ADVANCED MICRO DEVICES INC (AMD)·Q4 2024 Earnings Summary

Executive Summary

• AMD delivered record Q4 revenue of $7.66B (+24% y/y; +12% q/q) with non-GAAP EPS of $1.09 (+42% y/y) and non-GAAP gross margin of 54%; strength was driven by Data Center (+69% y/y) and Client (+58% y/y), partially offset by Gaming (-59% y/y) and Embedded (-13% y/y) .
• GAAP EPS fell 29% y/y to $0.29 due to higher operating expenses and a one-time tax provision, despite higher revenue and margin; GAAP operating income rose 155% y/y to $871M .
• Q1 2025 guidance: revenue ~$7.1B ±$300M (midpoint +30% y/y, -7% q/q) and non-GAAP gross margin ~54%; non-GAAP OpEx ~$2.1B, non-GAAP other net income ~$24M, tax ~13%, diluted shares ~1.64B .
• Management emphasized accelerating AI roadmap (MI325 in volume; MI350 pulled into mid-year; MI400 in 2026) and sees Data Center and Client as primary growth engines in 2025; Data Center AI revenue topped $5B in 2024 with a multiyear path to “tens of billions” .

What Went Well and What Went Wrong

• What Went Well

  • Record Q4 revenue and non-GAAP operating income; mix shift to Data Center and Client expanded non-GAAP gross margin to 54% .
  • Data Center momentum: $3.9B revenue (+69% y/y) on strong Instinct GPU ramp and EPYC CPU growth; hyperscalers launched 100+ AMD instances in Q4 .
  • Clear AI roadmap and traction: MI325 volume ramp underway; MI350 sampling pulled into the quarter and production shipments accelerated to mid-year; MI400 targeted for 2026. “MI350 series… biggest generational leap… 35x increase in AI compute performance compared to CDNA 3” .

• What Went Wrong

  • GAAP EPS declined 29% y/y to $0.29 on higher operating expenses and a one-time tax provision, despite higher revenue/gross profit .
  • Gaming revenue fell 59% y/y to $563M on lower semi-custom, with segment operating income down to $50M; discrete GPU revenue also declined as channels prepared for RDNA 4 .
  • Embedded revenue declined 13% y/y to $923M as end-market demand remained mixed; segment margin compressed (39% vs. 44% y/y) .

Financial Results

Segment breakdown

KPIs and balance sheet

Note on estimates: S&P Global consensus estimates could not be retrieved via our tool at this time; therefore we do not present vs-consensus comparisons. Values were unavailable from S&P Global due to API limits.

Guidance Changes

Earnings Call Themes & Trends

Management Commentary

• “2024 was a transformative year for AMD… Data Center segment annual revenue nearly doubled as EPYC processor adoption accelerated and we delivered more than $5 billion of AMD Instinct accelerator revenue.” — Dr. Lisa Su, CEO .
• “MI350 series… 35x increase in AI compute performance compared to CDNA 3… sample lead customers this quarter and… accelerate production shipments to mid-year.” — Dr. Lisa Su .
• “We exited 2024 with well over 50% share at the majority of our largest hyperscale customers.” — Dr. Lisa Su .
• “For Q1’25… revenue ~$7.1B ± $300M… non-GAAP gross margin ~54%, non-GAAP OpEx ~$2.1B, non-GAAP other net income ~$24M, tax ~13%, diluted shares ~1.64B.” — Jean Hu, CFO .

Q&A Highlights

• Data Center GPU trajectory: 2025 first half roughly consistent with 2H24; stronger 2H expected as MI350 ramps; MI350 pull-in to mid-year is a positive; exit 2025 GPU run-rate higher than 2024 exit .
• Server CPU competition and growth: AMD confident in growth across units and ASPs due to TCO/performance across Turin/Genoa/Milan portfolio, despite competitive pricing .
• Segment seasonality for Q1: Data Center down about corporate average; Client and Embedded down more; Gaming down less than corporate average after inventory normalization .
• Networking for AI: AMD leans into Ethernet ecosystem; developing in-house AI NIC (Pensando), building full rack-scale solutions for MI350/MI400 .
• Gross margin path: Mix-driven; ~54% in 1H if mix holds; expected step-up in 2H with faster Data Center growth .

Estimates Context

• We attempted to pull S&P Global consensus for Q4 2024 EPS, revenue, and gross margin but were unable to retrieve data due to API rate limits. As a result, we cannot provide vs-consensus comparisons or beats/misses anchored to S&P Global this quarter. Values were unavailable from S&P Global.
• Given management’s 2025 commentary (accelerating MI350 timing, stronger 2H, sustained EPYC demand), areas where estimates may adjust include: higher 2H Data Center revenues and margins, Client growth ahead of PC TAM on AI PC mix, and modest recoveries in Gaming/Embedded later in the year .

Key Takeaways for Investors

• Mix shift to Data Center and Client is driving sustained non-GAAP GM at ~54% near term, with potential 2H uplift as MI350 ramps and Data Center outgrows the corporate average .
• Data Center AI franchise surpassed $5B in 2024, with a pulled-in MI350 roadmap and strong hyperscaler traction positioning AMD for multi-year AI revenue expansion .
• EPYC share gains at major hyperscalers and expanding enterprise adoption underpin CPU growth and margin durability .
• Client momentum is outsized vs PC TAM on AI PC leadership (Ryzen AI), with a new Dell commercial portfolio broadening reach .
• Gaming and Embedded are near trough dynamics (post inventory normalization, mixed demand); RDNA 4 launch and gradual embedded normalization present optionality, but visibility is still modest .
• Near-term setup: Q1 seasonality (-7% q/q) is expected; focus on MI350 sampling/ship timing, incremental instance launches, and any 2H gross margin guide-up triggers .
• Watch the ZT Systems acquisition close and potential divestiture of manufacturing assets as a catalyst for faster AI systems time-to-market .

Management/press materials cross-referenced above include: Q4 2024 8-K press release and slides , Q4 2024 earnings call transcript –, Q3/Q2 8-Ks for trend analysis .