AMD achieves highest quarterly revenue since 2005 due to solid EPYC, Ryzen and Radeon sales

AMD has just released its Q3 2019 financials, and they are impressive, with the company achieving its highest levels of quarterly revenue since 2005 while aiming for a greater Q4. AMD’s Q3 2019 revenues totalled in at $1.8 billion. 

When compared to Q2, AMD’s revenue have risen by 18%, and when compared to Q3 2019, AMD’s revenue has increased by 9%. These increases come despite lower semi-custom sales, which are due to the incoming end of the current generation of consoles. Who wants to buy a new Xbox or PlayStation when next-gen is on the horizon? 

AMD’s growth comes thanks to AMD’s 7nm product offerings, with strong sales of Ryzen, EPYC and Radeon products leading to AMD’s strong financials. When compared to Q3 2018, AMD’s Gross Margin has increased by 3%, mostly thanks to AMD’s success in the high-end PC and server markets. Given this success, AMD can no longer be considered a low-end hardware manufacturer. AMD’s Bulldozer days are indeed behind them. 

This quarter, AMD’s Computing and Graphics Segment achieved revenues of $1.28 billion, which is up 36% when compared to last year. This growth is due to the sale of AMD’s Ryzen processors, and the increase in the average sales price (ASP) of AMD’s products. GPU ASPs have also grown year-over-year. 

When compared to last year, AMD’s Enterprise, Embedded and Semi-Custom segment saw revenue decrease year-over-year. This decrease was 27% year-over-year and 11% when compared to Q2. This decrease is primarily due to declining console sales, though this is expected to change in 2020 as the production of next-generation consoles starts.    
 
In Q4 2019, AMD expects revenues to grow to $2.1 billion (plus or minus $50 million), representing an increase of 48% year-over-year and 17% sequentially. Q4 2019 will be the first quarter where both Ryzen 3rd Generation, Radeon Navi and EPYC 2nd Generation products will be available for the whole quarter, which should partially explain this positive outlook. Add that to the release of new products like the Radeon RX 5500 and Ryzen 3rd Generation Threadripper, and we can see why AMD is full of confidence. 

Next quarter, AMD expects its gross margins to increase to 44%, which will help to boost AMD’s profitability further. These increased margins will be driven by the success of high-end AMD products, all of which will be sold with high margins.