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.
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.
150 Comments on AMD Trims Q3 Forecast, $1 Billion Missing, Client Processor Revenue down 40%, Halved Quarter-over-Quarter
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.
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.
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.
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.
When you're buying a phone do you also look at Samsung/Apple/BBK/Xiaomi's market cap :wtf:
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.
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
125W240W TDPs for K-SKU CPUs, and now AMD is following right in their footsteps with170W230W 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.
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.
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.
My S8 still got an update like a month ago. That's like 5.5yrs.
It's a win-win situation! (we win twice, you lose) 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.
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):