Advanced Micro Devices (AMD) 27 Oct 212021 Q3 Earnings call transcript

Hello, and welcome to the AMD Third Quarter 2021 earnings call and webcast. At this time, all participants are in listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to turn the call over to Laura Graves, Corporate Vice President Investor Relations. Laura. ahead, go Please

release welcome By Third had now, a earnings to and results the XXXX conference review press our of call. you copy accompanying to you slideware. Quarter AMD's financial opportunity and Thank should have

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sequentially Quarter to address We expect console in increase the we demand. revenue semi-custom to ramp further supply ongoing as Fourth game the

double-digit to percentage sales significant of a sequentially. server record more sixth quarter than revenue, grew delivered we our and year-over-year server, Turning by processor doubled straight as

software computing, financial with won end server ongoing our and in Argonne to majority expanded quarter Netflix will revenue and year-over-year. and in both Laboratory while processors. optimize others automotive, And and powered more Cloud, contributed Epic broader reducing test third-gen streaming as our quarter recently HPE, more CPU power deployments. to wins that have Lenovo, server XXX and Fortune We aerospace companies, we with new significant Xrd services, Netflix how opportunities announced and their future as In be has pipeline server, of announced quarter. ramp the was systems. With momentum doubled hyperscalers supercomputer, XXXX AMD processor instances. than processors business. preparation multiple the Vimeo, by customer data Epic by faster Google throughput expanded highlighting from installations the Third highlighted - pleased Microsoft per in our Exascale In Cisco, ramping into also growth gen selecting new see EPYC center the TCO. National Supermicro, than Polaris their platforms gen Enterprise Epic multiple Azure their very in generation, doubled Epic workloads. multiple deployments the powered class in quarter Overall, the our used internal built Cloudflare, to continue prior for their processor and they also new strong processors, the all than super Dell, in deployments we power we're particularly enterprise growth the the third-gen

the to grew revenue in GPU and CPU quarter. overall revenue a mid-XXs server, of percent As

expanding And acquisition, securing acquisition including making regulatory our our industrial, track demonstrates benefits the complementary Xilinx significant AMD, close right remain our we significant growth to required business third further in XXXX to portfolio leadership, record end customer and that computing, and year. to In of have by AI markets, Xilinx the approvals, including diversifying solutions. significant good Turning are of on with returns. provides we the base adaptive our quarter progress to wired and and and the shareholder towards closing, This wireless and into automotive. products strategies acceleration our drive and the best-in-class results communications, product

execution We the to by products. than consistent we made driven the have continue investments leadership build growing and faster our market,

the team revenue incremental growth. Our has to additional year, supply growth. extremely environment, delivering capacity significantly also our strong our We're challenging supporting secure support a long-term chain in to investing supply well throughout executed

sharing I our to datacenter our Xth. been and at accelerated Our and CPUs, have about GPUs product next-generation forward stronger, November servers, on never portfolio and premier roadmaps details more look

on I'd turn the to Third like Quarter color over performance. Now, our financial call Devinder? additional to to provide some Devinder

you, everyone. Thank afternoon, AMD and Lisa, good had excellent another quarter.

growing momentum leadership cash are products datacenter and driving Our flow profitability, and revenue, generation. significant record record

to compared Operating continue across income year-ago, by Operating margin up driven business. Net ago. revenue compared XXX and XX% primarily up billion was tax year share to by invest grew expenses income to to million Third-quarter product increases strong from includes ago, margin a year revenue by long-term $X.XX $X.XX effective a from up double businesses XX% up year X.X mix Operating strong our from quarter. Gross X.XX driven as a products. revenue the from and points scaling prior basis XXX was and up all ago we ago, competitive to was XX% XXX in our road-maps XX% Diluted growth. share was XXX year X.XX driven per revenue XXX were million XX%, a compared from rate XX% a than X% million, ago. a million per This up ago. more year billion a from to a earnings ago. year year billion

year a year revenue Operating higher prior strong primarily increase go-to-market. segment processor significantly X.X Semi-Custom revenue, X.X income sales. segment up higher was primarily of by than operating turning primary driven income slightly income and and revenue Computing by revenue, XXX by higher XX% revenue significantly or to segment up graphics revenue year-over-year, The was expenses. EESC million operating The driven was Enterprise Operating lower XX% business XX% partially by was operating semi-custom driven segment client richer XX% was computing XXX offset billion primarily driven mix, graphics operating and at billion the higher or by billion, was and and year. go-to-market graphics million or and was XXX million compared a ago. R&D from product XXX compared embedded million or Epic higher of R&D and significantly in increase X.X Now which investments higher growth the up margin and revenue XX% income year-over-year, in to to processor due XX% revenue. to more results, ago. expenses. offset was

revenue third the Free million were than repurchase as Balance Turning stock in program. future million million we in X flow the was long-term last the to Inventory investments cash cash equivalents, X.X quarter-over-quarter free XXX of prior prior chain ongoing quarter and million revenue same repurchase XXX was XXX stock capacity to as part support the cash year. XXX support in shares in X.X flow XXX lower common Sheet, basis, strategic XXXX million to our quarter utilized continued investments from the growth. and billion. a short-term We compared of million to growth. On quarter. of quarter made more was up of in billion, cash, supply

current the supply global Let current the to me Outlook. now environment and signals. is Fourth Today's expectations turn and contemplates outlook demand based Quarter on customer

to Semi-Custom increase by expected to minus We year-over-year sales. million, be increase higher to expect by businesses. is increase XX% billion, approximately all sequentially. driven and server plus approximately be approximately be driven and XXX across or year-over-year X.X of growth X% The revenue quarter-over-quarter expected an The

be to In to billion. approximately addition, approximately Non-GAAP Non-GAAP operating to to gross margin million million, non-GAAP expect the interest and we shares. XXXX, expenses X.XX XX.X%. diluted approximately approximately, XXX X.XX expense, for and taxes, be be share QX count other, be

XXXX, prior full-year the over across revenue the XXXX, approximately guidance of growth increase to XX% from we by expect XX%. businesses, all For now up driven

margin strong be gross we full and record the XX% for with In addition, expect year-over-year another revenue significant we to year. financial delivered closing, profitability. very to growth, approximately quarter In continue momentum, outstanding

to leadership cash session. With Our drive shareholder turn it returns. Laura. and I'll generation, position Laura the growth, strong significant for well us products that, back question-and-answer to future

you. Thank our for Devinder, operator, first question. we're ready

from coming Barclays. moment question-and-answer we please, be One first poll Curtis today for our Thank your while questions, conducting you. [Operator session. Instructions] Blayne now question and from is We'll

line now Your is live.

for Hey, great taking afternoon my questions. results. good Thanks and

of Just kind overall QX. outlook curious the for

computing [Indiscernible], and graphics for the for increase For So Gross be servers, related if margin maybe walk other will the there down you're maybe And Semi-Custom constraints just how being was would or curious you're you graphics computing I anything prioritize nice assuming more sequentially to Gross seeing was and sequentially the curious than QX. downstream that you service the assume what down, still just then growing market. offset margin. growing is constraints? supply, obviously, still in each in it us and I'm through supply I just you're

for the question. Thanks Blayne. Sure,

pleased the we're in what fourth playing performance market. it year. be overall the relates to where of look, the in out half we the are It's our expect as very terms of quarter and second to So, about it we PC with

the asking overall, as So, about that the you're end-user set some PC there market. PC constraints but and computing are strong seen market we demand in had is match graphics,

we've that flattish. called I it I would the we market, Fourth not the into said have called for reason, so, really And would've flattish PC as look Quarter. down,

However, overall And we has demand see to we well, think is gaming continuing performed I and console business, well data overall business look we're as see at quite also the very there that. strong the strong. center business, the as and

on go the margin Semi-Custom cover that? as and then we Fourth Devinder, to dynamics, so, want you And and servers growth the see we Quarter in into

it guidance mix, offset one on from And slightly Yeah, higher product QX? higher server being QX. so For QX. a also revenue QX, to really margin going by puts from Semi-Custom is from point QX that's up

So up quarter. basis XXX And very the points by margin the from very you is basis progress revenue also. gross with pleased as our in points that up year, QX, QX, progression look pleased with XX driven into the server, last at the obviously results last growing the

Thanks.

Blayne. Thanks,

question coming from next Arya of The today from Vivek America. Bank is

Your line is live. now

over my about launch several As because strong year. the the new on environment execution. question, and look quarters, they your taking the Lisa, results for next spending roadmap congratulations competition products to Thanks and and datacenter? are the the and you we important in server especially how feeling planning are the versus consistent already next several

about how and next landscape landscape just was I year? the wondering thinking So, over spending you're competitive the the

Sure.

question. the for thanks So,

or we're I the business market. good think feeling the very very server overall, datacenter about

market continuing into cloud market here from in XXXX. strong XXXX and we've standpoint, in I think a enterprise, seen a and both see that we

Milan. position standpoint, Milan is think well-positioned, the it and extremely of sort a I said we with so that to We very faster Rome, of competitive from were we I has. it grow rate think pleased expected than adoption

enrollment, metric crossover Third that. an Quarter, so, the And the with is for important Milan

about business, fourth been we feel and environment. good we but are very general. our to In partners. our we quarter, goes the of to most the always into Going strong execution strategic competitive and competitive continue X the be we're of there as with about think strong, then our the XXXX, we in Zen environment focus a positioning to good I our making And good XXXX, into continue and we the and has consistent progress expect very datacenters see believe roadmap competition feel that customers part

in gains there can enterprise the gaining you the think opportunity my competitor's for the share share you. well be to in Thank that your has then of Lisa, of importantly, at at limit the are do repeat Where hyperscalers. enterprise? And gain follow-up, very AMD journey? in had you done in Is that you incumbency terms a share hyperscalers lot still or

so, with Yeah Third Cloud. enterprise business hyperscalers say there do Quarter. there us believe additional is, for I our here would has in the cloud-weighted that Vivek, this the than in is been that opportunity significant a continued what more I

tailoring more as there's guys. about Really, and then, these and partners, So, more work X Tier with just it is of forward. And of there's Tier broader both and Cloud, is workloads. expansion go we penetration well as customers as it X in we workloads also

good a for So, I think that's market us.

side, quarter. strong I the say in quarter very would we enterprise the enterprise On third a saw here

the Fortune the terms of seeing with a platforms in think very we're breadth is the with of and companies. our OEMs traction good of XXXX good, sewer Milan strength I

overall, I trajectory see our I So, would for say, cloud think both and we a growth business. enterprise

enterprise, the get to made good the there. with I And has think thing Epic. we've more been in very key progress familiarity

so, And that's going. where very I good about feel

Lisa. you, Thank Okay.

Thanks.

Ramsay from coming is question next Matt The from Cowen.

line Your live. now is

to very business results. with strong a question much. the a specifically I really quarter ask server Good progress here the some did Obviously, datacenter crossing, guess business want China. on Thank everyone. with in I Lisa, you of your afternoon,

out then Your as how last there that's spending had Third could And specifically the next you maybe then quarters, comment the Quarter, their competitor turmoil Thanks. cloud on see follow-up. in quarter. market in the of have business in couple over gone why of China. that end And in I the some and of some called you some China and reason over headwinds a

Sure, would in Matt, geographies. I that quarter. our across in Cloud so very was That across both performed enterprise. say the what was datacenter and is again, Cloud And third business well

it we breadth to What out as I haven't of say work or relates with customer particular would So, there. is, broader the continue seen we're process and really set. customers of across in we adoption rolling to China anything the the

we environment think normal for I So, saw a pretty demand.

Thanks for up. clearing that

unrelated. kind follow-up of my As

we have a things hurdles mean, the about and confident regulatory-wise. and are Obviously, got achieved the that the but confidence. down you you into behind till that I December about, can't still guess of things there's about you've You you compute it. talk get you we over can, get there's extent that's heterogeneous the guys year, more, still term. maybe openly Lisa, of plans mentioned about end that in can I the lot business you long talk us the Xilinx the to extent and deal strategy the the as closed a through to what the some I make maybe for that of the there can you things could what important talk scenes slow weeks milestones to the feel more month think X by bit walk comments little

wonder we should Thank expect. confidence what get what we the and So, can that you. I gives just there

closure through there's of are of very we to acquisition. side. on front. Xilinx I vast up -- in there's finishing say do integration look, we've would the need the on good regulatory progress been and So, We're what we the working diligently a here majority the the

a done on integration. lot we've So, the

I the we in close the prepared of the think year. again regulatory and we're remarks, to the made said have, on we're we the that end at track good excited front, then as I on believe plans and we've with progress

Thanks. -- question next To our

Go Operator. ahead.

Certainly.

Sachs. question next Toshiya from coming from Our Goldman Hari is

Your line is now live.

questions Hi, so results. the had for two much strong on Lisa, and you taking good congrats afternoon. I Thank well. question as the

for your certainly XXXX, year, First, I you've outlook track you you year. sort estimate. people to concerned and XX% relative on if realize guys grew last that a to kind XX% been point But provide think grow expect you I you to early don't I growing it's of on are growth will, your are rate, long-term over this of

your of year into on XX%. so given you going term is could that and forth. decelerate growth PC concerned Given dynamics target dynamics through-cycle long and next competitive there so Again, and

expect you qualitatively, don't I've helpful, So That year pluses to could would follow-up. be give and and are next a the at if got quantification super any minuses year, point? this you again, describe then quick I what of potential but the

Sure.

of right? a multiple our AMD that's vectors. market for continues also us. statement, the early said, that's bit very you but portfolio one we talk I a a qualitatively, about as product is important look, it's and to see statement, So, Datacenter what a I'll we growth has be environment, little -- an demand XXXX look, quantitatively. positive say to see strength think

we graphics where good vector. a think make the we market, graphics is progress I growth continue think and to in

it that just and console mentioned Fourth business would expect we be expect up Quarter earlier the be -- up demand strength Our we in the XXXX, there. the to I given in environment would then be would of had it'd

side comments demand the I'll appears And end-user on be make the on the the PC so, strong. PC are, to side,

we continue going a there's into So, amount continue on, talking commercial, think flattish from standpoint whether assumption that the XXXX. But supply around as year. Refresh high-end into there's environment, to for sets planning opportunities there case, of believe There are us to go the consumer, the maybe you're about the within that we we're -- are what grow. using a we consumer, constraints first XXXX PC gaming. will being some or of market half good or is That match even from that

working need, portfolio very we're customers So into think going overall, our very were on to they feel with focused what very our and overall, we XXXX. on focused make aligned execution, with I good sure product that I about

you. my for quick Got then it. margin, super if question this follow-up, fully gross And I'm on helpful. is That's Thank not similar as sure Devinder.

obviously is year You're significant a ago. guiding QX to XX.X%, from which progress

you've sure growth CPU, the the Given I'm CPU talked mix it within server server mix the the some about, and dynamics client the on be potential whether of and dynamics side.

any XXXX should some think that do But nice terms potentially us headwinds foundry about be should I most you. there's pricing, think any of generally across aware positive any trajectory again, at risk a we is handle board, five of? gross with your in cost a risks pretty but into we the partner expect Thank of margins. inflation or raising items I think that this point?

situation. say wouldn't managing about the think that, is but like it's I I

I Lisa sectors we we As where very pleased progress the expect with making are products the and products, continue made mix leadership also the we we're without we in to currently, assume have, last of into progress the especially into you make the getting introducing and that that said competitive But over with progress we've years. to products on predicated XXXX. over we We're think that mix the have. of from specifics, can growth few competitive continue revenue,

you. Thank

Thanks.

Rasgon coming question is Bernstein Research. next Our from Stacy from

is line now Your live.

are than that the to the stuff Frontier ramp or ramping going and that of supercomputers are next how can other years. we Hi, like of And your ask larger guys, over feeling to you what of my how But tens dollars GPU, big it it lot of for than doubled. of about going first questions. our one still more Datacenter My taking thanks some that for is I for talking you said as expectations is us that? a know millions into I an give approximate is, wanted couple that's

Sure.

the Datacenter still are GPU. the for the It shipments Third in larger now cycle. CPU a So, Datacenter Frontier to compared site. we where was shipped small GPU a Stacy, is the is relatively that quarter Quarter the This build on business side, the

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follow-up that want For now you talk you had about QX guidance QX. that my The I implied where just last decently to is about you you [Indiscernible]. given to a Devinder, guidance obviously talk were about what last to expectations your for Obviously, ask or. quarter? driving wanted quarter. upside little Can relative is just

I revenue, -- ahead, the please. think go On

I'm or sorry. about margin, Were asking revenue you Stacy?

Well, to both if you're answer willing both.

Okay. All right.

look mean, the questions. start me that? And able chain And doing And all have answer similar. by on improved your it's I see servers, we've well what But of semi-custom chain and the is across the sure graphics but terms this well. the as supply consoles, are some growth, well How net-net, is secure we're some I work given really that we partially business board. look When And margin. gaming driving sequential been the having think let's been game some -- server revenue make to a we that's at on then demand look, mix in is and about of below graphics supply revenue as sequential I supply -- able consoles -- been And our well is the then So, positive strong we're guiding the as optimization. as sequential offset additional to margin, stronger we sequentially, I upside. both to quite have want Let corporate which and average, as the it's side. includes we demand gaming. doing.

QX for now, what they months than are servers expectations three is, your higher for guess you when example, QX? were I guidance into gave for asking implied ago I'm

Yes. Yes, it is.

it. Got

very much. Okay. Thank you

Sure.

Thanks.

from Your next Morgan question Joe coming today from is Stanley. Moore

Your live. line is now

the talk the case? I'm shown a forward? some What's bit. that struggled silicon. comfortable prognosis going And get to business you're the you've that's there. the that's low wondering there. about you Is business little currency you. Thank you've And that that probably seems there's graphics in if growth exposure like could said nice pretty for crypto the still It relatively yet past, most

Joe. sure business quarter. graphics a Yes, Look, have the did third strong

that's think GPU. as as I graphics, for well true gaming, datacenter,

marketplace overall, the X well, there think I strong competitively positioned have with portfolio with pleased with very that has really turned how we're has in so out that it's RDNA a had trend continued we the and gaming been secular demand.

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So, we about it. feel good

Thank very Great. you much.

Thanks.

you. Thank

is Aaron Fargo. Wells from Rakers question Next from coming

line now Your is live.

if shape expectations guide. in appreciating not to quick stick a been the how given this XXXX should Semi-Custom XXXX? think that's about just expect overall you at full taking question. questions that can on going sizable I've year, point? next as up for you're Thanks give growth the I'm well, the we how business, the two to in Any the curious I Yes. framing to how just of

Sure, Aaron.

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it As the a XXXX, What in was peak, consoles game historical again, that's is strong into generation. in has demand at what going been four to XXXX. view of is generation this very we the expect look we last year least the in

with supply well own it So, PCs, see given currently So, follow-up happens your any growth balanced color chain to we year the demand you said, then should then preferred all and about you on comments That's as your the graphics, expect end? -- how like is I we demand been supply we year give a to been business our you currently has really the I you is would dynamics we'll and the what about supply a of which see very the the of the if have datacenter multiple very cycle, situation after And what able on ramping think would meet adequate trajectory. you on a can across [Indiscernible] question here. Are XXXX, than growth view be working as side, grow your think of high. more that What very, the to is, working I'd chain we've for mean, know securing, drivers But overall, say into in helpful. on consoles. very supply overall, third I think that.

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you. Thank

Thanks.

Thanks.

from today Credit question coming is Our next Suisse. Pitzer John from

is line live. Your now

price business, supply we begins year your how it was, things. first next or an issue help I'm was the I side of loosen as supply server and especially Lisa. if understand, sense. competing guess, you when overall the make PC can back wondering given Good afternoon, of business tight on on look more Congratulations, didn't year, question into guys. up. your is of lot me a Lisa, better ecosystem to just This my

margins you gross wiggle competitor of gross year. them ecosystem, large benign accelerate across to begins on things of that do room next how your more their being about in for the supply view, side reset? lieu that margin you pricing, As think thinking they're or give that the especially pretty does your In on pricing are resetting

aspects Yeah, let take so there's that, us try in so to me lot -- pieces. of maybe John to let a it let me various

want the As higher that of clear. it to the tremendous QX amount we we're brought guided part mean, results of QX. a we to then I overachieved reason current that's that and and relates we additional have supply, make supply on sure in I

the lot of constrained think chain. do the matched I we I So, is our sets. on a work market in In done on more market have on supply particular, PC but think constrained that not CPUs necessarily

and as in we're at optimization to that's the of is is do, we And that trying processors sets ensure that And very inventory OEMs ship that an we building that inventory the not to factor so, see matched ensure From we're sell-through. the important into we healthy we part go selling that's think channel. XXXX. to that as standpoint, we

it As as happens the pricing what eases to supply up. environment with relates

people see most it's what an is where supply. environment right think, again, prioritizing are I now we

on value and our and be we think mean, all graphics customers do As the I is go what with of innovative the portfolio into side, on that, XXXX we're going continue in significant our the And to providing server continue aggressive excited though, I We're side. ownership roadmap. our the focus I and think the to product that XXXX. is to features overall the this our terms we're to that. very going always of ensuring build capabilities our and deep side in is cost was PC on been continue lean and relationships And to we're total moving cycle, has stack, up which customer time. what we view product is product the been, into line, the into plan has product and -- to that what exactly game it about over about out

the my you. little in business. you year-over-year the what sequentially in happened? That's Devinder, operating margins bit all for changes job I'm me. talk could explaining you And follow-up good if a about core was for did strong wondering GPUs it computing Revenue like and bit. the because into just influence graphics then as got a down sequentially in business sounds probably going the Is the that compute up were growth very of datacenter, margins better mix little a in the

all play. make dynamics the in to I trying understand sure just I'm So,

CG If you're about talking the its investments. segment,

have products transition There's And investments the year. into quarter-over-quarter. R&D really we come new in products curve happened the And of I what So, also, XXXX. that's the coming in did ahead of go-to-market. and a lot expenditure introduce involve before next you the

Thank Perfect. you.

Caso, Raymond Chris is today (ph.), from question from James. next coming Our

is Your now line live.

Good you. Thank Yes. evening.

and you year. affects is we constraints into as the next beginning that go And supply. making more efforts bring of the question First you're how on obviously, about supply to seasonality

QX, sure You pc, this how at you supply with don't I'm want we thinking out provide strengths current for point to seasonality for spoke as be but trains. QX we map can about contemplate should sets. regard guidance these to this

I down about it's Chris, see is Yeah, say mean, I let's about QX. is what QX lot be sub-seasonal the to early to say related demand pattern other QX. as typically, It bit see little given out a businesses. but things bit don't would this think, what from the I couple talk we'll the given go seasonality. play think to we than, environment, might have That's I typically have a how first months. over into of little the a quarter, next just we consumer

of question. designs, some from custom All right. in and their of question some And you own, doing to IP extent with trend because seen for threat these some what often that custom opportunity a we've a for on of, Thank hyperscalers have it hyperscalers my bigger of with little yourself? of you doing ARM-based portfolio cases, a heard you. are do on picture is designs the some and AMD, A second designs. some engaged you an bit those Do consider or

Yeah. for of larger, definitely workloads what's in So, various the on for compute of tailoring as market we I is the this the as that an opportunity. that, think datacenter compute gets Right? sort Chris need happening trend. is it view an important

portfolio is we over be the plan And are it GPU, some well different some today IP on few our next compute how the have with and given very closely Xilinx allow interconnect addition the think of will into capability, strong, I of put with CPU, working in then years a that the more tailoring. we very to together number even things we as vision our think I hyperscalers a might coming solutions and of of between our portfolio. stronger

trend think certainly to lean going into. are So, key a there customization, we I for lots of opportunity that that's

Thank you.

two please. more Thank you, Operator, Chris. questions,

Certainly.

is question Ross Seymore next Bank. from coming Our Deutsche from

is line Your now live.

in specific market a that's for you happen to is strength the bit C&G comparison market the Thanks you've for PC other ask year? the How is And ask strong GPU congrats the question. GPU do side think Clearly But just really next client we little this has it go-forward AMD? pretty on this flattish in we're AMD. C of something your just a or going specifically your a results. that letting I I me the the year year of what's be reconcile how on where you had would and that is strong the G. side PC between a about and the year continues GPUs the graphic to versus aware do of I side the on for much side. weaker, AMD Can and headwind area you about all that also if a Lisa, on people strong client Datacenter things. market, of on commentary on think think the wanted been well talk the

would side. or So again, is talking APU I side, the the still, say or what our you're share client about I underrepresented, whether would is CPU market say GPU

second is, business in half the quarter demand amongst It well. is the quite channel I seen gamers that graphics year in third think what and our GPUs. for there's the performed here still of has we driven strong sense have then into the

we as the I the a headwind into As don't for go though, Company. view XXXX PC market

I of course of all a the these think down. bunch of or we as if we do it's planning markets, of at market is up look scenario

maybe base you're choosing talking flattish. model to or there market market, think share who maybe are many to And the gain have think that within grow -- opportunities the there's many and who some that case CPUs market business. about think in up, even down. that is we're GPUs, we why I that's we But think client client whether that

to those of think product our underrepresented and we are portfolio Just given expect the the the what strength we fact can that given products.

any guys give as my your year, just one guess have know specifics Thanks Devinder I'll year. the a OpEx not to the disclaimer on for intensity for lowering OpEx you you're about And great that done of throughout next follow-up, same I this give but that. I going And side. job

as XX you're think last quarter. going closer XX% to the be I versus in to to XX your year XX entering of

there great expansion and So and leverage. margins better

leverage range? so it where operating first where able that And feeds think you're in that think closer you expect I little can former to third though, the to positive, where we a your do a it's enough forward, it why to be look you fell we you actually to operating As all I doing But think you're sales margin and quarter segment do time was the understand spent bit. the next impacted not a look of year great the year 'XX, guys XX% I XX% another is into negative. be as or targets spend growth

continues is viewpoint fundamentally, in disciplined and what Whether requires dot which an is the standpoint. it's important. about vectors. of all in a can very an R&D, the And the you OpEx talked And it, the that I the standpoint. you go-to-market, you is standpoint. from for growth of can growth for from standpoint in Investing Lisa growth hiring, growth a sure flattens very things modeling in top Margin that we're to observed about guidance And that model from down. obviously, is priority disciplined a assume think think OpEx expand, many stand doing investing point Many making us. right, OpEx that funding be we're from different Company. earlier revenue. but on mean, that in OpEx I I our lower the on will even

you. Thank

you. Thank

UBS. from today coming Arcuri is from question final Timothy Our

live. now is line Your

your maybe to for no your first, close me how changes software efforts. Xilinx, fitting on follow-up. software you software update search much the us yet and I in. things side, I been, you a closing was how talents for can two, I as software get had for you about Thank invest then you guess wondering that maybe Lisa, if and And on I had

Sure, Tim.

yes. So

invest talking be heavily to continue a architecture, GPU Datacenter next-generation the weeks. we our We GPU little With bit next in about which particularly will software, MIXXX, few in side. on

progress. and We significant have investments made

using Frontier and working AI that and been beachhead partners development. focus computing Our has on expanding the into with our software with high-performance that

make to there. So progress overall, continue good

in the the in opportunities software I also optimize bringing portfolio just in talent want infrastructure that overall to software across terms the of overall people and provides acquisition Xilinx an ecosystem. think that

So very good making strategic that area progression. we're

last I And lot. me. guess a just question Thanks for

like QX. So, XXX it server basis like for entire last TAM. QX, the going share, in looks that's your year guidance to look points the be if if at use XX.X-XX% you're I up I And share versus

gain a next think you into year. So, months you where you reasonable I share about next? XXX go Where surprised guess that next that sitting basis as points is do the can be trajectory XX here would if year another we're from now, question if

overall I XXXX. server has pleased I very think trajectory strong. been trajectory the mean, I our Well, in we're think very with here

quarters of year-on-year number doubling speaks to there. a where having progress the revenue think I we're the

a and launch still environment yet XXXX, we As given we gainer to our in the into just strength of that portfolio set. are that believe share that's we across go customer platforms our are called still

very continuing X of Zen that focused being the differentiated. datacenter in certainly similarly well-positioned third-generation with the on next-generation with that's and our marketplace. we in we're Epic out a So, the a is we are very the and place to where ensuring are technology And true play [Indiscernible] think strategy

lot. Thanks a

Tim. you, Thank

for reached you. comments. We I'd end closing back Thank or further turn to any question-and-answer of session. the over our like floor

you We you good. Have joining Thank of afternoon. good your your AMD. much, very participation Operator. And us today. we're everyone a No, and thank and support appreciate for to time

and today's teleconference webcast. Thank you. That does conclude

may time at thank wonderful today. have and participation you a We You this your line for disconnect day. your