The News: AMD revenue rose to $5.6 billion in the fourth fiscal quarter of 2022, up 16 percent from $4.8 billion one year ago, as the computer chip maker announced its latest earnings on January 31 for the quarter ending December 31, 2022. For its full fiscal year of 2022 (FY2022), AMD posted $23.6 billion in revenue, which was up 44 percent from $16.4 billion one year ago. AMD also posted Q4 non-GAAP net income of $1.11 billion, which was flat from $1.12 billion one year ago. Read the full Press Release on the AMD website.
AMD Revenue Hits $5.6B in Q4, Up 16% YoY, Beating Estimates
Analyst Take: AMD’s revenue increase of 16 percent to $5.6 billion from one year ago is particularly impressive in Q4 due to the post-pandemic earnings crunch that many tech companies have been experiencing in recent months.
When the Covid-19 pandemic and work from home shutdowns began in March 2020, IT powerhouses like AMD and computer makers saw huge increases in their businesses as customers accelerated their equipment refresh schedules and desperately bought up laptops, desktops, and other hardware to outfit their employees to work from their homes. If you tried to buy a laptop, desktop or other hardware during those early days, you likely remember how difficult it was to find one.
Those earlier revenue and demand boosts from 2020 to 2021 have since been leveling off or dropping, leaving tech companies reeling as demand has slackened. It is a natural progression, of course, that follows what essentially was two or three years of demand that was squeezed into a six to eight month period of big sales and revenue due to the start of the pandemic.
For AMD, which like its competitors is still experiencing some of these effects, its Q4 and full year FY2022 numbers are pretty good despite those realities, largely due to AMD’s forward-looking product and technology diversification that no longer makes the company totally dependent on consumer and business CPU sales for revenue success.
Here are the AMD Q4 2022 and full fiscal year 2022 (FY2022) earnings by the numbers:
- Q4 2022 revenue of $5.6 billion, up 16 percent from $4.8 billion one year ago. The revenue figure beat the $5.52 billion consensus estimate expected by analysts at Investing.com.
- Q4 2022 non-GAAP net income of $1.11 billion, which was flat from $1.12 billion one year ago.
- Q4 2022 non-GAAP gross profit of $2.8 billion, which is up 18 percent from $2.4 billion one year ago.
- Q4 2022 non-GAAP gross margin of 51 percent, up slightly from 50 percent one year ago.
- Q4 2022 non-GAAP operating income of $1.26 billion, down five percent from $1.32 billion one year ago.
- Q4 2022 non-GAAP basic earnings per share (EPS) of $0.69, down 25 percent from $0.92 one year ago. The EPS price did, however, beat analyst consensus estimates of $0.67 per share from analysts with Investing.com.
- FY2022 full year revenue of $23.6 billion, up 44 percent from $16.4 billion one year ago.
- FY 2022 full year non-GAAP net income of $5.5 billion, up 60 percent from $3.4 billion one year ago.
- FY 2022 full year non-GAAP EPS of $3.50, up from $2.79 per share one year ago.
- FY 2022 full year non-GAAP gross profit of $12.3 billion, up 55 percent from $7.9 billion one year ago.
- FY 2022 full year non-GAAP gross margin of 52 percent, compared to 48 percent one year ago.
- FY 2022 full year non-GAAP operating income of $6.3 billion, up 56 percent from $4 billion one year ago.
- FY 2022 full year non-GAAP operating margin of 27 percent, up from 25 percent one year ago.
This was a truly impressive quarter for AMD, which beat on top and bottom and was right in there with AMD’s prior guidance for its Q4 revenue, which called for $5.5 billion, plus or minus $300 million.
AMD Revenue by Business Segment
Also helping AMD in Q4 is its diverse product portfolio, from CPUs for laptops and desktops to graphics chips and video gaming graphics components, which serve a broad range of users in enterprise IT, supercomputing, AI, data centers, and high performance computing (HPC) markets.
Here are AMD’s Q4 revenue numbers by its business segments:
For Q4, data center revenue reached $1.7 billion, up 42 percent from $1.1 billion one year ago. AMD said this primarily came from strong sales of its powerful new fourth generation Epyc processors, which are built on the company’s Zen 4 cores.
AMD’s client segment brought in revenue of $903 million in Q4, which is down 50.6 percent from $1.8 billion it reported one year ago. The dramatic fall was due to “reduced processor shipments resulting from a weak PC market and a significant inventory correction across the PC supply chain,” following the earlier work from home business boom, the company said.
AMD’s gaming segment Q4 revenue totaled $1.64 billion, which was down 6.75 percent from $1.76 billion one year ago. The lower revenue was due to lower gaming graphics sales that were partially offset by higher semi-custom product revenue, the company said.
Revenue in AMD’s embedded computing segment was $1.4 billion, which was up an astounding 1,868 percent (that is NOT a typo) due to the inclusion of revenue from embedded tech specialist Xilinx, which AMD acquired in February 2022 for $49 billion. Xilinx focuses on embedded markets with its powerful and flexible FPGAs (field-programmable gate arrays) and high performance, programmable data center SoCs (system on chip) hardware.
Combined, we believe that this was a remarkable performance by AMD, particularly in data center revenue, and that these embedded revenue figures show the strength that Xilinx adds to AMD’s bottom line due to the acquisition. PC revenue was down as expected and AMD was not immune to that recent hit throughout the marketplace.
We see AMD as a much more diversified company that had a positive Q4, especially given the challenging macroeconomic conditions that continue to roil the markets in the tech and consumer segments. Congratulations to AMD CEO Lisa Su and her experienced and talented executive team for this performance.
AMD Revenue Guidance for Q1 2023 and Full Year 2023
AMD also provided financial guidance for Q1 2023 and for the full year of FY2023.
For Q1 2023, the company expects revenue of about $5.3 billion, plus or minus $300 million, which would be a decrease of about 10 percent from Q1 2022.
For the full FY2023, AMD said it expects that its client and gaming segments will decline YoY, partially offset by embedded and data center segment growth. AMD said it expects its non-GAAP gross margin to be about 50 percent in Q1.
AMD Earnings Overview
As Q1 2023 begins for AMD, the company is not sitting back. Earlier in January it announced a wide range of new products at CES 2023 in Las Vegas, including the inclusion of AMD Ryzen AI technology and hardware within the company’s latest Ryzen 7040 series CPUs and a new AMD Alveo V70 AI accelerator, which will give more options for users of AI inferencing from a trusted IT partner.
Also fascinating was AMD’s preview of its AMD Instinct MI3000 accelerator, which is touted as an integrated data center CPU and GPU that is built for HPC and AI workloads. That takes direct aim at similar work from NVIDIA, which will make this segment even more intriguing in the months and years to come.
AMD’s innovation is driving these positive results and we see this trend continuing under Su’s wise leadership. And as we expected, AMD is continuing to display its broad leadership in the marketplace and is providing plenty of exciting technologies to follow throughout 2023 and beyond.
Disclosure: Futurum Research is a research and advisory firm that engages or has engaged in research, analysis, and advisory services with many technology companies, including those mentioned in this article. The author does not hold any equity positions with any company mentioned in this article.
Analysis and opinions expressed herein are specific to the analyst individually and data and other information that might have been provided for validation, not those of Futurum Research as a whole.
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Author Information
Daniel is the CEO of The Futurum Group. Living his life at the intersection of people and technology, Daniel works with the world’s largest technology brands exploring Digital Transformation and how it is influencing the enterprise.
From the leading edge of AI to global technology policy, Daniel makes the connections between business, people and tech that are required for companies to benefit most from their technology investments. Daniel is a top 5 globally ranked industry analyst and his ideas are regularly cited or shared in television appearances by CNBC, Bloomberg, Wall Street Journal and hundreds of other sites around the world.
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