News AMD 3Q Earnings Report

[Hitman928]

AMD will announce 3Q earnings after the market closes today. I will update this post as info comes out.

In the mean time, saw this on [WCCF]

AMD Outsells Intel in Korea for First Time in History, Doubles Sales in Europe

Once again AMD finds itself making headlines ahead of its earnings report tomorrow for the headway its products have recently been making around the world. In Korea, the company's processors have reportedly outsold Intel's for the first time in history. According to the research arm of...

wccftech.com

AMD has traditionally done very well in the do-it-yourself channel market, where customers buy parts separately and build their own PCs. Although the pre-built OEM market has been much much harder for the company to penetrate, due to Intel's multi-decade long entrenchment in that space.


Which is precisely why this is such a big deal, AMD has rarely ever outsold Intel in the pre-built market and it has in fact never done so in Korea, a market where both of AMD's competitors NVIDIA & Intel have traditionally been very strong in.

I'm not familiar with the Korean market so I don't know how big it is or how much it is driven by more boutique builders or by large OEMs. A European report linked in the WCCF article states that AMD rose from 7% to 12% of pre-built machines in 3Q in the European region. It will be interesting to see what AMD reports today in their quarterly earnings.

 

[LikeLinus]

Did you read the replies above ? EPYC is not down 27%, the division is. EPYC is up 50%

My quote says "The unit as a whole is down 27%, so telling me they have a 50% increase is pointless. "

Way to misquote me, yet again.

 

[scannall]

Although a lot of people sure seem to know how EPYC is doing. Despite the results saying they are down 27% YOY. So that is why I asked. And I completely understand the lag, but Intel saw an uptick in that segment. People are saying that is because companies are worried about tariffs. Where is all of that in the conversation about AMD? Not to mention that those Intel customers are going to be held over for the next year, giving Intel time to get to where they need to be.

But, as you said, a lot can happen. At least you are reasonable and not suggesting that AMD is "curb-stomping" Intel. When the reality, in the largest market, is not true.

While curb-stomping might be hyperbole, at this point in time, in the server space AMD is a lot faster in every metric than the Intel parts. And that's what they HAVE to do in order to start moving in that market. If it were a matter of a couple percent here or there, there would be no reason to change away from Intel. Aside from security issues anyway.

They are on a good path to make serious inroads in that market now. But it's a job of years. Lisa Su has been pretty clear headed on what she expects the rate of adoption to be. And it's NOT %50 in a year or two. AMD just has to keep the push on, as Intel gave them a large gap to run through.

 

[gdansk]

It's all so tiresome. Even when AMD does make a better product they won't move the market in a few months. Or even a year.

No one will ever get fired for buying Intel despite some of those chips having terrible flaws. If you buy AMD and it has flaws, people will criticize you for making the unconventional choice.

 

[LikeLinus]

Why ever talk about those humongous companies that make up the majority of purchases from OEM computer manufactures for servers and desktop/laptop computers? Uh, no reason........

 

[scannall]

It's all so tiresome. Even when AMD does make a better product they won't move the market in a few months. Or even a year.

No one will ever get fired for buying Intel despite some of those chips having terrible flaws. If you buy AMD and it has flaws, people will criticize you for making the unconventional choice.

Back when I was new in the computer biz, the saying was "Nobody ever got fired for buying IBM." Took a while for that to change of course, but it did change irrevocably.

 

[LikeLinus]

While curb-stomping might be hyperbole, at this point in time, in the server space AMD is a lot faster in every metric than the Intel parts. And that's what they HAVE to do in order to start moving in that market. If it were a matter of a couple percent here or there, there would be no reason to change away from Intel. Aside from security issues anyway.

They are on a good path to make serious inroads in that market now. But it's a job of years. Lisa Su has been pretty clear headed on what she expects the rate of adoption to be. And it's NOT %50 in a year or two. AMD just has to keep the push on, as Intel gave them a large gap to run through.

Nope and I completely agree. I'm not sure they are faster in every metric (because I simply don't have the data in front of me), but they have obviously advanced and no one cares to even mention that TSMC is a huge part of that. Kudos to both of them. It just sucks that you can't come in and talk about an Intel product and not getting crapped on. You have people posting such negative Intel responses that are not needed. They both have their place and it's good for end users.

 

[scannall]

Nope and I completely agree. I'm not sure they are faster in every metric (because I simply don't have the data in front of me), but they have obviously advanced and no one cares to even mention that TSMC is a huge part of that. Kudos to both of them. It just sucks that you can't come in and talk about an Intel product and not getting crapped on. You have people posting such negative Intel responses that are not needed. They both have their place and it's good for end users.

If I were building a new machine this year it'd most likely be AMD. But regardless, no matter what mid-range or better CPU you buy from either Intel or AMD it's going to run well. We all win when there is real competition in the marketplace.

These guys did a good job evaluation the new Epyc parts. Serve the Home Epyc Review.

 

[Hitman928]

Although a lot of people sure seem to know how EPYC is doing. Despite the results saying they are down 27% YOY. So that is why I asked. And I completely understand the lag, but Intel saw an uptick in that segment.

The number you are quoting for AMD is a segment that is different than the number you are quoting for intel, so why are you making that comparison? If you look strictly at Enterprise/Data Center for both companies, intel actually decreased 6% Y/Y while AMD grew.

People are saying that is because companies are worried about tariffs. Where is all of that in the conversation about AMD? Not to mention that those Intel customers are going to be held over for the next year, giving Intel time to get to where they need to be.

People are saying that because intel said they pulled in $200M from Q4 and counted it in Q3.

But, as you said, a lot can happen. At least you are reasonable and not suggesting that AMD is "curb-stomping" Intel. When the reality, in the largest market, is not true.

Intel has nothing to compete against AMD in technical terms in HEDT and Enterprise. Sales of course is a different story but the momentum is clearly on AMD's side at the moment. We'll see how long they can keep it going.

 

[LikeLinus]

no matter what mid-range or better CPU you buy from either Intel or AMD it's going to run well.

QFT. The issue here is people stare at benchmarks all day. It's the "forest for the trees" issue. Companies and people who are buying Intel, they are perfectly pleased! It runs, it has a brand name and it's reliable. Period. People here think "oh they are 10% more in this test" that the company/CPU is "curb-stomping" the competitors. Problem is, no one really physically sees those results. The only people who do, are the ones running software test and not actually using said product in production. I know this doesn't go for everyone, but it goes for the mass majority here.

So people saying "Intel has nothing to compete". It's all silly! Are you saying that AMD is performing something that Intel actually can't? LOL, those Intel CPUs will do everything that the AMD will do.

 

[Markfw]

QFT. The issue here is people stare at benchmarks all day. It's the "forest for the trees" issue. Companies and people who are buying Intel, they are perfectly pleased! It runs, it has a brand name and it's reliable. Period. People here think "oh they are 10% more in this test" that the company/CPU is "curb-stomping" the competitors. Problem is, no one really physically sees those results. The only people who do, are the ones running software test and not actually using said product in production. I know this doesn't go for everyone, but it goes for the mass majority here.

And of course you ignore the benchmarks where EPYC beat Intels best by 100% or more. And on average are like 80% more. And take half the power (which in the server world equates to 1/4th the total power consumption due to electricity costs). All of this you ignore, and says "they both run". One thing is winning a benchmark, when you totally dominate the benchmarks by a large margin, that when people use other terms for it.

But you don't get that.

Oh, and doing it for 1/2 the price.....

 

[turtile]

So people saying "Intel has nothing to compete". It's all silly! Are you saying that AMD is performing something that Intel actually can't? LOL, those Intel CPUs will do everything that the AMD will do.

By that logic, why didn't everyone just buy Bulldozer after Opteron? Wait, why did people ever buy Opteron in the first place?

You came in here and trashed AMD and then say that people here just want to trash Intel. Even then you refused to read the transcript. It's not easy to increase production and support a bunch of clients in a few months. You can't expect AMD to just start supporting 5x the business and take over Intel in two seconds.

When you look at the Fortune 50, most of the biggest customers (Alphabet, Microsoft, Amazon etc.) all use AMD products in the data center and consumer products. The rest combined don't touch how many the large cloud companies purchase. Don't forget Baidu and Tencent in China.

AMD has the most work to do with smaller companies that don't have the resources to support a move to a new system.

 

[ondma]

Dont really understand why some posters are so incensed that AMD did not skyrocket on basically meeting expectations. Future gain are already priced in, the stock has already risen what, 20x from the lows? The response in stock price to this earnings report seems to me to be quite reasonable and about what one would expect.

 

[Markfw]

Dont really understand why some posters are so incensed that AMD did not skyrocket on basically meeting expectations. Future gain are already priced in, the stock has already risen what, 20x from the lows? The response in stock price to this earnings report seems to me to be quite reasonable and about what one would expect.

I don't see anybody incensed about not skyrocketing, only about other posters that are trying to make out the results worse than they are.

 

[Hitman928]

Conference Call Quotes:

We saw particularly strong demand for our top-end Ryzen processors, and believe we gained client processor unit share for the eighth straight quarter. In desktops, we are seeing strong demand for Ryzen 3000 and previous generation Ryzen 2000 processors.

In mobile, we had another quarter of strong double-digit percentage notebook processor revenue growth, driven by a richer product mix and increased unit shipments. The number of AMD-powered laptops from major OEMs has increased by 50% this year, including multiple premium notebooks like the first-ever AMD-powered Microsoft Surface laptop.

In graphics, revenue increased year-over-year, driven largely by higher channel GPU sales. Shipments of our Radeon 5000 GPU family featuring our RDNA architecture increased sequentially and we are seeing solid demand for the new products based on their competitive performance and features.
For mainstream gamers, we began shipping the Radeon RX 5500 GPU in the third quarter. Acer, HP, Lenovo and MSI announced plans to offer the new GPU in their upcoming PCs, and multiple AIB partners plan to launch RX 5500 cards during the fourth quarter.

Data Center GPU sales were down sequentially and roughly flat year-over-year.

In server, we had our highest quarterly CPU revenue since 2006, as strong second-generation EPYC processor demand grow a greater than 50% sequential increase in unit shipments and revenue.

We also secured multiple new HPC wins in the quarter, including three separate U.S. Department of Defense supercomputers and what is expected to be the fastest scientific computer in the UK. We expect server revenue to grow sequentially by a strong double-digit percentage in the fourth quarter, as we continue ramping our second-generation EPYC processors. We remain on track to achieve our near-term goal of double-digit server CPU share by mid next year.

Operating expenses grew 13% year-over-year to $539 million, primarily driven by increased R&D investments and support for our new product introductions. Operating income was $240 million, up $54 million, or 29% from a year ago, due to increased revenue from new higher-margin products.

Now turning to the business segment results. Computing and Graphics segment revenue was $1.28 billion, up 36% year-over-year, driven by strong client processor and gaming GPU sales.

Cash, cash equivalents and marketable securities totaled $1.2 billion at the end of the quarter higher than the gross debt of $1.1 billion, resulting in AMD being net cash positive.

Now turning to the outlook for the fourth quarter of 2019. We expect revenue to be approximately $2.1 billion, plus or minus $50 million, an increase of approximately 48% year-over-year and 17% sequentially.

 

[VirtualLarry]

Now turning to the outlook for the fourth quarter of 2019. We expect revenue to be approximately $2.1 billion, plus or minus $50 million, an increase of approximately 48% year-over-year and 17% sequentially.

That seems to basically be what I took out of this, and it sounds like they are doing great, thus far.

 

[Hitman928]

Q&A Quotes (just answers are quoted)

So if you look at the [Computing and Graphics] segment from a sequential standpoint, we saw the client CPUs increase the most. And those were certainly the driver being both desktop and mobile. Desktop was higher than mobile, but both grew up very nicely.

If you look at GPUs overall, they actually declined a bit sequentially. And that decline was primarily driven by data center GPUs, which declined just due to some of the buying cycles in the cloud. Overall, gaming did well and we continue to expect that. As we go into the fourth quarter, you’ll see that the data center GPUs will increase, as well as I mentioned in the prepared remarks that client and graphics would also increase.

There is some noise in the system as it relates to some [Intel] supply constraints and all that stuff. I would view that as mostly, again, it’s pockets at the low-end. I don’t think it’s a significant driver of our business. Our business is driven primarily by our new platforms, the fact that we are in a number of premium platforms on both the notebook side, as well as just the strength that we’re having in the DIY channel is there, and that’s contributing to the positive mix, as well as the unit growth in the client business.

When we look at, both the client and server business, I wouldn’t say that we saw any significant pull-ins due to tariffs or other reasons. We monitor sort of certainly, very closely the sell-in and sell-through trend. And we believe that what we’re seeing in terms of the growth of the businesses is actually just new platforms running – ramping. And given where we are in the product cycle that makes sense. And so I wouldn’t say that we saw any significance of pull-ins in the quarter.

Going forward, we are not relying on process technology as the main driver. We think process technology is necessary. It’s necessary to be sort of at the leading edge of process technology. And so, today, 7-nanometer is a great node, and we’re getting a lot of benefit from it. We will transition to the 5-nanometer node at the appropriate time and get great benefit from that as well. But we’re doing a lot in architecture. And I would say, that the architecture is where we believe the highest leverage is for our product portfolio going forward.

 

[LikeLinus]

It's not easy to increase production and support a bunch of clients in a few months. You can't expect AMD to just start supporting 5x the business and take over Intel in two seconds.

Do you mean TMSC? Didn't realize AMD started producing all their chips again.

People want to blame Intel for fab issues, but celebrate AMD for theirs. Anyone notice a slight problem here?

I came here to trash AMD the same way other posters trash Intel in every thread.



Trolling isn't allowed.
Neither is derailing a thread about AMD's
3rd qtr earnings.


esquared
Anandtech Forum Director

 

[tamz_msc]

AMD's Data center GPU sales are nonexistent anyway, so the sequential decrease in GPU might be due to Navi underperforming. There isn't any other way of interpreting that statement.

To be honest AMD should really start breaking down their CPU and GPU sales by segment - it will show their true position in the market.

 

[Hitman928]

AMD's Data center GPU sales are nonexistent anyway, so the sequential decrease in GPU might be due to Navi underperforming. There isn't any other way of interpreting that statement.

To be honest AMD should really start breaking down their CPU and GPU sales by segment - it will show their true position in the market.

AMD over the last few quarters has had 10 - 12% market share in data center GPUs with $100M+ in revenue. Not earth shattering by any means but they went from practically 0 to double digit market share pretty fast, it was a faster ramp than Epyc. They've mostly found success in cloud servers though a little in machine learning as well. They mentioned being down as a cyclical thing which is probably true.

AMD also said that Navi was performing well and that increased gaming GPU sales was one of their drivers for increased revenue, so not sure why you think Navi is underperforming.

 

[tamz_msc]

AMD over the last few quarters has had 10 - 12% market share in data center GPUs with $100M+ in revenue. Not earth shattering by any means but they went from practically 0 to double digit market share pretty fast, it was a faster ramp than Epyc. They've mostly found success in cloud servers though a little in machine learning as well. They mentioned being down as a cyclical thing which is probably true.

AMD also said that Navi was performing well and that increased gaming GPU sales was one of their drivers for increased revenue, so not sure why you think Navi is underperforming.

Where are you getting these numbers from? If data center GPUs are down due to cyclical reasons then higher client GPU sales due to Navi should have offset it. But we got a sequential decrease in overall GPU revenue. There is only one conclusion to this outcome.

 

[Hitman928]

Where are you getting these numbers from? If data center GPUs are down due to cyclical reasons then higher client GPU sales due to Navi should have offset it. But we got a sequential decrease in overall GPU revenue. There is only one conclusion to this outcome.

I've posted links and a ton of quotes in this thread from both the earnings report and the conference call, that's where it all comes from.

Advanced Micro Devices, Inc. (AMD) CEO Lisa Su on Q3 2019 Results - Earnings Call Transcript

Advanced Micro Devices, Inc. (NASDAQ:NASDAQ:AMD) Q3 2019 Earnings Conference Call October 29, 2019 5:30 PM ETCompany ParticipantsLaura Graves - Investor RelationsLisa Su - President and...

seekingalpha.com

Now turning to the business segment results. Computing and Graphics segment revenue was $1.28 billion, up 36% year-over-year, driven by strong client processor and gaming GPU sales.

In graphics, revenue increased year-over-year, driven largely by higher channel GPU sales. Shipments of our Radeon 5000 GPU family featuring our RDNA architecture increased sequentially and we are seeing solid demand for the new products based on their competitive performance and features.

Data Center GPU sales were down sequentially and roughly flat year-over-year.

If you look at GPUs overall, they actually declined a bit sequentially. And that decline was primarily driven by data center GPUs, which declined just due to some of the buying cycles in the cloud. Overall, gaming did well and we continue to expect that. As we go into the fourth quarter, you’ll see that the data center GPUs will increase, as well as I mentioned in the prepared remarks that client and graphics would also increase.

Everything seems in line to me, unless you want to say that Lisa Su was outright lying to investors (which is a crime). Remember, Navi is only 2 cards right now, both based on the same GPU and priced at the mid to upper mid tier pricing, so having Navi sell well (by AMD standards obviously) be "a bit" more than offset by the whole of data center GPU sales being down is not unrealistic.

 

[fkoehler]

I came here to trash AMD the same way other posters trash Intel in every thread.

Its pretty clear what you were doing, but thanks for making it explicit.

Since you seem so proud of your antics, maybe another Mod can do the necessary.

 

[tamz_msc]

I've posted links and a ton of quotes in this thread from both the earnings report and the conference call, that's where it all comes from.

Advanced Micro Devices, Inc. (AMD) CEO Lisa Su on Q3 2019 Results - Earnings Call Transcript

Advanced Micro Devices, Inc. (NASDAQ:NASDAQ:AMD) Q3 2019 Earnings Conference Call October 29, 2019 5:30 PM ETCompany ParticipantsLaura Graves - Investor RelationsLisa Su - President and...

seekingalpha.com

Everything seems in line to me, unless you want to say that Lisa Su was outright lying to investors (which is a crime). Remember, Navi is only 2 cards right now, both based on the same GPU and priced at the mid to upper mid tier pricing, so having Navi sell well (by AMD standards obviously) be "a bit" more than offset by the whole of data center GPU sales being down is not unrealistic.

In your own quotes you have Lisa Su saying that GPUs decreased sequentially. Also, from where are you getting 100m revenue for data center GPUs? AMD doesn't disclose revenue by market segment.

 

[CHADBOGA]

Its pretty clear what you were doing, but thanks for making it explicit.

Since you seem so proud of your antics, maybe another Mod can do the necessary.

I guess he should have started the thread, then he would have been given a free pass to troll, just like in the below:

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forums.anandtech.com

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forums.anandtech.com

Trolling in tech the forums is not allowed.


esquared
Anandtech Forum Director

 

[Shmee]

So big companies made money. Cool... Well good that we have competition, in the end this means we get better products.

I am not really interested in the EPYC platform, though from what I have seen, it is a better product than the current Xeons. Neither of them is really something I would buy though. I use my PC primarily for gaming.

I currently have a 3700X, though the 9900KS is a nice CPU, though much pricier.