Chairman and Chief Executive Officer at Advanced Micro Devices
Thank you, Laura, and good afternoon to all those listening in today. For the last several years, we have been on a journey to both scale and transform AMD. We have consistently executed our strategy, expanded our portfolio of leadership products and diversified our business all while driving best-in-class growth. We reached a significant inflection point in our journey during the first few months of 2022 as we took several major steps that fundamentally reshaped our business. In addition to delivering record financial results, we closed our strategic acquisition of Xilinx and announced our plans to acquire Pensando. The strategic importance of the Xilinx acquisition to our long-term goals cannot be overstated. As the industry's #1 provider of FPGA and adaptive computing solutions, Xilinx significantly expands our technology and product portfolio.
Xilinx also adds multiple high-margin long-term revenue streams, spanning a new set of markets and customers, further strengthening and diversifying our business model. Importantly, Xilinx has successfully executed its own growth strategy in recent years with the increased adoption of adaptive silicon across data center, communications, automotive and other large embedded markets. With Pensando, we will further expand our data center solutions capabilities. Pensando will add a proven team that has developed an industry-leading DPU and software stack already deployed with key customers, including IBM, HPE, Microsoft, Oracle and Goldman Sachs. Pensando's differentiated technology further expands our product portfolio and will enable AMD to innovate at the silicon, software and platform levels to deliver leadership solutions for our cloud, enterprise and edge customers. Now turning to our first quarter financial performance. We started the year very strong with record quarterly revenue and net income.
First quarter revenue, including the contributions from six weeks of Xilinx, grew 71% year-over-year to a record $5.9 billion. We expanded gross margin seven percentage points to 53% and more than doubled both operating and net income year-over-year. Excluding Xilinx, revenue grew 55% year-over-year to a record $5.3 billion, gross margin expanded five percentage points to 51% and operating income more than doubled to a record $1.6 billion. Turning to our Computing and Graphics segment. Revenue increased 33% year-over-year to $2.8 billion, driven primarily by the ramp of our latest Ryzen and Radeon products. Client Compute revenue grew by a strong double-digit percentage year-over-year based on higher Ryzen mobile and desktop processor sales. As a result, we believe we gained client processor revenue share for the eighth straight quarter. In desktop, we expanded our processor portfolio with the introduction of seven new Ryzen CPUs, including the Ryzen 5800 X3D CPU, which is the industry's fastest gaming CPU and first desktop processor featuring 3D stack chiplets.
In notebooks, record mobile processor revenue was driven by the launch of our Rembrandt Ryzen 6000 mobile processors that extend the leadership compute, gaming and battery life capabilities of our mobile processors. In commercial, we recently introduced our latest Ryzen 6000 Pro processors with leadership performance and battery life and modern security and manageability features. We are well positioned to accelerate our growth in commercial notebooks in 2022 based on the expanded number of design wins on track to launch. Although the PC market is experiencing some softness coming off multiple quarters of near-record unit shipments, our focus remains on the premium, gaming and commercial portions of the market where we see strong growth opportunities, and we expect to continue gaining overall client revenue share. In Graphics, revenue grew by a strong double-digit percentage year-over-year with record desktop graphics channel sales.
Desktop GPU sales nearly doubled year-over-year as sales of our Radeon 6000 Series graphics cards were strong. In mobile, the first notebooks featuring our latest Radeon 6000 mobile GPUs launched in the quarter, and we expect sales to ramp over the coming quarters. Data center graphics revenue was flat year-over-year as we launched our Instinct MI210 accelerators. We expanded our engagements with large cloud customers in the quarter and launched our ROCm five software suite targeting exascale-class HPC and AI applications. Turning to our Enterprise, Embedded and Semi-Custom segment. Revenue increased 88% year-over-year to $2.5 billion, driven by record server semi-custom and embedded processor sales. Semi-Custom sales grew by a significant double-digit percentage year-over-year based on strong demand for Sony and Microsoft consoles as well as Valve's new Steam deck. Sales for this game console generation continued to outpace all prior generations, and we expect 2022 to be a record year for our Semi-Custom business.
Turning to our Embedded business. Revenue more than doubled year-over-year, led by growth in automotive. We also secured multiple design wins in next-generation security and firewall devices from Tier one networking providers. Turning to Server. We had another record quarter as revenue more than doubled year-over-year and increased by a double-digit percentage sequentially. We have more than doubled server processor revenue year-over-year in eight of the last 10 quarters, highlighting the growing demand for our EPYC processors with cloud, enterprise and HPC customers. Cloud revenue more than doubled year-over-year as hyperscalers expanded their internal infrastructure deployments, and 70 new AMD-powered instances launched from Alibaba, Amazon, Baidu Cloud, Microsoft Azure, Google and others. There are now more than 460 AMD-based cloud instances available from the largest hyperscalers, with additional instances on track to launch in the coming quarters.
In Enterprise, revenue more than doubled year-over-year with strong growth in key verticals, including IT infrastructure, financial services and database applications. Our sales pipeline continues to be very strong, and we saw our win rate grow in the first quarter across a broad set of Enterprise end customers. We launched our first EPYC processors with 3D-stacked chiplets in the quarter. This technology extends our performance leadership in technical computing workloads by up to 66% compared to our prior generation. Atos, Cisco, Dell, HPE, Lenovo and Supermicro all launched servers featuring the new CPUs in the quarter. Excitement for our next-generation Genoa server processors continues to grow as we expanded customer and partnering sampling in the quarter. We expect Genoa will be the industry's highest-performance general-purpose server CPU, further extending the performance, energy efficiency and TCO advantages of our EPYC processors. We remain on track to launch Genoa in the second half of the year and expect to continue our share gain trajectory based on expanded cloud, enterprise and HPC customer adoption.
In addition, development of our higher core count Bergamo processors optimized for high throughput cloud workloads continues to progress well, with shipments on track to begin in the first half of 2023. Turning to the Xilinx business. For the six weeks following acquisition close, Xilinx revenue was $559 million. On a pro forma basis for the full quarter, Xilinx delivered its fourth straight quarter of greater than 20% year-over-year revenue growth and the second straight quarter of greater than $1 billion of revenue. In data center, first quarter demand was led by expanded FPGA-as-a-Service and SmartNIC deployments at Tier one hyperscalers as well as low latency networking solutions with fintech companies. We saw strength in communications led by wired demand and access and optical transport. In wireless, Versal-based 5G deployments continue ramping in multiple regions, and we secured a strategic design win with a Tier one communications equipment provider to power their next-gen baseband solutions with a Versal ACAP solution.
We saw strong demand across the Xilinx embedded markets, led by record pro forma full quarter revenue in automotive, industrial, vision and health care and consumer. Looking forward, we see very strong demand across all of the Xilinx end markets and are focused on increasing supply. Turning to our integration work. In the first few months since close, we have seen tremendous excitement from our customers, partners and employees, and we expect to see significant product and revenue synergies. We now have the best portfolio of high-performance and adaptive computing engines in the industry, and we see multiple opportunities to leverage our expanded technology portfolio to deliver even stronger products. As one example, we're integrating Xilinx' differentiated AI engine across our CPU product portfolio to enable industry-leading inference capabilities with the first products expected in 2023.
We have also identified significant additional revenue synergy opportunities with some of our largest customers as we can now address a larger portion of their compute needs with our expanded product portfolio. In summary, the start of 2022 is a significant inflection point for AMD, marked by record top and bottom line financial results, driven by our leadership product portfolio and strong execution and the close of our Xilinx acquisition. We have now delivered greater than 45% year-over-year revenue growth for seven straight quarters and increased net income by more than 60% year-over-year for the last 10 quarters. Based on higher AMD organic growth as well as the addition of Xilinx with strong demand across multiple end markets, we now expect annual revenue to grow by approximately 60% year-over-year, up from approximately 31% growth we guided at the beginning of the year.
Longer term, I'm incredibly excited about our additional growth opportunities as we add the Xilinx and Pensando teams. We now see a significantly larger TAM opportunity for AMD across a diverse set of end markets based on our broader portfolio of leadership compute engines and expanded solutions capabilities. I look forward to sharing more about the products and technologies that will enable the next stage of our growth journey at Financial Analyst Day in June.
Now I'd like to turn the call over to Devinder to provide some additional color on our first quarter financial performance. Devinder?