Advanced Micro Devices, Inc. Q3 FY2022 Earnings Call

· Earnings call transcript and AI-powered summary

Quarter Overview

  • Revenue: $5.6B, up 29% year-over-year (vs. Q3 2021), but below prior expectations due to weak PC demand and large channel inventory corrections.
  • Gross Margin: 50%, up 150 bps year-over-year, impacted by $160M in inventory and pricing charges in Client and Gaming.
  • Operating Income: $1.3B, up 20% year-over-year.
  • Net Income: $1.1B, up $202M year-over-year.
  • EPS: $0.67, down from $0.73 a year ago due to lower Client segment revenue.

Segment Performance

Data Center

  • Revenue: $1.6B, up 45% year-over-year and 8% sequentially.
  • Drivers: Strong EPYC CPU demand, cloud revenue doubled year-over-year, 70+ new cloud instances launched on AMD platforms.
  • Enterprise OEM revenue was down sequentially due to macro caution and match-set issues.
  • Data Center GPU revenue down sharply due to heavy Q3 2021 Frontier supercomputer shipments.
  • Pensando DPUs and Xilinx FPGAs saw record adoption.
  • Genoa (5nm, next-gen EPYC) launches publicly next week; strong customer enthusiasm and no expected supply constraints in 2023.

Client

  • Revenue: $1B, down 40% year-over-year due to a weak PC market and heavy inventory correction across the PC supply chain.

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Operator: Hello. And welcome to the AMD Third Quarter 2022 Earnings Call. At this time, all participants are in a listen-only mode. [Operator Instructions] A question-and-answer session will follow the formal presentation. As a reminder, this conference is being recorded. 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 third quarter 2022 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 do not receive 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, which are posted on amd.com as mentioned. Participants on today’s conference call are Dr. Lisa Su, our Chair and Chief Executive Officer; and Devinder Kumar, our Executive Vice President and Chief Financial Officer and Treasurer. This is a live call and will be replayed via webcast on our website. Before we begin today, I would like to note that Mark Papermaster, Chief Technology Officer and Executive Vice President, Technology and Engineering, will attend the Wells Fargo Technology, Media and Telecommunications Summit on Wednesday, November 30th. And our fourth quarter quiet time is expected to begin at the close of business on Friday, December 16th. T

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