AMD announced its fourth-quarter 2019 and full-year earnings results today, with top-line numbers including record quarterly revenue of $2.13 billion, a 50% gain over the prior quarter. AMD also notched a record $6.73 billion in revenue in 2019, a 4% increase over the prior year.

AMD CEO Lisa Su announced during the earnings call that the company will introduce its next-gen RDNA architecture in 2020, saying, "In 2019 we launched our new architecture in GPUs, it’s the RDNA architecture, and that was the Navi-based products. You should expect those will be refreshed in 2020 and we'll have our next-generation RDNA architecture that will be part of our 2020 lineup."

There has been some confusion over Su's use of the term "refresh," which we've covered here. In short, we shouldn't expect to see a refreshed lineup of Navi cards based on the tech community's typical definition of a refresh. Instead, we will see new cards based on the next-gen RDNA architecture.

Su didn't share any details about the new graphics cards but said the company would announce more details at its Investor Day on March 5, 2020. Su also said we could expect new data center GPUs in the second half of 2020, too.

On the Computing and Graphics side of the business, which encompasses both Ryzen and Radeon products, AMD's revenue grew 69% on the year to $4.7 billion, and 30% over the prior quarter to $1.66 billion. Comparatively, Intel generated $10 billion in revenue for its consumer CPUs last quarter.

7nm products and Ryzen Mobile processors drove AMD's sales, and AMD CEO Lisa Su stated that the company had the highest processor sales in six years. Graphics unit shipments also grew by "double-digit" percentage year-over-year (YoY), driven by Radeon RX 5000 sales.

AMD's quick move to TSMCs 7nm process has given the company its first process lead over Intel in its history. AMD's 7nm chips now comprise 50% of its overall revenue, and Su noted that its 7nm volume would continue to grow throughout 2020. That doesn't come without challenges, but AMD has largely moved beyond the initial shortages. AMD is working diligently to ensure continued supply, with Su noting that even though "it's fair to say that wafer supply is tight," AMD's current supply visibility supports its projected sales during 2020.

Su also noted that AMD expects "resistance" from its competitors this year, including on the pricing front. Su said AMD is gaining market share in the consumer processor market, mirroring Intel's claims during its own recent earnings call. We expect the coming market share reports will suss out the actual winners.

Image 1 of 31 (Image credit: AMD) Image 2 of 31 (Image credit: AMD) Image 3 of 31 (Image credit: AMD) Image 4 of 31 (Image credit: AMD) Image 5 of 31 (Image credit: AMD) Image 6 of 31 (Image credit: AMD) Image 7 of 31 (Image credit: AMD) Image 8 of 31 (Image credit: AMD) Image 9 of 31 (Image credit: AMD) Image 10 of 31 (Image credit: AMD) Image 11 of 31 (Image credit: AMD) Image 12 of 31 (Image credit: AMD) Image 13 of 31 (Image credit: AMD) Image 14 of 31 (Image credit: AMD) Image 15 of 31 (Image credit: AMD) Image 16 of 31 (Image credit: AMD) Image 17 of 31 (Image credit: AMD) Image 18 of 31 (Image credit: AMD) Image 19 of 31 (Image credit: AMD) Image 20 of 31 (Image credit: AMD) Image 21 of 31 (Image credit: AMD) Image 22 of 31 (Image credit: AMD) Image 23 of 31 (Image credit: AMD) Image 24 of 31 (Image credit: AMD) Image 25 of 31 (Image credit: AMD) Image 26 of 31 (Image credit: AMD) Image 27 of 31 (Image credit: AMD) Image 28 of 31 (Image credit: AMD) Image 29 of 31 (Image credit: AMD) Image 30 of 31 (Image credit: AMD) Image 31 of 31 (Image credit: AMD)

However, AMD's stock slumped 4% in after hours trading (at the time of writing) due to a softer-than-expected Q1 outlook of $1.8 billion (up 42% YoY), along with somewhat soft performance in the Enterprise, Embedded and Semi-Custom (EESC) business that produces both EPYC processors and chips for consoles.

Citing weak console sales partially offset by increased EPYC sales, the EESC group generated $465 million for the quarter (down 11% quarter-over-quarter), which was well below the consensus estimate of $604 million. The group generated $2 billion during 2019, down 14%. Comparatively, Intel's data center group generated $7.2 billion during the fourth quarter alone.

AMD says that console sales have softened faster than expected as Microsoft and Sony gear up for holiday launches of new hardware, with AMD's semi-custom business down more than the expected "high 30's [%]" in the second half of 2019.

AMD has doubled the number of EPYC platforms to 100 systems during the fourth quarter, which is important to gain share in the lucrative OEM market, but on the surface, it appears that AMD's EPYC Rome processors aren't gaining quite the expected rapid traction.

Su said the company remains on track to reach a double-digit unit share in the data center by mid-2020 and that server revenue grew by "double-digit" percentages on the back of increased EPYC Rome demand and higher average selling prices.

Notably, AMD shook up its server business unit this month with the hire of ex-Intel'er Dan McNamara, who will take over for the departing CVP and GM of AMD's Data Center Solutions, Scott Aylor.

AMD also made solid progress on the margin front as it enhances its profitability. Gross margins increased from 38% in 2018 to 43% in 2019, including a record 45% margin for the fourth quarter. AMD generated $170 million in profits during the quarter, a sharp increase over $45 million a year ago, and a total of $341 million during 2019.

AMD also reduced its debt by 50% during 2019 and has $1.5 billion in net cash on hand, the highest since 2016. That's a massive change from its $4.5 billion in debt ten years ago.

For 2020, AMD projects a 45% gross margin and a 30% increase in revenue. AMD said that, removing its semi-custom products from the mix, its other businesses grew over 20% during 2019 (including EPYC), and the company expects the same trend for 2020.