Advanced Micro Devices (AMD) 30 Jul 242024 Q2 Earnings call transcript

Greetings, and welcome to the AMD Second Quarter 2024 Conference Call. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce to you Mitch Haws, Vice President, Investor Relations. Thank you, Mitch.

You may begin.

to Quarter welcome Conference Financial and Call. you, AMD's XXXX Second Results Thank should opportunity accompanying had copy now, have By you the earnings release of press to and the slides. our a review

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sales afternoon above by our quarter results, We Instinct, and of and the good processors. with percentage higher-than-expected and revenue EPYC Ryzen, of increasing all to Mitch, today. second in those financial double-digit by profitability delivered midpoint guidance driven coming a strong you, listening Thank

general as Instinct also purpose MIXXXX positive demand and expanded solutions, leading for our We enterprise processor signals saw our and businesses. both traction cloud client providers we and continued server accelerating compute AI in availability of

$X.X As a and significantly result, declines second sales higher quarter Client to our sales. in Center than Gaming product revenue of X% more offset processors billion as year-over-year and Embedded increased Data

We also XX% EPS accounted and the overall expanded sales points as X grew sales XX% than product quarter. by for percentage Data Center margin of gross more nearly in

Turning deploy increased segments. CPUs driven to instances. billion, year-over-year CPU to ramp their remains a by of percentage EPYC $X.X power EPYC in the and adoption segment Instinct double-digit the Xth steep Data shipments Gen GPU workloads Center revenue sales. XXX% MIXXX a Cloud as more hyperscalers record of strong increase strong public and to internal

AMD-powered of from We of a EPYC year processors ago applications instances XXX. hyperscalers number portion [indiscernible] performance across displacing select with and has infrastructure more XX% clear the efficiency are to incumbent their advantages. The AMD largest providers solutions workloads, to offerings offer that than seeing and available increased their cloud from

strong for cloud-first seeing and instances enterprise both with are We these pull businesses.

customer-facing an instances closed key Optiver, customers, transportation both workloads. In to & power multiple the Gen the including one Light as services, percentage example, Adobe, retail, Industrial large double-digit We and in technology, manufacturing, recently Siemens. Xth mission-critical Netflix health sell-through strong with of selected a the cloud their EPYC sequentially. Magic, care, and quarter Boeing, financial wins As by solutions enterprise, increased Uber public and

new success first with the centers time, were continuing existing for X/X wins in the year businesses than their also our of our enterprise while our attracting half deploying highlighting to customers. the with data EPYC in more expand customers Importantly, first of server footprint

the to workloads. threads, grounds-up and X TCO Xth compute-intensive publicly for and in is Turin leadership looking Gen advantages in support Turin memory XXX for platforms. significant and EPYC new core into our offering strong. multiple very extend cores for performance demonstrating drop next-generation ability our a time our is We the efficiency. performance previewed will existing ahead, up Zen technologies, optimized Looking and the featuring new XXX first core I/O Zen to Turin design June, family latest leadership our X by

We also we expect and cloud Turin to passed ahead second started is cloud production milestone availability a OEM major the shipments year. of quarter in and this launch, lead now Production later customers. we as ramping broad

quarter. The services, Data adopt hyperscaler Microsoft Center models, to Center for power the Face Turbo the quarterly first Teams. thousands MIXXXX the multiple availability and exceeding instances with to new announce to third Azure ROCm in and latest enabling with Word, software We business. Microsoft to leverage GPT-X Chat, MIXXX conjunction Hugging quarter time. and of also customers frontier the VMs performance compute inferencing AI Data industry-leading MIXXXX MIXXXX Azure click. our including of on our became of first general GPT-X. capacity of performance AI price hundreds to X Microsoft XXX their of new running one MIXXXX the when and deploy of large revenue the the use models $X the copilot GPU Turning to straight billion with was customers latest including memory delivered enterprise accelerators GPUs in revenue of record first expanded leadership instances, deliver public

in grew closely on providers MIXXX address HP, to are this Dell, Our very platforms multiple X and Super instances pipeline growing customer and system quarter. in working are our Instinct track production, Micro MIXXX Tier launch customer partners and with cloud the to cloud we solutions Lenovo, and availability ramp demand. to have AI and and all of quarter, enterprise hyperscale cloud

front, progress to our it across deploy our made stack, software AI significant platforms. and the software features enhancing making easier on we AI support On solutions high-performance

with We to also implement algorithms. continued source open to customers latest community enable work the to AI the

and an inference large upstreamed, training providing Flash increase performance in was transformer X library out-of-the-box As AMD that AMD Attention support hardware support on models. for can example, algorithm popular the for

proud X.X by with is of support Karber, solutions the customers SD Finnair, to to development, training large by our that Silo Unilever. announce looking LLM. model multiple Allianz, The in single work for to multiple acquire And industry-leading Image the optimization their advantages. accelerating, X AI, lab and this frameworks Last accelerate we're memory AMD server, for Llama first industry's largest and customers, announce use TCO open embedded accelerators. also the AI private that were Our T-Mobile, our to of and for first community significantly inference their to of of team AI optimize and X.X latest the support Ericsson, including help Generation models our Llama GPU fine-tuning brings runs source new the joined Philips, expands service run day week, to large Diffusion AI Silo model continued simplifying a able Earlier I to Computex, model also parameter At AMD with MIXXX Stable deployment enterprise of we hardware. X.X version note the MIXXXX and support launches which agreement Silo on XXXB is FPXX model models, leadership AMD X.X AI their including capacity, language seamlessly latest that for the the announced highlighted deep Nokia, in we also was solutions. with the and significant will solutions co-CEO hardware. experience of and partners enterprise ROCm Europe's because extensive developing billion providing month, tailored MIXXX version XXX frontier-level capability to model. Llama expertise

AMD across Nod.ai, million have dozen a AMD platforms. In Mipsology, in AI, invested ecosystem, AI companies and over addition computing $XXX XX expand and partners, to the our advance we acquisitions the support last of to Silo AI leadership months

map follow road AI on to our leadership in increase launch an to based launch accelerators, is X we new great as than compared accelerating powered development and X.Xx a of in starting MIXXX with cadence XXXX later XXXX. year. X. on in to more infrastructure and to of which twice by performance deliver XXx leverages Next are memory annual Looking the expanding the ahead, from our by a compute offering generative is MIXXX progress capacity peak performance MIXXXX AI road series in Instinct MIXXX extends plan the to CDNA series our MIXXXX CDNA architecture competitive track this performance is the deliver the and perspective, scheduled with same And MIXXXX map and CDNA architecture, making offerings. We the

of response and Turning of By combining joined with AI all to building high-performance AI AI based road Enterprise, Cisco, hundreds solutions the coming HP that together to us accelerators establish to Broadcom, solutions the Fabric proven pleased maps Link, UALink an we're Microsoft, the to scale. In widely Accelerator Infinity standardized multiyear our Meta, summary, supported with Ultra at overwhelmingly is work. are AMD's technology technology. customer specification, next on positive Intel, connect is and to consortium the Instinct and Ultra approach industry standard very announce center building. is data generation ROCm Ethernet industry our for momentum we a Google,

As in XXXX, a in up we from revenue exceed billion billion result, expect April. the now Center we $X.X GPU to Data guided $X

$X.X increase delivers of PC our previous Ryzen our initial more instructions by Client processors. of industry-leading prior clock for strong X XX% processors our average to Ryzen Turning generation demand and In XX% billion, per segment. applications, our Revenue processors. Zen shipments X an next-generation was of of an driven year-over-year, Zen than generation

and motherboards productivity, our series upcoming Ryzen and extends across our leadership and energy into AMX performance existing creation gaming, processors desktops, For content efficiency workloads. XXXX dropped

industry-leading our For Copilot+ XX the that PCs. industry's performance XXX and with performance of notebooks, fastest our we compute CPU for series NPU AI AI extends [ introduces GPU tops ] Ryzen announced and

track positioned our revenue over gains platforms The the processors Ryzen and Series on to HP, others went first notebooks Lenovo, our launch and strong the quarters. XXX design and AI Ryzen portfolio on ongoing to commercial sale new from more win coming AI the strong, based for Ryzen excitement gaming, reviews, are well premium, XXX leadership strength are of is XXX for ASUS, over and Series weekend momentum. Customer and Acer, we on very share than

our soft line XXXX declined cycle, with segment. half we and now to the first as $XXX of revenue our of year-over-year half. sales the Revenue in demand SoC lower XX% XXXX year declined in the Series our sales Now semi-custom Gaming turning second compared the the as in year to improved Radeon by gaming and the are In channel. expect fifth driven year-over-year, remains GPUs to Semi-custom console increased sales we of projections. million be graphics, in to

to Embedded segment. year-over-year our $XXX Revenue to million. XX% Turning decreased

The first bottom quarter Embedded our for the marked revenue. segment

me, Center has of leading President of second revenue order to Design win Peng, to design by note, of On strategy. been acquisition business strong end of Victor we signs segments. and year. the Board, Victor the momentum helping year and I to that has second key improving AMD's greater early flattish all for quarter grow strong Alveo him at Victor Xnd of a week, positioned Embedded significantly was $X the gradually our integration. AI Xilinx Xilinx would than leadership Embedded in XX% also to results Longer Embedded portfolio. delivered announced best of early of saw scale than On half increased of are our half in made to are triple-digit success contributions of personal in including our the announced wish our on billion, from multiple and cross-company all partners Client workloads thank for and compute VXX employees the Adaptive we year recover revenue access with and building in our Versal driven ensuring well AMD, patterns Data XX AMD, the the by solutions upcoming entered all quarter his memory-intensive want the second success the significant second prior the sequentially, and we half of AI summary, we a Although than our deliver expect retirement. In contributions to term, first behalf Victor combining wins capabilities expanded next-generation year, accelerators and great in to retire our Adaptive revenue partner and the including xXX on Gen AMD edge and products. We more more wins, SoCs. Last our million-dollar his August. and

business Center demand Ryzen and our seeing We're workloads. GPU on steep in as EPYC, trajectory shipments X, strong performance customers. Client ramp Zen growth an deliver expanding leadership Center and that of Data Our a Data set efficiency both for processors also is next-generation across and

are opportunities AI Looking significantly with product data years open our that on across the increasing and leadership across over ahead, annual center market we scale generative models turnkey of in demand delivering for for full coming the solutions and and markets. the rapid Under community, laser our integrating portfolio, strong and an accelerate are growth development AI more of advances and the capabilities source see industry-leading investments development AMD-based AI with more speed customers driving hardware, this capable backdrop, cadence all focus a providing compute amplifying entire to enabling GPU with stack hardware, ROCm capabilities, software of the solutions systems. time software,

the positioned of to and excited in about of well front are opportunities unprecedented next significant growth. We drive us our are phase

I'd call Now our like second over Jean? turn results. additional to on provide to the Jean to quarter color some

then third Lisa, I'll start and results quarter. good you, Thank outlook of financial our with everyone. review our and the afternoon, for a provide current

expectations. above more XXX grew doubled, basis, pleased We On significantly and results second points. with basis expanded Data revenue the segment financial year-over-year gross revenue segment margin we a in came are Client our by overall than very Center quarter that

Center was opportunities second as segment. in up Data Client and expenses was and revenue. other the an was Center XXXX, partially revenue $X.XX, we $X.X X% growth interest ahead AI quarter segments the lower of revenue address For billion, $X.X points year-over-year, enhanced Center $XXX of Client earnings invest continue a go-to-market XX% revenue and Diluted Data representing R&D Revenue segments sequentially, share revenue. as was $X.X of in growth to of our offset the increase expense by were XX% year-over-year Operating X% driven by up higher Embedded the increase billion, basis growth by billion, and was margin primarily in primarily per year-over-year XX%, income and increased XXX Data operating an in XX% driven Gross the to margin. Operating million. significant activities. year-over-year. us Taxes, was Gaming

driven compared by delivered revenue, due a our to The XXX%, sequentially, revenue revenue nearly On of of and million and operating X% sequentially. $X.X was increase revenue of lower increased record Center segment and XX% the with strong segment as driven a revenue a segments. reportable server processor The a continued X%. GPUs $X.X revenue ago. Embedded segment Center, basis, Starting double-digit of was turning by XX%, percentage $XXX $XXX year Embedded primarily billion Data On customers was $XXX million, ramp Center $XXX compared or operating billion, year-over-year or segment the inventory up revenue income investment basis, year higher was steep normalize total Data year-over-year. sequential XX% down million for million increased a million $XX XX% levels. down of Ryzen AMD XX% Now quarterly or Gaming revenue was of ago. Gaming million, Data year, prior $XX income accounted XX% operating to and from segment or sales. digestion Client sequential to their growth. year-over-year up year-over-year million segment segment Instinct AMD and semi-custom Embedded EPYC $XX was a operating inventory led revenue of million revenue segment demand. or driven in billion, loss strong end was XX% XX% revenue an primarily Center X% up primarily income to million $X.X AMD ago. Instinct XX% segment XX% in even $XXX XX% decrease Client the compared as ago. in income income primarily to or operating XX% $XXX was market revenue more to GPUs. Data $XXX was of by operating segment or year to revenue a million by our Xx Operating revenue was R&D. momentum significantly year compared than up leverage we a

cash flow. sheet and balance the to Turning

During to returned At of remaining. billion. cash operations, by $XXX shareholders, of of the GPU to generated cash $XXX the have ramp $XXX quarter, was and flow billion support and in quarter, authorization primarily the we free million equivalents, million billion, from investments million. Inventory $X.X $X.X the we end cash short-term increased million products. $X shares, cash, and sequentially Data second X.X repurchasing were quarter, million $XXX continued we Center to the In

we debt matured million $XXX quarter, June, cash. During the this utilizing existing past of retired that

to outlook. third quarter turning XXXX Now our

Sequentially, approximately to by expect grow in the to or revenue We expect billion, million. approximately and Center strong growth plus we revenue be driven XX%, $X.X minus Client primarily $XXX Data segment.

server up Gaming Embedded the AMD and strong segment and revenue a double-digit the in of Instinct be by declines We approximately expect the revenue the and revenue by than steep XX%, we client Gaming offset to ramp and expect to segment our Embedded decline growth percentage. segment. processors, to more to Year-over-year, grow driven the

be quarter during XX%, approximately million progress record non-GAAP to tax with $XXX Silo expected approximately Also billion expanded we EPYC $X.X is non-GAAP exceeded the traction expenses $X third margin non-GAAP made We for significantly our delivered rate we and MIXXX X.XX be increasing gross gross count to expect AI effective that We quarter, share margin we our XX.X%, and and during approximately be expect toward demonstrated quarter and billion in revenue to goals. diluted acquisition cash. In achieving financial third earnings the AI. billion, investment addition, in Ryzen the drove to shares. significant to closing, approximately product. while growth next-gen In operating solid be the close of

to [indiscernible] Q&A back forward, it session. I'll Looking the operational long-term will executing the growth focused while our opportunity remain Mitch turn that, excellence. With financial and to driving strategy on for discipline

the Jane. audience for questions. Thank to poll John, you, we're happy

Melius question [Operator Ben with comes of the Instructions] Research. first And line Reitzes from the

billion I year. wanted results. ask about see the your out these playing $X.X you how rest on it to hit I annual for guess Lisa, target. there's you the MIXXX, left Congratulations to about of sequentially

that's to wanted and I if if you year picking if things growth. you see the mind, going for next wondering in So also fourth rapid sequentially. And potential up don't you ask see how about I'm quarter

I of signs You're you're if given your already the that seeing some probably of you was aware out road there, and year. for wondering grow next significantly, map chatter just can

Ben. question. Great, the Thanks Yes. for

say those with very on think centers, see was seen to all we've key us of and year, progress have for them of more in our production and especially get I So customers' customer we're then progressed. products we MIXXX happy performance into to qualify how the I first the halfway things. And When their evolution, can point our sort year, great the workloads, data really all, than has production the started of the capabilities being the to through are, across sort ramp what and of now board. MIXXX

As current we think continuing look continue would we're quarter of and the revenue MIXXX we into to the the and large have pipeline deployments well to in all with would working fourth as that we I that second of existing quarter. ramp expand our architecture half year, And getting software expect third customers the are both that as a stuff. that with we're our and familiar through customers

continuing would the with say So what to product. track we and overall, very the on expected right of the really capabilities from I pleased progress,

the year, of into mean, things that increasing go next we at and road important I map. As was one we Computex our expanding announced

way as year, be feel Next our map. good very Blackwell well. with I next year, well CDNA We're And on to solutions. will MIXXX later this to on really track road and we think launch which we're our our then Series, MIXXX competitive our then about

remain overall, AI on think, market. the bullish I we So quite overall

And getting more very continuing to that we expand also need feel we're are continues software pipeline. compute. good solutions traction, think and and our to the hardware good that I market

line Wells from Rakers comes Fargo. And with the the next of question Aaron

market? see I forward. playing to over as CPU on how as just the about quarter server And go of currently the side, any ability you're year, kind of and market we updated server expectations Center how forward I'm your on continue about EPYC guess update out Data gain kind you of server think quarters. we couple the look of thoughts to in us on kind the curious as of the next the thinking share growth Just full on sticking Congrats well. you the

Yes, sure, the question. Thanks for Aaron.

progress the that made So we've we're very pleased with EPYC. with

couple things. I think of a

all, in cloud. in the also well. doing as well. as positioning as our Bergamo traction as enterprise Gen Xth prepared very is We've X nice terms the very broad third-party see customers, as of seen good well been then in adoption adoption, very market, new First a just there and remarks, to And across of cloud enterprise pickup instances. starting customers EPYC really we're with And third-party focused for I then both competitive in traction and the we've well as on Gen said existing between cloud

overall, think done well. So I I our portfolio think EPYC has

also the it's of a see year, all, Going into to feel and think I the the looks there. cloud. it. return both of There we about good are of improving, spending we some We seen second market positives so have in -- half couple first like enterprise

I launching And we those in of are the process think so that, positive in And market addition then trends. Turin. are to

in So track some launch of the year. the of see We'll of we in year broadly contributing and half started second the in to Turin the well. second revenue production half here as second we're quarter the on

things the the think second year. in to So overall, ability in one see continue half grow of share the to the market of we the server market that I and our is server

next UBS. the of question comes And Arcuri with from the Timothy line

GPU the to Data I Lisa, map. wanted ask Center about road

cooling and that's And or scale systems if the from said, to competition's have have seeing launching does And rack I little it? big to what revenue to the it Obviously, you X As wondering more I'm a look scale is XXX? like. include questions. later going a a can this so you I XXX? product. it shift Does that guess going billion, any $X.X had XXX talk year, XXX is aspect rack rack-scale toward going about we're than to bit liquid greater Is for

Yes, absolutely.

the on question. And really then a fourth but track the MIXXX revenue is will me I let original still mostly it the let's to that ramp small we start XXXX, year. I will the SKUs contribution of, then standpoint, series is your quarter capabilities. series XXX it, we the range be air-cooled half In more we a it in be launch multiple call time and this start quarter go what XXX call think seeing at as with to the there with Series, our we're So first there in because look will the of reason fourth and in year. And mean, liquid-cooled. through that are next From looking spending we'll a later in at customers.

think we're of people for I our integration who doing are certainly more terms certainly there want more system-level products. and much rack level solutions, in

see also integration. But many current You'll in us who system-level customers more use invest we have to want infrastructure. their

I the fits beauty series. as same it of think the into series MIXXX infrastructure is the actually MIXXX the

And so in pretty to, XXX would already lend invested XXX. ramp a itself let's or fast it, you've if call it

part see and road we map range the expansion So of of the that that's of the options, planning. we're

next line with Ross the Bank. question And comes Seymore Deutsche of from the

means you about very pivot systems? AMD changing just to of and second the Client competitive is the expecting Center things? AI results. Data seeing wanted any strong roll want talk believe I you're important. to the intensity to out what obviously emergence is Lisa, seasonality. that Are how positioned? with on you ARM-based half to How of you see Just it to the can Well, side. Congrats side PC

Ross. Sure, Yes.

very results. we're with Client business our first, So pleased

X-based Zen What launching positive I notebook year. in -- we in we've of road seen middle strong have this the and map, so The very products, pleased both I'm on map. we're road is this feedback product. the think with desktop very actually a very the

actually just notebooks weekend. the first spaced went the over strict ] we So sale. They launched [ on

the are some positive. You reviews The may seen have reviews. very of

the PC is overall is this the important of an category. view add Our PC to AI

product second into seasonality see call we're into the set of strength AI which a opportunities. it, the up our And think general, across seasonality, go of of points, above-typical then launching. more will open we better given also going in XXXX, PCs can when and larger and think to launches we half the I let's sort do, price have year, we As we of you're

And both is growth launches ecosystem products So the with opportunity to partners us. strong. performing overall, the are have revenue the closely the a market I say is as would business our PC strong The year. for working very well well. into second OEM The here as partners good of half we're

really? is changing not ARM the And side anything or

Look, market and a would take I products all point, are the being competition seriously. think market big say I positioned. PC market. underrepresented we the of the well in I that at our think are this case, is we our very very That

question next from Matt Ramsay with the And line Cowen. the of comes

X negatively wanted there portfolio software Instinct early, perturbations small both is of, most the remember out EPYC. I market X, was important with and forward. toehold your generations between volumes the long-term if hardware or relatively engagement, the sentiment side launched, that and and customers draw company parallel maybe was X, to to years to that rolling a in ago go what might remember were. Super what of Naples Lisa, side for you I map the product X your with was but the now a back I road sort X the your did around that, when what positively the and would guys into And lot the I where say, was reaction on

So with customer about base engagement, the of is could that the an across the with accurate are to where you and intensity maybe MIXXX? parallel the XXX. And of breadth of engagement, guys XXX level it you talk

Yes, Matt. absolutely,

more the that making on parallels larger you Instinct gain map. the deployments long-term opportunities, I correct. go from we're with generation. where a really lot absolutely, So very to This journey, is you road EPYC have absolutely you the so generation progress play pleased of -- said as earlier, It look, you're to broader we're as workloads, to has a

game So playing here. the we are long

from we I as to lot it's a to standpoint some that term, lot with confidence out-of-box in learned volume out so matured we of getting features, also areas wanted in. generations with a substantially. performance, year. customers. customers, had items then environments, We've now multiple across very conversations that is in well that start done to our near customers, milestones gained with as they large point in system-level in very, we're the conversations we've whole of pass rack and a scale is hyperscalers functions, And and seen Tier this X in having Our the aspects the really continuing that. lot important. key performance our a of said, building would getting as hardware multiple And software first, the and invest of networking I We've ROCm of to in process. The long-term different are related

So those as us for well. view And couple will help progress road I open the but I maps over years. think lot do. very of progressed various those think We of more up opportunities we have all things MIXXX, to next good have a the this

Vivek with And question of from the comes the next of line Securities. Arya Bank America

the they industry AMD. can and X GPUs can this to your Lisa, right? buy all buy do AI And these and customers custom whistles be seems there and the monetization software they can largest about debate from chips CapEx. or ROI they getting competitor bells incumbency, on have right They whether with from are options, ongoing your their today, or

how between these that industry visibility debate? a How make think to plays there? continue you just it Do the your suppliers? next will carve this kind position of And all are their other do into does X out next X your given how choices out think concern So consolidate around competitive year, monetization, this around given is you other AMD customers, year? going them this CapEx

to. people Yes, I sure, I a talk Vivek. the to lot same think talk that of you Well, we mean,

the way to is invest. all and so the mean, I industry has of AI impact think that view potential invest. investment AI have enterprises to overall I stuff. the operate is large on to The we

still So be I to think engagement, continue deep I And strong. road large choices multiple so there hardware, solutions. In And I to firmly choice. custom language is there talking architecture from relative will strong the software GPUs demonstrated about investment And then be important whether map ASICs, our will really and of the the the or standpoint be partner the of the think talking for or case, market, multiple are cycle that models, our that co-optimization with you're believe solutions, a size GPUs for you're we've about the to of well chips various customers. will in that. ability

large. think is strong market is very strong makers. of really with partnerships our the the And think technology I with piece I that So opportunity key AI

Stanley. And the next Joe with question of comes Morgan the from line Moore

to what you I was the traction lot about a versus focus inference. MIXXX. training if know sense have any wanted that I the side? initial a about -- look talk ask split Do you but like time? And have of do you could on training I wonder inference, that of sense also over may

Yes, Thanks for sure. Joe. question, the

are said about great lots MIXXX, characteristics there of as So it. we on

leading that it memory and of performance One memory bandwidth most cases, capacity standpoint, of our -- and one early the largely is them inference fantastic seen industry. an standpoint. deployments have is From inference we've the been from in

standpoint, to training a our easier on also that We've stack do to that expect bit customers that doing it from have training continue seen I And to also we'll are time. over AMD. for ramp quite train we've people a optimized make software ROCm We training.

I will As than forward, a the belief inference standpoint. and I be we from go training training AMD growth larger expect for us. But be see from inference opportunities standpoint, would to an market that is both think -- you'll

comes next question the Hari of Toshiya line from Goldman the with Sachs. And

of quarter, Curious some you're think update the provide could $X.X my there. And for forecast profitability MIXXX. gave CoAs. if then billion an HBM I constrained, part my on you had shape on a as B to on if question comments is question annual is last demand well. and some the form you currently MIXXX to shipping in supply or if Curiously, or updated

the you've made? talked acquisitions think through in time intensity to need past, margins continue or I through still business the over you you've that Or organic are Has work accretive of of sort profit the expand? the and about the will. competitive the as sort changed at you it in R&D view your all, evolved that if business some being and of you kinks, further be improving invest, confident to or whether given

Toshiya. for question. Thanks Sure, the Yes.

then of Jean comment I'll side, the a supply and maybe couple the on the let on of let business. for So comments make sort trajectory me

progress ramped quarter. made in We great on significantly billion side, supply $X the we in quarter. So exceeding the the second supply up

has executed the team think well. really I

through will to tight to as We remain through of we of supply I the increasing continue go year. But sight half see continue chain XXXX. the overall and line second supply the say that will is tight

additional been there. great backdrop, building under have the partnerships we and capability capacity So chain. across supply We've that

continue as half really to year. so And accelerating well our second we both overall, and to ramp demand how opportunities, we'll customer the play work to as supply out go this of the we as through go we that's things we'll see expect And adoption continue year. as into and

team product the On gross to our a also to ramped has margin. optimization Yes. to successfully. At job It's a profitability, complex first, ramp same product so the tremendous MIXXX. done operational the implement to the team it about continue improve time, started question your very second we

margin term, gross in longer accretive a So believe average. From we we continue to always see Over profitability do margin platforms. AMD in the corporate will time, improvement. invests perspective, to gross the be

it significant, invest definitely If you significantly platform, same revenue. GPU profitable already. We can leverage look the the side, especially the the margin Data revenue are expand. huge. from ramp Data Because at to been very business has continued opportunity continue to Center our the model business is ramping operating server want the GPU we the The time, a is At side. quite to as both even and Center

question line next the of Research. with Rasgon from comes the Stacy And Bernstein

could. little I wanted I bit, QX if guidance into to a the dig

to you was billion probably you've Data revenue Embedded. I splits close us out down double Gaming if billion-ish on got and some that it Center, how wondering of $X digits, across with give could color $X means Client, So those growth across businesses. way across should apportioning XX% segment? X about I the that we going be Client of that going how and Or Data like out it would and Center Like XX% Embedded, to off? XX% think like to if had to going

Yes. following color. Maybe Stacy, let me give the you

Embedded Gaming Think the double the as Data it of And you it the is sequential state. on Center single-digit is of digit growth. side, Client largest of So down the it, think business as then next. piece as

it. Got

equally again, Instinct? how Center like again, Center that does of $XXX mean, I Data $XXX of the it to it Data Or something that, piece million split million that don't growth does does EPYC? Or bulk -- or if then, how split you I I got, how up? like sequential of weighted is know, within it is and mean sort Instinct So between it [indiscernible] out?

Yes.

being will -- the that server granular, on nice both again, see grow also without certainly, we see we'll growth the and will GPUs So Instinct very side.

Kumar And from Harsh of Piper with the next Sandler. line question comes the

level understanding, kind rudimentary the your rack your versus my products between from difference be the and is structure is may and the nearest level rack that Instinct Lisa, of adoption lacking. competitor large that performance you

any industry a close bit color if could us major -- talked UALink. that on might this color Or be gap? little I some to the more that step Just closed. You be wondering you give that a is appreciated. about on that gap expand for and when was when would might

Yes.

help the sort well no customers and Infinity of you overall, there's the rack if more large question Fabric-type for to our that systems maybe as about basis together. are that into level training just general just solutions complex, need system UALink as Harsh, those that back especially the getting put a the how So the systems and integration. take clusters, includes as And are things evolving, go are talk I step

networking should Harsh I we for of But of partners think capability. first think with that pieces more very And Fabric, expect, have AMD the of pleased with you'll already is, all Pensando. within important see the capability we're of Infinity the through We UALink. what acquisition an then invest this area. with have sort all come the that's in the all, our this you together of us of our umbrella work with

So market as customers the investing this the well faster is of how GPUs, is networking we the by solutions. of in the help CPUs, system-level so part components, as get to capability all

And comes line the Curtis with Jefferies. Blayne from of question next the

MIXXX. I want another question on just ask to

investing of know sure software. on of had, but in these can hardware all big customers. in challenge contingency? Just second you Kind I'm a and next end curious kind assets. challenges, government of ramping And characterize been you've the kind invested I lot of know you some makeup the if of talk the there's the too. the a in you're year, first there is I customer. government last half. of it a that's the wave really still memory of challenge, software of part Is curious of issues such, a then customers

biggest the Just ramp. wave of of what hurdle curious to kind you customers kind next for of that is get

Yes.

lot a so question that of to Blayne, address let me So try pieces to them.

That about, think mainly on supercomputing First, asking question you're your QX a the and I piece. basically about bit QX. was in

almost AI. QX our think about think you if So about all it revenue, as

MIXXXX, it's hyperscalers well data X and Tier So going it's centers. as enterprise OEM for to AI, large customers as

team on really attention your makeup the of a wouldn't that's question the in the fastest set. And think definitely the that noise I pay in billion then proud done of I doing, just then in an I'm quarter in we've terms all in And lot been ramp the $X of done noise in various ramp. QX. ever this the billion system. and system. the that of has what $X actually to incredible has think we're first customer ramping quarter terms to here about of QX of second I the So what and really -- each in there's pieces memory, I product mean, over

that's is it well tricky business on for multiple memory, we're memory we've done qualified -- it's but there. And memory have a tricky well. In very with terms we And future a also of then suppliers think HBMXE and HBMX. I suppliers multiple qualifying as that products we've

frameworks ROCm the really things how customers been the substantially be to the doing, like, does small overall question has that's many like of we're the very up if very the a what it, with and higher-level great software companies out-of-box based PyTorch, it. And amount number is customer using of get particularly we've to on that, this that exciting can short is So And the we have of look are capability portfolio. what call seen, it take a performance, let's on so of out-of-the-box you're time, very cetera, overarching And at long et are that's that of we running MIXXX? some in on because weeks. your expanding running gotten part using, because better that well depending

this continue hardware. that lot a It's Nod.ai to engineers so we to the going get like hire talent customers good Silo great did with helping we are are We quite that like AI engineers. base reasons opportunity at to software, a invest one brought hardware are compiler expand acquisition -- And have for the which very, very AMD scientists was These that's us. and Silo and acquisition. of that and the and view talent. XXX continue we of to then customer with on in the as bit AI, AMD running up a organically. And experience

to huge, in this think model, have the but I earlier out of This we scale. invest is is to and opportunity continue about that pieces. leverage So we we're see building Jean just because the going said all

with O'Malley question line next comes of from Barclays. the the And Tom

December. MIXXX a second, September, No but on a Focused the second Client just said in second half. you from focus of Client in breather the on problem. to you for give half, the for I'll above-seasonal kind

a you're new Is PC? AI any the better. launching break just the why Is those trends? it that's you're obviously you're ASP of from AI getting products? little seeing it a down assumption you bit also you're kind Could seeing unit between about it and Just a talking coming breakdown with above-seasonal but desktop You're those PC. notebook, product, new uplift where X

Tom. Sure,

So I well. think you said it actually

Usually, notebooks PC third into just ramping reason element are AI that's volume feel primary a The of that, very that going third above-seasonal. X And positioned. quarter is refresh. is good desktop certainly that we we the are with Zen desktops quarter. element are We products see there launches well X us, the in the but and for overall and launching the

are So reasons. primary the those

Danely from Chris question comes our final with of line And the Citi.

question margin. a on Just gross

of a little you bit we your just like MIXXX? accretion angle. guidance, another if that margin at then point look the seems follow-up And expectations changed a gross dropping Has it gross the out a margin for is happening? for gross the your bit? little So margin incremental the Have is Why on part moved QX.

question. the for thanks Chris, Yes,

think, XX.X% made from we progress, growth. we XXXX have our actually you business lot Data guided for gross of percentage XX faster a as driver mentioned, year a primary to, first, QX. at this really The Center expand margin to I point is the

see we'll the continue half, and revenue growth, really major as That a our be percentage If there to look other with us Data last you to of of second the you Center at at from driver Center top puts in faster close XX%. helped with to business will look the the margin some now line takes. expansion are Data margin. When year revenue XX% But QX help the expansion. to gross

seasonally, business be PC going better is mentioned Lisa think the to second I to more consumer-focused. it actually typically, especially half, tends in do

is So little there. bit dynamics a different really that

recovery, Secondly, we business, are to more business the But be say to see quarter. I going gradual. up Embedded would each is Embedded sequentially mentioned as earlier, we

see why when margin continued we expansion. you the changed margin the the the -- we balance look pace gross picture, that's of little margin gross at gross the a but see of So do bit,

feel margin We be of the quite are our to pretty MIXXX, far accretive Data the to average. absolutely we business to the expansion. about long confident over driver As as Center term, gross be continue will it overall corporate good

like turn the floor any back would over I closing to comments. for to Mitch

all call. today. you of Great. us Thanks today's joining for to That concludes

that and gentlemen, teleconference. does today's ladies conclude And

time. you participation. disconnect may for your You this your at lines Thank