AMD Q1 Revenue Surges on Strong Ryzen, Radeon Sales

AMD Q1 Revenue Surges on Strong Ryzen, Radeon Sales

AMD’s Ryzen-fueled recovery handed the company its first full-year profits in years in 2017, and 2018 appears to be off to a very strong start. The company posted revenue of $1.65B for Q1 2018, up 1.4x from the same period in 2017. According to AMD CEO Lisa Su, Ryzen processor shipments grew significantly, from a bit more than 40 percent of client APU/CPU revenue in Q4 2017 to 60 percent in Q1 2018. This surge was undoubtedly helped by the launch of both Ryzen Mobile in very late Q4 and new Ryzen desktop APUs like the 2400G and 2200G in mid-Q1.

Here’s how Lisa Su summarized the GPU market:

In Graphics, we delivered strong year-over-year revenue growth as ASP and unit shipments increased significantly. On a sequential basis, revenue increased and we outperformed seasonality with strong Radeon Vega and 500 series channel sales, driven by both gaming and blockchain demand.

AMD Q1 Revenue Surges on Strong Ryzen, Radeon Sales

AMD also stated it’s on track to ramp Radeon Instinct MI25 for deep learning workloads, and still expects to deliver a 7nm die shrink for its GPUs later in 2018. Apart from a very small OEM rebrand effort around the 500-series, AMD has not indicated that it intends to launch any new desktop cards this year, and it’s not clear if such cards could significantly close the gap with the refreshed hardware Nvidia is expected to debut.

Server revenue grew by double-digits sequentially, though be aware that ramp is essentially starting from $0. While AMD has been slowly ramping Epyc into the server market, these rollouts take time. The company has previously stated it hopes to hold mid-single digit market share in server by the end of the year (we’re estimating that at 4-6 percent).

AMD Q1 Revenue Surges on Strong Ryzen, Radeon Sales

AMD’s gross margins ticked up to 36 percent, in-line with the company’s predictions and 4 percentage points higher than the 32 percent it recorded for Q1 2017. AMD expects its Q2 2018 earnings to be $1.725B, up 1.5x from the same period in Q2 2017. While investors have repeatedly expressed fear that AMD might suffer a hit if GPU sales into cryptocurrency mining calm down, AMD doesn’t see itself as overly exposed. Devinder Kumar told investors that the company expects “Blockchain revenue to be mid to high-single-digit percentage of revenue for 2018.” Reduced profit in the EESC business was related to a one-time licensing gain that AMD recorded back in Q1 2017 rather than a significant difference in unit sales.

Now, we’re not saying that 7-9 percent of AMD’s yearly revenue is nothing. Even if we assumed AMD simply hit Q1 2018’s sales figures four times in a row, that’d work out to as much as $594M. But remember, revenue isn’t the same thing as profit, and AMD’s margins on GPUs have historically been much smaller than its CPUs. Napkin-level math using our lowballed ($1.65B *4) figure with a 10 percent net profit margin suggests AMD might make $60 million in profit off crypto mining in 2018, assuming that demand for cards holds. Again, that’s by no means nothing, but it’s not particularly large compared with Ryzen, either. With a second-generation Ryzen now in-market, AMD looks to be well-positioned for 2018.

Continue reading

Nvidia Soars On Cryptocurrency, Gaming Revenue
Nvidia Soars On Cryptocurrency, Gaming Revenue

Nvidia's revenues soared last quarter, thanks to cryptocurrency and strong gaming performance — but the company is playing things close to the chest on when we should expect new GPUs.

Fortnite Is So Massive, It’s Propping Up Console Gaming Revenue Single-Handedly
Fortnite Is So Massive, It’s Propping Up Console Gaming Revenue Single-Handedly

Fortnite's mammoth success is single-handedly propping up console gaming revenue.

Apple Now Bricks MacBook Pros to Prevent Third-Party Repair
Apple Now Bricks MacBook Pros to Prevent Third-Party Repair

Apple is locking down the MacBook Pro and iMac Pro the same way it's locked down iOS devices to prevent third-party repairs.

Apple Slashes Revenue Forecast, Admits iPhone Sales Weakness
Apple Slashes Revenue Forecast, Admits iPhone Sales Weakness

Tim Cook admitted that Apple has a serious iPhone sales problem. He chalks it up to weakness in emerging markets, trade tensions, a strong US dollar, and customers who replaced their batteries instead of buying all-new phones.