Advanced Micro Devices, Inc. Q1 FY2023 Earnings Call

· Earnings call transcript and AI-powered summary

Quarter Overview

  • Q1 2023 revenue was $5.4B, down 9% year-over-year (YoY), but above expectations.
  • Data Center and Embedded segments contributed over 50% of total revenue.
  • Strong execution in product launches and accelerated progress in AI initiatives.

Segment Performance

Data Center
  • Revenue: $1.3B, flat YoY.
  • Cloud sales grew double-digit YoY; enterprise sales declined.
  • Sequential decline due to cloud inventory digestion and weaker enterprise demand.
  • Operating income: $148M (11% margin), down sharply from $427M (33%) YoY due to mix shift and higher R&D.
  • Genoa (Zen 4) ramp progressing; broad deployments expected in Q2 and stronger adoption in 2H23.
  • Bergamo, a cloud-native CPU, and Genoa-X launching in Q2 2023.
  • AI activity increased; large interest in MI300 accelerators for training and inference.
  • Expectation: Double‑digit full-year Data Center revenue growth, implying ~50% YoY growth in 2H23.
Client
  • Revenue: $739M, down 65% YoY as AMD purposely under-shipped consumption to reduce channel inventory.
  • Operating loss: $172M versus +$692M YoY.
  • Q1 seen as the bottom; sequential improvement expected from Q2 onward.

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Operator: Hello, and welcome to the AMD First Quarter 2023 Earnings Conference Call. [Operator Instructions]. It's now my pleasure to turn the call over to Ruth Cotter. Please go ahead, Ruth. Ruth Cotter: Thank you, and welcome to AMD's First Quarter 2023 Financial Results Conference Call. By now, you should have had the opportunity to review a copy of our earnings press release and accompanying slideware. If you've not reviewed these documents, they can be found on the Investor Relations page of amd.com. . We will refer primarily to non-GAAP financial measures during this call. The full non-GAAP to GAAP reconciliations are available in today's press release and slides posted on our website. Participants on today's conference call are Dr. Lisa Su, our Chair and Chief Executive Officer; and Jean Hu, our Executive Vice President, Chief Financial Officer and Treasurer. This is a live call and will be replayed via webcast on our website. Before we begin today's call, we would like to note that Jean Hu will attend the JPM Annual Technology, Media and Communications Conference on Tuesday, May 23; Dan McNamara, Senior Vice President and General Manager, Server Business Unit, will attend the Bank of America Global Technology Conference on Tuesday, June 6. And our second quarter 2023 quiet time is expected to begin at the close of business on Friday, June 16. Today's discussion contains forward-looking statements based on current beliefs, assumptions and expectations, speak only as

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