AMD Reports $6.2B in Q4 Revenues, Yet Faces 4% Decline in FY23 Revenue

Advanced Micro Devices (AMD) Q4 Earnings Report

Advanced Micro Devices (AMD) concluded 2023 on a positive note, with Q4 revenue totaling $6.2 billion—marking a 10% increase year-on-year and aligning with analyst expectations.

Key Revenue Drivers

The company's growth is primarily fueled by its data center and client segments. AMD recorded significant advancements in its data centers, driven by the ramp-up of AMD Instinct GPUs and the strong demand for EPYC CPUs. Although the client segment remained flat compared to the previous year, robust holiday sales of AMD Ryzen 7000 Series processors contributed to the quarterly increase.

In contrast, AMD's gaming and embedded segments faced notable challenges amid broader market trends. While higher Radeon GPU sales slightly cushioned the impact of declining semi-custom revenues from console manufacturers, the embedded segment slowed down due to inventory reduction initiatives across various end markets.

Fiscal Year 2023 Overview

In total, AMD's revenues for 2023 reached $22.7 billion, reflecting a 4% year-over-year decrease. The growth in the data center and embedded segments was insufficient to offset declines in client and gaming revenues. Specifically, the data center segment grew by 7% due to the rising demand for AMD Instinct GPUs and 4th Gen AMD EPYC CPUs. The embedded segment experienced a 17% increase, largely due to AMD's $35 billion acquisition of Xilinx. However, the client and gaming segments contracted by 25% and 9%, respectively, attributed to reduced demand for PCs and consoles.

Future Outlook

Looking ahead, AMD projects Q1 revenue to be approximately $5.4 billion, with a variance of $300 million. The company anticipates flat revenue in the data center segment, with a seasonal decline in server sales being offset by increased Instinct GPU revenue. However, declines are expected in the client, embedded, and gaming segments.

"Our forecast indicates a significant double-digit year-over-year revenue decline as supply catches up with demand in 2023, entering the fifth year of a strong console cycle," stated CEO Lisa Su in her remarks.