AMD: Record quarterly revenue of $5.9 billion with gross margin grew 7% YoY

Attitude: AMD has consistently executed the strategy, expanded the portfolio of leadership products and diversified business while driving best-in-class growth. AMD reached a significant inflection point in Q1 2022 as major steps were taken that fundamentally reshaped AMD’s business. The importance of the Xilinx acquisition to AMD’s long-term goals cannot be overstated.

Guidance: Based on high organic growth, as well as the addition of Xilinx with strong demand across multiple end markets, AMD expects annual revenue to grow by around 60% y/y. The non-GAAP gross margin is expected at approximately 54%, and non-GAAP operating expenses to be about 24% of the revenue. For the Q2 of 2022, AMD expects revenue to be $6.5 billion, plus or minus $200million, which means an increase of about 10% q/q. AMD expects to continue gaining clients’ revenue share. 2022 will be a record year for AMD’s Semi-Custom business. Turning to the integration work, AMD has seen tremendous excitement from customers, partners and employees, and AMD expects to see the significant product and revenue synergies.

Product: In commercial, AMD introduced the latest Ryzen 6000 Pro processors with leadership on performance, battery life, modern security and manageability features. Desktop GPU sales nearly doubled y/y as sales of Radeon6000 Series graphics cards were strong. In mobile, the first notebooks featuring the Radeon 6000 mobile GPUs launched in Q1. Datacenter graphics revenue was flat Y/Y as AMD launched the Instinct MI210 accelerators. AMD expanded engagements with large cloud customers in Q1 and launched the ROCm 5 software suite targeting exascale-class HPC and AI applications. Turning to our enterprise, Embedded and Semi-Custom segment. Revenue increased 88% y/y to $2.5billion, driven by record server semi-custom and embedded processor sales. AMD plans to launch Genoa in the second half of 2022 and expects to continue the market share gain trajectory.


Q: There is some debate that there's going to be some slowdown in the procurement of servers. Do you see it slowing later on this year or even into next year?

Lisa Su: We haven't seen that particular phenomenon. What we do see is that the needs to be good planning with our server customers and our large cloud customers. Our planning extends beyond 2022 into 2023 as well. It's robust demand.

Lisa Su: I think the data center business, particularly the Server CPU business, continues to be very strong for us. I'm not going to proclaim a certain, will it double every quarter. I will say that we expect to grow very strongly over the next few quarters. And we are continuing to bring on additional supply to do that. The demand is there, and it is really about continuing to work with our customers on that. I think our confidence level in data center growth is very high.

Q: In the context of a PC market TAM that you see down or modeling down high single digits, do you think you can actually grow client revenues y/y in 2022 for the full year?

Lisa Su: We are expecting that we will grow client revenues on a year-over-year basis in that environment. We continue to mix shift to the more premium segments and so it's a revenue share statement. We have a number of growth drivers in the business. But in terms of what has allowed us to increase the full-year guide from an organic standpoint, it is strong visibility in Server, the Console side, and from an overall supply and demand perspective.


Q: How much of the strength in the Server business is being driven by the strong enterprise design? How is the cloud business?

Lisa Su: We have made great progress on the cloud side, so we have strong adoption on internal, as well as external-facing workloads. We've also made strong progress on the Enterprise. All major OEMs have EPYC throughout the portfolio. In general, we've grown the Enterprise business about at the same pace as the cloud business. We're still cloud-weighted but I believe that it's going to be fairly balanced growth across both portfolios.

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