Q124 AMD earnings

Revenue: AMD posted revenue of $5.5 billion for Q1 2024, which is a 2% year-over-year increase.
Gross Margin: Gross margin expanded by 230 basis points year-over-year to 52%.
Operating Income: Operating income reached $1.1 billion, reflecting a 21% operating margin.
Earnings Per Share: Diluted earnings per share were $0.62, up 3% year-over-year.
Data Center Segment: Record quarterly segment revenue of $2.3 billion, up 80% year-over-year, accounting for more than 40% of AMD’s total revenue.
Client Segment: Client segment revenue was $1.4 billion, up 85% year-over-year.
Gaming Segment: Revenue declined 48% year-over-year to $922 million.
Embedded Segment: Revenue decreased 46% year-over-year to $846 million.

Q2 2024 Revenue Forecast: Approximately $5.7 billion, plus or minus $300 million.
Segment Revenue: Expect data center segment revenue to increase by a double-digit percentage, client segment revenue to increase, embedded segment revenue to be flat, and gaming segment revenue to decline by a significant double-digit percentage year-over-year.
Q2 Gross Margin: Estimated to be approximately 53%.
Operating Expenses: Projected to be approximately $1.8 billion for Q2.
Effective Tax Rate: Expected to be 13% in Q2.
Diluted Share Count: Anticipated to be approximately 1.64 billion shares in Q2.

AI Demand Driving Compute: The widespread deployment of AI is propelling demand for more compute across various markets, positioning AMD for growth through its data center business and AI capabilities.
Data Center Growth: Strong year-over-year growth driven by AMD Instinct MI 300x GPU shipments and an increase in server CPU sales. Forward-looking, the company anticipates continuous growth powered by upcoming products and extended enterprise adoption.
PC Market Recovery: Anticipation of market return to growth in 2024, spurred by enterprise refresh cycles and AI PC adoption.
Embedded and Gaming Segments: Both segments observed a decline, attributed to normalization of inventory levels and the gaming cycle entering its fifth year.
Supply Chain Management: AMD notes improvement and support in supply chain dynamics, especially for complex products like the MI300, despite ongoing tightness.

Lisa Su on AI Opportunities: “We are very excited about the trajectory of the business and the significant growth opportunities ahead.”
Response to AI Infrastructure: “AI represents an unprecedented opportunity for AMD.”
On the Data Center Business: “Our EPYC business has actually performed pretty well…we believe that we’re continuing to be very well positioned to gain share throughout the year.”
Future Focus: “Our priorities for 2024 are very clear: accelerate our data center growth…and expand our adaptive computing portfolio with differentiated solutions.”