AMD Radeon RX 7600 XT GPU, a high-performance graphics card designed to deliver immersive 1080P gaming experiences.
  • AMD introduced the AMD Versal™ AI Edge XA Series and AMD Ryzen Embedded V2000A devices designed for automotive focus segments including infotainment, advanced driver safety and autonomous driving.
  • AMD announced the AMD Ryzen Embedded 7000 Series processors, delivering leadership performance and advanced features for industrial and edge solutions. The launch was supported by a growing partner ecosystem, including integrated solutions from Advantech, ASRock and DFI.

Current Outlook

AMD’s outlook statements are based on current expectations. The following statements are forward-looking and actual results could differ materially depending on market conditions and the factors set forth under “Cautionary Statement” below.

For the first quarter of 2024, AMD expects revenue to be approximately $5.4 billion, plus or minus $300 million. Sequentially, AMD expects Data Center segment revenue to be flat, with a seasonal decline in server sales offset by a strong Data Center GPU ramp. Client, Embedded and Gaming segment sales are expected to decline sequentially, with semi-custom revenue expected to decline by a significant double-digit percentage. Non-GAAP gross margin is expected to be approximately 52%.

AMD Teleconference

AMD will hold a conference call for the financial community at 2:00 p.m. PT (5:00 p.m. ET) today to discuss its fourth quarter and full-year 2023 financial results. AMD will provide a real-time audio broadcast of the teleconference on the Investor Relations page of its website at www.amd.com.

 

RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES   
(in millions, except per share data) (Unaudited)    
 Three Months Ended Year Ended
 December 30, 
2023
 September 30, 
2023
 December 31, 
2022
 December 30, 
2023
 December 31, 
2022
GAAP gross profit$2,911  $2,747  $2,403  $10,460  $10,603 
GAAP gross margin 47%  47%  43%  46%  45%
Stock-based compensation 6   6   9   30   29 
Amortization of acquisition-related intangibles 215  { "@context": "https://schema.org", "@type": "FAQPage", "name": "AMD Reports Fourth Quarter and Full Year 2023 Financial Results FAQs", "mainEntity": [ { "@type": "Question", "name": "What was AMD's revenue for the fourth quarter of 2023?", "acceptedAnswer": { "@type": "Answer", "text": "AMD's revenue for the fourth quarter of 2023 was $6.2 billion." } }, { "@type": "Question", "name": "What was the gross margin for AMD in the fourth quarter of 2023?", "acceptedAnswer": { "@type": "Answer", "text": "AMD's gross margin was 47% for the fourth quarter of 2023." } }, { "@type": "Question", "name": "What was AMD's net income for the fourth quarter of 2023?", "acceptedAnswer": { "@type": "Answer", "text": "AMD's net income for the fourth quarter of 2023 was $667 million." } }, { "@type": "Question", "name": "What was AMD's non-GAAP gross margin for the fourth quarter of 2023?", "acceptedAnswer": { "@type": "Answer", "text": "AMD's non-GAAP gross margin was 51% for the fourth quarter of 2023." } }, { "@type": "Question", "name": "How much did AMD's Data Center segment revenue increase by year-over-year?", "acceptedAnswer": { "@type": "Answer", "text": "AMD's Data Center segment revenue increased by 38% year-over-year." } } ] }

FAQ

What was AMD's revenue for the fourth quarter of 2023?

AMD's revenue for the fourth quarter of 2023 was $6.2 billion.

What was the gross margin for AMD in the fourth quarter of 2023?

AMD's gross margin was 47% for the fourth quarter of 2023.

What was AMD's net income for the fourth quarter of 2023?

AMD's net income for the fourth quarter of 2023 was $667 million.

What was AMD's non-GAAP gross margin for the fourth quarter of 2023?

AMD's non-GAAP gross margin was 51% for the fourth quarter of 2023.

How much did AMD's Data Center segment revenue increase by year-over-year?

AMD's Data Center segment revenue increased by 38% year-over-year.

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