AMDs gaming revenue falls 59%, but company still posts a 9% year-over-year revenue increase

Sales of AMD’s gaming hardware dropped a whopping 59% in the second quarter of 2024 as shipments of both its graphics cards and processors for Microsoft’s Xbox and Sony’s PlayStation game consoles declined. Nonetheless, record sales of datacenter products as well as massively increased sales of processors for client PCs more than offset declined gaming hardware shipments. 

AMD’s revenue for the second quarter of 2024 totaled $5.835 billion, up 9% year-over-year and up 7% quarter-over-quarter. The company’s net income reached $1.126 billion and its gross margin increased to 53%.

“We delivered strong revenue and earnings growth in the second quarter driven by record Data Center segment revenue,” said Dr. Lisa Su, chief executive of AMD. “Our AI business continued accelerating and we are well positioned to deliver strong revenue growth in the second half of the year led by demand for Instinct, EPYC and Ryzen processors. The rapid advances in generative AI are driving demand for more compute in every market, creating significant growth opportunities as we deliver leadership AI solutions across our business.”

Sales of AMD’s datacenter hardware set a record achieving $2.834 billion in Q2 2024, which was up 115% year-over-year. AMD’s datacenter business unit earned $743 million in operating income, which was 405% higher compared to the same quarter a year ago. Additionally, AMD’s revenue for the datacenter segment rose by 21% from the previous quarter. AMD attributes this significant growth to a sharp increase in shipments of AMD Instinct GPUs and strong sales of the 4th Generation AMD EPYC processors.

As far as sales of client processors are concerned, they were up 49% year-over-year and reached $1.492 billion for the second quarter of 2024 drive by success of Ryzen processors. Profitability of client computing business unit was not as high as that of AMD’s datacenter unit and hit $89 million, which is much better than a loss of $69 million in Q2 2023. 

Not all of AMD’s business units performed that well. Sales of AMD’s gaming hardware — comprising of Radeon graphics processors and system-on-chips for Microsoft’s Xbox and Sony’s PlayStation — dropped sharply to $648 million in Q2 2024, down 59% year-over-year. Still, the business division remained profitable and earned $77 million in operating income.

AMD’s revenue for its embedded segment was $861 million in Q2 2024, reflecting a 41% decline compared to the same quarter a year ago, as customers continued to adjust their inventory levels. However, revenue increased by 2% from the previous quarter, a good sign for AMD’s Xilinx business unit.

AMD forecasts revenue for the third quarter of 2024 to be around $6.7 billion ±$300 million. This estimate suggests a year-over-year growth of about 16% and a sequential growth of roughly 15% at the midpoint of the range. The non-GAAP gross margin is projected to be approximately 53.5%.