Leading computer chip manufacturer, AMD recently announced its “highest profitability” in the past seven years.
However, the California-based tech firm also informed its shareholders on Tuesday (January 29th) that it is expecting significantly lower revenue in Q1 2019 - which may partially be attributed to declining sales of GPUs to cryptocurrency miners.
Last quarter, AMD generated approximately $1.42 billion in revenue, and earned $6.48 billion during FY 2018. In 2017, AMD’s reported revenue was around $5.25 billion. Notably, AMD’s Q4 2018 revenue was about $20 million less than what the company had expected.
AMD Reports "Second Straight Year Of Signficant Revenue Growth"
Commenting on AMD’s revenue and market value, Dr. Lisa Su, the firm’s president and CEO, remarked:
In 2018 we delivered our second straight year of significant revenue growth, market share gains, expanded gross margin and improved profitability based on our high-performance products.
Dr. Su, who earned her Phd in electrical engineering from MIT, revealed that AMD had “doubled” its “EPYC processor shipments sequentially.” EPYCs are proprietary processors manufactured by AMD specifically for datacenters. Additionally, AMD noted in its financial outlook report that it “delivered record GPU datacenter revenue” in Q4 2018.
According to Dr. Su:
Despite near-term graphics headwinds, 2019 is shaping up to be another exciting year driven by the launch of our broadest and most competitive product portfolio ever with our next-generation 7nm Ryzen, Radeon, and EPYC products.
"Absence Of Blockchain-Related GPU Revenue"
The report also mentioned that AMD is expecting around $1.25 billion in total revenue during Q1 2019 (“plus or minus $50 million”). This figure is a “decrease” of about 12% “sequentially” and 24% “year-over-year”, AMD’s financial statement stated.
AMD’s report also revealed that the firm generated almost no revenue from the crypto sector:
The sequential decrease is expected to be primarily driven by continued softness in the graphics channel and seasonality across the business. The year-over-year decrease is expected to be primarily driven by lower graphics sales due to excess channel inventory, the absence of blockchain-related GPU revenue and lower memory sales.
AMD Accurately Predicts "Near Zero" Revenue From Crypto
In July 2018, AMD had reported that its revenue from the crypto and blockchain industry would likely be “near zero” in Q3 2018. This, after AMD’s earnings from the crypto mining sector had skyrocketed in previous quarters - due largely to the bull market. At that time, Dr. Su had said:
For Q2 2018, we were approximately 6% of revenue for blockchain. For Q3 2018, we’re planning very little blockchain.
Earlier in October 2017, Dr. Su had predicted that there would be “some leveling-off of some of the cryptocurrency demand.” AMD’s annual 10-K filing (submitted last year) pointed out that “the cryptocurrency market is unstable and demand could change quickly.”
During Q1 2018, AMD earned 10% of its revenue from GPU sales to cryptocurrency miners. As predicted, AMD’s revenue from the crypto sector was “negligible” for the remainder of FY 2018.