AMD reported a strong first quarter and raised its outlook amid strong sales of its Radeon and Ryzen chips.
The chipmaker reported first quarter net income of $81 million, or 8 cents a share, on revenue of $1.65 billion, up 40 percent from a year ago. Non-GAAP earnings for the first quarter of 11 cents a share.
Wall Street was expecting AMD to report first quarter earnings of 9 cents a share on revenue of $1.56 billion.
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CEO Dr. Lisa Su said the company saw strong gains in its PC, gaming and data center markets. Indeed, gross margins for the first quarter were 36 percent, up from 32 percent a year ago. AMD is also being helped by the cryptocurrency mining boom, which inflates demand for graphics processors.
She added that Ryzen Pro commercial notebooks will land in the second quarter from Dell, HP and Lenovo. AMD will have 60 Ryzen-based systems on the market by the end of 2018.
Commenting on the enterprise, Su highlighted machine learning efforts and servers.
Our machine learning strategy continues to gain momentum. Mega datacenter partners are validating and testing our Radeon Instinct MI25 for deep learning applications, and we introduced our Radeon Open Compute Ecosystem (ROCm) 1.7, a top-to-bottom open-solution software stack for machine learning. I am also happy to report that our next generation 7nm Radeon Instinct product, optimized for machine learning workloads, is running in our labs and we remain on track to provide samples to customers later this year.
For servers, AMD saw EPYC processor unit shipments more than double from the previous quarter. Su added:
To date, there are more than 40 EPYC-based platforms in market, and we are actively working with OEMs, system integrators, and channel partners to increase deployment to end customers. We remain focused on achieving mid-single digit server unit share by the end of 2018.
Patrick Moorhead, principal of Moor Insights & Strategy, said:
AMD had a blowout revenue quarter, beating guidance and growing 40% year on year which would make it the third straight quarter of double digit YoY revenue growth. The growth was led by sales of AMD's Ryzen client CPU and APU product line in desktops and notebooks. I expect AMD to show even more gains next quarter based on channel fill of second generation Ryzen desktop CPU, increased distribution of Ryzen mobile notebooks and the continued ramp of EPYC server deployments.
- Computing and graphics revenue was $1.12 billion, up 95 percent from a year ago.
- AMD saw average selling prices increase for client and graphics processors.
- Enterprise, embedded and semi-custom revenue fell 12 percent in the quarter, but declines were offset in part by AMD's EPYC server processor sales.
As for the outlook, AMD said it expects second quarter revenue of $1.725 billion, up 50 percent from a year ago. Wall Street was looking for second quarter sales of $1.57 billion.
AMD had a big quarter rolling out its Ryzen desktop processors, landing server partnerships for EPYC with Dell EMC as well as Cray and updating its Radeon gaming efforts.