AMD Reports Q4 2015 Results And FY 2015 Earnings
by Brett Howse on January 19, 2016 5:10 PM EST- Posted in
- CPUs
- AMD
- GPUs
- Financial Results
Today AMD released their quarterly earnings for Q4 of Fiscal Year 2015. AMD continues to struggle financially, and for Q4 they had revenues of $958 million, down 10% from last quarter and down 23% since a year ago. Gross margin for the quarter did increase to 30% after last quarter’s $65 million inventory write-down, and for the full year gross margin was 27%, impacted heavily by the write-down last quarter. For Q4, AMD had an operating loss of $49 million, and a net loss of $102 million, or $0.13 per share. For the full year, the operating loss was $481 million and the net loss was $660 million, or $0.84 per share.
| AMD Q3 2015 Financial Results (GAAP) | |||||
| Q4'2015 | Q3'2015 | Q4'2014 | |||
| Revenue | $958M | $1.06B | $1.24B | ||
| Gross Margin | 30% | 23% | 29% | ||
| Operating Income | -$49M | -$158M | -$330M | ||
| Net Income | -$102M | -$197M | -$364M | ||
| Earnings Per Share | -$0.13 | -$0.25 | -$0.47 | ||
On a non-GAAP basis, AMD reports an operating loss for the quarter of $39 million, and a net loss of $79 million. For the full year 2015, the operating loss of $253 million, down from a non-GAAP operating income of $316 million in 2014. This amounts to a per share loss of $0.53 using non-GAAP numbers.
| AMD Q4 2015 Financial Results (Non-GAAP) | |||||
| Q4'2015 | Q3'2015 | Q4'2014 | |||
| Revenue | $958M | $1.06B | $1.24B | ||
| Gross Margin | 30% | 23% | 34% | ||
| Operating Income | -$39M | -$97M | $52M | ||
| Net Income | -$79M | -$136M | $18M | ||
| Earnings Per Share | -$0.10 | -$0.17 | $0.02 | ||
Looking at the individual segments, the Computing and Graphics segment had revenue of $470 million for the quarter, up 11% since last quarter but down 29% year-over-year. AMD had more notebook processor sales compared to last quarter, but lower client processor sales compared to last year. This segment had an operating loss of $99 million, compared to $181 million last quarter and $56 million last year. The inventory write-down last quarter was the main reason for the improvement this quarter, and lower sales caused the year-over-year drop. One good nugget for AMD is that average selling price (ASP) increase sequentially for processors, although it is down year-over-year, but GPU ASP increased both sequentially and year-over-year.
| AMD Q4 2015 Computing and Graphics | |||||
| Q4'2015 | Q3'2015 | Q4'2014 | |||
| Revenue | $470M | $424M | $662M | ||
| Operating Income | -$99M | -$181M | -$56M | ||
The Enterprise, Embedded, and Semi-Custom segment had revenue of $488 million, down 23% from last quarter and 15% year-over-year. Operating income was $59 million, down from $84 million last quarter and $109 million last year. AMD attributes the seasonally lower sales of semi-custom SoCs as the reason for the drop from last quarter, and the year-over-year drop is due to lower game console royalties, and lower server and embedded sales.
| AMD Q4 2015 Enterprise, Embedded and Semi-Custom | |||||
| Q4'2015 | Q3'2015 | Q4'2014 | |||
| Revenue | $488M | $637M | $577M | ||
| Operating Income | $59M | $84M | $109M | ||
The All Other segment had an operating loss of $9 million, an improvement over the $61 million loss last quarter, and a big improvement over the $383 million operating loss in Q4 2014. AMD has made some restructuring charges which affected them last quarter, and the year-over-year improvement was “primarily due to the absence of a goodwill impairment charge, lower restructuring and other special charges, net and a Q4 2014 lower of cost or market inventory adjustment.”
With a less than amazing 2015, for 2016 AMD is resting a lot of hope on their new 4th generation GCN GPU, which they are calling Polaris. On the CPU side, they hope to execute their new Zen platform with a 40% increase in Instructions Per Clock. With AMD getting out of the fab business, they have now been relying on others to move forward on the process side, and we are finally seeing fabs other than Intel now producing FinFET based designs. Clearly AMD has a lot of work to do to not only launch the products, but execute sales of them as well. VR could also be an area where AMD could find some growth, since the requirements for VR will likely drive some GPU sales over the next 12 months.
Source: AMD Investor Relations
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HighTech4US - Thursday, January 21, 2016 - link
AMD has been losing large amounts of market share to Nvidia for well over a year.Look at the chart here:
https://forum.beyond3d.com/posts/1873668
AMD has lost over 50% of it's market share and has dropped from 37.9% to 18% whereas Nvidia has gone from 62% to 81.9%
So no this is not just a "one quarter" or a slant.
RafaelHerschel - Wednesday, January 20, 2016 - link
No, they are not. They compete by coupling a brute force approach to low prices. That only works as a long term strategy if it leads to an increase in market share. And it doesn't. Therefore the company is loosing money.As for competing for market share by appealing to consumers, NVDIA cards tend to be more practical. The brute force approach of AMD causes inconsistencies in the frame rate and higher power usage.
I think the new focus on smaller cards is really smart though, and hopefully AMD has the technology in 2016 to really make that concept work. AMD needs to be different from NVDIA in order to compete in a meaningful way.
xthetenth - Wednesday, January 20, 2016 - link
Just as a heads up, the only current solution that really has serious frame rate inconsistencies is SLI, while CF and single cards from both companies are quite smooth by now.RafaelHerschel - Wednesday, January 20, 2016 - link
I'm referring to the fact that AMD cards have a tendency to have lower minimum frame rates during parts of a game. I'm not referring to micro-stuttering.NVDIA cards are better optimized for the settings that people actually use.
Strunf - Wednesday, January 20, 2016 - link
"Who has interest in funding AMD... except Intel?"All those that have already invested millions in it... at some point you prefer to keep putting money in hoping someone will buy the company and give you some benefit or at least that the company will eventually be profitable rather than let the company sink and end up with a huge loss.
Kjella - Wednesday, January 20, 2016 - link
Well they are a 10k employee company so all the numbers get big, per employee per quarter it's about $100k revenue, $30k gross profit, $10k loss. Not that absurd numbers for a company in trouble. And AMD used to have a ton of assets in factories and facilities, it's like selling your house/car and rent/lease it back which would give you cash to burn for a while even though you lose money every month. The $371m deal they made with Nantong for the chip assembly and test facilities should keep them floating a few quarters more. But they had better turn their core business around very soon, because that was the last major physical asset they own.MadAd - Wednesday, January 20, 2016 - link
So after that, in about a year will that make AMD about ready to announce bankruptcy?Lonyo - Wednesday, January 20, 2016 - link
They have about 5-7 years (not sure exactly) until bankruptcy, because that's when their loans are due. They are in an overall net liability position (meaning if they were to declare bankruptcy, anyone they owe money to wouldn't get all of their money back), but no one cares for now until the $2b in loans are due, which starts in about 7 years. And even then they will probably try to extend or refinance the loans, as there's almost no way they will be able to repay them.Cash wise they have enough cash to keep going for a while. It's the big loan balance that will hit them.
Dribble - Wednesday, January 20, 2016 - link
You can't say they have 5-7 years then say "Cash wise they heave enough to keep going for a while". You know that "a while" is a lot less, perhaps a year. If you take away the cash needed for cash flow to just keep running the company then that doesn't leave much, and at their current rate of losses that is going fast.gamerk2 - Wednesday, January 20, 2016 - link
AMD has the cash to continue to stay in operation until around mid-2018, when about $600 Million in debt comes due. An addition $400 Million comes due in 2019. For a company currently only valuated at $1.5 Billion, those debt payment will equal 66% of the companies total valuation.Point being, AMD needs to bring in an operating profit of $1 Billion over the next 3-4 years just to cover those payments.
The danger for AMD, is if Zen doesn't turn the financials around, the investors could start dumping the stock as those payments approach, making it impossible for AMD to raise enough cash to make those payments. The investors are already VERY skittish, and in my opinion, Zen is AMDs last shot.