AMD bulls are hoping the company will deliver a better-than-feared full-year outlook when it reports on Tuesday afternoon.
Among analysts polled by FactSet, the consensus is for AMD to report fourth-quarter revenue of $5.51 billion (up 14.2% annually, with an assist from the Xilinx acquisition) and non-GAAP EPS of $0.67.
AMD typically provides quarterly and full-year sales guidance in its reports. For the first quarter, AMD’s revenue consensus stands at $5.5 billion (down 6.5% annually). And for 2023, the revenue consensus stands at $24.77 billion (up 5.3%).
Eric Jhonsa, Real Money’s tech columnist, will be live-blogging AMD’s earnings report, along with a call with management that’s scheduled for 5 P.M. Eastern Time.
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6:08 PM ET: AMD's call has ended. Shares are up 1.8% after-hours to $76.49 after AMD topped Q4 estimates and guided for Q1 revenue of $5B-$5.6B vs. a $5.5B consensus. Client and Data Center segment sales were below consensus in Q4, but Gaming and Embedded were above.
On its call, AMD guided for Client, Gaming and Data Center revenue to be down Q/Q in Q1, and for Embedded sales to be up Q/Q. For the full year, Data Center and Embedded are expected to be up, while Client and Gaming are expected to be down.
Notably, AMD said it expects inventory-clearing among cloud clients to weigh on its first-half Data Center sales, before strong growth (aided by the ramp of AMD's Genoa and Bergamo server CPU platforms) is seen in the second half. The company also said it expects Q1 to be the bottom for its PC CPU business, as inventory-clearing comes to an end.
Thanks for joining us.
6:00 PM ET: Another question about PC CPU inventory-clearing and pricing.
Su notes pricing tends to be "a bit more competitive" for older-gen products that are being cleared. Says AMD thinks Client "continues to be a good market" overall, and that it will normalize.
5:58 PM ET: Su reiterates AMD's cloud-related workloads are expanding, and that the company has good 2023 visibility from cloud clients.
5:56 PM ET: Another question about expected 2H GM improvement.
Hu says the biggest GM headwind right now is from PC CPUs, and that sales normalization for this business would provide a margin boost.
5:55 PM ET: A question about whether the end of China's COVID lockdowns will provide a demand boost, and whether there are supply-chain risks from COVID outbreaks.
Su says AMD doesn't have much supply-chain risk from outbreaks. Regarding demand, she notes Data Center sales to China have been weak, and that AMD would benefit from any demand improvement.
5:53 PM ET: Su reiterates AMD thinks Q1 is the bottom for its PC CPU business. Notes AMD under-shipped PC CPU end-demand in Q3 and Q4, and will do so to a lesser extent in Q1. Adds that 1H is typically a seasonally weak time for PC CPU sales.
5:52 PM ET: A question about the CPU pricing environment.
For Data Center pricing, Su suggests AMD is confident about its ability to obtain strong pricing by offering more powerful total solutions. For Client pricing, she indicates there's price pressure for older-gen CPUs as inventory is cleared, partly offset by the launch of newer CPUs.
5:50 PM ET: Su indicates Data Center revenue will be down double-digits Q/Q in Q1, and that Client and Gaming will be down single-digits. Hu adds Embedded is expected to be up single-digits.
5:49 PM ET: A question about share in the PC CPU market, where Intel is believed to be pricing aggressively.
Su says near-term market share numbers are noisy, due to inventory-clearing. Indicates AMD thinks it's still gaining share in the areas that it competes, and reiterates that the company is focused on premium segments of the PC market.
5:46 PM ET: A question about Xilinx's growth.
Su reiterates AMD feels very good about Xilinx demand across various end-markets, and that it's confident about 1H Xilinx growth given its backlog. Notes AMD is waiting to see how the puts and takes evolve for 2H Embedded sales before forecasting.
5:44 PM ET: A question about Genoa's expected ASP uplift, and the expected impact of Bergamo (a next-gen platform optimized for cloud environments).
Su notes Genoa's higher core counts will provide some ASP uplift. Says AMD is on track to launch Bergamo in 1H, and that it will be a larger contributor in 2H. Adds that AMD expects its Zen 4 (Genoa/Bergamo) server CPU shipments to surpass its Zen 3 shipments by Q4.
5:42 PM ET: A question about expected Client margin recovery.
Su reiterates AMD expects some Client sales improvement in 2H, while adding AMD expects its Client GM to remain below the corporate average.
5:41 PM ET: A question about growth related to AI workloads.
Su highlights AMD's efforts to add AI acceleration features in CPUs and GPUs. Adds that AMD is working with cloud vendors to qualify its next-gen MI300 server accelerator (due to launch in 2H) with them.
5:38 PM ET: A question about whether AMD's Data Center/Embedded mix will be materially higher in 2H.
Su says AMD expects its Data Center growth to be "significantly stronger" in 2H. Adds that Embedded has a strong backlog right now and is expected to be up in 2023, but can't say whether it will grow in 2H vs. 1H given that it's coming off strong growth in 2022.
5:37 PM ET: A question about how much AMD expects its GM to grow in 2H.
Hu reiterates Data Center and Embedded growth boost AMD's GM, and that the normalization of Client sales should provide a 2H lift. Adds that the pace of the Client recovery will determine just how much GM grows.
5:35 PM ET: A question about when PC CPU sales start recovering.
Su notes IDC estimates a PC TAM of ~290M units for 2022, and says AMD thinks a 2023 TAM of ~260M sounds about right. Adds that Q1 should be the bottom for AMD's PC CPU sales, and that the recent launch of Ryzen 7000 CPUs should help.
5:32 PM ET: A question about whether cloud inventory-clearing weighs on the pace of Genoa's ramp and Epyc share gains.
Su says AMD remains very bullish about its Data Center business. Notes each cloud customer is different in terms of inventory management. Reiterates Genoa gives AMD an opportunity to further grow both its server CPU share and ASPs.
5:30 PM ET: A question about gross-margin headwinds.
Su notes higher Data Center sales are a margin tailwind, and that lower Q/Q Data Center sales and ongoing PC CPU inventory-clearing will weigh on GM in Q1. Margin expansion expected in 2H as Data Center/Embedded grow and Client sees some normalization.
5:29 PM ET: First question is about 2023 sales drivers. Can AMD grow overall in 2023?
Su says there are a lot of puts and takes for 2023. Reiterates that Data Center is AMD's largest growth driver, aided by Genoa and Bergamo, and that there's some cloud inventory that needs to be burned. Sees a number of growth drivers for Embedded. Thinks a lower TAM will weigh on Client sales in 2023, but sees some room to grow in 2H, and that game-console cycle dynamics will weigh on Gaming revenue.
5:25 PM ET: The Q&A session is starting.
5:24 PM ET: AMD has pared its AH gains a bit following those remarks: Shares are now up 1.3% to $76.16.
5:24 PM ET: Hu says Data Center, Client and Gaming revenue is expected to be down Q/Q in Q1. Embedded is expected to be up Q/Q.
Data Center and Embedded revenue are expected to be up in 2023, while Client and Gaming are expected to be down. Non-GAAP GM is expected to be "flattish" in 1H 2023, before growing in 2H.
5:20 PM ET: Hu notes inventory growth weighed on AMD's FCF in Q4. Says AMD upped its inventory to support the ramp of new products (Zen 4 PC and server CPUs, RDNA 3 GPUs, etc.).
5:18 PM ET: CFO Jean Hu is talking. She begins by recapping AMD's Q4 financials.
5:16 PM ET: Su says AMD expects a mixed demand environment in 2023, with 2H demand stronger than 1H demand.
Adds that AMD expects the PC addressable market (TAM) to be down about 10% this year, and that it expects PC CPU shipments to trail end-consumption again in Q1. Also says there's elevated server CPU inventory at some cloud customers, which will lead 2H sales to them to be stronger than 1H sales.
5:12 PM ET: Regarding Gaming, Su says gaming GPU sales fell Y/Y due to inventory corrections, while console SoC sales were up. Adds that channel sell-through of gaming GPUs rose Q/Q, aided by the launch of RDNA 3 GPUs.
Embedded sales (dominated by Xilinx) saw record sales in a number of end-markets. Su highlights strong growth in telco infrastructure (aided by 5G ramps) and automotive (aided by ADAS).
5:10 PM ET: Su notes AMD's PC CPU shipments in Q4 were below end-market consumption, as customers pared inventories (echoes of what Intel said). Also says desktop CPU sell-through rose Q/Q in Q4.
5:08 PM ET: Su says initial cloud deployments for Genoa are going very well, and that there are 140+ Genoa-based server platforms in development with OEMs.
She adds that Xilinx and Pensando's data center sales also grew strongly Y/Y, while data center GPU sales were down significantly due to big year-ago shipments related to supercomputer deals.
5:05 PM ET: Su is now recapping AMD's 2022 and Q4 performance. Says server CPU sales to North American hyperscalers more than doubled Y/Y in Q4. Enterprise server CPU revenue declined Y/Y.
5:05 PM ET: Lisa Su is talking. She starts by praising Kumar's tenure as CFO, and by stating she's looking forward to working with Hu.
5:03 PM ET: Along with CEO Lisa Su, both new CFO Jean Hu and departing CFO Devinder Kumar (he's staying at AMD until April) will be on the call.
5:01 PM ET: The call is starting. AMD is up 2.5% AH heading into it.
4:57 PM ET: With no official full-year guide having been given, any informal commentary AMD shares on its call about its 2023 expectations will get attention.
4:55 PM ET: AMD's call should kick off in a few minutes (I'll be covering it). Here's the webcast link, for those looking to tune in.
4:53 PM ET: Free cash flow was $443M in Q4 vs. $842M in Q3 and $736M in Q4 2021. AMD ended 2022 with $5.8B in cash/equivalents and $2.5B in debt.
4:49 PM ET: AMD's inventories totaled $3.77B at the end of Q4, up from $3.37B at the end of Q3 and (with both Xilinx and organic increases playing roles) $1.96B a year ago.
Like some peers, AMD has made large wafer-purchase commitments with top foundry partner TSMC. Also, the ramp of AMD's next-gen Epyc CPUs (Genoa) could be driving some inventory growth.
4:45 PM ET: Regarding the lack of a full-year guide, it's worth noting AMD got a new CFO last week, as former Marvell CFO Jean Hu took over from long-time AMD CFO Devinder Kumar. The company might want to give Hu a little time to settle in before issuing full-year guidance.
4:41 PM ET: AMD's non-GAAP operating expenses totaled $1.6B, up from $1.52B in Q3 and (thanks partly to the Xilinx and Pensando acquisitions) $1.1B a year ago. The company signaled on its Q3 call that it plans to slow its spending growth, particularly for consumer-centric businesses.
4:36 PM ET: $250M was spent on stock buybacks. That's down from $617M in Q3.
4:34 PM ET: GAAP EPS was just $0.01, due to $1.04B worth of amortization charges related to the Xilinx acquisition and $310M worth of stock comp.
4:31 PM ET: AMD's non-GAAP gross margin was 51%, up slightly from 50% in Q3 and in Q4 2021, and in-line with guidance.
For Q1, the company is guiding for a 50% non-GAAP GM.
4:28 PM ET: AMD is holding onto its AH gains: Shares are up 3.7% to $77.90.
4:26 PM ET: Regarding the Q1 guide, AMD says it expects Client and Gaming revenue to be down Y/Y again, and that Embedded and Data Center revenue is expected to be up again.
Of note: While Xilinx has been seeing organic revenue growth, annual comps for the Embedded segment are skewed by the fact that the Xilinx acquisition closed in mid-February 2022. Officially, Embedded revenue was up 1,868% Y/Y in Q4.
4:23 PM ET: Data Center revenue (dominated by Epyc server CPUs) totaled $1.66B, up 42% Y/Y but slightly below a $1.71B consensus.
Client (PC CPU) revenue totaled $903M, down 51% and below a $966M consensus.
4:21 PM ET: Driving the Q4 sales beat: AMD's Gaming revenue (gaming GPUs and console SoCs) was $1.64B, down 7% Y/Y but above a $1.49B consensus, and its Embedded revenue (Xilinx + embedded CPUs) totaled $1.397B, above a $1.34B consensus.
4:17 PM ET: Though the Q1 sales guide was a little light, the market's initial reaction is that the numbers are better than feared, given what was known about PC demand and customer inventory corrections.
4:16 PM ET: Results are out. Q4 revenue of $5.599B beats a $5.51B consensus. Non-GAAP EPS of $0.69 beats a $0.67 consensus.
AMD guides for Q1 revenue of $5.3B, plus or minus $300M, versus a $5.5B consensus. No full-year guidance is provided in the report.
Shares are up 3.4% AH.
4:03 PM ET: The Q4 report should be out shortly. AMD often reports a little after the market's close (the Q3 report came out at 4:15 PM).
4:00 PM ET: Though still down 34% over the last 12 months, AMD's stock is up 17% YTD going into earnings, thanks to a broader tech rally. Shares closed up 3.7% today to $75.15 ahead of earnings.
3:56 PM ET: CPU archrival Intel tumbled last week in response to a Q4 report that featured very weak Q1 guidance, but AMD's stock shrugged off the news. On its call, Intel indicated its sales are being hurt by weak PC demand, softening server demand, server CPU share loss (AMD and Arm CPUs have both been taking share), and major customer inventory corrections.
3:54 PM ET: The FactSet consensus is for AMD to report Q4 revenue of $5.51B and EPS of $0.67. But its guidance (particularly the full-year guide) might have a bigger impact on how its stock moves post-earnings.
The Q1 revenue consensus is at $5.5B, and the 2023 consensus is at $24.77B.
3:51 PM ET: Hi, this is Eric Jhonsa. I'll be live-blogging AMD's earnings report and call.
