AMD earned $6.55 billion in Q2; net income dropped to $447 million.

AMD on Tuesday reported its revenue of $6.6 billion for the second quarter of 2022, its highest quarterly revenue ever. In addition, all AMD products, including CPUs and GPUs, increased in Q2 2022. Nonetheless, shipments of products for client PCs started to demonstrate softness because of growing inflation and a challenging macroeconomic environment.

AMD's revenue for the second quarter of 2022 increased 70% year-over-year due to the company's products success and adding products from Pensando and Xilinx to AMD's family. The company posted a gross of 46%, net income of $447 million, and earnings per share of $0.27. While AMD's net income dropped 37% year-over-year, it was primarily due to the amortization of intangible assets associated with the Xilinx acquisition, the chip designer explained.

AMD's Client Computing segment — which includes desktop and notebook CPUs as well as chipsets — remained the company's main cash cow in Q2 with $2,152 billion revenue (up 25% year-over-year) and $676 million operating income (a YoY growth). In addition, the chipmaker noted solid sales of its mobile Ryzen CPUs and their increased average selling prices (compared to the same quarter a year ago), which helped boost client computing segment revenue.

Sales of Datacenter products — CPUs, GPUs, Xilinx FPGAs, and Pensando DPUs — surged to $1,486 billion compared to Q2 2021, an increase of 83%. To a large degree, AMD's data center business unit posted a massive gain as it added FPGAs and GPUs to its lineup. Still, AMD's EPYC processor shipments increased as the company continued to win designs with server makers.

AMD's Gaming business — which includes client GPUs and console system-on-chips — demonstrated mixed results during the quarter. On the one hand, AMD's gaming hardware sales boosted 32% year-over-year to $1,655 billion. But on the other hand, the operating income of the business unit increased by only 7%, to $187 million. AMD said that mixed results resulted from slowing demand for consumer graphics cards by gamers and miners following strong 2021, slowing demand for client PCs, and dropping graphics card prices.

Shipments of AMD's Embedded products (which includes embedded solutions both from AMD and Xilinx) totaled $1,257 billion, an increase of a whopping 2,228% year over year primarily because of the low base effect as AMD's shipments of embedded products were not exceptionally high in the recent years.

AMD expects its revenue to increase to $6.7 billion ± $200 million in Q3 2022, which is 55% higher than Q3 2021. The company expects its revenue growth to be driven primarily by expensive data center products and embedded products from Xilinx. While the company confirmed plans to release its Ryzen 7000-series 'Raphael' processors this fall and Radeon RX 7000-series GPUs based on its RDNA 3 architecture later this year, it did not quantify how these launches improve the results of its Client Computing and Gaming businesses. Meanwhile, AMD must maintain its $26.3 billion ± $300 million revenue guidance for 2022, an increase of 60% over 2021.