AMD earnings smash Wall Street estimates

PCs, gaming and data centres drove company growth

AMD's Q1 earnings report has handily beaten analysts' estimates for the quarter, and are guiding higher for the full year. The results reflect the massively increased demand for consumer electronics that has been a hallmark of the last year.

The company reported Q1 revenue of $3.5 billion, up 93 per cent YoY and 6 per cent QoQ, while Wall Street had forecast $3.2 billion.

Operating income rose to $662 million, compared to $570 million in Q4'20 and $177 million in Q1'20.

According to AMD, its performance in the Computing and Graphics segment and Enterprise, Embedded and Semi-Custom division drove the improvement.

Computing and Graphics revenues rose 7 per cent QoQ and 46 per cent YoY, to $2.1 billion in revenue. The segment accounted for 61 per cent of AMD's total revenues.

The growth was driven by robust adoption of Radeon and Ryzen processors, and increased revenues from graphics and client processor sales. Average selling prices for both Radeon GPUs and Ryzen CPUs rose QoQ and YoY.

The Enterprise, Embedded and Semi-Custom division, which includes AMD's EPYC processors and custom chips for game consoles, posted $1.4 billion in revenue, up a massive 286 per cent year-over-year.

The pandemic-induced remote working trend continued to drive PC market strength, leading to strong growth in client processor revenues, mainly across gaming, ultrathin, and commercial segments. Mobile chips also performed well, with AMD's Ryzen Mobile 5000 Series with revenues growing twice as fast as the prior generation.

The company expects Q2'21 revenues of $3.6 billion, up 4 per cent QoQ and 86 per cent YoY. Growth is expected to mainly come from the gaming and data centre markets.

"Our business continued to accelerate in the first quarter driven by the best product portfolio in our history, strong execution and robust market demand," said CEO Lisa Su.

"We had outstanding year-over-year revenue growth across all of our businesses and data centre revenue more than doubled."

Su admitted that AMD is still struggling with the global chip shortage, but has seen improvements recently.

AMD, which has been Intel's long-time rival for CPUs in the PC business, has taken a lead over its competitor in several key areas - most notably data centres. AMD's recent acquisiton of Xilinx in October, for $35 billion, should also make the firm more competitive in the automotive electronics and 5G markets.