AMD posts highest Q1 result ever — Strong CPU sales, but GPUs and gaming trail behind
AMD warns that the U.S. export tariffs may hit its sales
Late on Tuesday, AMD announced its financial results for the first quarter of fiscal 2025, posting its highest quarterly revenue ever. The company's results were driven by sales of expensive client and datacenter CPUs as well as improved sales of Instinct MI300-series AI accelerators. However, the company's gaming earnings dropped mainly due to the slowdown of console sales. But while the company's revenues in Q1 set records, AMD warned that the U.S. export tariffs may hit its sales by around $1.5 billion in 2025.
AMD posted a revenue of $7.438 billion for the first quarter of 2025, up 36% year-over-year. When it comes to earnings, this is the best quarter posted by AMD throughout its history. In fact, it is more than AMD earned for the whole year 2019. AMD's gross profit totaled $3.736 billion, whereas its net income achieved $709 million for the quarter (up a whopping 2,139% for the same quarter a year ago) as its gross margin hit 50%.
"We delivered an outstanding start to 2025 as year-over-year growth accelerated for the fourth consecutive quarter driven by strength in our core businesses and expanding data center and AI momentum," said Dr. Lisa Su, AMD chair and CEO. "Despite the dynamic macro and regulatory environment, our first quarter results and second quarter outlook highlight the strength of our differentiated product portfolio and consistent execution positioning us well for strong growth in 2025."
In the first quarter, AMD's Client and Gaming division generated $2.9 billion in revenue, reflecting a 28% increase compared to the same period last year. The Client subsegment contributed $2.3 billion, marking a 68% rise year-on-year, largely fueled by high interest in the latest generation of Ryzen AI processors and a product mix that included more premium parts (such as Ryzen 9000 X3D for desktops and Ryzen AI 300-series for laptops).
In contrast, revenue from the Gaming subsegment declined 30% to $647 million, mainly due to reduced contributions from AMD's semi-custom system-on-chips for Microsoft Xbox and Sony PlayStation game consoles. Nonetheless, AMD expressed optimism about sales of its latest Radeon RX 9070-series graphics cards for desktop PCs based on the RDNA 4 architecture.
AMD's Data Center division reported $3.7 billion in revenue in Q1 2025, reflecting a 57% rise compared to the same quarter last year. This sharp increase was primarily fueled by continued momentum in server processor, particularly the 5th Generation EPYC CPUs. Nonetheless, AMD says that sales of its Instinct MI300-series accelerators for AI also inreased. Specifically, AMD, highlighted new deployments of of its AI GPUs with Core42, Oracle, and Siemens.
AMD's Embedded products unit generated $823 million in the first quarter, a 3% decrease from the prior year. This decline reflected varied conditions across end markets, with some areas showing strength while others struggling. Specifically, the launch of the EPYC Embedded 9005 processors, which are being integrated into IBM's latest storage systems and Cisco's high-end network security appliances, positively affected performance of the division. In addition, AMD also began shipments of Spartan UltraScale+ FPGAs and second-generation Versal AI Edge SoCs. However, demand for other products was a mixed bag.
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Looking ahead to the second quarter of 2025, AMD anticipates revenue to be around $7.4 billion ±$300 million. However, the company's profitability is expected to be impacted by a one-time $800 million inventory-related charge tied to the recently imposed U.S. export controls, which will lower the reported gross margin to around 43%. Without this adjustment, the gross margin would be around 54%.
Anton Shilov is a contributing writer at Tom’s Hardware. Over the past couple of decades, he has covered everything from CPUs and GPUs to supercomputers and from modern process technologies and latest fab tools to high-tech industry trends.
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-Fran- Wait. Wait a second. Where are the layoffs? Aren't successful Companies meant to fire their employees when they are doing well?Reply
Regards. -
TerryLaze Reply
You first need to have employees to then fire them.-Fran- said:Wait. Wait a second. Where are the layoffs? Aren't successful Companies meant to fire their employees when they are doing well?
Regards.
And yeah, with their operating expenses being 39% of revenue, and their net income being less than 10% ,they wish they could fire people to keep a bit more of that pie. -
Zaranthos GPU sales lag behind because you can't get them. Months now with almost nothing but scalper pricing and news articles about new models being released. MSRP and actual prices are so far apart it's hard to justify buying a new GPU. This will all be a lot easier when a factory can be run mostly by AI with robots that can all go idle when demand is low and almost instantly ramp up production when demand goes up. Maybe AI can replace some of the over paid CEO's as well.Reply -
KyaraM Reply
In the US, maybe. In Europe, all cards, be it Nvidia or AMD, are available, and most Nvidia cards even below MSRP. AMD are currently all over MSRP, but they are available. Oh, and even with sales tax, they are cheaper than in the US. I wonder why that might be^^Zaranthos said:GPU sales lag behind because you can't get them. Months now with almost nothing but scalper pricing and news articles about new models being released. MSRP and actual prices are so far apart it's hard to justify buying a new GPU. This will all be a lot easier when a factory can be run mostly by AI with robots that can all go idle when demand is low and almost instantly ramp up production when demand goes up. Maybe AI can replace some of the over paid CEO's as well. -
TerryLaze Reply
Ain't nobody gonna build a hugely expensive FAB to have it sit idle, if your money press ain't pressin you ain't making money, and if you ain't making money you are losing money.Zaranthos said:This will all be a lot easier when a factory can be run mostly by AI with robots that can all go idle when demand is low and almost instantly ramp up production when demand goes up. Maybe AI can replace some of the over paid CEO's as well.
The best we can hope for is that amd and nvidia will start using intel in addition to tsmc so that they can make more product building up to releases, if people can be sure that there will be enough cards for everybody then scalping has no chance. -
bit_user Reply
It's not the workers that are the bottleneck, except I guess when building a new fab and doing the initial workforce hiring and training. Once a fab is up and running, I think they run 24/7.Zaranthos said:This will all be a lot easier when a factory can be run mostly by AI with robots that can all go idle when demand is low and almost instantly ramp up production when demand goes up.
The bottleneck is lithography machines. First, ASML produces them rather slowly, because they're incredibly exacting, like scientific instruments, and take a long time to install and setup, for the same reasons. Second, they're so expensive that you only buy as many as you think you can keep busy. -
-Fran- Reply
Around 38K employees, if my GoogleFu is to be trusted. So, yeah, they could fire some if they wanted to... I don't know why they would, but they could. Hence the rethoric question.TerryLaze said:You first need to have employees to then fire them.
And yeah, with their operating expenses being 39% of revenue, and their net income being less than 10% ,they wish they could fire people to keep a bit more of that pie.
I guess most companies wait until XMas time, so they get them a nice XMas send off.
Regards. -
Mr Majestyk Reply
In Australia the supply is similar, about half the models are available in a given class and half sold out. 5070 Ti is massively dearer than 9070XT, $150US becomes $400-500AUKyaraM said:In the US, maybe. In Europe, all cards, be it Nvidia or AMD, are available, and most Nvidia cards even below MSRP. AMD are currently all over MSRP, but they are available. Oh, and even with sales tax, they are cheaper than in the US. I wonder why that might be^^ -
lmcnabney AMD isn't making that many GPUs because they want to make more money.Reply
They have only contracted for so many wafers with TSMC. For every wafer they turn into 9070s that is one less wafer of 9800X3Ds. The die size of a 9800X3D is 70.6mm while the 9070 is 357 and it requires expensive RAM. They are probably making at least 5x as much per wafer making CPUs than GPUs. -
thestryker Reply
They're in that bubble where their operations are lean enough they aren't culling, but their outlook also isn't good right now either. I'm sure if AI/graphics was looking good you'd get that classic, stupid, corporate "we're optimizing..." cover for layoffs.-Fran- said:Wait. Wait a second. Where are the layoffs? Aren't successful Companies meant to fire their employees when they are doing well?