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AMD-Naples-Feature

AMD reported its fourth quarter and full year results for 2022 yesterday evening. The company's financial results are easily the best its posted in five years and arguably some of the best results nosotros've seen in a decade (this last needs a bit of unpacking, but nosotros'll get to that).

If AMD performed well from Q1 to Q3 2022, it positively crushed Q4. Revenue for the quarter was $1.48B, an increase of 1.34x yr-on-year. Full year acquirement striking $five.3B, compared with $four.27B for 2022, an increase of one.25x. The 10 percent seasonal decline is due to a subtract in console revenue — while Q4 is the strongest quarter for PC OEMs, console purchases top in Q3 as Sony and Microsoft ramp upward their ain manufacturing to meet holiday demand. AMD's full year net revenue was $201M, a respectable result because the Client and Graphics business hasn't posted a internet turn a profit for the year in six years.

AMD-Annual-Summary-2017

There've been a lot of questions raised over the by year over where AMD's revenue is coming from and what we tin can look in the future. These are reasonable questions: Equally great as Ryzen is, Piledriver was an underperforming compages from the start and it was 5 years erstwhile at the showtime of 2022. Now that a hefty chunk of the depression-hanging fruit has been nerveless, what's side by side?

Where's the Money Coming From?

AMD reports its increased revenue is due to potent sales of its Ryzen, Radeon, and Epyc platforms. The enterprise, embedded, and semi-custom (EESC) segment, which includes consoles, saw sales decline in line with seasonality, but segment acquirement rose iii percent in Q4 2022 compared with the same menstruation in 2022, an increase AMD attributed to increased server market share for Epyc. Epyc revenue is expected to ramp strongly into 2022, with new pattern wins and deject deployments across the industry.

As far as weighting whether the major increase in revenue came from Vega or Ryzen, Lisa Su plays that close to her chest. Here she is on revenue mix:

[West]due east saw a 17 percent sequential growth, significantly better than seasonality. That was up on clients, particularly Ryzen desktop had a very strong holiday. Nosotros likewise started initial shipments on Ryzen mobile. And so, on the graphics side, nosotros saw strength in all production lines. So, we saw strength in the channel for both gaming equally well as blockchain; nosotros saw force in OEMs as we ramped Apple tree with our Vega processors; we as well saw forcefulness in professional graphics as nosotros launched some GPU compute into the data centers.

Later, Su clarifies that of AMD's $140M worth of increased C&Chiliad sequential revenue, roughly ane/3 of it came from cryptocurrency-related sales. The other 2/iii of revenue was generated by a mixture of "other" GPU action and Ryzen sales. Ryzen deemed for just nether 50 percent of AMD'south total CPU sales in Q4, with legacy products roofing the rest of the market.

We don't know what the revenue split was between Ryzen and Radeon for that other 2/3 of spending. I'd wager it was tilted much more heavily towards Ryzen, simply even if the raw product sales weren't, the profits nearly certainly were. Vega yields have never been great, even earlier this latest cryptocurrency boom, and the GPU demand explosion doesn't automatically drop cash into AMD's pockets if AMD doesn't raise its prices to compensate (as far every bit we know, neither it or NV take).

Lisa Su noted that memory shortages go on to constrain AMD's overall GPU production, saying:

Relative to merely where we are in the market today, for sure the GPU aqueduct is lower than we would like information technology to be, and then nosotros are ramping up our production. At this point we are not limited by silicon per se, so our foundry partners are supplying us, in that location are shortages in memory and I retrieve that is truthful across the board, whether you are talking about GDDR5, or you're talking about high bandwidth memory.

Su also answered a question on which products she expected to drive the about revenue for AMD in 2022 in accented dollar terms. She answered Ryzen and Epyc are the largest absolute contributors to AMD's expected growth, particularly every bit Ryzen mobile ramps up.

Looking Alee to 7nm, 2022 Acquirement, Meltdown and Spectre

AMD didn't have much to say virtually 7nm that information technology hasn't said before. It intends to ramp a single GPU part (Vega for machine learning workloads) in 2022. This tracks with what nosotros know of 7nm — information technology's a very early node, with a express-run part slated for 2022 ramp-up and production.

AMD-Q4-Financials

AMD expects Q1 2022 revenue to be $1.55B, upward roughly one.32x year-on-year. AMD is moving to a new accounting standard in Q1 2022, which mucks up the comparing some, but its restated Q1 2022 income is $ane.17B and its restated Q4 2022 income is $ane.34B. Gross margin improvements of ~1 percent are anticipated. For the full year 2022, AMD expects double digit pct growth in revenue compared with 2022, and a gross margin rate in excess of 36 percent.

AMD's guidance on Meltdown and Spectre have not inverse. Information technology believes its CPUs are completely immune to Meltdown. It is working with vendors to roll out patches for Spectre Variant 1. Variant 2 is yet believed to be "hard" to exploit on AMD processors, just AMD is working to close the loopholes.

All in all, the all-time twelvemonth AMD has had in a long fourth dimension, and a welcome return to profitability.