amd（amd.o) released its financial results for the fourth quarter of 2023 (as of December 2023) after the U.S. stock market on the morning of January 31, 2024, Beijing time, with the following highlights:
1. Overall performance: mediocre performanceAMD posted revenue of 61$6.8 billion, up 102%, in line with market expectations (61.).$3.2 billion). On the revenue side, there was a sequential recovery, mainly driven by the continued growth of data centers。AMD achieved a net profit of 6$6.7 billionThe better-than-expected net profit was mainly due to changes in income tax. From the perspective of operation, there was no performance beyond expectations.
2. Business segments: driven by data centers only。From $amdWith the growth of the data center business, the proportion of US has reached nearly 4%. The remaining three businesses all maintain a share of about 20%. Among the company's businesses in the quarter, only the data center business showed sustained growth momentum, while the recovery of the client business began to slow down.
3. AMD's performance guidanceExpected revenue for the first quarter of 2024 is $5.1-5.7 billion (consensus of $57.7.)$8.5 billion) and non-GAAP gross margin of around 52% (consensus of 51.).83%）。The revenue side will decline by 76％－17.3%, mainly due to the sequential decline in revenue from client, gaming and other businesses.
Dolphin's overall view:
AMD's overall numbers were flat, with revenue in line with expectations and gross margin below expectations. The higher than expected net profit was mainly due to the change in income tax. From the perspective of operating profit, the company's core operating profit increased slightly, and did not exceed expectations.
In terms of business segmentation, data centers are still growing, while PC business growth is gradually weakening. Combined with the company's guidance for the next quarter, we look at revenue ($5,157 billion) and non-GAAP gross margin of 52. Although the gross margin is in line with expectations, there will be clear signs of decline on the revenue side. In the next quarter, the data center business will be flat quarter-on-quarter, while the client business, embedded and gaming business will all decline to varying degrees
Combined with the previous one$Intel. usAccording to the guidance, the PC industry chain has begun to slow down after replenishing inventory, which will directly affect the company's client business and game business. Although the demand for data centers is still there, the growth rate of the company's related business has also slowed down.
In the case of a slowdown in the performance recovery, AMD's logic of this round of "growth recovery" will be tested. Dolphin Jun believes that in terms of the company's current performance, the company's market value of 300 billion yuan corresponds to a valuation of nearly 100 times is high, and there will be a certain amount of pressure.
The following is Dolphin's specific analysis of AMD's financial report:
1. Overall performance: mediocre performance
1.1 Revenue
AMD posted revenue of 61$6.8 billion, up 102%, in line with market expectations (61.).$3.2 billion). On a sequential basis, the company's revenue continued to recover in the quarter, mainly due to higher demand for data centers.
1.2 Gross margin
AMD achieved gross profit of 29$1.1 billion, an increase of 21.1 percent year-over-year1%。Gross profit grew faster than revenue, mainly because gross margin also improved during the quarter.
AMD's gross margin for the quarter was 472%, an increase of 4 year-on-year1pct, which was lower than market expectations (49.).8%）。The increase in gross margin was primarily due to improved profitability in the Data Center & Client segment and a decrease in amortization of acquired intangible assets.
1.3 Operating expenses
AMD's operating expenses for the fourth quarter of 2023 were $21$5.5 billion, up 102%, of which R&D expenses and sales and administrative expenses increased.
On the specific cost side, let's split it up:
1) R&D expenses: The company's R&D expenses in the quarter were 15$1.1 billion, up 106%R&D expenses have been on the rise. As a technology company, the company continues to focus on research and development. Even in the trough of performance, the company's R&D is still improving;
2) Selling and administrative expensesThe Company's selling and administrative expenses for the quarter were 6$4.4 billion, up 92%。There is a clear correlation between the cost situation on the sales side and the revenue growth rate.
1.4 Net Profit
AMD achieved a net profit of 6$6.7 billion, with a net profit margin of 10.0 percent for the quarter8%, which continued to increase month-on-month.
As AMD continues to incur large deferred charges on its Xilinx acquisitions, it will be a margin erosion for some time to come. As for the actual operating conditions of this quarter, Dolphin Jun believes that the "core operating profit" is closer.
Core Operating Profit = Gross Profit - Total Operating Expenses.
Excluding the impact of acquisition expenses, Dolphin estimates AMD's core operating profit for the quarter to be 7$5.6 billion, up 13.3 percent sequentially9%, driven by the data center business.
2. Business segments: driven by data centers only
From the perspective of the company's sub-business, with the growth of the data center business, the proportion has come to nearly 4%. The remaining three businesses all maintain a share of about 20%.
2.1 Data center business
AMD's data center business achieved revenue of 22$8.2 billion, up 3.7 billion year-over-year9%, which was largely in line with market expectations ($2.3 billion).This is mainly due to the company's increased sales of EPYCTM™ CPUs and AMD Instinct GPUs.
Microsoft, Meta, Oracle, and other cloud providers are currently announcing the deployment of MI300X; Dell Technologies, HPE, Lenovo, Supermicro and others announced the new AMD Instinct MI300 enterprise and HPC platforms.
2.2 Client business
AMD's client business achieved revenue of 14$6.1 billion, up 6.1 percent year-over-year8%, less than market expectations (15.).$1.6 billion).。Year-over-year growth in client business was driven by higher sales of Ryzen™ 7000 Series CPUs. The month-on-month growth rate has slowed down significantly, and after the replenishment of the industrial chain, the current downstream pulling momentum has slowed down.
2.3 Game business
AMD's gaming business achieved revenue of 13 in the fourth quarter of 2023$6.8 billion, down 168%，Slightly better than market expectations (12.)$4.6 billion). The decline in the games business was affected by the decline in revenue from some semi-custom businesses. Dolphin Jun believes that the previous game graphics card manufacturers were mainly in the demand for replenishing inventory, and the weak downstream demand affected the sustainability of pulling goods.
2.4 Embedded services
AMD's embedded business achieved revenue of 10$5.7 billion, down 243%, in line with market expectations (10$6.2 billion).。The company's embedded business, which was previously acquired by Xilinx, was mainly affected by the decline in the communications market in the quarter, and the current customers are mainly engaged in the digestion of inventory.
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