AMD(US:AMD) ZACKSยท2025-05-07 17:20Core Viewpoint - Advanced Micro Devices (AMD) reported strong first-quarter 2025 results, with significant growth in Data Center and Client segments, although Gaming and Embedded segments showed weakness [1][3][9]. Financial Performance - AMD's non-GAAP earnings for Q1 2025 were 96 cents per share, exceeding the Zacks Consensus Estimate by 3.23% and reflecting a 54.8% year-over-year increase [1]. - Revenues reached $7.438 billion, surpassing estimates by 4.45% and increasing 35.9% year over year, but declining 2.9% sequentially [1]. - Non-GAAP gross margin expanded by 140 basis points year-over-year to 53.7%, while non-GAAP operating margin increased by 320 basis points to 23.9% [12]. Segment Performance - Data Center revenues surged 57.2% year over year to $3.674 billion, making up 49.4% of total revenues, driven by strong Instinct GPU shipments and EPYC CPU sales [3][4]. - Client segment revenues increased 67.7% year over year to $2.294 billion, accounting for 30.8% of total revenues, supported by strong demand for Ryzen CPUs [7][8]. - Gaming segment revenues fell 29.8% year over year to $647 million, while Embedded segment revenues decreased 2.7% year over year to $823 million [9][10]. Strategic Developments - AMD completed the acquisition of ZT Systems, aiming to capture a share of the $500 billion data center AI accelerator market by 2028 [5]. - Partnerships with major companies like Meta Platforms, Dell Technologies, and Cisco Systems were expanded to enhance AI solutions and infrastructure [5][6]. Cash Flow and Balance Sheet - As of March 29, 2025, AMD had cash and short-term investments totaling $7.310 billion, up from $5.132 billion at the end of 2024 [13]. - Free cash flow for Q1 2025 was $727 million, with a free cash flow margin of 10% [14]. Future Outlook - AMD expects Q2 2025 revenues to be around $7.4 billion, indicating a year-over-year growth of approximately 27% at the midpoint [15]. - The company anticipates strong demand in Data Center and Client businesses, with modest growth in Gaming and Embedded segments, projecting double-digit percentage revenue and earnings growth for 2025 [16].