AMD Reports 9% Revenue Growth in Q2, Reaching $5.8B and Surpassing Analyst Expectations

Advanced Micro Devices (AMD) Q2 2024 Financial Report

AMD's revenues for the second quarter reached $5.8 billion, a 9% increase year-over-year and exceeding analyst expectations.

The primary driver was record revenue in the data center segment, which totaled $2.8 billion—an impressive 115% increase from the previous year. This growth was fueled by a significant ramp-up in AMD Instinct GPU shipments and robust sales of the 4th Gen EPYC processors. However, the gaming segment struggled, with console chip sales declining as the industry enters its fifth year of the current console cycle.

Compared to the prior quarter, AMD experienced strong momentum in Instinct GPU shipments. Client segment revenue rose to $1.5 billion, reflecting a 49% year-over-year increase and a 9% rise from the previous quarter, driven by strong AMD Ryzen processor sales.

In contrast, the gaming segment reported revenues of $648 million, which represents a 59% decline from a year ago and a 30% drop from the previous quarter, primarily due to reduced revenue from semi-custom components linked to the aging console market.

The embedded segment saw revenues of $861 million, down 41% year-over-year as clients adjusted inventory levels. AMD's gross profit margins were 53% on a non-GAAP basis, with net income at $1.1 billion, up 19% from last year and 11% from the previous quarter. Earnings per share were $0.69, marking a 19% increase compared to last year and an 11% increase from the prior quarter.

AMD Q3 2024 Guidance

For the upcoming quarter, AMD projects Q3 2024 revenue to be approximately $6.7 billion, with a variance of plus or minus $300 million. At the midpoint, this indicates year-over-year growth of about 16% and quarter-over-quarter growth of around 15%. The expected non-GAAP gross margin is approximately 53.5%.

CEO Comments

“We achieved robust revenue and earnings growth in Q2, driven by record results in our data center segment,” stated AMD CEO Lisa Su. “Our AI business is rapidly accelerating, positioning us well for strong growth in the second half of the year, led by demand for Instinct, EPYC, and Ryzen processors. The surge in generative AI is increasing compute needs across all markets, presenting significant growth opportunities as we provide leading AI solutions.”

CFO Insights

“AMD performed excellently in Q2, with revenues surpassing our guidance due to strong growth in the data center and client segments,” commented AMD CFO Jean Hu. “We also expanded our gross margin and achieved solid earnings growth while intensifying our strategic investments in AI to lay the groundwork for future expansion.”

Upcoming Innovations

At Computex 2024, AMD announced an expanded roadmap for AMD Instinct accelerators, introducing the new AMD Instinct MI325X, set for release in Q4 2024. This accelerator promises industry-leading memory capacity and computing performance. Additionally, the next-generation AMD CDNA 4 architecture, expected in 2025, aims to deliver up to 35 times the AI inference performance compared to its CDNA 3 counterparts.

AMD also introduced the AMD Ryzen AI 300 Series processors, its third generation for AI PCs, featuring industry-leading 50 TOPs of AI processing power for Windows Copilot+ devices. OEM partners, including Acer, ASUS, HP, Lenovo, and MSI, showcased new products powered by this lineup.

Lastly, AMD unveiled the Ryzen 9000 Series processors based on the “Zen 5” architecture, designed to provide top performance in gaming, productivity, and content creation.