Release Date: February 04, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Advanced Micro Devices Inc (AMD, Financial) achieved record annual revenue of $25.8 billion in 2024, marking a 14% increase year over year.
- The Data Center segment contributed roughly 50% of annual revenue, with a 69% year-over-year increase to a record $3.9 billion.
- AMD's Client segment revenue increased 58% year over year to a record $2.3 billion, driven by strong demand for Ryzen processors.
- The company successfully established a multi-billion-dollar Data Center AI franchise, delivering over $5 billion in revenue for 2024.
- AMD expanded its ROCm software suite, enhancing inferencing and training performance, and achieved significant customer adoption.
Negative Points
- Gaming segment revenue declined 59% year over year to $563 million, primarily due to a decrease in semi-custom sales.
- Embedded segment revenue decreased 13% year over year to $923 million, with mixed demand across markets.
- The company anticipates a significant decline in its Gaming business and a modest decline in its Embedded business for the first quarter of 2025.
- AMD's gross margin guidance for the first quarter of 2025 remains flat at 54%, indicating potential pressure on profitability.
- The company faces competitive pressures in the server CPU market, with concerns about aggressive pricing from competitors.
Q & A Highlights
Q: How should we think about the GPU business and its revenue progression in 2025?
A: Lisa Su, CEO, stated that AMD was pleased with the 2024 data center GPU business ramp. For 2025, the MI325 launched at the end of Q4, and MI350 series production is pulled into mid-year due to strong demand. The data center business is expected to grow strong double digits, with a stronger second half due to MI350 as a catalyst.
Q: Are you assuming a sequential decline in the data center segment in Q1 2025?
A: Lisa Su, CEO, explained that the Q1 guide is down 7% sequentially. The data center segment is expected to be down just about the corporate average, with the client and embedded businesses down more due to seasonality, while the gaming business will be down less.
Q: How do you view the competitive landscape in the server CPU market, and can you still grow in line with core count growth?
A: Jean Hu, CFO, noted that the server CPU market is competitive, but AMD's portfolio, including Turin, Genoa, and Milan, offers the best TCO for customers. AMD is confident in continuing to drive growth in server CPU units, ASPs, and market share.
Q: Can AMD's data center GPU business grow at a 60% CAGR in 2025, similar to long-term projections?
A: Lisa Su, CEO, expressed confidence in the strong demand for AI compute and the data center accelerator TAM. While not providing a specific 2025 number, she emphasized the business's potential to grow to tens of billions over the next few years, with a strong roadmap including MI300, MI350, and MI400 series.
Q: How is AMD addressing the AI networking architecture needs, and are there any innovations planned for 2025?
A: Lisa Su, CEO, highlighted AMD's investments in AI networking, including Ethernet and in-house AI NIC development. AMD is working on full rack solutions for MI350 and MI400 series, emphasizing the importance of system-level scaling in AI solutions.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
