Q4 2024 Advanced Micro Devices Inc Earnings Call

February 4, 2025

Please press Star zero on your telephone keypad and as a reminder, this conference is being recorded.

Speaker Change: It is now my pleasure to introduce to you, Matt Ramsey Vice President of Investor Relations. Thank you Ma'am you may begin.

Speaker Change: Thank you and welcome to Amd's fourth quarter and full year 2024 financial results Conference call by now you should have had the opportunity to review a copy of our earnings press release and accompanying slides. If you have not had the chance to review. These materials. They can be found on the Investor Relations page of AMD Dot com.

Speaker Change: We will refer primarily to non-GAAP financial measures during today's call.

Speaker Change: Full non-GAAP to GAAP reconciliations are available in today's press release and slides posted on our website.

Speaker Change: Participants in today's conference call are Dr. Lisa Su, our chair and Chief Executive Officer, and Jean Hu, Our executive Vice President and Chief Financial Officer and Treasurer.

Speaker Change: This is a live call and will be replayed via webcast on our website.

Speaker Change: Before we begin I would like to note that Jean who will attend the Morgan Stanley Global TMT Conference on Monday March 3rd.

Speaker Change: Today's discussion contains forward looking statements based on our current beliefs assumptions and expectations speak only as of today and as such involve risks and uncertainties that could cause actual results to differ materially from our current expectations.

Speaker Change: Please refer to the cautionary statements in our press release for more information on factors that could cause our actual results to differ materially with that I will hand, the call over to Lisa Lisa.

Lisa: Thank you, Matt and good afternoon to all those listening today.

Lisa: <unk> thousand 24 was a transformative year for AMD, we successfully established our multibillion dollar datacenter AI franchise launched a broad set of leadership products and gained significant server and PC market share.

Lisa: As a result, we delivered record annual revenue grew net income, 26% for the year and more than doubled free cash flow from 2023.

Lisa: Importantly, the data center segment contributed roughly 50% of annual revenue as instinct and epic processor adoption expanded significantly with cloud enterprise and supercomputing customers.

Lisa: Looking at our financial results.

Lisa: Fourth quarter revenue increased 24% year over year to a record $7 7 billion led by record quarterly data Center and client segment revenue both of which grew by a significant double digit percentage.

Lisa: On a full year basis annual revenue grew 14% to $25 8 billion as data center revenue nearly doubled in client segment revenue grew 52% more than offsetting declines in our gaming and embedded segments.

Lisa: Turning to the segments.

Lisa: Data Center segment revenue increased 69% year over year to a record $3 9 billion.

Lisa: <unk> 2024 marked another major inflection point for our server business as share gains accelerated driven by the ramp of fifth Gen epic turn and strong double digit percentage year over year growth in fourth Gen epic sales.

Lisa: In cloud, we exited 2024 with well over 50% share at the majority of our largest hyperscale customers.

Lisa: Hyperscale demand for epic Cpus was very strong driven by expanded deployments powering both their internal compute infrastructure and online services.

Lisa: Public cloud demand was also very strong with the number of epic instances, increasing 27% in 2024 to more than 1000.

Lisa: AWS Alibaba, Google, Microsoft and <unk> launched more than 100, AMD General purpose and AI instances in the fourth quarter alone.

Lisa: This includes new Azure instances powered by our custom built epic processor with HBM memory that delivers leadership HBC performance based on offering a X higher memory bandwidth compared to competitive offerings.

More than offsetting declines in our gaming and embedded segments.

Lisa: We also build significant momentum with Forbes 2000 global businesses using epic in the cloud as enterprise customers activated more than double the number of epic cloud instances from the prior quarter.

Turning to the segments.

Data Center segment revenue increased 69% year over year to a record $3 9 billion.

2024 marked another major inflection point for our server business is share gains accelerated driven by the ramp of fifth Gen epic turn and strong double digit percentage year over year growth in fourth Gen epic sales.

Lisa: This capped off a strong year of growth as enterprise consumption of epic in the cloud nearly tripled from 2023.

Lisa: Turning to enterprise on Prem adoption epic CPU sales grew by a strong double digit percentage year over year as sell through increased and we closed high volume deployments with Akamai Hitachi LG service now Verizon visa and others.

In cloud, we exited 2024 with well over 50% share at the majority of our largest hyperscale customers.

Hyperscale demand for epic Cpus was very strong driven by expanded deployments powering both their internal compute infrastructure and online services.

Lisa: We are seeing growing enterprise pool based on the expanding number of epic platforms available and our increased go to market investments.

Public cloud demand was also very strong with a number of epic instances, increasing 27% in 2024 to more than 1000.

Lisa: Exiting 2024, there are more than 450 epic platforms available from the leading server Oems and Oems, including more than 120 turn platforms that went into production in the fourth quarter from Cisco Dell HPE, Lenovo supermicro and others.

AWS Alibaba, Google, Microsoft and <unk> launched more than 100, AMD General purpose and AI instances in the fourth quarter alone.

This includes new Azure instances powered by a custom built epic processor with HBM memory that delivers leadership HBC performance based on offering a X higher memory bandwidth compared to competitive offerings.

Lisa: Looking forward turn is clearly the best server processor in the world with more than 540 performance records across a broad range of industry standard benchmarks.

Lisa: At the same time, we are seeing sustained demand for both fourth and third Gen epic processors as our consistent roadmap execution has made AMD, the dependable and safe choice.

We also build significant momentum with Forbes 2000 global businesses using epic in the cloud as enterprise customers activated more than double the number of epic cloud instances from the prior quarter.

Lisa: As a result, we see clear growth opportunities in 2025 across both cloud and enterprise based on our full portfolio of epic processors optimized for leadership performance across the entire range of datacenter workloads and system price points.

This capped off a strong year of growth as enterprise consumption of epic in the cloud nearly tripled from 2023.

Turning to enterprise on Prem adoption epic CPU sales grew by a strong double digit percentage year over year as sell through increased and we closed high volume deployments with Akamai Hitachi LG service now Verizon visa and others.

Lisa: Turning to our data center AI business 2024 was an outstanding year as we accelerated our AI hardware roadmap to deliver an annual cadence of new instinct accelerators expanded our <unk> software suite with significant uplifts in inferencing and trading performance built strong customer.

We are seeing growing enterprise pool based on the expanding number of epic platforms available and our increased go to market investments.

Exiting 2024, there are more than 450 epic platforms available from the leading server Oems and Oems, including more than 120 turn platforms that went into production in the fourth quarter from Cisco Dell HPE, Lenovo supermicro and others.

Lisa: And shifts with key industry leaders.

And delivered greater than $5 billion of datacenter AI revenue for the year.

Lisa: Looking at the fourth quarter <unk> 300, ex production deployments expanded with our largest cloud partners.

Lisa: Meta exclusively used 300 acts to serve their Lama 405 be frontier model on meta data AI and added instinct Gpus to its otp compliant Grand Teton platform designed for deep learning recommendation models and large scale AI inferencing workloads.

Looking forward turn is clearly the best server processor in the world with more than 540 performance records across a broad range of industry standard benchmarks.

At the same time, we are seeing sustained demand for both fourth and third Gen epic processors as our consistent roadmap execution has made AMD, the dependable and safe choice.

Lisa: Microsoft is using <unk> to power multiple GPT for base co pilot services and launched flagship instances that scale up to thousands of Gpus for AI training and inference and HTC workloads.

As a result, we see clear growth opportunities in 2025 across both cloud and enterprise based on our full portfolio of epic processors optimized for leadership performance across the entire range of datacenter workloads and system price points.

Speaker Change: IBM digital Ocean voucher and several other AI focused USPS have begun deploying AMD instinct accelerators for new instances.

Speaker Change: IBM also announced plans to enable <unk> on their Watson X AI and data platform for training and deploying enterprise ready generative AI applications.

Turning to our data center AI business 2024 was an outstanding year as we accelerated our AI hardware roadmap to deliver an annual cadence of new instinct accelerators expanded our <unk> software suite with significant uplifts in inferencing and trading performance built strong customer.

Speaker Change: Instinct platforms are currently being deployed across more than a dozen csp's globally and we expect this number to grow in 2025.

And ships with key industry leaders.

Speaker Change: For enterprise customers more than 25 300 series platforms are in production with the largest Oems and Oems.

And delivered greater than $5 billion of datacenter AI revenue for the year.

Looking at the fourth quarter, and <unk> 300, ex production deployments expanded with our largest cloud partners.

Speaker Change: To simplify and accelerate enterprise adoption of AMD instinct platforms, Dell began offering 300 acts as a part of their AI factory solution suite and is providing multiple ready to deploy containers via the Dell enterprise hub on hunting face.

Meta exclusively used 300 acts to serve their Lama 405 be frontier model on meta Dot AI and added instinct Gpus to its otp compliant Grand Teton platform designed for deep learning recommendation models and large scale AI inferencing workloads.

Speaker Change: HBC adoption also grew in the quarter.

Speaker Change: <unk> now powers five of the 10 fastest and 15 of the 25, most energy efficient systems in the world and the latest top 500 supercomputer list.

Microsoft is using <unk> to power multiple GPT four based co pilot services and launched flagship instances that scale up to thousands of Gpus for AI training and inference and HTC workloads.

Speaker Change: Notably the <unk> system at Lawrence Livermore National Labs debuted as the world's fastest supercomputer using over 44300, AAP use to deliver more than $1 seven extra flops of compute performance.

Speaker Change: IBM digital Ocean voucher and several other AI focused USPS have begun deploying AMD instinct accelerators for new instances.

Speaker Change: Earlier this month the high performance Computer center at the University of Stuttgart launched the Hunter supercomputer that also uses 300 day.

Speaker Change: IBM also announced plans to enable <unk> on their Watson X AI and data platform for training and deploying enterprise ready generative AI applications.

Speaker Change: Like El cap a ton hunter will be used for both foundational scientific research and advanced AI projects, including training <unk> and 'twenty four different European languages.

Speaker Change: Interesting platforms are currently being deployed across more than a dozen csp's globally and we expect this number to grow in 2025.

Speaker Change: For enterprise customers more than 25 300 series platforms are in production with the largest Oems and Oems.

Speaker Change: On the AI software front, we made significant progress across all layers of the rock in the stack in 2024.

Speaker Change: Our strategy is to establish <unk> as the industry's leading open software stack for AI, providing developers with greater choice and accelerating the pace of industry innovation.

Speaker Change: More than 1 million models on hugging face now run out of the box on AMD and our platforms are supported in the leading frameworks like pie portion Jack's serving solutions like BLM and compilers like open AI right.

Speaker Change: HBC adoption also grew in the quarter.

Speaker Change: <unk> now powers five of the 10 fastest and 15 of the 25, most energy efficient systems in the world and the latest top 500 supercomputer list.

Speaker Change: We have also successfully ramp large scale production deployments with numerous customers using rocket, including our lead Hyperscale partners.

Speaker Change: We ended the year with the release of <unk> six three that included multiple performance optimizations, including support for the latest flash attention algorithm that runs up to three times faster than prior versions and SV Lang runtime that enabled <unk> support for a state of the art models like deep seek these III.

Speaker Change: Earlier this month the high performance Computer center at the University of Stuttgart launched the Hunter supercomputer that also uses 300 day.

As a result of these latest enhancements and <unk> 300 ex Inferencing performance has increased to seven times since launch.

Speaker Change: Like El Capitan Hunter will be used for both foundational scientific research and advanced AI projects, including training <unk> in 24 different European languages.

Speaker Change: Looking forward, we are continuing to accelerate our software investments to improve the out of the box experience for a growing number of customers adopting instinct to power their diverse AI workloads.

Speaker Change: On the AI software front, we made significant progress across all layers of the rock and stack in 2024.

Speaker Change: For example in January we began delivering by weekly container releases that provide more frequent performance and feature updates and ready to deploy packages and we continue adding resources dedicated to the open source community that enable us to build test and launch new software enhancements at a faster pace.

Speaker Change: Our strategy is to establish <unk> as the industry's leading open software stack for AI, providing developers with greater choice and accelerating the pace of industry innovation.

Speaker Change: More than 1 million models on hugging face now run out of the box on AMD and our platforms are supported in the leading frameworks like pie porch in Jack's serving solutions like BLM and compilers like open AI right.

Speaker Change: On the product front, we began volume production of <unk> hundred 25 ex in the fourth quarter.

Speaker Change: The production ramp is progressing very well to support new customer wins.

Speaker Change: We have also successfully ramp large scale production deployments with numerous customers using rocket, including our lead Hyperscale partners.

<unk> hundred 25 is well positioned in market delivering significant performance and <unk> advantages compared to competitive offerings.

We have also made significant progress with a number of customers adopting AMD instinct.

Speaker Change: For example, we recently closed several large wins with <unk> 300, and <unk> hundred 25 at lighthouse AI customers that are deploying instinct that scale across both their inferencing and training production environments for the first time.

Speaker Change: As a result of these latest enhancements and my 300, <unk> Inferencing performance has increased to seven times since launch.

Speaker Change: Looking ahead, our next generation <unk> hundred 50 series, featuring our cdna for architecture is looking very strong.

Speaker Change: Looking forward were continuing to accelerate our software investments to improve the out of the box experience for a growing number of customers adopting instinct to power their diverse AI workloads.

Speaker Change: DD&A for we will deliver the biggest generational leap in AI performance in our history with a 35 X increase in AI compute performance compared to <unk> three.

Speaker Change: The silicon has come up really well we were running large scale llm's within 24 hours of receiving first silicon and validation work is progressing ahead of schedule.

Speaker Change: The customer feedback on <unk> 350 series has been strong driving deeper and broader customer engagements with both existing and net new hyperscale customers in preparation for at scale <unk> 350 deployments.

Speaker Change: On the product front, we began volume production of <unk> hundred 25 ex in the fourth quarter.

Speaker Change: The production ramp is progressing very well to support new customer wins.

Speaker Change: Based on early Silicon progress and the strong customer interest in the <unk> 350 series, we now plan to sample lead customers. This quarter and are on track to accelerate production shipments to mid year.

Speaker Change: I 325 is well positioned in market delivering significant performance and <unk> advantages compared to competitive offerings.

We have also made significant progress with a number of customers adopting AMD instinct.

Speaker Change: Okay.

Speaker Change: As we look forward into our multiyear AMD instinct roadmap I'm excited to share that <unk> 400 series development is also progressing very well.

Speaker Change: The cdna next architecture takes another major leap, enabling powerful rack scale solutions at tightly integrate networking CPU and GPU capabilities at the silicon level to support instinct solutions at datacenter scale.

Speaker Change: Looking ahead, our next generation <unk> 350 series, featuring our cdna for architecture is looking very strong.

Speaker Change: We designed cdna next to deliver leadership, AI and HTC flops, while expanding our memory capacity and bandwidth advantages and supporting an open ecosystem of scale up and scale out networking products.

Speaker Change: DD&A for will deliver the biggest generational leap in AI performance in our history with a 35 X increase in AI compute performance compared to cdna three.

Speaker Change: We are seeing strong customer interest in the 400 series for large scale training and inference deployments and remain on track to launch in 2026.

Speaker Change: The silicon has come up really well we were running large scale <unk> within 24 hours of receiving first silicon and validation work is progressing ahead of schedule.

Speaker Change: Turning to our acquisition of <unk> systems, we pass key milestones in the quarter and received unconditional regulatory approvals in multiple jurisdictions, including Japan, Singapore and Taiwan.

The customer feedback on <unk> 350 series has been strong driving deeper and broader customer engagements with both existing and net new hyperscale customers in preparation for at scale <unk> 350 deployments.

Speaker Change: Cloud and OEM customer response to the acquisition has been very positive as Gtt's systems expertise can accelerate time to market for future instinct accelerator platforms.

Speaker Change: Based on early Silicon progress and the strong customer interest in the <unk> hundred 50 series, we now plan to sample lead customers. This quarter and are on track to accelerate production shipments to mid year.

Speaker Change: We have also received significant interest in <unk> manufacturing business, we expect to successfully divest <unk> industry, leading U S based datacenter infrastructure production capabilities. Shortly after we closed the acquisition, which remains on track for the first half of the year.

Speaker Change: Okay.

Speaker Change: As we look forward into a multi year AMD instinct roadmap I am excited to share that <unk> 400 series development is also progressing very well.

Speaker Change: The cdna next architecture takes another major leap, enabling powerful rack scale solutions that tightly integrate networking CPU and GPU capabilities at the silicon level to support instinct solutions at datacenter scale.

Speaker Change: Turning to our client segment revenue increased 58% year over year to a record $2 3 billion.

Speaker Change: We gain client revenue share for the fourth straight quarter, driven by significantly higher demand for both ryzen desktop and mobile processors.

Speaker Change: We had record desktop channel sell out in the fourth quarter in multiple regions as ryzen dominated the best selling CPU lists at many retailers globally exceeding 70% share at Amazon Newegg mine factory and numerous others over the holiday period.

Speaker Change: We are seeing strong customer interest in the 400 series for large scale training and inference deployments and remain on track to launch in 2026.

Speaker Change: In mobile we believe we had a record OEM PC sell through share in the fourth quarter as ryzen AI 300 series notebooks ramped.

Turning to our acquisition of <unk> systems, we pass key milestones in the quarter and received unconditional regulatory approvals in multiple jurisdictions, including Japan, Singapore and Taiwan.

Speaker Change: In addition to growing share with our existing PC partners. We were very excited to announce a new strategic collaboration with Dell that marks the first time, they will offer a full portfolio of commercial Pcs powered by Ryzen Pro processors.

Speaker Change: Cloud and OEM customer response to the acquisition has been very positive as Gtt's systems expertise can accelerate time to market for future instinct accelerator platforms.

Speaker Change: The initial wave of ryzen powered Dell commercial notebooks is planned to launch this spring with the full portfolio ramping in the second half of the year as we focus on growing commercial PC share.

Speaker Change: After we close the acquisition, which remains on track for the first half of the year.

Speaker Change: At CES, we expanded our ryzen portfolio with the launch of 22, new mobile processors that deliver leadership compute graphics and AI capabilities.

Turning to our client segment revenue increased 58% year over year to a record $2 3 billion.

Speaker Change: Our ryzen processor portfolio has never been stronger with leadership compute performance across the stack.

Speaker Change: We gain client revenue share for the fourth straight quarter, driven by significantly higher demand for both ryzen desktop and mobile processors.

Speaker Change: For <unk>, we are the only provider that offers a complete portfolio of Cpus, enabling windows copilot plus experiences on premium ultra thin commercial gaming and mainstream notebooks.

Speaker Change: Looking into 2025, we are planning for the PC Tam to grow by a mid single digit percentage year on year.

Speaker Change: In mobile we believe we had a record OEM PC sell through share in the fourth quarter as ryzen AI 300 series notebooks ramped.

Speaker Change: Based on the breadth of our leadership client CPU portfolio and strong design win momentum. We believe we can grow client segment revenue well ahead of the market.

Now turning to our gaming segment revenue declined 59% year over year to $563 million.

Speaker Change: Semi custom sales declined as expected as Microsoft and Sony focused on reducing channel inventory.

Speaker Change: Overall this console generation has been very strong highlighted by cumulative unit shipments surpassing $100 million in the fourth quarter.

Speaker Change: Looking forward, we believe channel inventories have now normalized and semi custom sales will return to more historical patterns in 2025.

Speaker Change: Okay.

Speaker Change: At CES, we expanded our ryzen portfolio with the launch of 22, new mobile processors that deliver leadership compute graphics and AI capabilities.

Speaker Change: And gaming graphics revenue decline year over year, as we accelerated channel sell out in preparation for the launch of our Nexgen Radeon 9000 series Gpus.

Speaker Change: Our ryzen processor portfolio has never been stronger with leadership compute performance across the stack.

Speaker Change: Our focus with this generation is to address the highest volume portion of the enthusiast gaming market with our new rdna for architecture.

Speaker Change: Our DNA for deliver significantly better Ray tracing performance and add support for AI powered upscaling technology that will bring high quality <unk> gaming to mainstream players when the first Radeon 90, 70 series Gpus go on sale in early March.

Speaker Change: Looking into 2025, we are planning for the PC Tam to grow by a mid single digit percentage year on year.

Speaker Change: Based on the breadth of our leadership client CPU portfolio and strong design win momentum. We believe we can grow client segment revenue well ahead of the market.

Speaker Change: Yeah.

Speaker Change: Now turning to our embedded segment fourth quarter revenue decreased 13% year over year to $923 million.

Speaker Change: Now turning to our gaming segment revenue declined 59% year over year to $563 million.

Speaker Change: The demand environment remains mixed with the overall market recovering slower than expected as strength in aerospace and defense and test and emulation is offset by softness in the industrial and communications markets.

Speaker Change: Semi custom sales declined as expected as Microsoft and Sony focused on reducing channel inventory.

Overall this console generation has been very strong highlighted by cumulative unit shipments surpassing $100 million in the fourth quarter.

Speaker Change: We continued expanding our adaptive computing portfolio in the quarter with differentiated solutions for key markets.

Speaker Change: We launched our Versal RF series with industry, leading compute performance for aerospace and defense markets introduced our virtual premium series Gen. Two as the industry's first adaptive compute devices supporting <unk>, three one and PCI Gen six and.

Speaker Change: Looking forward, we believe channel inventories have now normalized and semi custom sales will return to more historical patterns in 2025.

Speaker Change: And gaming graphics revenue decline year over year, as we accelerated channel sell out in preparation for the launch of our Nexgen Radeon 9000 series Gpus.

Speaker Change: And began shipping our Nextgen LVL card with leadership performance for ultra low latency trading.

Speaker Change: Our focus with this generation is to address the highest volume portion of the enthusiast gaming market with our new rdna for architecture.

Speaker Change: We believe we gained adaptive computing share in 2024 and are well positioned for ongoing share gains based on our design win momentum.

Speaker Change: Our DNA for deliver significantly better Ray tracing performance and added support for AI powered upscaling technology that will bring high quality four key gaming to mainstream players when the first Radeon 90, 70 series Gpus go on sale in early March.

Speaker Change: We closed a record $14 billion of design wins in 2024 up more than 25% year over year as customer adoption of our industry, leading adaptive computing platforms expands and we won large new embedded processor designs.

Speaker Change: Now turning to our embedded segment fourth quarter revenue decreased 13% year over year to $923 million.

Speaker Change: In summary, we ended 2024 with significant momentum delivering record quarterly and full year revenue.

Speaker Change: Epic and ryzen processor share gains grew throughout the year and we are well positioned to continue outgrowing the market based on having the strongest CPU portfolio in our history.

Speaker Change: The demand environment remains mixed with the overall market recovering slower than expected strength in aerospace and defense and test and emulation is offset by softness in the industrial and communication markets.

Speaker Change: We established our multibillion dollars data center, AI business and accelerated both our instinct hardware and <unk> software Roadmaps.

Speaker Change: We continued expanding our adaptive computing portfolio in the quarter with differentiated solutions for key markets.

For 2025, we expect the demand environment to strengthen across all of our businesses driving strong growth in our data center and client businesses and modest increases in our gaming and embedded businesses.

Speaker Change: Against this backdrop, we believe we can deliver strong double digit percentage revenue and EPS growth year over year.

Speaker Change: And began shipping our Nextgen LVL card with leadership performance for ultra low latency trading.

Speaker Change: Looking further ahead, the recent announcements of significant AI infrastructure investments like Star Gate and latest model breakthroughs from deep seek and the Allen Institute highlight the incredibly rapid pace of AI innovation across every layer of the stack from silicon to algorithms to model system.

Speaker Change: We believe we gained adaptive computing share in 2024 and are well positioned for ongoing share gains based on our design win momentum.

Speaker Change: <unk> and applications.

These are exactly the types of advances we want to see as the industry invest in increased compute capacity, while pushing the envelope on software innovation to make AI more accessible and enable breakthrough regenerative and agenda AI experiences that can run on virtually every digital device.

Speaker Change: In summary, we ended 2024 with significant momentum delivering record quarterly and full year revenue.

Speaker Change: All of these initiatives require massive amounts of new compute and create unprecedented growth opportunities for AMD across our businesses.

Speaker Change: We established our multibillion dollars data center, AI business and accelerated both our instinct hardware and <unk> software Roadmaps.

Speaker Change: <unk> is the only provider with the breadth of products and software expertise needed to power AI from end to end across data center edge and client devices.

Speaker Change: For 2025, we expect the demand environment to strengthen across all of our businesses driving strong growth in our data center and client businesses and modest increases in our gaming and embedded businesses.

Speaker Change: We have made outstanding progress building, the foundational product technology and customer relationships needed to capture a meaningful portion of this market and we believe this places AMD on a steep long term growth trajectory led by the rapid scaling of our data center AI franchise for more than $5 billion of revenue in 2020.

Speaker Change: Against this backdrop, we believe we can deliver strong double digit percentage revenue and EPS growth year over year.

Speaker Change: For the tens of billions of dollars of annual revenue over the coming years.

Speaker Change: Now I'd like to turn the call over to Jim to provide some additional color on our fourth quarter and full year results Jean.

Jim: Thank you Lisa and good afternoon, everyone.

Speaker Change: <unk> and applications.

Speaker Change: I'll start with a video for our financial results and then provide our kind of outlook for the first quartile for fiscal 2025.

Speaker Change: These are exactly the types of advances we want to see as the industry invest in increased compute capacity, while pushing the envelope on software innovation to make AI more accessible and enable breakthrough generative and agenda AI experiences that can run on virtually every digital device.

Speaker Change: <unk> executed very well in 2020 for delivering record revenue of 25 8 billion up 14% driven by 94% of growth in our data center segment and 52% of growth in our client segment, which more than offset headwinds in our <unk> and <unk>.

Speaker Change: All of these initiatives require massive amounts of new compute and create unprecedented growth opportunities for AMD across our businesses.

Speaker Change: <unk>.

<unk> is the only provider with the breadth of products and software expertise needed to power AI from end to end across data center edge and client devices.

Speaker Change: We expanded gross margin by 300 basis point and achieved earnings per share growth of 25%, while investing aggressively in AI to fuel our future growth.

Speaker Change: For the fourth quarter of 2020 for revenue was a record of seven 7 billion growing 24% year over year as strong revenue growth in the data center and client segment was partially offset by lower revenue in our gaming and embedded segments.

Speaker Change: For the tens of billions of dollars of annual revenue over the coming years.

Speaker Change: Revenue was up 12% sequentially, primarily driven by the growth of client datacenter and gaming segments.

Speaker Change: Now I'd like to turn the call over to Jim to provide some additional color on our fourth quarter and full year results Jean.

Speaker Change: Gross margin was 54% up 330 basis points year over year due to a favorable shift in revenue mix with a higher datacenter and the client revenues lower gaming revenue, partially offset by the impact of lower embedded in revenues.

Jim: Thank you Lisa and good afternoon, everyone I'll start my review of our financial results and then provide our current outlook for the first quarter for fiscal 2025.

Jim: AMD executed very well in 2020 for delivering record revenue of $25 8 billion up 14% driven by 94% of growth in our data center segment, and a 52% of growth in our client segment, which more than offset headwinds in our aiming and embedded segments.

Speaker Change: Operating expenses were $2 1 billion, an increase of 23% year over year as we invested in R&D and marketing activities to address our significant growth opportunities.

Speaker Change: Operating income was a record of 2 billion, representing 26% operating margin.

Jim: We expanded gross margin by 300 basis point and achieved earnings per share growth of 25%, while investing aggressively in AI to fuel our future growth.

Taxes interest and other was 249 million in net expense with fourth quarter of 2024 diluted earnings per share was $1 <unk>, an increase of 442% year over year, reflecting the significant operating leverage of our business model.

Jim: For the fourth quarter of 2020 for revenue was a record of $7 7 billion growing 24% year over year as strong revenue growth in the data center and client segment was partially offset by lower revenue in our gaming and embedded segments.

Speaker Change: Now turning to our reportable segment stacking made the data Center segment revenue was a record of $3 9 billion up 69% year over year, driven by strong growth in both the AMD instinct that GPU and a fourth and fifth generation AMD <unk> Cpus sales.

Jim: Revenue was up 12% sequentially, primarily driven by the growth of client datacenter and gaming segments.

Jim: Gross margin was 54% up 330 basis points year over year due to a favorable shift in revenue mix with higher datacenter and the client revenues lower gaming revenue, partially offset by the impact of lower embedded revenue.

Speaker Change: Data Center segment operating income was $1 2 billion or 30% of revenue compared to 666 million or 29% a year ago.

Speaker Change: Client segmented revenue was a record of $2 3 billion up 58% year over year, driven by strong demand for AMD ryzen processors.

Jim: Operating expenses were $2 1 billion, an increase of 23% year over year as we invested in R&D and marketing activities to address our significant growth opportunities.

Speaker Change: <unk> segment operating income was 446 million or 19% of revenue compared to operating income of 55 million or 4% of revenue a year ago, driven primarily by operating leverage from higher revenue.

Jim: Operating income was a record of 2 billion, representing 26% operating margin.

Jim: Taxes interest and other was at 249 million of net expense with fourth quarter of 2024 diluted earnings per share was $1 <unk>, an increase of over 42% year over year, reflecting the significant operating leverage of our business model.

Speaker Change: Gaming segment revenue was $563 million down 59% year over year, primarily due to a decrease in semi customer revenue.

Speaker Change: Gaming segment operating income was 50 million or 9% of revenue compared to 224 million or 16% a year ago.

Jim: Now turning to our reportable segment stacking made the data Center segment revenue was a record of $3 9 billion up 69% year over year, driven by strong growth at both the AMD instinct that GPU and a fourth and fifth generation AMD <unk> Cpus sales.

Speaker Change: <unk> segment revenue was 900 at the end of 'twenty 3 million down 13% year over year as end market demand continues to be mixed.

Speaker Change: <unk> segment operating income was $362 million or 39% of revenue compared to 461 million or 44% a year ago.

Jim: Data Center segment operating income was $1 2 billion or 30% of revenue compared to 666 million or 29% a year ago.

Speaker Change: Turning to the balance sheet and cash flow during the quarter, we generated $1 3 billion in cash from operations and a record $1 1 billion outflow of free cash flow.

Jim: Client segmented revenue was a record of $2 3 billion up 58% year over year, driven by strong demand for AMD ryzen processors.

Speaker Change: Inventory increased sequentially by 360, <unk> and 257 P M.

Jim: Client segment operating income was 446 million or 19% of revenue compared to operating income of 55 million or 4% of revenue a year ago, driven primarily by operating leverage from higher revenue.

Speaker Change: At the end of quarter cash cash equivalents and short term investment were $5 1 billion.

Speaker Change: In the fourth quarter, we repurchased one 8 million shares and returned 256 million to shareholders for the year, we repurchased five 9 million shares and they returned 862 million to shareholders.

Jim: Gaming segment revenue was $563 million down 15, 9% year over year, primarily due to a decrease in semi customer revenue.

Speaker Change: A $4 $7 billion remaining in our share repurchase authorization.

Jim: Gaming segment operating income was 50 million or 9% of revenue compared to 224 million or 16% a year ago.

Speaker Change: Before I turn to our financial outlook <unk> power, our financial segment reporting.

Speaker Change: Beginning with our first quarter fiscal year 2025 financial statement disclosures, we plan to combine the client and the gaming segment into one single reportable segment.

Jim: <unk> segment revenue was 923 million down 13% year over year as end market demand continues to be mixed.

Jim: <unk> segment operating income was 362 million or 39% of revenue compared to 461 million or 44% a year ago.

Speaker Change: To align with how we manage the business therefore reporting three segments datacenter client video gaming and the embedded will.

Speaker Change: We will continue to provide that these teen revenue disclosures for our data center client gaming and embedded businesses consistent debate our country policy.

Jim: Turning to the balance sheet and cash flow during the quarter, we generated $1 3 billion in cash from operations and a record 1.1, BV ample free cash flow.

Jim: Inventory increased sequentially by 360, <unk> 5.7 PVA.

Speaker Change: Now turning to our fourth quarter of 2025 outlook.

Speaker Change: We expect revenue to be approximately $87 1 billion plus or minus the 300 <unk>.

Jim: At the end of quarter cash cash equivalents and short term investment were $5 1 billion.

Speaker Change: Up 30% year over year, driven by strong growth in our data center and client businesses.

Jim: In the fourth quarter, we repurchased one 8 million shares and returned 256 million to shareholders for the year, we repurchased five 9 million shares and returned 862 medium two shareholders.

Speaker Change: More than offsetting a significant decline in our gaming business and a modest decline in our embedded business.

Speaker Change: We expect revenue to be down sequentially, approximately 7% driven primarily by seasonality across our businesses.

Jim: We have a $4 $7 billion remaining in our share repurchase authorization.

Jim: Before I turn to our financial outlook, Let me power our financial segment every policy.

Speaker Change: In addition, we expect fourth quarter non-GAAP gross margin to be approximately 54%.

Jim: Beginning with our first quarter fiscal year 2025 financial statement disclosures, we plan to combine the client and the gaming segment into one single reportable segment to align with how we manage the business therefore reporting three segments datacenter climb.

Speaker Change: non-GAAP operating expenses to be approximately $2 1 billion.

Speaker Change: non-GAAP other net income to be 24 million non-GAAP effective tax rate to be 13%.

Speaker Change: And the diluted share count is expected to be approximately $1 64 billion shares in.

Speaker Change: In closing 2024 was a strong year for AMD MSG team, our disciplined execution to deliver revenue growth and expanded earnings at a faster rate than revenue all while investing in AI and the innovation to fuel long term growth looking ahead, we will build on the momentum.

We the gaming and the embedded well.

Jim: We will continue to provide that these teen revenue disclosures for our data center client gaming and the embedded businesses consistent debate our country Party.

Now turning to our fourth quarter of 2025 outlook.

Speaker Change: Drive double digit percentage revenue growth and further accelerated earnings in 2025 and beyond with that I will turn it back to Matt for the Q&A session.

Jim: We expect revenue to be approximately <unk>, seven 1 billion plus or minus the 300 <unk>.

Jim: Up 30% year over year, driven by strong growth in our data center and the client business more than offsetting a significant decline in our gaming business and a modest decline in our embedded business we.

Matt Ramsey: Thank you very much Jim we're now ready to start the Q&A session as the operator poll for questions. We remind each participated please ask one question and a brief follow up operator, please poll for questions. Thanks.

Jim: We expect revenue to be down sequentially, approximately 7% driven primarily by seasonality costs our businesses.

Speaker Change: Thank you, Matt we will now be conducting a question and answer session.

Speaker Change: Like to ask a question. Please press star one on your telephone keypad, a confirmation tone will indicate that your line is in the queue. You May press star two to remove yourself from the queue.

Jim: In addition, we expect fourth quarter non-GAAP gross margin to be approximately 54% non-GAAP operating expenses to be approximately $2 1 billion.

Speaker Change: For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys and as a reminder, like Matt said, please limit yourself to one question and one follow up. Thank you one moment, while we poll for questions.

Jim: non-GAAP other net income to be 24 million non-GAAP effective tax rate to be 13%.

Jim: And the diluted share count is expected to be approximately $1 64 billion shares.

Speaker Change: And the first question comes from the line of Aaron Rakers with Wells Fargo. Please proceed.

Jim: In closing 2024 was a strong year for AMD, demonstrating our disciplined execution to deliver revenue growth and to expand the earnings at a faster rate than revenue all while investing in AI and the innovation to fuel long term growth looking ahead, we will build on our momentum.

Aaron Rakers: Yes, thanks for taking the question I guess I'll just ask it in aggregate as you think about the GPU business and I. Appreciate you talked about delivering north of $5 billion of revenue, which.

Speaker Change: Which is extremely impressive.

Speaker Change: 2024, I am curious if you how we should think about framing that.

Jim: To drive the double digit percentage revenue growth and further accelerated earnings in 2025 and beyond.

Speaker Change: The GPU the instinct business as we think about 2025.

Jim: With that I'll turn it back to Matt for the Q&A session.

Speaker Change: And any kind of color you can provide us as far as kind of the progression of revenue the pace of revenue first half versus second half as we think about some of the product cycle dynamics. Thank you.

Matt: Thank you very much Jim we're now ready to start the Q&A session.

Matt: Operator pool for questions. We remind each participated please ask one question and a brief follow up operator, please poll for questions.

Speaker Change: Sure Erinn. Thanks for the question. So first of all look we were very pleased with how we finished 2024 in terms of the datacenter GPU business I think the ramp with steep as we went throughout the year and the team executed well going into 2025 as I mentioned in the prepared remarks, we're actually very happy with the progress.

Speaker Change: Thank you, Matt we will now be conducting a question and answer session. If you would like to ask a question. Please press star one on your telephone keypad, a confirmation tone will indicate that your line is in the queue. You May press star two to remove yourself from the queue.

Speaker Change: For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys.

Speaker Change: That we're making on both on the hardware Roadmaps and the software roadmap so on the hardware side.

Speaker Change: And as a reminder, like Matt said, please limit yourself to one question and one follow up. Thank you one moment, while we poll for questions.

Speaker Change: We launched 325 at the end of the fourth quarter started shipments then we have new designs that have come on both 300 and 325 that will deploy in the first half of the year and then the Big news is on the $3 50 series. So we had previously stated that we thought we would launch that in the second half.

Speaker Change: And the first question comes from the line of Aaron Rakers with Wells Fargo. Please proceed.

Aaron Rakers: Yes, thanks for taking the question I guess I'll, just ask or Aggregators.

Aaron Rakers: Think about the GPU business and I appreciate you talked about delivering north of $5 billion of revenue.

Speaker Change: The year, and frankly that bring up has come up.

Speaker Change: Better than we expected and there's very strong customer demand for that so we are actually going to pull that production ramp into the middle of the year, which improves our relative competitiveness. So as it relates to how data center. So the overall data center business will grow strong double digits certainly.

Aaron Rakers: Which is extremely impressive.

Aaron Rakers: 2024, I am curious if you how we should think about framing.

Aaron Rakers: The GPU the instinct business as we think about 2025.

Aaron Rakers: And any kind of color you can provide us as far as Canada.

Aaron Rakers: Progression of revenue the pace of revenue first half versus second half as we think about some of the product cycle dynamics. Thank you.

Both the server.

Speaker Change: Product line as well as the datacenter GPU product line will grow strong double digits and from the shape of the revenue you would expect that the second half would be stronger than the first half just given 350 will be a catalyst for the datacenter GPU business, but overall I think we're very pleased with the trajectory of the datacenter business.

Speaker Change: In both 2024, and then going into full year 2025.

Speaker Change: Progress that we're making on both on the hardware Roadmaps and the software roadmap so on the hardware side.

Speaker Change: Yes. Thank you very much and then as a quick follow up just.

Speaker Change: Thinking about the guidance overall relative to that down 7% sequential.

Speaker Change: I know you mentioned seasonality across the business segments.

Speaker Change: Are you assuming that you were down sequentially in data center in total in <unk>, and how do I frame that relative to seasonality. Thank you.

Speaker Change: Yeah sure. So let me give you some more color on the Q1 guide. So Q1 guide was down 7% sequentially as gene mentioned and the way that breaks out in each of the segments assume that data center would be down just about that average of the corporate average we would expect the client's business and the embed.

Speaker Change: A year and frankly that bring up has come up.

Speaker Change: <unk> business to be down more than that.

Speaker Change: Given where seasonality is for those businesses and then we would expect gaming business will be down a little less than that and thats, a little atypical from a seasonality standpoint, but we're coming off of a year. When there was a lot of let's call. It inventory normalization and now that inventory is normalized we would expect that that would be down.

Speaker Change: Both the server product.

Speaker Change: Little bit less than the corporate average.

Speaker Change: And the next question comes from the line of Timothy Arcuri with UBS. Please proceed with your question.

Speaker Change: In both 2024, and then going into our full year 2025.

Timothy Arcuri: Thanks, a lot I wanted to ask about the server CPU business.

Speaker Change: Yes. Thank you very much and then as a quick follow up just.

Timothy Arcuri: And I think you have said in the past the core count is going to grow mid to high teens and as long as your competitors not super.

Speaker Change: Thinking about the guidance overall relative to that down 7% sequential.

Speaker Change: Aggressive on pricing.

Speaker Change: I know you mentioned seasonality across the business segments.

Timothy Arcuri: Sure.

Timothy Arcuri: Should grow roughly that much as well are you expecting or are you already seeing them become a little more aggressive on pricing as they attempt to shore.

Speaker Change: Are you assuming that you're down sequentially in data center in total in <unk>, and how do I frame that relative to seasonality. Thank you.

Timothy Arcuri: Sure up their share it sounds like they are getting a bit more.

Speaker Change: Yeah sure. So let me give you some more color on the Q1 guide. So Q1 guide was down 7% sequentially as gene mentioned and the way that breaks out in each of the segments assumed that data center would be down just about that average of the corporate average we would expect the client's business and the embed.

Timothy Arcuri: Instead of on pricing. So wondering if you still think that.

Timothy Arcuri: Server CPU business can grow in line with that.

Timothy Arcuri: Or kind of mid to high teens.

Timothy Arcuri: Yeah first we always assume server CPU is a very competitive market.

Timothy Arcuri: But we currently have with the best lineup of full portfolio from.

Speaker Change: Good business to be down more than that.

Timothy Arcuri: Not only to rent generation Gen Y and then even malign with.

Timothy Arcuri: Provided <unk> for our customers based on the product portfolio. So overall, we are actually quite confident about continue to drive that.

Timothy Arcuri: Server CPU business is not only growing from a unit perspective, ASP perspective, and continue to gain share.

Speaker Change: A little bit less than the corporate average.

Timothy Arcuri: Thanks, a lot and then gene can you just give us a sense of where datacenter GPU came in for December I I'm thinking, it's probably in the $2 billion range.

Speaker Change: And the next question comes from the line of Timothy Arcuri with UBS. Please proceed with your question.

Timothy Arcuri: And then is it assumed to be down flat or up would you be willing to give a number for March.

Timothy Arcuri: Thanks, a lot I wanted to ask about the server CPU business.

Timothy Arcuri: And I think you have said in the past the core count is going to grow mid to high teens and as long as your competitors not Super <unk>.

Speaker Change: Yeah, I think the way to look at our Q4 performance fees to our data center business overall did really well actually is consistent with our expectations of cost on when we look at silver and the data center GPU server to either better than datacenter GPU, but overall, it's very consistent with outperformed.

Timothy Arcuri: Aggressive on pricing, but your business should grow roughly that much as well are you expecting or are you already seeing them become a little more aggressive on pricing as they attempt to.

Timothy Arcuri: <unk> per share it sounds like they are getting a bit more aggressive on pricing. So wondering if you still think that.

Timothy Arcuri: <unk>.

Timothy Arcuri: Yes, maybe I'll just add.

Timothy Arcuri: Server CPU business can grow in line with that core kind of mid to high teens.

Timothy Arcuri: Tim on your question as to what you would expect as we go into 2025, I think you should assume that the first half of 2025 data Center segment will be consistent with the second half of 'twenty, four and Thats true for both businesses on the server side as well as the datacenter GPU side.

Timothy Arcuri: Yeah first we always assume service Epo is a very competitive market.

Timothy Arcuri: But we currently have the best lineup of full portfolio from.

Timothy Arcuri: Not only to rent generation, but the Gen Y and then even the line we provided <unk> for our customers based on the product portfolio. So overall, we are actually quite confident about continue to drive.

Speaker Change: And the next question comes from the line of Vivek Arya with Bank of America Securities. Please proceed with your question.

Vivek Arya: Thanks for taking my question Lisa a few.

Timothy Arcuri: Server CPU business is not only growing from a unit perspective, ASP perspective, and continue to gain share.

Vivek Arya: Questions on the datacenter GPU business I think last year AMB.

Vivek Arya: AMD was very explicit about.

Speaker Change: Thanks, a lot and then gene can you just give us a sense of where data center GPU came in for December I I'm thinking, it's probably in the $2 billion range.

Speaker Change: And beating or meeting expectation this year youre not set a specific forecast and I'm curious what has changed and then if I go back to your analyst day in December and I think at that time, you had sort of long term, 60% CAGR.

Speaker Change: Is it assumed to be down flat or up would you be willing to give a number for march. Thanks.

Speaker Change: Is it fair to assume that you can grow at that.

Speaker Change: Yeah, I think the way to look at our Q4 performance fees to our data center business overall, it did really well actually is consistent with our expectations of Casa on when we look at silver and the data center GPU server data better than datacenter GPU, but overall its a very consistently the outperformance.

Speaker Change: <unk> of $4 25.

Speaker Change: Oh versus the 5 billion plus that you do.

Speaker Change: No. So just contrast, the two years and then whether we can grow at that 60% trend line.

Vivek Arya: Sure So vivek.

Speaker Change: For the question.

Speaker Change: I think what we look at is certainly for the first year of the datacenter GPU business. We wanted to give some clear progression as it was growing the business is now at scale actually now at over $5 billion and as we go into 2025, I think our guidance, we'll be more at the segment level with some color as to.

Speaker Change: Okay.

Timothy Arcuri: Yes, maybe I'll just add Tim.

Timothy Arcuri: Tim on your question as to what you would expect as we go into 2025, I think you should assume that the first half of 2025 datacenter segment will be consistent with the second half of 'twenty, four and Thats true for both businesses on the server side as well as the datacenter GPU side.

Speaker Change: Some qualitative color as to what's going on between the two businesses and relative to your question about long term growth rates Youre, absolutely right I mean, I believe that.

Speaker Change: And the next question comes from the line of Vivek Arya with Bank of America Securities. Please proceed with your question.

Speaker Change: The demand for AI compute is strong and we've talked about a data center.

Speaker Change: Thanks for taking my question lithium a few.

Speaker Change: Questions on the datacenter GPU business I think last year AMB.

Speaker Change: Accelerator Tam upwards of $500 billion by the time, we get out to 2028 I think all of the recent data points would suggest that there is strong demand out there without guiding for a specific number in 2025.

Speaker Change: <unk> was very explicit about that.

Speaker Change: And beating or meeting expectation this year youre not set a specific forecast. It I'm curious what has changed and then if I go back to your analyst day in December I think at that time, you had sort of long term, 60% CAGR.

Speaker Change: One of the comments that we've made as we see this business growing to tens of billions as we go through the next couple of years and that gives you a view of the confidence that we have in the business and particularly our roadmap is getting stronger with with each generation right. So and my 300 was a great start.

Speaker Change: Is it fair to assume that you can grow at that.

Speaker Change: On 425.

Speaker Change: Oh versus the 5 billion plus that you didn't know.

Speaker Change: So just contrast, the two years and then whether we can grow at that 60% trend line.

Speaker Change: $3 50 series is.

Vivek Arya: Sure So vivek.

Speaker Change: <unk> and addresses a broader set of workloads.

Speaker Change: Thanks for the question.

Speaker Change: I think what we look at is certainly for the first year of the datacenter GPU business. We wanted to give some clear progression as it was going the business is now at scale actually now at over $5 billion and as we go into 2025, I think our guidance, we'll be more at the segment level with some color as to.

Speaker Change: <unk>, both inference as well as training and then as we get into <unk> 400 series, we see significant.

Speaker Change: The traction and excitement around what we can do there with rack scale designs and just the innovation that's going on there. So yes, we're bullish on the long term and we'll certainly give you progress as we go through each quarter in 2025.

Speaker Change: Some qualitative color as to what's going on between the two businesses and relative to your question about long term growth rates Youre, absolutely right I mean, I believe that.

Speaker Change: Thank you Lisa and for my follow up.

Speaker Change: Would love your perspective on the news from Deep Sea recently, Brian.

Speaker Change: Brian.

Speaker Change: The demand for AI compute is strong and we've talked about a data center.

Speaker Change: Two parts to that one is <unk>.

<unk> heard the news do you think that should make us more confident or more conservative.

Speaker Change: Accelerator Tam upwards of $500 billion by the time, we get out to 2028 I think all of the recent data points would suggest that there is strong demand out there.

Speaker Change: The semiconductor opportunity going forward that gives us something disruptive and what we have done that reduces the overall market opportunity and then within that have your views about GPU versus basic how that share develops over the next few years have evolved in any way at all.

Speaker Change: Guiding for a specific number in 2025.

Speaker Change: One of the comments that we made is we see this business growing to tens of billions as we go through the next couple of years and that gives you a view of the confidence that we have in the business and particularly our roadmap is getting stronger with with each generation right. So and my 300 was a great start.

Speaker Change: Sure.

Vivek Arya: Yeah, great. Thanks for the question Vivek.

Speaker Change: It's been a pretty exciting first few weeks of the year.

Speaker Change: The deep seek announcements Ellen Institute as well as some of the Stargate announcements you'll talk about just how much.

Speaker Change: $3 50 series is stronger and addresses a broader set of workloads include.

Speaker Change: Including both inference as well as training and then as we get into <unk> 400 series, we see significant.

Speaker Change: The rate and pace of innovation, that's happening in the AI world. So specifically relative to deep seek look we think that innovation on the models and the algorithms is good for AI adoption.

Its traction and excitement around what we can do there with rack scale design and just the innovation that's going on there. So yes, we're bullish on the long term and we will certainly give you progress as we go through each quarter in 2025.

Speaker Change: The fact that there are new ways to bring about.

Speaker Change: Training and inference capabilities with with less infrastructure actually.

Speaker Change: Thank you Lisa and for my follow up.

Speaker Change: Is a good thing because it allows us to continue to deploy AI compute and broader application space and more adoption I think from our standpoint, we also like very much. The fact that we're a big.

Speaker Change: Would love your perspective on the news from deep Sea recently.

Speaker Change: They're kind of two parts to that one as well.

Speaker Change: <unk> heard the news do you think back should make us more confident or more conservative about the semiconductor opportunity going forward.

Speaker Change: Big believers in open source and from that standpoint, having open source model is looking at the rate and pace of adoption there.

Speaker Change: <unk> is in.

Speaker Change: Is there something sort of disrupted and what they have done and that reduces the overall market opportunity and then within that have your views about GPU versus basic share develops over the next few years have evolved in any way.

Speaker Change: Pretty pretty amazing and that is how we expect things to go so to the overall question of.

Speaker Change: How should we feel about it I mean, we feel bullish about the overall cycle and similarly on some of the infrastructure investments that were announced with <unk>.

Speaker Change: Thank you.

Vivek Arya: Yeah, great. Thanks for the question Vivek, Yes, I think it's been a pretty exciting first few weeks of the year I think the deep seek announcements Ellen Institute as well as some of the Stargate announcements you'll talk about just how much.

Speaker Change: Open AI and Star Gate and building out let's call it massive infrastructure for.

Speaker Change: Next generation AI I think all of those say that AI is certainly on the very steep part of the curve and as a result, we should expect a lot more innovation and then on the ASIC points. Let me address that because I think that is also a place where there's a good amount of discussion.

Vivek Arya: The rate and pace of innovation, that's happening in the AI world. So specifically relative to deep C. Look we think that innovation on the models and the algorithms is good for AI adoption.

Speaker Change: I have always been a believer in you need the right compute for the right workload and so with AI given the diversity of workloads large models media models small models training inference, when youre talking about.

Vivek Arya: Fact that there are new ways to bring about training.

Vivek Arya: Training and inference capabilities with with less infrastructure actually is a good thing because it allows us to continue to deploy AI compute and broader application space and more adoption I think from our standpoint, we also like very much the fact that.

Speaker Change: Broad foundational models or very specific models, you're going to need all types of compute and that includes Cpus Gpus Asics and FPGA.

We're big believers in open source and from that standpoint, having open source model is looking at the rate and pace of adoption there.

Speaker Change: Relative to our 500 billion plus Tam going out in time, we've always had a success a piece of that but.

Vivek Arya: I think is.

Speaker Change: My belief is given how much change there is still going on in AI algorithms that asics will still be the smaller part of that Tam because it is a more.

Vivek Arya: Is pretty pretty amazing and that is how we expect things to go so to the overall question of.

Vivek Arya: How should we feel about it I mean, we feel bullish about the overall cycle.

Speaker Change: Specific a specific.

Vivek Arya: Early on some of the infrastructure investments that were announced with.

Speaker Change: Workload optimized, whereas Gpus will enable.

Vivek Arya: Open AI and Star Gate and building out let's call it massive infrastructure for.

Speaker Change: Significant programmability and adjustments to all of these algorithm changes but.

Vivek Arya: Your next generation AI I think all of those say that AI is certainly on the very steep part of the curve and as a result, we should expect a lot more in innovation and then on the ASIC point, let me address that because I think that is also a place where there's a good amount of discussion.

Speaker Change: When I look at the AMD portfolio. It really is across all of those pieces. So Cpus Gpus and we're also involved in a number of Asa conversations as well as customers.

Speaker Change: Customers want to really have an overall compute partner.

Speaker Change: And the next question comes from the line of Joshua Buchalter with TD Cowen. Please proceed with your question.

Vivek Arya: I have always been a believer in you need the right compute for the right workload and so with AI given the diversity of workloads large models media model small models training inference, when youre talking about.

Hey, guys. Thanks for taking my question.

Speaker Change: It was good to see Mark UGG products pulled into mid year.

Speaker Change: And to clarify you said first half 'twenty five data center GPU equity consistent with second half 'twenty four and I was wondering if you could speak to whether or not the shape of a first half changed over the last few months and is potentially related to this pulled in timeline as it could be a potential air pocket pocket ahead of that launch or if this was sort of consistent with how you thought.

Vivek Arya: Broad foundational models or very specific models, you're going to need all types of compute and that includes Cpus Gpus Asics and FPGA.

Vivek Arya: Relative to our 500 billion plus Tam going out in time, we've always had a six as a piece of that but.

Speaker Change: Playing out as my T 50, and 325 X ramps more fully thank you.

Vivek Arya: My belief is given how much <unk>.

Vivek Arya: <unk> there is still going on in AI algorithms that Asics will still be the smaller part of that Tam because it is a more call it specific specific.

Speaker Change: Yes. Thanks for the question Joshua No I would say.

Speaker Change: From from our standpoint, we've gotten.

Speaker Change: Incrementally more positive on the 2025 datacenter GPU ramp I think $3 50 series.

Vivek Arya: Workload optimized, whereas Gpus will enable.

Vivek Arya: Significant programmability and adjustments to all of these algorithm changes but.

Speaker Change: It was in second half always but pulling it into mid year is a incremental positive and from a first half second half statement as I mentioned, we have some new important AI design wins that are going to be deployed with 300 and 325 in the first half of the year, but with $3 50 series, we end up.

Vivek Arya: When I look at the AMD portfolio. It really is across all of those pieces. So Cpus Gpus and we're also involved in a number of basic conversations as well as customers.

Vivek Arya: Customers want to really have an overall compute partner.

Speaker Change: With more content I mean, it's a more powerful GPU Asps go up and you would expect larger deployments that include training and inference in that timeframe. So.

Vivek Arya: And the next question comes from the line of Joshua Buchalter with TD Cowen. Please proceed with your question.

Joshua Buchalter: Hey, guys. Thanks for taking my question.

Joshua Buchalter: He was good the CE Mark UGG products pulled into mid year, but I wanted to clarify you said first half 'twenty five datacenter GPU likely consistent with second half 'twenty four and I was wondering if you could speak to whether or not the shape of a first half changed over the last few months and is potentially related to this pulled in timeline as it could be a potential.

Speaker Change: <unk> is.

Speaker Change: Similar to what we would have expected before.

Speaker Change: Okay. Thank you and I believe you're not going to ask a question on client.

Speaker Change: Obviously the growth number in the fourth quarter again, certainly higher than our model could.

Speaker Change: Could you clarify the drivers of the strength across desktop notebook and enterprise and how we should think about.

Speaker Change: <unk> and in particular to put it bluntly and are you worried at all about inventory build up given how much you are quiet revenue has outperformed the broader PC market in the second half of the year. Thank you.

Joshua Buchalter: Air Pocket pocket ahead of that launch or if this was sort of consistent with how you saw things playing out as <unk> hundred 50, and 325 X ramps more fully thank you.

Speaker Change: Yes, thanks for the question, Josh, but no I would say.

Speaker Change: Yes, thanks for the question.

Speaker Change: Our client business performed really well throughout 2024 in Q4 was a very strong quarter. There are a couple of reasons for that so we should go through that we don't believe there is some substantial inventory buildup, we actually think that what we're seeing is very.

Joshua Buchalter: From from our standpoint, we've gotten increments.

Joshua Buchalter: Incrementally more positive on the 2025 datacenter GPU ramp I think $3 50 series.

Joshua Buchalter: Was in second half always but pulling it into mid year is a incremental positive and from a first half second half statement as I mentioned, we have some new important AI design wins that are going to be deployed with 300 and 325 in the first half of the year, but with $3 50 series, we ended up with.

Speaker Change: Very very strong adoption of our new products. So on the desktop side, we saw our highest sellout in many years as.

Speaker Change: As we went through the holiday season, launching our new gaming Gpus.

Speaker Change: Frankly, they have been constrained in the market and we've continued shipping very strongly through the month of January as we are catching up with some demand. There. So desktop business was very strong and on the notebook side. We also saw a number of our OEM partners launching new AI Pcs.

Joshua Buchalter: With more content I mean, it's a more powerful GPU Asps go up and you would expect.

Joshua Buchalter: Larger deployments that include training and inference in that timeframe. So the shape is.

Joshua Buchalter: Similar to what we would have expected before.

Speaker Change: Okay. Thank you and I believe you're not going to ask a question on client.

Speaker Change: With the slew of new bulk mobile part numbers that we announced at CES, we have our strongest PC portfolio.

Speaker Change: Obviously the growth number in the fourth quarter and it was certainly higher than our model could.

Speaker Change: Could you clarify the drivers of the strength across desktop notebook and enterprise and how we should think about.

Speaker Change: On the mobile side with top to bottom.

Speaker Change: <unk> in particular to put it bluntly and are you worried at all about inventory buildup keeping how much your acquired revenue has outperformed the broader PC market in the second half of the year. Thank you.

Speaker Change: Copilot plus.

Speaker Change: PC compatible.

Speaker Change: Products and those are playing very well into the market. So I think Q4 was strong.

Speaker Change: Know that there was some commentary about whether there were pull ins relative to tariffs.

Speaker Change: Yes, thanks for the question.

Speaker Change: I don't we didn't see that in the fourth quarter I think as I said, we saw strong sell out.

Speaker Change: Going into the first quarter, we do expect seasonality in there, but the part of our business that is performing better than seasonality is the desktop portion of the business and the mobile a portion of the business as you know let's call. It more typical seasonality, but overall I think we're very bullish on our prospects to grow clients in 2025.

Speaker Change: Very very strong adoption of our new products. So on the desktop side, we saw our highest sellout in many years.

Speaker Change: As we went through the holiday season, launching our new gaming Gpus.

Speaker Change: Just given all of the drivers from product portfolio to some of the <unk>.

Speaker Change: Frankly, they have been constrained in the market and we've continued shipping very strongly through the month of January as we are catching up with some demand there. So a desktop business was very strong and on the notebook side. We also saw a number of our OEM partners launching new AIP seeds with the flu.

Speaker Change: Market dynamics as well as our new commercial Pcs.

Speaker Change: Portfolio.

Speaker Change: And the next question comes from the line of Harlan sur with Jpmorgan. Please proceed with your question.

Harlan Sur: Hi, Good afternoon. Thanks for taking my question for the fourth quarter did your overall server CPU business grow double digit sequentially and it is a follow on to that.

Speaker Change: <unk>, new bulk mobile part numbers that we announced at CES, we have our strongest PC portfolio.

Harlan Sur: I think Q4 was the sixth consecutive quarter of double digit year over year increases were on term service solutions.

Speaker Change: On the mobile side with top to bottom.

Speaker Change: Copilot plus.

Speaker Change: PC compatible.

Speaker Change: Sequential basis, I know you guys did start to see recovery in enterprise in the second quarter of last year I think it was strongly up sequentially in the third quarter, a pretty broad based to the enterprise servers grow sequentially in Q4, and you saw how do you see the share prospects in this segment as you step into 2025.

Speaker Change: Products and those are playing very well into the market. So I think Q4 was strong.

Speaker Change: Know that there was some commentary about whether there were pull ins relative to tariffs.

Speaker Change: I don't we didn't see that in the fourth quarter I think as I said, we saw strong sell out.

Speaker Change: Going into the first quarter, we do expect seasonality in there, but the part of our business that is performing better than seasonality as the desktop portion of the business and the mobile a portion of the business as you know let's call. It more typical seasonality, but overall I think we're very bullish on our prospects to grow clients in 2025.

Speaker Change: Yeah Harlan thanks for the question. So I think as Steve mentioned earlier, so in the fourth quarter, we did see a sequential.

Speaker Change: Sequential double digit growth in our server business we.

Speaker Change: We saw that in both cloud and enterprise I think the server business has been performing extremely well.

Speaker Change: Continuing to grow our cloud footprint with more workloads as we have.

Speaker Change: Just given all of the drivers from product portfolio to some of the.

Speaker Change: The market dynamics as well as our new commercial Pcs.

Speaker Change: The strength of the turn portfolio.

Speaker Change: In addition to general in Milan, and then to your question on enterprise.

Speaker Change: Portfolio.

Harlan Sur: And the next question comes from the line of Harlan sur with Jpmorgan. Please proceed with your question.

Speaker Change: I do believe we're seeing some strong traction in the enterprise I think whats, helping us there is frankly, we've invested.

Harlan Sur: Hi, Good afternoon. Thanks for taking my question for the fourth quarter did your overall server CPU business grow double digit sequentially and he does a follow on to that.

Speaker Change: A lot more and go to market and the go to market investments are paying off the enterprise sales cycle is often a six to nine month sales cycle, but as we've invested more resources in it throughout 2024, and we've seen that converts into a significant number of new POC that are now converting.

Speaker Change: I think Q4 was the sixth consecutive quarter of double digit year over year increases for your on Prem server solutions.

Speaker Change: Into volume deployments and as we go through into 2025.

Speaker Change: From a competitiveness standpoint.

Speaker Change: Have a very strong portfolio across every price point every core count every workload.

Speaker Change: So I think we see a strong 2025 for surface Cpus.

Speaker Change: Yeah Harlan thanks for the question. So I think as Steve mentioned earlier, so in the fourth quarter, we did see.

Speaker Change: I appreciate that networking is a very critical part of the infrastructure of the company to.

Speaker Change: Sequential double digit growth in our server business.

Speaker Change: Becoming even more important because they.

Speaker Change: It seems to give you some misconception that aim.

Speaker Change: We saw that in both cloud and enterprise I think the server business has been performing extremely well.

MD is behind the curve here yet.

Speaker Change: Keeping pace kind of leveraging the incumbent you cannot technology.

Speaker Change: Continuing to grow our cloud footprint with more workloads.

Speaker Change: <unk> installed ecosystem you guys are spearheading the option of using a consortium you've got your infinity fabric technology for scale up connectivity. So you continue to drive customer adoption of your overall <unk> platforms.

Speaker Change: As we have.

Speaker Change: The strength of the turn portfolio.

Speaker Change: In addition to general in Milan, and then to your question on enterprise.

Speaker Change: I do believe we're seeing some strong traction in the enterprise I think whats, helping us there is frankly, we've invested.

Speaker Change: What's the feedback been like on your AI networking architectures and any networking related innovations the team is going to be bringing to the market. This year.

Speaker Change: A lot more on go to market and the go to market investments are paying off the enterprise sales cycle is often a six to nine months sales cycle, but as we've invested more resources in it throughout 2024, we've seen that converts into a significant number of new <unk> that are now converting.

Speaker Change: Yeah. Thanks Heartland for that question no question networking is an extremely important part of the AI solution and it's an area that we have been investing and spending quite a bit of effort with our customers and our partners jointly the way to think about it is that our networking proof points are.

Speaker Change: Into volume deployments and as we go through into 2025.

Speaker Change: <unk>, increasing as we're going from.

Speaker Change: From a competitiveness standpoint.

Speaker Change: 300, <unk> hundred 25 to $3 50 to 400, so in each of those points, we're increasing the number of proof points I think people want to see.

Speaker Change: Have a very strong portfolio across every price point every core count every workload. So I think we see a strong 2025 for server Cpus.

Speaker Change: More clusters of ours, certainly an influence we've shown.

Speaker Change: I appreciate that.

Speaker Change: Great performance and total cost of ownership. We are now also have a number of training systems that we are putting on board and the important part there is the networking we have worked very closely with our partners on Ethernet. We believe that this is the right.

Speaker Change: Makena is a very critical part of the infrastructure of the company, becoming even more important.

Speaker Change: To give you some misconception that AMD is behind the curve here yet you are keeping pace kind of leveraging the incumbent you cannot technology strong installed ecosystem you guys are spearheading the option of using a consortium.

Speaker Change: AG for the future. In addition to third party networking solutions were also with our <unk> team developing our own in house AI, Nick That's a force mentioned.

Speaker Change: Got Ya Infinity fabric technology for scale up connectivity. So as you continue to drive customer adoption of your overall platforms. What's the feedback been like on your AI networking architectures and any networking related innovations. The team is going to be bringing to the market. This year.

Speaker Change: At our Q4 advancing AI event.

Speaker Change: And as we look forward working with our customers we are actually standing up.

Speaker Change: Yeah, Thanks, Harlan for that question.

Speaker Change: Full rack solutions.

Speaker Change: No question networking is an extremely important part of the AI solution.

Speaker Change: About $3 50 level as well as in the 400 series. So I think the net of it is we believe that yes. It is absolutely very important and in addition to all of the hardware and software work the system level scaling is super important and we are on <unk>.

Speaker Change: It's an area that we have been investing and spending quite a bit of effort with our customers and our partners jointly the way to think about it is that our networking proof points are actually increasing as we're going from three.

Speaker Change: 300, <unk> hundred 25 to $3 50 to 400, so in each of those points, we're increasing the number of proof points I think people want to see.

Speaker Change: To deliver that with our roadmap.

Speaker Change: And the next question comes from the line of Blayne Curtis with Jefferies. Please proceed with your question Hey, Thanks.

Speaker Change: More clusters of ours, certainly an influence we've shown.

Blayne Curtis: Taking my question I, just want to follow up the data center GPU business obviously.

Speaker Change: Great performance and total cost of ownership. We are now also have a number of training systems that we are putting on board and the important part there is the networking.

Blayne Curtis: Very strongly year over year, but thanks for your commentary kind of the sequential growth kind of flows from that kind of three quarters. So just wanted to understand the why obviously you have some new products coming so maybe it's just the shift to the new products I also want to just finger bring on in terms of when you look at the ACC storylines <unk> via.

Speaker Change: Have worked very closely with our partners on Ethernet, we believe that this is the right technology for the future. In addition to third party networking solutions were also with our <unk> team developing our own in house AI, Nick That's a force mentioned.

Blayne Curtis: It'd be kind of a shift to focus on training versus <unk>. So just your perspective I know a lot of your workloads initially were in <unk>.

Blayne Curtis: Are you seeing any shift in terms of the demand from our customers between training in France as well.

Speaker Change: At our Q4 advancing AI event and as we look forward working with our customers. We are actually standing up full rack solutions at about the $3 50 level as well as in the 400 series. So I think the net of it is we believe that yes. It is absolutely very.

Blayne Curtis: Yeah, sure Blayne, well the way I would say it is yes, we saw a tremendous growth as we built up the datacenter GPU business throughout 2024. So I think what we're seeing is we're continuing to do new deployments, we are continuing to bring on new customers.

Blayne Curtis: Clearly, we are going through a little bit of a product transition timeframe in the first half of the year, but.

Speaker Change: Portland, and in addition to all of the hardware and software.

Speaker Change: Work the system level scaling is super important.

Blayne Curtis: The key is bringing in the $3 50 series was a very very important for us and for.

Speaker Change: And we are on track to deliver that with our roadmap.

Blayne Curtis: The customer set so the fact that that hardware has come on clean and we've learned a lot from the initial deployments of <unk> 300, I think is very positive.

Speaker Change: And the next question comes from the line of Blayne Curtis with Jefferies. Please proceed with your question.

Speaker Change: And my question I, just want to follow up the data center GPU business obviously.

Blayne Curtis: And this is as we might expect given the.

Blayne Curtis: Overall landscape of deployments.

Speaker Change: Very strongly year over year, but it seems from your commentary kind of the sequential growth kind of flows from that kind of three quarters. Just wanted to understand the why obviously you have some new products coming so maybe it's just the shift to the new products I also want to just finger bring on in terms of when you look at the ACC storylines <unk> via.

Blayne Curtis: And then.

Blayne Curtis: The second part of your question as it relates to Asics.

Blayne Curtis: I really haven't seen a big shift at all in the conversation I will say that the conversation as it relates to AMD is kind of the following.

Speaker Change: It'd be kind of a shift to focus on training versus <unk>. So just your perspective I know a lot of your workloads initially were in drinks.

Blayne Curtis: People like the work that we've done an influence.

Blayne Curtis: But certainly our customers want to see us as a training.

Speaker Change: Are you seeing any shift in terms of the demand from your customers between training in France as well.

Blayne Curtis: As a a strong training.

Blayne Curtis: Our solution and that's consistent with what we said right. We've said that we have like a step wise.

Speaker Change: Yeah, sure Blayne, well the way I would say it is we saw a tremendous growth as we built up the datacenter GPU business throughout 2024. So I think what we're seeing is we're continuing to do new deployments, we are continuing to bring on new customers.

Blayne Curtis: Our roadmap to two.

Blayne Curtis: To really show each one of those solutions on the software side, we've invested significantly more in some of those.

Blayne Curtis: Sort of the trading libraries, we talked.

Speaker Change: Clearly, we are going through a little bit of a product transition timeframe in the first half of the year, but.

Blayne Curtis: Heartlands question earlier about networking and then this is about just getting into data centers and ramping up tens of thousands of Gpus. So from my standpoint, I think we're making very good progress there and I just want to reiterate on the ASIC side look I think a six or a.

Speaker Change: The key is bringing in the mid 350 series was a very very important for us and.

Speaker Change: For the customer set so the fact that that hardware has come on Queen and we've learned a lot from the initial deployments of <unk> 300, I think is very positive.

Blayne Curtis: A part of the solution, but there.

Blayne Curtis: I wanted to remind everyone. There also as a very strong.

Speaker Change: And this is as we might expect given the.

Blayne Curtis: A strong part of the AMD sort of toolbox, so we've done.

Speaker Change: Overall landscape of deployments.

Speaker Change: And then.

Blayne Curtis: Semi custom solutions.

Speaker Change: The second part of your question as it relates to Asics.

Blayne Curtis: For a long time.

Blayne Curtis: Very involved in a number of ASIC discussions with our customers as well and what they like to do is they'd like to take our baseline IP and really innovate on top of that.

Speaker Change: I really haven't seen a big shift at all in the conversation I will say that the conversation as it relates to AMD is kind of the following.

Blayne Curtis: That's what that's what I think differentiates our capability is that we do have all of the building blocks of Cpus Gpus as well as all of the.

Speaker Change: People like the work that we've done an influence.

Speaker Change: But certainly our customers want to see us as a training.

Speaker Change: As a strong training.

Blayne Curtis: Networking technologies that you would need to put the solutions together.

Speaker Change: Our solution and that's a consistent with what we said right. We've said that we have like a step wise.

Blayne Curtis: Thank you.

Speaker Change: Okay. Operator, I think we have time for two more callers. Please.

Speaker Change: Our roadmap to two.

Speaker Change: Okay. The next question comes from the line of Stacy <unk> with Bernstein Bernstein Research. Please proceed.

Speaker Change: To really show each one of those solutions on the software side, we've invested significantly more in some of those.

Stacy: Hi, guys. Thanks for taking my questions.

Speaker Change: Sort of the trading libraries, we talked.

Speaker Change: I wanted to ask a little more explicitly. So you said your server business was up strong double digits sequentially in Q4.

Speaker Change: Heartlands question earlier about networking and then this is about just getting into datacenters and ramping up tens of thousands of Gpus. So from my standpoint, I think we're making very good progress there.

Speaker Change: My math suggests that could've, even meant that the GPU business was down sequentially and given your guidance for I guess flattish.

Speaker Change: I just want to reiterate on the ASIC side look I think asics are a.

Speaker Change: A part of the solution, but there.

<unk> in the first half of 'twenty four versus second half of 'twenty four.

I wanted to remind everyone. There are also a very.

Speaker Change: Again does the math Mark suggested you'd be down sequentially, both in Q1 and in Q2.

Speaker Change: Strong part of the AMD sort of toolbox, so we've done.

Speaker Change: I doing something wrong with my math like what am I missing here.

Speaker Change: Semi custom solutions.

Speaker Change: For a long time, we are very involved in a number of ASIC discussions with our customers as well and what they like to do is they'd like to take our baseline IP and really innovate on top of that.

Speaker Change: Yes.

Speaker Change: Perhaps Stacy maybe let me let me help give you a little bit of color. There I don't think we said strong double digits I think we said double digits. So that perhaps is the.

Speaker Change: That's what that's what I think differentiates our capability is that we do have all of the building blocks of Cpus Gpus as well as all of the.

Speaker Change: So the data center segment was up 9% sequentially server was a bit more than that datacenter GPU was a little less than that I think for some of the models that are out there you might be a little bit light in the Q3 data center GPU number.

Speaker Change: Networking technologies that you would need to put solutions together.

Speaker Change: Thank you.

Speaker Change: Okay. Operator, I think we have time for two more callers. Please.

Speaker Change: There might be some adjustments that need to be done there, but I think your suggestion would be incorrect.

Speaker Change: Okay. The next question comes from the line of Stacy <unk> with Bernstein Bernstein Research. Please proceed.

Speaker Change: We.

Speaker Change: You just take the half second half 'twenty four to first half 'twenty five let's call it roughly flattish plus or minus I mean, we will see exactly how it goes but.

Stacy: Hi, guys. Thanks for taking my questions.

Stacy: I wanted to ask a little more explicitly. So you said your server business was up strong double digits sequentially in Q4.

Speaker Change: It is going to be a little bit dependent on just one deployments happen, but that's currently what we see.

Stacy: My math suggests that could've, even meant that the GPU business was down sequentially and given your guidance for I guess flattish.

Speaker Change: Got it thanks, and I guess for my follow up maybe the follow on there.

Speaker Change: Do you think your exit rate on Gpus in 25 was higher than your exit rate in 'twenty four.

Stacy: Q2s in the first half of 'twenty versus second half.

Stacy: 24.

Stacy: Again does the math Mark suggested you'd be down sequentially, both in Q1 and in Q2.

Speaker Change: Are you willing to commit to that.

Absolutely.

Speaker Change: Yes of course.

Stacy: Am I doing something wrong with my math or what am I missing here.

Speaker Change: It would be hard to grow strong double digits otherwise right.

Stacy: Yeah.

Speaker Change: Perhaps Stacy maybe let me let me help give you a little bit of color there.

Speaker Change: Okay.

Speaker Change: And the final question comes from the line of Toshi Hari with Goldman Sachs. Please proceed with your question.

Speaker Change: We said strong double digits I think we said double digits, so that perhaps is.

Toshi Hari: Hi, Thank you so much for squeezing me in.

Speaker Change: So data center segment was up 9% sequentially server was a bit more than that datacenter GPU was a little less than that.

Toshi Hari: So I had a question on the server CPU business Im curious, how youre thinking about the market. This year and if you can delineate between cloud and enterprise that would be really helpful.

Speaker Change: For some of the models that are out there.

Toshi Hari: And then kind of part B to that question in your prepared remarks, you talked about.

Speaker Change: Might be a little bit light in the Q3 data center GPU number.

Speaker Change: So there might be some adjustments that need to be done there but.

Toshi Hari: You, all having more than 50% share across the major hyperscale or how would you characterize the competitive intensity at those customers visiting some of internal custom silicon that's expected to ramp over the coming quarters and years.

Speaker Change: Your suggestion would be incorrect.

Speaker Change: If you just take the half second half 'twenty four to first half 'twenty five let's call it roughly flattish plus or minus I mean, we will see exactly how it goes but.

Toshi Hari: Sure, Yes, so let me say as we look into 2025, I think we see a.

Speaker Change: It is going to be a little bit dependent on just one deployments happen, but that's currently what we see.

Toshi Hari: A good server market between cloud and enterprise.

Speaker Change: Got it thanks, and I guess for my follow up maybe the follow on there.

Toshi Hari: I think as we went into sort of the early part of 'twenty four there was a little bit of let's call. It less investment on the CPU side as people were optimizing investments for AI, we saw that sort of pick.

Speaker Change: Do you think your exit rate on Gpus in 'twenty five is higher than your exit rate in 'twenty four.

Are you willing to commit to that.

Speaker Change: Absolutely.

Toshi Hari: Pick up in the second half of the year in 'twenty, four and we would expect that to go into 25.

Speaker Change: Yes of course.

Speaker Change: It would be hard to grow strong double digits otherwise right.

Toshi Hari: So the enterprise refresh cycles are coming in again and certainly there are a number of cloud.

Speaker Change: Okay.

Speaker Change: And the final question comes from the line of Toshi Hari with Goldman Sachs. Please proceed with your question.

Toshi Hari: Vendors that are now let's call it a re updating some of their data centers.

Toshi Hari: Hi, Thank you so much for squeezing me in.

Toshi Hari: And then.

Toshi Hari: So I had a question on the server CPU business Im curious, how youre thinking about the market this year and if you can delineate.

Toshi Hari: Your second question was as it relates to.

Toshi Hari: What was the competitive.

Toshi Hari: Sorry.

Toshi Hari: Between cloud and enterprise that would be really helpful.

Toshi Hari: Okay.

Toshi Hari: Hum.

Toshi Hari: Kind of part B to that question in your prepared remarks, you talked about.

Toshi Hari: I think it's about the same what I would say.

Toshi Hari: There is it's less about custom silicon versus.

Toshi Hari: Versus X 86, it's much more about do you have the right product for the right workload.

Toshi Hari: The server market is always a competitive market, what we've done and you've seen it in our <unk> four product line as well as in our <unk> product line, we've expanded the design points for each of the.

Toshi Hari: Sure, Yes, so let me say as we look into 2025, I think we see a.

A good server market between cloud and enterprise.

Toshi Hari: Yes.

Toshi Hari: Each of the the core generation so that we have cloud native and then we have enterprise optimized low core count hi.

Toshi Hari: <unk>.

Speaker Change: I think as we went into sort of the early part of 'twenty four there was a little bit of let's call. It less investment on the CPU side. As you know people were optimizing investments for AI, we saw that sort of a pickup.

Toshi Hari: High core count highest performance.

Toshi Hari: <unk> per dollar and I think as we do those things.

Speaker Change: Pick up in the second half of the year in 'twenty, four and we would expect that to go into 25.

Toshi Hari: We are continuing to grow share across both cloud and enterprise and look it's always very competitive we take.

Speaker Change: So the enterprise refresh cycles are coming in again and certainly there are a number of cloud.

Toshi Hari: <unk> design win with.

Toshi Hari: Very very.

Speaker Change: Vendors that are now let's call it a re updating some of their data centers.

Toshi Hari: Very seriously but.

Toshi Hari: We're winning our fair share and I think thats the strength of the product portfolio and also I think there's a good amount of trust for our our delivery capability.

Speaker Change: And then.

Speaker Change: Your second question was as it relates to.

Speaker Change: What was the competitive.

Toshi Hari: <unk> are sort of.

Speaker Change: Sorry.

Toshi Hari: Our franchise over the last number of years.

Speaker Change: Okay.

Speaker Change: Hum.

Speaker Change: That's great. Thank you and then as a quick follow up maybe one for Jean Pierre.

I think it's about the same what I would say.

Regarding gross margin to 54% in the first quarter I am curious what some of the major puts and takes are and those are things that we should be cognizant of going into Q2 and more importantly, the second half.

Speaker Change: It is it's less about custom silicon versus.

Speaker Change: Versus X 86, it's much more about do you have the right product for the right workload.

Speaker Change: Given your data center commentary skewed more to the second half I would expect margins to improve in the second half but.

The server market is always a competitive market, what we've done and you've seen it in our <unk> four product line as well as in our Gen. Five product line, we've expanded the design points for each of the.

Speaker Change: If you can if you can kind of run through the pluses and minuses that would be really helpful. Thank you.

Speaker Change: Yes. Thanks for the question Youre right. Our gross margin is primarily driven by our revenue mix Ah I think when you look at look into 2025 with Q1 tied to <unk>.

Speaker Change: Each of the the core generation so that we have cloud native and then we have enterprise optimized low core count hi.

Speaker Change: High core count highest performance.

Speaker Change: The only data center continued to grow significantly year over year at the same time apply on the business is also growing year over year. So overall the revenue mix is quite consistent to be the Q4.

Speaker Change: <unk> per dollar and I think as we do those things.

Speaker Change: We are continuing to grow share across both cloud and enterprise and look it's always very competitive we take.

Speaker Change: Every design win with <unk>.

Speaker Change: So the gross margin guidance of 54, I think for the first half or if the revenue mix is at this level. We do feel the gross margin will be consistent debated at 54, but going into the second half will we do BD, but data center is our fastest growth driver for the company.

Speaker Change: So very.

Speaker Change: Very seriously but.

Speaker Change: We're winning our fair share and I think thats the strength of the product portfolio and also I think there's a good amount of trust for our our delivery capability.

Speaker Change: Built up our sort of our franchise over the last number of years.

Speaker Change: And that will drive the gross margin to step up in second half.

Speaker Change: That's great. Thank you and then as a quick follow up maybe one for Jean Pierre you're guiding gross margin to 54% in the first quarter I am curious what some of the major puts and takes are and those are things that we should be cognizant of going into Q2 and more importantly, the second half given.

Speaker Change: Alright with that.

I think we are ready to close the call now operator I just wanted to say thank you to everybody that listened and participated today and for your interest in AMD. Thank you very much.

Speaker Change: Okay.

Speaker Change: And ladies and gentlemen that does conclude today's teleconference. We thank you for your participation participation you may disconnect your lines at this time.

Speaker Change: Given your data center commentary skewed more to the second half I would expect margins to improve in the second half, but if you can if.

Speaker Change: If you can kind of run through the pluses and minuses that would be really helpful. Thank you.

Speaker Change: Yes. Thanks for the question Youre right. Our gross margin is primarily driven by our revenue makes it all I think when you look at looking into 2025 with Q1 tied to.

Speaker Change: Not the only data center continue to grow significantly year over year at the same time apply on the business is also growing year over year. So overall the revenue mix is quite consistent to be the Q4.

Speaker Change: In second half.

Speaker Change: Alright with that.

Speaker Change: We are ready to close the call now operator I just wanted to say, thank you to everybody that listened and participated today and for your interest in AMD. Thank you very much.

Speaker Change: Okay.

Speaker Change: Thank you and ladies and gentlemen that does conclude today's teleconference. We thank you for your participation participation you may disconnect your lines at this time.

Speaker Change: Yeah.

Speaker Change: Uh-huh.

Speaker Change: Hum.

Speaker Change: Mhm.

Speaker Change: [music].

Speaker Change: Hum.

Speaker Change: Okay.

Speaker Change: Hum.

Speaker Change: [noise] Hum.

Speaker Change: Hum.

Speaker Change: [music].

Speaker Change: Hum.

Hum.

Speaker Change: [music].

Speaker Change: Yeah.

Speaker Change: [music].

Speaker Change: Okay.

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