Thursday, October 6th 2022

AMD Trims Q3 Forecast, $1 Billion Missing, Client Processor Revenue down 40%, Halved Quarter-over-Quarter

AMD (NASDAQ:AMD) today announced selected preliminary financial results for the third quarter of 2022. Third quarter revenue is expected to be approximately $5.6 billion, an increase of 29% year-over-year. AMD previously expected revenue to increase approximately 55% year-over-year at the mid-point of guidance. Preliminary results reflect lower than expected Client segment revenue resulting from reduced processor shipments due to a weaker than expected PC market and significant inventory correction actions across the PC supply chain.

Revenue for the Data Center, Gaming, and Embedded segments each increased significantly year-over-year in-line with the company's expectations. Gross margin is expected to be approximately 42% and non-GAAP(*) gross margin is expected to be approximately 50%. AMD previously expected non-GAAP gross margin to be approximately 54%. The gross margin shortfall to expectations was primarily due to lower revenue driven by lower Client processor unit shipments and average selling price (ASP). In addition, the third quarter results are expected to include approximately $160 million of charges primarily for inventory, pricing, and related reserves in the graphics and client businesses.
Third quarter operating expenses are expected to be approximately $2.4 billion and non-GAAP operating expenses are expected to be approximately $1.5 billion. Non-GAAP operating expenses are lower than previous expectations of $1.6 billion driven by lower variable compensation expenses in the quarter.

"The PC market weakened significantly in the quarter," said AMD Chair and CEO Dr. Lisa Su. "While our product portfolio remains very strong, macroeconomic conditions drove lower than expected PC demand and a significant inventory correction across the PC supply chain. As we navigate the current market conditions, we are pleased with the performance of our Data Center, Embedded, and Gaming segments and the strength of our diversified business model and balance sheet. We remain focused on delivering our leadership product roadmap and look forward to launching our next-generation 5 nm data center and graphics products later this quarter."

This update does not present all necessary information for an understanding of AMD's financial condition as of the date of this release, or its results of operations for the third quarter of 2022. As AMD completes its quarter-end financial close process and finalizes its financial statements for the quarter, it will be required to make judgments in a number of areas. It is possible that AMD may identify items that require it to make adjustments to the preliminary financial information set forth above and those adjustments could be material. AMD does not intend to update any financial information prior to release of its final third quarter financial statement information, which is currently scheduled for Nov. 1, 2022.

AMD Q3'22 Earnings Conference Call
AMD will hold a conference call for the financial community at 2:00 p.m. PT (5:00 p.m. ET) on Nov. 1, 2022 to discuss its third quarter 2022 financial results. AMD will provide a real-time audio broadcast of the teleconference on the Investor Relations page of its website at www.amd.com.
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150 Comments on AMD Trims Q3 Forecast, $1 Billion Missing, Client Processor Revenue down 40%, Halved Quarter-over-Quarter

#51
Palladium
I'm sure keeping those AM5 mobos very hilariously overpriced will solve that in Q4!
Posted on Reply
#52
Valantar
PalladiumI'm sure keeping those AM5 mobos very hilariously overpriced will solve that in Q4!
That money doesn't go to AMD though - it's not like there are massive licensing costs attached to making and selling a compatible motherboard.
Posted on Reply
#53
the54thvoid
Super Intoxicated Moderator
Stop the arguing and stop being needlessly personal.
Posted on Reply
#54
Darmok N Jalad
I don’t understand some of the arguments being employed here. Even if a project was started before a CEO came into position, it is still their job to see that any of those projects make it to completion, ideally on time. AMD has executed rather well, especially compared to pre-Su times. It’s not all her doing, mind you, but she’s the captain of the ship.

Besides this, why would someone root for any of these companies to fail? Do we want “our team” to win, or to have the best products available to us at reasonable prices? Just to get one-up on a group of internet strangers isn’t a good reason, IMO.
Posted on Reply
#55
RedelZaVedno
Lisa wanted us on a milking table with Zen 4, now the joke's on her.
Jensen's Lovelace is next in the line to fail miserably as millions of 2nd hand Amperes flood the market.
Their unlimited greed has hit stagflation reality wall. Milking times are over, let them suffer.
Posted on Reply
#56
Hofnaerrchen
Maybe the tech companies should focus even more on highly energy efficient products instead of increasing performance by all means. I am quite dissappointed by the Zen 4 generation so far but - as I am not using my PC for professional applications - this is not a big deal for me: I will defenitely skip this generation and maybe even the next.

Especially in the entertainment sector (average user assumed) it would make more sense to reduce power consumption and increasing performance by just a small margin - a new generation with improved feature set that can handle RT better or has specialized cores that will benefit upscaling technologies/AI (Skynet?!?^^) but does not increase overall power consumption would be enough in my opinion - sure higher fps are a selling point, but just because customers were told over and over again (almost like training an AI). It just needs a turn in the right direction to change that perception. In my experience rasterization performance is already good enough for almost all games on high/very high settings. Higher settings improve image quality only by a small margin but cost alot of performance.

I will not go into further detail but I think the current crisis might also be a major factor that has an impact on sales of "luxury" products like CPUs/GPUs nobody really needs for above mentioned reasons. And raising prices will not improve the situation either.
Posted on Reply
#57
RedelZaVedno
HofnaerrchenMaybe the tech companies should focus even more on highly energy efficient products instead of increasing performance by all means. I am quite dissappointed by the Zen 4 generation so far but - as I am not using my PC for professional applications - this is not a big deal for me: I will defenitely skip this generation and maybe even the next.

Especially in the entertainment sector (average user assumed) it would make more sense to reduce power consumption and increasing performance by just a small margin - a new generation with improved feature set that can handle RT better or has specialized cores that will benefit upscaling technologies/AI (Skynet?!?^^) but does not increase overall power consumption would be enough in my opinion - sure higher fps are a selling point, but just because customers were told over and over again (almost like training an AI). It just needs a turn in the right direction to change that perception. In my experience rasterization performance is already good enough for almost all games on high/very high settings. Higher settings improve image quality only by a small margin but cost alot of performance.

I will not go into further detail but I think the current crisis might also be a major factor that has an impact on sales of "luxury" products like CPUs/GPUs nobody really needs for above mentioned reasons. And raising prices will not improve the situation either.
TBH, you can run Zen4 in eco mode (aka 65W power limit) and get only 3-10% performance hit in games. Zen4 is very efficient, it's the pricing of the whole AM5 platform that sucks big time.
Posted on Reply
#58
Tek-Check
thegnomeNo wonder with the shortage basically gone, and the new stuff being overpriced. AM5 sales numbers are very low from what I have seen...
AMD doesn't expect a rapid adoption of AM5. It's a process and premium platform offer. They still have AM4 sales going well at all retailers. So, it will be two platform offer for some time, until prices become more reasonable.
Posted on Reply
#59
Valantar
RedelZaVednoTBH, you can run Zen4 in eco mode (aka 65W power limit) and get only 3-10% performance hit in games. Zen4 is very efficient, it's the pricing of the whole AM5 platform that sucks big time.
And, of course, every architecture is optimized for efficiency already, as that's how you get higher performance at any given power level. That current architectures are also ballooning in power just demonstrates that both AMD and Intel are currently struggling to increase efficiency sufficiently to stay competitive on that basis alone. Which just shows how there's a fundamental contradiction between a competitive market situation and efficiency, as performance (or, more precisely, an oversimplified game of benchmark one-upmanship) will always be a more compelling selling point unless efficiency can be framed practically (like with battery life in laptops).
Posted on Reply
#60
RandallFlagg
ValantarAnd, of course, every architecture is optimized for efficiency already, as that's how you get higher performance at any given power level. That current architectures are also ballooning in power just demonstrates that both AMD and Intel are currently struggling to increase efficiency sufficiently to stay competitive on that basis alone. Which just shows how there's a fundamental contradiction between a competitive market situation and efficiency, as performance (or, more precisely, an oversimplified game of benchmark one-upmanship) will always be a more compelling selling point unless efficiency can be framed practically (like with battery life in laptops).
That's something a lot of people don't get. Speaking as an engineer, while efficiency and performance are not the same, they are very closely related and excluding other constraints (like materials ability to handle heat or force) efficiency defines maximum performance. That over-arching thing hasn't changed for eons.

A cave man might be able to make a wheel with a wooden bearing that is not lubricated and turn it at 60 RPM with enough power and the right tree. But add some animal fat to that wheel bearing and it can be turned at that speed with less effort, and last far longer, making it more efficient. It can also be turned much faster, giving it far more performance, for perhaps the same effort. i.e. Performance is more about how you use your efficiency.
Posted on Reply
#61
maxfly
This is going to be the new normal for everything tech. Market, profit retraction either due to the crypto crash and or belt tightening worldwide. Notice I left the R word out. That's to scary to ponder. It's going to get worse for the entire tech sector before it gets better. The only tech companies that may grow significantly in the next few years, aren't the kind we generally pay attention to.
Posted on Reply
#62
Upgrayedd
Down almost 12% at the moment. I still think it's too high. Idk wtf the market was smoking when they sent it to $140 a share.
Posted on Reply
#63
Garrus
HofnaerrchenMaybe the tech companies should focus even more on highly energy efficient products instead of increasing performance by all means. I am quite dissappointed by the Zen 4 generation so far but - as I am not using my PC for professional applications - this is not a big deal for me: I will defenitely skip this generation and maybe even the next.

Especially in the entertainment sector (average user assumed) it would make more sense to reduce power consumption and increasing performance by just a small margin - a new generation with improved feature set that can handle RT better or has specialized cores that will benefit upscaling technologies/AI (Skynet?!?^^) but does not increase overall power consumption would be enough in my opinion - sure higher fps are a selling point, but just because customers were told over and over again (almost like training an AI). It just needs a turn in the right direction to change that perception. In my experience rasterization performance is already good enough for almost all games on high/very high settings. Higher settings improve image quality only by a small margin but cost alot of performance.

I will not go into further detail but I think the current crisis might also be a major factor that has an impact on sales of "luxury" products like CPUs/GPUs nobody really needs for above mentioned reasons. And raising prices will not improve the situation either.
You're making a mistake there. Zen4 is way more efficient than older Zen architectures. All you have to do is set it to eco mode, don't run the chip at stock. Voila. More performance and less power use. I think the default settings have confused people. 5nm and Zen4 is still way more efficient, even if they don't run it that way, for competitive purposes (they want to look good compared to Intel and charge more money for their performance).
Posted on Reply
#64
noel_fs
Like someone else said, these companies need to readjust their expectations and get real. People are not gonna keep buying mid tier gpu's for 500$ every year.
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#65
R0H1T
GunShotThose "potential" numbers will be missed... by a lot, so, you're are incredible wrong here. And the bleeding is just getting started for AMD! Oh, BTW, all metrics matters when a company is being evaluated. :laugh:
These are still projections & we don't know the extent of the purported miss! For earnings the market cap is as relevant as one asking his SO about their grandparents' wages during the Bronze age i.e. totally worthless :rolleyes:

When you're buying a phone do you also look at Samsung/Apple/BBK/Xiaomi's market cap :wtf:
Posted on Reply
#66
Chrispy_
RedelZaVednoas millions of 2nd hand Amperes flood the market.
I'm waiting (with open arms) to welcome this coming flood.

I've been waiting 3 weeks so far, no cheapo Ampere cards in sight yet - everything's pretty much still within 10% of the full MSRP from 2 years ago.
Posted on Reply
#67
Upgrayedd
R0H1TWhen you're buying a phone do you also look at Samsung/Apple/BBK/Xiaomi's market cap :wtf:
you better be, I used to like LG phones but it wasn't looking good for them so I went samsung so I could keep getting software updates. Now LG doesn't even make phones lol
Posted on Reply
#68
R0H1T
LG didn't exit the phone business because of market cap, they weren't making any money there whilst many of their other businesses were doing just fine. But I'm (almost) sure you already knew that?

Your point may have been somewhat valid if they went belly up & didn't honor say warranty on them, but they're still delivering software updates what after 2 years? I know because I have a G8x thinQ & it's doing just fine!

www.gsmarena.com/lg_g8x_thinq-review-2017.php
Posted on Reply
#69
Valantar
UpgrayeddDown almost 12% at the moment. I still think it's too high. Idk wtf the market was smoking when they sent it to $140 a share.
Not smoking anything, just following the logic of the ... "special" form of organized gambling that stock markets are.
RandallFlaggThat's something a lot of people don't get. Speaking as an engineer, while efficiency and performance are not the same, they are very closely related and excluding other constraints (like materials ability to handle heat or force) efficiency defines maximum performance. That over-arching thing hasn't changed for eons.

A cave man might be able to make a wheel with a wooden bearing that is not lubricated and turn it at 60 RPM with enough power and the right tree. But add some animal fat to that wheel bearing and it can be turned at that speed with less effort, and last far longer, making it more efficient. It can also be turned much faster, giving it far more performance, for perhaps the same effort. i.e. Performance is more about how you use your efficiency.
Yeah, it's obvious really. If you have 90W of energy to spend, how do you get more performance? By spending those 90W more efficiently. It's literally the what the word means, after all. Of course any specific iteration of a design can be tuned towards being more or less efficient by changing other variables, but that's another question entirely - and where people get sidetracked, as first Intel went to 125W240W TDPs for K-SKU CPUs, and now AMD is following right in their footsteps with 170W230W high X-SKU CPUs - which are still architecturally more efficient than previous generations (for both brands), but are tuned to have higher absolute power consumptions, making their absolute efficiency (perf/W) into a more complicated comparison.

Still, IMO, we need CPU makers to step down to more sensible power levels at stock. 95-125W is fine for the high end, with an easily selectable cTDP-up mode for those wanting more. The performance differences are so small it really doesn't matter, and the power savings are meaningful at scale, while anyone really wanting those extra 5% of performance could get them easily still.
Posted on Reply
#70
Icon Charlie
GunShotSu was asked ~1Q22, doing the worst scalping/mining frenzy in our history - "how is AMD" - her response: "*outstanding* year for AMD with record annual revenue and profitability." Yeah, she had stated that doing a time for many consumers were being gouged by scalpers, hunted by miners, and/or suffering from COVID lockdowns. But, Su thought it was still all "outstanding" even when she knew that many consumers were struggling and hurting.

www.google.com/amp/s/amp.hothardware.com/news/amd-best-year-ever-strong-gains-rdna-2-zen-3-sales

Well, there is a happy ending after all, and Su is now concerned.

Reap what you sow!
AGAIN as stated before Dr Lisa Su is NOT a friend to the consumer base. She has betrayed the trust of customer base for the shekel and IMHO is just 1 step lower than the Sleeze ball Jensen. I seen her business moves for the past 2 years and they have more and more using the US as their cash cow, because people still believe that they are the Under Dog.

As stated before AMD is price gouging their newest generation of product for the amount of performance you are getting over the previous generation. People do not have the money for this crap.
Posted on Reply
#71
RandallFlagg
ValantarYeah, it's obvious really. If you have 90W of energy to spend, how do you get more performance? By spending those 90W more efficiently. It's literally the what the word means, after all. Of course any specific iteration of a design can be tuned towards being more or less efficient by changing other variables, but that's another question entirely - and where people get sidetracked, as first Intel went to 125W240W TDPs for K-SKU CPUs, and now AMD is following right in their footsteps with 170W230W high X-SKU CPUs - which are still architecturally more efficient than previous generations (for both brands), but are tuned to have higher absolute power consumptions, making their absolute efficiency (perf/W) into a more complicated comparison.

Still, IMO, we need CPU makers to step down to more sensible power levels at stock. 95-125W is fine for the high end, with an easily selectable cTDP-up mode for those wanting more. The performance differences are so small it really doesn't matter, and the power savings are meaningful at scale, while anyone really wanting those extra 5% of performance could get them easily still.
You and I value different things, but efficiency is still the route to get there. I don't really care about power consumption within reason (600W 4090s are outside of reason IMO).

But all of these systems are tunable within their own power/performance curves to what a knowledgeable end user desires, and their performance limits are pretty close albeit with different strengths/weaknesses is my bet. If you want low power consumption, you can tune to that. If you want absolute performance, you can tune to that too.
Posted on Reply
#72
Upgrayedd
R0H1TLG didn't exit the phone business because of market cap, they weren't making any money there whilst many of their other businesses were doing just fine. But I'm (almost) sure you already knew that?

Your point may have been somewhat valid if they went belly up & didn't honor say warranty on them, but they're still delivering software updates what after 2 years? I know because I have a G8x thinQ & it's doing just fine!

www.gsmarena.com/lg_g8x_thinq-review-2017.php
Yeah they weren't going to go bankrupt but their phone business was, which is what I was going to buy. I wouldn't buy one of their TVs is that was getting slaughtered either.
My S8 still got an update like a month ago. That's like 5.5yrs.
Posted on Reply
#73
Wirko
bonehead123make some, lose some...

surge & purge....

What goes around comes around (and usually bites you in the arse on the return trip !)....

Forget but never forgive......

this is how the market works, Capitalism 101 at it's finest :D

HOWEVER, all the companies that became soooo accustomed overpricing everything during the pandemic at outrageous scapler's prices are now feeling the pain of those decisions....

Pain, when used properly, a wonderful motivator, it is !
To complete your list,

It's a win-win situation! (we win twice, you lose)
cvaldesTomorrow won't be a pretty day for their stock but I expect a partial rebound next week.
I expect the same, that's a common pattern, so let's wait and see. A seasoned financial analyst who has paid attention on many such occasions before (like financial announcements and reports) would also be able to tell when and by how much, and make lots of money from it.
Posted on Reply
#74
Valantar
RandallFlaggYou and I value different things, but efficiency is still the route to get there. I don't really care about power consumption within reason (600W 4090s are outside of reason IMO).

But all of these systems are tunable within their own power/performance curves to what a knowledgeable end user desires, and their performance limits are pretty close albeit with different strengths/weaknesses is my bet. If you want low power consumption, you can tune to that. If you want absolute performance, you can tune to that too.
That's true - but all the more of an argument for the standard configuration to strike more of a balance, especially as performance-hungry enthusiasts are far more likely to know how to tune things than anyone else. And across hundreds of thousands if not millions of CPUs sold to everyone else every year, the difference in overall energy usage would be meaningful, while the performance difference wouldn't be noticeable for most of these users.
Posted on Reply
#75
RandallFlagg
ValantarThat's true - but all the more of an argument for the standard configuration to strike more of a balance, especially as performance-hungry enthusiasts are far more likely to know how to tune things than anyone else. And across hundreds of thousands if not millions of CPUs sold to everyone else every year, the difference in overall energy usage would be meaningful, while the performance difference wouldn't be noticeable for most of these users.
Well they need some kind of standard to measure against, I agree, or at least an agreed on method of measuring performance of a CPU with a specific set of platform / power / frequency points.

I'm not sure what people expect to happen when they stick these chips in a motherboard called 'Apex' or 'Godlike'. Those boards will run the CPUs as hard as they can.

Not all boards do that (90W difference between the NZXT N5 and the Godlike or Unify with 12900K at 4.9Ghz):

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