Demo
AMD Nasdaq· Advanced Micro Devices Inc
FundamentalsNews digest Peer analysis
Login
AMD Nasdaq· Advanced Micro Devices Inc
Earnings report Q4 2023

AMD Experiences Slight Revenue Decline Amid Mixed Demand

Segments of Revenue

AMD's net revenue for 2023 was $22.7 billion, marking a 4% decrease from the previous year's $23.6 billion. This decline was primarily due to a 25% drop in Client segment revenue, largely attributed to lower processor sales, and a 9% decrease in Gaming segment revenue due to lower semi-custom product sales. However, these losses were partially offset by a 17% increase in Embedded segment revenue, largely due to the inclusion of embedded product revenue from Xilinx, Inc., and a 7% increase in Data Center segment revenue, driven by higher sales of AMD Instinct GPUs and 4th Gen AMD EPYC CPUs.

Strengths

Despite the overall decrease in revenue, AMD showed resilience in certain segments. The Embedded segment saw a 17% increase in revenue, largely due to the inclusion of embedded product revenue from Xilinx, Inc. The Data Center segment also performed well, with a 7% increase in revenue driven by higher sales of AMD Instinct GPUs and 4th Gen AMD EPYC CPUs. The company's gross margin also improved slightly, from 45% in 2022 to 46% in 2023.

Challenges

AMD faced significant challenges in its Client and Gaming segments, which saw revenue decreases of 25% and 9% respectively. The decline in the Client segment was primarily due to lower processor sales, while the Gaming segment suffered from lower semi-custom product sales. Additionally, the company's operating income decreased significantly, from $1.3 billion in 2022 to $401 million in 2023, primarily due to lower Client segment performance and increased R&D investments.

Noteworthy

The company's net income for 2023 was $854 million, a decrease from the $1.3 billion reported in the previous year. This decrease was primarily driven by lower operating income.

Summary

AMD faced a challenging year in 2023, with a 4% decrease in net revenue driven by significant declines in its Client and Gaming segments. However, the company showed resilience in its Embedded and Data Center segments, which saw increases in revenue. Despite these challenges, AMD managed to slightly improve its gross margin and maintains a strong cash position with $5.8 billion in cash, cash equivalents, and short-term investments.

Source documents

Form 10-K  filed on Jan 31, 2024
133 pages scanned

Reference data

Company financials Q4 revenue 6.17B
Analyst estimates Q4 EPS missed by -0.01%
Sign up to Fey

Get in-depth analysis on thousands of stocks for just $30/month. Cancel anytime.