AMD enjoys massive revenue and profit growth in Q1 2018

In the wake of a solid second-generation Ryzen CPU launch, AMD reported its first-quarter 2018 financial results this afternoon. The company announced revenue of $1.65 billion, up 40% year-on-year, and operating income of $120 million, up a whopping 990% from $11 million a year ago. To wrap up a fine quarter, the company reported net income of $81 million, reversing a course charted by a $33 million net loss a year ago. The company earned eight cents per share, up from a four-cent-per-share loss a year ago. Gross margin was 36%, up four percentage points.

  Q1 2018 Q1 2017 Year-on-year
Revenue $1.65 billion $1.18 billion +40%
Gross margin % 36% 32% +4%
Operating expense $477 million $394 million +$83 million
Operating expense % 29% 33% -4%
Operating income $120 million $11 million +$109 million
Net income $81 million -$33 million +$114 million
Earnings per share $0.08 -$0.04 +$0.12

Source: AMD

On a business-unit level, AMD's Computing and Graphics unit took in $1.12 billion in revenue, up 95% year-on-year, thanks to strong sales of Ryzen CPUs and Radeon graphics products. The company says its CPU and graphics-card average selling prices increased thanks to its Ryzen CPUs and new Radeon graphics products. Operating income for the segment was $138 million, compared to an operating loss of $21 million a year ago.

AMD's Enterprise, Embedded, and Semi-Custom revenue was $532 million, down 12% on the year. AMD says that result is thanks to lower semi-custom revenue, but that server and embedded parts helped arrest the slide. The division made $14 million in operating income, compared to an operating profit of $55 million a year ago. The outsize year-ago profit was thanks in part to a licensing payment the company received during that quarter. The All Other operating unit posted an operating loss of $32 million, compared with a $23 million loss a year ago.

For its second quarter of 2018, AMD expects revenue of $1.725 billion, plus or minus $50 million. If those projections hold, the company would increase revenue 50% year-over-year. The company expects a non-GAAP gross margin of 37% next quarter.

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