AMD posts 29 per cent revenue growth in spite of PC market slowdown

Embedded and datacentre business units bolstering revenue.


AMD’s recent earnings report reveals the company grossed $5.6 billion in third-quarter revenue which ended September 30. Though lower than guidance presented in August, overall yearly revenue increased by 29 per cent, helped by strong datacentre sales and income derived from the Xilinx acquisition.

A sharp decline in PC-related income and inventory reductions led to a revenue shortfall of $1 billion, per August’s guidance. The company announced last month its earnings would be below previous forecasts. When broken down, AMD earned $66 million in profits from $5.6 billion revenue compared to last year’s $923 million on $4.3 billion in revenue within the same quarter. A significant portion of additional expense occurred this year is related to the Xilinx purchase.

AMD CEO, Lisa Su, who spoke on the company’s earnings call, said: “Third quarter results came in below our expectations due to the softening PC market and substantial inventory reduction actions across the PC supply chain,” further adding, “Despite the challenging macro environment, we grew revenue 29% year-over-year driven by increased sales of our data center, embedded and game console products. We are confident that our leadership product portfolio, strong balance sheet and ongoing growth opportunities in our data center and embedded businesses position us well to navigate the current market dynamics.”

AMD is not the only company this quarter to announce a shortfall; Intel and Sony posted reduced revenues due to rising productivity costs, inflation and softening demand. Intel alone plans to shed $10 billion in costs by 2025 as it prepares for economic uncertainty.

Despite the sub-par performance overall, AMD has seen growth in custom business. As it stands, the division is up 14 per cent, totalling $1.6 billion in revenue, while the datacentre division’s revenues, driven by Epyc processor demand, rose by a very healthy 45 per cent year over year.

AMD’s recent Xilinx acquisition turbocharged the embedded business unit, signalling $1.3 billion in revenue, up 1,549 per cent in year on year.

Looking toward the future, the company says it expects a Q4 revenue of approximately $5.5 billion. The recent launch of Ryzen 7000 Series CPUs and imminent arrival of next-generation GPUs ought to help bolster the bottom line.