07-05-2025
Advanced Micro Devices Inc (AMD) Q1 2025 Earnings Call Highlights: Strong Revenue Growth Amid ...
Revenue: $7.4 billion, up 36% year over year.
Gross Margin: 54%, up 140 basis points from a year ago.
Net Income: Increased by 55% year over year.
Operating Income: $1.8 billion, representing a 24% operating margin.
Diluted EPS: $0.96, an increase of 55% year over year.
Data Center Revenue: $3.7 billion, up 57% year over year.
Client and Gaming Revenue: $2.9 billion, up 28% year over year.
Embedded Revenue: $823 million, down 3% year over year.
Cash from Operations: $939 million.
Free Cash Flow: $727 million.
Share Repurchase: $749 million returned to shareholders.
Cash and Equivalents: $7.3 billion at the end of the quarter.
Second Quarter Revenue Outlook: Approximately $7.4 billion, plus or minus $300 million.
Second Quarter Gross Margin Outlook: Estimated to be 43%, inclusive of charges.
Release Date: May 06, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
Advanced Micro Devices Inc (NASDAQ:AMD) reported a 36% year-over-year increase in first-quarter revenue, reaching $7.4 billion, driven by strong growth in data center and client segments.
The company achieved a 55% increase in net income, supported by a higher percentage of data center product sales and a richer Ryzen processor mix.
Data center segment revenue grew by 57% year over year, with significant contributions from EPYC CPU and Instinct AI accelerator sales.
AMD's client revenue increased by 68% year over year, marking the fifth consecutive quarter of revenue share gains, driven by high-end Ryzen processors.
The company expanded its gross margin for the fifth straight quarter, reaching 54%, up 140 basis points from the previous year.
Negative Points
Gaming revenue decreased by 30% year over year, primarily due to lower semi-custom sales despite higher Radeon Graphics sales.
Embedded segment revenue declined by 3% year over year, with a gradual recovery expected in the second half of 2025.
The new export license requirement for MI308 shipments to China is expected to result in a $1.5 billion revenue reduction for the full year 2025.
AMD's second-quarter guidance includes an estimated $700 million revenue reduction due to the new export license requirement, impacting data center segment revenue.
Operating expenses increased by 28% year over year, as AMD continues to invest in go-to-market activities and R&D.
Q & A Highlights
Q: Congrats on the results. Can you expand on the drivers of upside in both footprint and the guide, particularly for the Client segment? A: Lisa Su, CEO: We saw strength across several businesses, notably in the client business with strong desktop performance and a successful Radeon launch in gaming. The client segment's growth was driven by a stronger mix and higher ASPs, particularly in the desktop channel. For Q2, despite a $700 million headwind from new export controls on MI308, we expect continued strength in Client and Gaming, with above-seasonal performance in desktop and commercial ramps.
