AMD Post 5th Straight Quarter Of Year Over Year Revenue Growth

👤by Tim Harmer Comments 📅24.10.2018 22:55:38

AMD have posted another solid quarter of revenue on the back of challenging conditions for their Computing and Graphics business segments in the last three months. Compared to the same period last year, Q3 2018 net revenue was up to $1.65bn versus $1.58bn, an improvement of 4% year over year and a touch on the low end of expectations. Operating income and net income were also up year over year to $150m and $102m respectively. Gross Margin hit 40%, up both on the year and versus the last quarter.

Q3 2018 is now AMD's fifth straight quarter of year-over-year revenue growth, signalling gradual and sustained improvements since AMD Ryzen CPUs entered the market in 2017. The adoption of Ryzen in the consumer sector and emergence of EPYC in the Enterprise market bears no small amount of responsibility for this turn-around.

Not all is rosy however. Sequential decreases were driven by lower graphics revenue due to higher inventory in the channel and low demand from blockchain/cryptocurrency markets. That's understandable, but underscores the weaknesses of AMD's graphics portfolio in the face of NVIDIA's 20-series GPUs as we sit on the fringe of a transition to 7nm products.

Other Highlights

AMD EPYC datacenter processor adoption continues to accelerate, with new platforms and deployments from several industry leaders showcasing the performance and value EPYC processors bring to a variety of workloads:

o Microsoft announced a new Azure H-Series cloud instance for high performance computing workloads powered by AMD EPYC processors.
o Dropbox announced that it will leverage AMD EPYC 7351P one-socket processor platforms to support future growth and refresh its existing infrastructure for its most demanding compute workloads.
o Xilinx revealed a new world-record for inference throughput of 30,000 images per-second, achieved by a system using two AMD EPYC 7551 CPUs alongside eight Xilinx Alveo U250 acceleration cards.
o Oracle announced the launch of multiple new AMD EPYC-powered service instances on Oracle Cloud Infrastructure that offer significant TCO and performance advantages for general purpose cloud computing workloads and popular Oracle applications.

AMD expanded its client compute product portfolio with new high-performance desktop processors spanning from high-end desktop to entry-level:

o AMD launched its 2nd Generation AMD RyzenTM ThreadripperTM processors including a new WX Series for professional computing and improved X Series for enthusiasts and gamers. The Ryzen Threadripper 2990 WX processor is the world’s most powerful desktop processor, delivering up to 53 percent faster multi-thread performance than the competition.
o AMD introduced its first “Zen” core-based AMD AthlonTM and Athlon PRO desktop processors, bringing the combined power of the high-performance “Zen” and “Vega” architectures to its entry-level consumer and commercial desktop processing product line-ups. The AMD Athlon 200GE consumer desktop processor delivers up to 67 percent more GPU performance and up to 2X greater power efficiency than the competition.

AMD continues to enable state-of-the-art visualization and virtualization with powerful professional graphics solutions:
o AMD introduced the Radeon™ Pro WX 8200 graphics card, delivering the world’s best workstation graphics performance for under $1,000 for real-time visualization, VR and photorealistic rendering.
o AMD introduced the Radeon™ Pro V340 graphics card, a high-performance dual-GPU Virtual Desktop Infrastructure (VDI) solution. The “Vega” architecture-based graphics card is purpose-built to power and accelerate the most demanding datacenter virtualization workloads.

AMD expect year-over-year revenue growth to continue, even as net income diminishes in Q4 2018 due to seasonal effects.

Current Outlook

AMD’s outlook statements are based on current expectations. The following statements are forward-looking, and actual results could differ materially depending on market conditions and the factors set forth under “Cautionary Statement” below.

For the fourth quarter of 2018, AMD expects revenue to be approximately $1.45 billion, plus or minus $50 million, an increase of approximately 8 percent year-over-year, and non-GAAP gross margin to increase to approximately 41 percent, driven by sales growth of Ryzen, EPYC and datacenter GPU processor sales. For comparative purposes, Q4 2017 revenue was $1.34 billion, adjusted for the ASC 606 revenue accounting standard, and included blockchain-related GPU sales of approximately low double-digit percent of overall AMD revenue.

SOURCE AMD Q3 2018 Financial Statement

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