AMD (Minutes): AI GPU will achieve double-digit growth for the full year.

AMD (AMD.O) released its Q1 2025 earnings report (as of March 2025) after U.S. market hours on May 7, 2025 Beijing time. Key highlights:

Below are the minutes of AMD's Q1 2025 earnings call. For earnings analysis, please refer to AMD: "Outplaying" Intel and Now Turning Up the Heat on Nvidia?

I. $AMD(AMD.US) Key Earnings Highlights

1. Overall performance: Record revenue of $7.4B, exceeding guidance 上限， up 36% YoY but down 3% QoQ; gross margin at 54%, up 1.4pct YoY; operating expenses of $2.2B, up 28% YoY; operating income of $1.8B with 24% margin; diluted EPS of $0.96, up 55% YoY.

2. Segment breakdown:

- Data Center: Revenue of $3.7B, up 57% YoY but down 5% QoQ. Growth driven by server CPU market share gains and Instinct GPU expansion; operating income of $932M with 25% margin.

- Client & Gaming: Revenue of $2.9B, up 28% YoY and 2% QoQ, benefiting from Ryzen processor demand though partially offset by semi-custom declines; client revenue of $2.3B surged 68% YoY with over half 来自高端产品涨价. Operating income of $496M with 17% margin.

- Embedded: Revenue of $823M, down 3% YoY and 11% QoQ. Operating income of $328M with industry-leading 41% margin.

3. Financial position: Free cash flow of $727M; $749M returned via buybacks with $4B remaining authorization; cash reserves at $7.3B; debt reached $1.5B with $950M commercial paper issued to fund ZT Systems acquisition completed March 31.

4. Outlook:

a. Q2: Revenue guidance of $7.4B ±$300M (MI308 export restrictions 预计减少$700M; ex-impact still up 27% YoY); non-GAAP gross margin ~43% (含$800M inventory charge, 54% ex-charge); opex ~$2.3B including ZT design 团队; net interest expense $5M; non-GAAP tax rate 13%; ~1.64B diluted shares.

b. Full-year: Export license requirements expected to impact revenue by ~$1.5B.

c. Sequentially, Client & Gaming revenue 预计两位数% 增长， Embedded flat, while Data Center declines due to MI308 exclusion.

II. Earnings Call Details

2.1 Management Commentary

1. Q1 performance: Strong start despite tariffs/regulatory headwinds. Revenue up 36% YoY to $7.4B with double-digit growth across DC/Client/Gaming.

2. Data Center:

a. Revenue up 57% YoY to $3.7B. 5th-gen EPYC 量产 +4th-gen demand drove server CPU share gains. Hyperscalers launched 30+ new instances including first 5th-gen EPYC solutions; AWS debuted new FPGA accelerators.

b. Enterprise EPYC adoption accelerated with Global 2000 use cases doubling. Custom solutions with Siemens (Azure SDV), Oracle (Exadata X11N 性能提升 25% with EPYC 优化).

3. EPYC Enterprise:

a. 7th straight quarter of double-digit EPYC revenue growth. 450+ EPYC platforms now available, adopted by 多数 Global 2000 leaders. 150+ Turin platforms coming from Dell etc.

b. 5th-gen EPYC (TSMC Arizona) enters production with H2 shipments. Next-gen Venice (2nm) lab 验证中 for 2026.

4. DC AI:

a. MI325X shipments drove double-digit AI revenue growth. Hyperscalers expanded Instinct for generative AI workloads; added Tier-1 cloud/enterprise clients including major LLM developer using Instinct for 推理流量。

b. ROCm update cadence accelerated to bi-weekly 训练/推理 containers. 2M+ Hugging Face models now AMD-compatible.

c. ZT Systems acquisition completed - enables rack-scale AI solutions. MI350 samples shipped with mass production mid-year (1.5x memory vs MI300X, 35x throughput gains). Oracle deploying multi-billion-dollar MI350 clusters.

d. MI400 (2026) enables seamless scaling from server-to-DC. Early feedback positive; details at June 12 event.

5. Client & Gaming:

a. Revenue up 28% YoY to $2.9B (Client +68%). Record client CPU ASPs with desktop channel sales >50% YoY. AI PC processors 销量环比增长超 50%.

b. Commercial strength: Ryzen Pro PC sales up >30% YoY; HP shipments +80%.

c. Gaming revenue down 30% YoY as Radeon growth offset by semi-custom declines.

6. Embedded:

a. Revenue $823M (-3% YoY). H2 recovery expected in test/measurement, comms, aerospace. Spartan UltraScale+ FPGA and Versal AI edge chips shipped.

7. Full-year outlook: Confident in double-digit revenue growth driven by EPYC/Ryzen share gains and MI350 ramp. Semi-custom recovery expected.

2.2 Q&A

Q: Client revenue +67% YoY - demand pull-forward?

A: Strength 来自 product mix/ASP gains. Desktop outperformed seasonality. Q2 Client remains strong; Gaming to rebound as console inventory clears.

Q: MI308 performance ex-China?

A: MI325/MI300 drove Q1 DC GPU results. MI350 on track for mid-year launch with strong customer interest.

Q: DC GPU growth math?

A: $1.5B export impact mostly in Q2-Q3. H2 DC GPU growth expected.

Q: Inventory build?

A: Primarily for H2 DC GPU demand given long lead times.

Q: MI400 rack challenges?

A: ZT acquisition addresses rack-scale design. MI350 easier transition; MI400 focus.

Q: EPYC enterprise share gains?

A: Product breadth + direct customer engagement drove success.

Q: Gross margin trajectory?

A: H2 margin improvement expected as DC mix improves.

Q: AI inference costs?

A: Distributed inference plays to AMD strengths. MI300/325/350 excel at 推理.

Q: Custom ASIC competition?

A: GPUs address larger TAM given model volatility. Differentiation through TCO.

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Disclosures: Dolphin Research Disclaimer