News AMD 2Q24 Financial Results

[Hitman928]

• Advanced Micro Devices press release (NASDAQ:AMD): Q2 Non-GAAP EPS of $0.69 beats by $0.01.
• Revenue of $5.84B (+9.0% Y/Y) beats by $120M.
• Record Data Center segment revenue of $2.8 billion was up 115% year-over-year primarily driven by the steep ramp of AMD Instinct™ GPU shipments, and strong growth in 4th Gen AMD EPYC™ CPU sales. Revenue increased 21% sequentially primarily driven by the strong ramp of AMD Instinct GPU shipments.
• Client segment revenue was $1.5 billion, up 49% year-over-year and 9% sequentially primarily driven by sales of AMD Ryzen™ processors.
• Gaming segment revenue was $648 million, down 59% year-over-year and 30% sequentially primarily due to a decrease in semi-custom revenue.
• For the third quarter of 2024, AMD expects revenue to be approximately $6.7 billion vs. $6.61B consensus, plus or minus $300 million. At the mid-point of the revenue range, this represents year-over-year growth of approximately 16% and sequential growth of approximately 15%. Non-GAAP gross margin is expected to be approximately 53.5%.

Advanced Micro Devices Non-GAAP EPS of $0.69 beats by $0.01, revenue of $5.84B beats by $120M (NASDAQ:AMD)

AMD reports strong Q2 2024 financial results with Non-GAAP EPS and revenue beating expectations.

seekingalpha.com

 

[Hitman928]

Just saw the headline numbers but looks to be a good quarter overall. Client segment recovering well. Gaming revenue continues to crash due to console sales plummeting. Good guidance given for Q3. Nothing really surprising overall.

 

[Hitman928]

GAAP and non-GAAP numbers

 

[Hitman928]

Quick hitter graphic and segment numbers

 

[desrever]

They seem to be doing well in DC and consumer segment is recovering. Looking good for the year.

Just not great on the Radeon front, theres really nothing they can do unless they want to eat loses to recover there based on these numbers.

Also embedded seems pretty bad considering how much they paid for xilinx.

 

[Hitman928]

They seem to be doing well in DC and consumer segment is recovering. Looking good for the year.

Just not great on the Radeon front, theres really nothing they can do unless they want to eat loses to recover there based on these numbers.

Also embedded seems pretty bad considering how much they paid for xilinx.

I don't think Radeon is doing that bad compared to recent history, gaming is down mostly because of plummeting console sales, according to AMD.

FPGAs are in a severe down market right now, Altera is having a pretty bad go of it as well. AMD has previously said they expect FPGA demand to increase towards the end of the year, we'll see if they still expect the same if anyone asks about it during the earnings call.

Edit: They also technically paid $0 for Xilinx, it was an all stock deal.

 

[Markfw]

I think next quarter/year will beat the expected due to the Intel degrading issue. Its probably not here yet.

Not to mention Zen 5 client and Turin. They appear to be a giant leap, so far mostly in efficiency.

Edit: When are Intel Q2 results coming out ??

 

[Hitman928]

Lisa Su updated the data center GPU sales (MI300) to $4.5B for 2024. AMD originally said $3.5B and then updated that to $4B at the last earnings call, so it seems like they continue to gain new orders/customers. They also said that MI300 sales passed $1B for Q2, which was more than originally expected.

 

[jpiniero]

Client margins are still terribad. They are turning a profit at least but it's not a lot.

Lisa Su updated the data center GPU sales (MI300) to $4.5B for 2024. AMD originally said $3.5B and then updated that to $4B at the last earnings call, so it seems like they continue to gain new orders/customers. They also said that MI300 sales passed $1B for Q2, which was more than originally expected.

Not bad. They might be the only ones actually making money on AI besides nVidia.

 

[DAPUNISHER]

I don't think Radeon is doing that bad compared to recent history, gaming is down mostly because of plummeting console sales, according to AMD.

Most of the incentives to buy a console are gone.

Couch/living room gaming is just as easy on PC now.
There are no true exclusives anymore, just limited time ones.
Microsoft is moving another direction apparently.
There are PC exclusive games, and performance in many others that perform so much better kids are choosing PC as their platform.

Consoles saved AMD in their darkest hour, but it is a good thing they have evolved past that. They'd be back in the hurt locker otherwise.

 

[adroc_thurston]

Most of the incentives to buy a console are gone.

No, it's just that neither vendor has any games to sell this year.

 

[gdansk]

Not bad. They might be the only ones actually making money on AI besides nVidia.

In hardware. Certain social media (reddit) are losing less money selling user data to be training material.

And I'm not sure AMD is making enough money on AI to justify their stock price.

 

[gdansk]

Well it seems the market likes it, up 7.7% after hours.

 

[adroc_thurston]

Well it seems the market likes it, up 7.7% after hours.

It's beat and raise, what's not to like?

And I'm not sure AMD is making enough money on AI to justify their stock price.

See, the $AMD story is simple.
If ML capex craters, the dollars would go back to server CPU spend and guess what AMD sells also.

Client margins are still terribad.

Because they run a Big and Expensive roadmap that hedges on AMD winning commercial volume in the coming years (and they will, afaik).

 

[desrever]

Lol, Intel announces job cuts the same day AMD releases a good earning report.

 

[adroc_thurston]

Lol, Intel announces job cuts the same day AMD releases a good earning report.

Ouch, they really are cash-strapped to hell and back.

 

[Nothingness]

Lol, Intel announces job cuts the same day AMD releases a good earning report.

View attachment 104191

That belongs to one or both of the two threads about Intel chip issues😇

 

[Tuna-Fish]

Ouch, they really are cash-strapped to hell and back.

I don't know if it's that. It's not uncommon to release restructuring stuff just before earnings when the earnings suck, as a way to defuse the news with a "we know we fumbled, but we have already started righting this boat" style message.

I wonder how much money they are accounting for the increased RMAs because of the recent issues.

 

[adroc_thurston]

I don't know if it's that.

This is the n-th round of layoffs under Pat and it's definitely driven by their huge capex and low FCF.

I wonder how much money they are accounting for the increased RMAs because of the recent issues.

The most affected upper SKUs aren't particularly high volume.
Volume drivers like RPL-U 282 are safe.

 

[Hitman928]

Some earnings call highlights:

In the enterprise, sales were increased by a strong double-digit percentage sequentially. . . more than one-third of our enterprise server wins in the first half of the year were with businesses deploying EPYC in their data centers for the first time, highlighting our success attracting new customers.

Turning to our data center AI business, we delivered our third straight quarter of record data center GPU revenue with MI300 quarterly revenue exceeding $1 billion for the first time. Microsoft expanded their use of MI300X Accelerators to power GPT-4 Turbo and multiple co-pilot services including Microsoft 365 Chat, Word, and Teams. Microsoft also became the first large hyperscaler to announce general availability of public MI300X instances in the quarter.

We are working very closely with our system and cloud partners to ramp availability of MI300 solutions to address growing customer demand. Dell, HPE, Lenovo, and Supermicro all have Instinct platforms in production, and multiple hyperscale and tier-2 cloud providers are on track to launch MI300 instances this quarter.

We now expect data center GPU revenue to exceed $4.5 billion in 2024, up from the $4 billion we guided in April.

In gaming graphics, revenue increased year-over-year driven by improved sales of our Radeon 6000 and 7000 series GPUs in the channel.

The first quarter marked the bottom for our embedded segment revenue. Although second quarter revenue was flattish sequentially, we saw early signs of order patterns improving and expect embedded revenue to gradually recover in the second half of the year.

AMD is predicting an above seasonal increase in client sales in the last 3 - 4 months of the year.

 

[poke01]

Some earnings call highlights:













AMD is predicting an above seasonal increase in client sales in the last 3 - 4 months of the year.

Gaming should also improve if PS5 Pro is releasing later in the year.

 

[gdansk]

Interesting that RDNA sales are actually up YoY.

 

[Vattila]

Nice report — I'm celebrating!

Notably, at $743M the Data Centre operating income was for the first time larger than what AMD has ever achieved in the Client segment. The Client income peaked at $692M in 2022-Q1, and has since then utterly collapsed, to just $89M this quarter (up just a little bit above water from the $172M loss at the trough last year). Income from the Data Centre segment is now over 8 times as big. Even at less than half the revenue, operating income from the Gaming segment is pretty close to matching the measly income from the Client segment. The scorched earth competition from Intel has completely decimated the margins in this segment.

Meanwhile, the Embedded segment is despite decline still generating hundreds of millions on just 60% of the revenue in the Client segment. And, fortunately, they have a large sticky order book going forward, so this segment should rebound nicely with excellent operating margins. Thank goodness for the Xilinx acquisition and for Victor Peng's role in making it happen successfully — happy retirement to him!

Here is my updated segment results overview:



OneDrive

 

[gdansk]

Who would have thought ~3-5% of market share would be so profitable. That AI bubble sure is big.

 

[jpiniero]

Because they run a Big and Expensive roadmap that hedges on AMD winning commercial volume in the coming years (and they will, afaik).

What exactly would the bull case be though, Intel imploding? Corpos don't seem to care, and it's not like AMD can entice OEMs by undercutting Intel... in fact the bad margins are likely because they simply aren't getting high enough prices.