AMD continued to enjoy strong growth in Q2 2018

AMD released its second-quarter 2018 financial results yesterday evening. The company posted revenue of $1.76 billion, up 53% year-on-year, and made $153 million in operating income on that haul compared to a $1 million operating loss a year ago. Net income was $116 million, compared to a $42 million net loss a year ago, and gross margin rose three percentage points to 37%.

  Q2 2018 Q2 2017 Change
Revenue $1.76 billion $1.15 billion Up 53%
Operating income $153 million -$1 million Up $154 million
Net income $116 million -$42 million Up $158 million
Gross margin 37% 34% Up 3 percentage points

The Computing and Graphics business brought in $1.09 billion of revenue, a 64% year-on-year increase. AMD says that result comes from strong Radeon sales and the continued momentum of its Ryzen CPUs. Investors looking for signs of AMD's exposure to the cryptocurrency market will want to note that sequential revenue declined 3% from last quarter primarily because of a decline in crypto demand. The division made $117 million in operating profit for the quarter compared to $7 million a year ago.

While AMD's CPU average selling price declined in part thanks to a more competitive Intel lineup and the consequently lower suggested prices of some second-generation Ryzen CPUs, GPU ASPs increased thanks to products both for the consumer market and data center.

The Enterprise, Embedded, and Semi-Custom division raked in $670 million, up 37% year-on-year and 26% sequentially, thanks to increases in semi-custom and server product revenues. That sequential figure suggests Epyc products are beginning to have a small but material impact on the server CPU market. The division made $69 million in operating profit, too, compared to $16 million a year ago.

The All Other portion of AMD's balance sheet posted an operating loss of $33 million compared to $24 million a year ago.

For the next quarter, AMD expects revenue of about $1.7 billion, plus or minus $50 million. If that range proves correct, the company will enjoy 7% year-on-year growth for the quarter. AMD also expects gross margin to increase to about 38%, buoyed by Ryzen and Epyc CPUs and counterbalanced by lower GPU sales into the cryptocurrency market.

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