AMD Announces Q4 2016 Earnings
by Brett Howse on January 31, 2017 10:00 PM EST- Posted in
- CPUs
- AMD
- GPUs
- Financial Results
This afternoon, AMD announced their fourth quarter earnings for the 2016 fiscal year. 2016 was a challenging year for AMD, as they continue to expand their business away from only focusing on the PC market, and although they still have a long way to go, 2016 was an improvement on 2015. For Q4 AMD had revenues of $1.11 billion, which is up 15% from Q4 2015. Gross margin for the quarter was $351 million, up from $283 million a year ago. As a percentage, AMD’s gross margin was 32%, compared to 30% in Q4 2015. AMD had an operating loss of $3 million for the quarter, compared to a loss of $49 million a year ago, while net loss improved as well, from $102 million in Q4 2015 to $51 million this quarter. This resulted in a loss per share of $0.06, compared to a loss of $0.13 last year. AMD makes note that Q4 2016 was a 14-week quarter, compared to a 13-week quarter for Q3 2016 and Q4 2015.
| AMD Q4 2016 Financial Results (GAAP) | |||
| Q4'2016 | Q3'2016 | Q4'2015 | |
| Revenue | $1106M | $1307M | $958M |
| Gross Margin | 32% | 5% | 30% |
| Operating Income | -$3M | -$293M | -$49M |
| Net Income | -$51M | -$406M | -$102M |
| Earnings Per Share | -$0.06 | -$0.50 | -$0.13 |
For the full fiscal year, AMD had revenues of $4.27 billion, which is up 7%, but a sixth amendment to their wafer supply agreement hit their margins very hard in 2016. For the full year, AMD had margins of just 23%, which is a drop of 4% compared to 2015. Operating loss was $372 million for the year, compared to $481 million in 2015, and net loss was $497 million, compared to $660 million a year ago. For the full year, AMD had a net per share loss of $0.60, which is an improvement from the $0.84 loss in 2015.
AMD also reports Non-GAAP results, which exclude stock-based compensation, restructuring charges, node transition costs, and wafer agreement charges, to give a look at their core business. On a Non-GAAP basis, AMD had revenues of $1.11 billion, just like their GAAP numbers, but they posted operating income of $26 million for the quarter, compared to an operating loss of $39 million a year ago. Net loss was $8 million, compared to $79 million in Q4 2015, and loss per share was $0.01 compared to $0.10 a year ago.
| AMD Q4 2016 Financial Results (Non-GAAP) | |||
| Q4'2016 | Q3'2016 | Q4'2015 | |
| Revenue | $1106M | $1307M | $958M |
| Gross Margin | 32% | 31% | 30% |
| Operating Income | $26M | $70M | -$39M |
| Net Income | -$8M | $27M | -$79M |
| Earnings Per Share | -$0.01 | $0.03 | -$0.10 |
AMD attributes their increase in revenue primarily due to increased GPU sales. AMD’s Computing and Graphics segment had revenues for the quarter of $600 million, which is up 28% year-over-year. Polaris seems to be doing quite well, which is great to see. The segment still had an operating loss of $21 million, but that is a big improvement from the operating loss of $99 million a year ago. CPU average selling price fell year-over-year, but GPU average selling price increased year-over-year, thanks to higher desktop and professional graphics pricing. We eagerly await the launch of Ryzen, which AMD showed off last quarter, and expect to hear more about it this quarter.
| AMD Q4 2016 Computing and Graphics | |||||
| Q4'2016 | Q3'2016 | Q4'2015 | |||
| Revenue | $600M | $472M | $470M | ||
| Operating Income | -$21M | -$66M | -$99M | ||
AMD branched into Enterprise, Embedded, and Semi-Custom designs and it has proven to be a strong source of revenue for them. With wins in both the Xbox One and PlayStation 4, AMD continues to be the beneficiary of both of those consoles outselling their predecessors. For Q4, this segment had revenue of $506 million, which is up 4% year-over-year, thanks to higher embedded and semi-custom SoC revenue. This segment does have it’s ups and downs annually with consoles peaking and ebbing, but annually it has been a strong market for AMD to branch into. This segment had an operating income of $47 million for the quarter, which is down from $59 million a year ago, which AMD attributes to higher R&D investments this quarter.
| AMD Q4 2016 Enterprise, Embedded, and Semi-Custom | |||||
| Q4'2016 | Q3'2016 | Q4'2015 | |||
| Revenue | $506M | $835M | $488M | ||
| Operating Income | $47M | $136M | $59M | ||
Finally, All Other had an operating loss of $29 million, compared to $9 million a year ago. The increased loss is attributed to higher stock-based compensation charges for Q4 2016.
AMD had strong margins for this quarter, and if they are going to have a strong 2017, that needs to be their focus. Ryzen may help as well, depending on how it compares, but Dr. Lisa Su, AMD’s president and CEO, has been slowly but surely bringing AMD back to a point of profitability. Looking ahead, AMD expects revenues to decrease 11% for next quarter, plus or minus 3%, which would put them at an 18% increase in revenue for Q1 2017 compared to Q1 2016, if you pick the mid-point in their target.
Source: AMD Investor Relations
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OEMG - Tuesday, January 31, 2017 - link
AMD really needs to get their footing back to the server/HPC market. They need to follow nvidia in the mobile/ARM space. They need to remake their mobile/smartphone graphics division. And hell, retake their fabs!Now that's a lot of work and needs a lot of capital. But I seriously can't see AMD growing with their current markets.
WorldWithoutMadness - Tuesday, January 31, 2017 - link
Whilst at it, why not ask them to declare bankruptcy as well? Talking is cheap, mate. They haven't made overall positive income in couple of years and you're asking them to bleed more money.Samus - Wednesday, February 1, 2017 - link
Very true, I don't think he, or many people, realize this margin of growth is stronger than AMD has been in over a decade. They are clearly doing something right...those console design wins certainly help in sales and "free" marketing, and they still have superior integrated graphics, especially in cheap $400 A10-based notebooks.TheinsanegamerN - Wednesday, February 1, 2017 - link
I doubt this has anything to do with the consoles, which AMD has controlled for 3.5 years now, and everything to do with polaris coming out. AMD finally had a GPU without the 300 stigma attached to it, and while not nvidia numbers, polaris has been selling very well for AMD.Samus - Wednesday, February 1, 2017 - link
It has everything to do with the consoles.1) New editions of BOTH consoles were released last year at premium prices with higher margin AMD chips. It's likely for every XBOX One S or PS4 Pro sold, AMD is making the same profit they would on 2 or 3 regular model consoles, since the only real difference between these consoles is the APU.
2) Most mainstream console gamers now associate AMD with gaming, and are statistically more likely to use AMD components when building a PC or talking about gaming, and this marketing was essentially "free" because it's advertised by the console manufactures that the consoles have an AMD "Jaguar 8-core graphics engine" or whatever the hell PR wants to spin it as.
3) Because of AMD dominance in console gaming, most games are being optimized for their GPU architecture without incentives directly from AMD, making the gaming performance more consistent on their GPU's. This explains why the RX480 bests the GTX970 across the board in games, when in reality, it shouldn't, as indicated by various synthetic benchmarks. All the more interesting because in my opinion, Nvidia has far superior driver optimization.
Alexvrb - Wednesday, February 1, 2017 - link
They don't have the resources to branch out into everything. They're on the right track, but they've got their hands full getting Ryzen together for DT CPUs, server CPUs, and APUs. On the graphics side Vega and Navi are keeping them busy. Then there's the ongoing semi-custom business, like Scorpio's APU.They wisely put their ARM plans on the backburner for the moment, but they will likely continue that work later. Mobile graphics, at sub-tablet TDPs? Not very likely. Too much competition anyway, even Nvidia isn't having much luck forcing their way into the smartphone market. You've got PowerVR, Mali, and Adreno to contend with. Not sure if it's worth it, really. Has Nvidia made any serious money selling Tegras recently?
StevoLincolnite - Wednesday, February 1, 2017 - link
Adreno (A world play on "Radeon") used to be owned by AMD anyway.Chinese SoC's are quickly ramping up in capability whilst racing to the bottom in terms of price, not an ideal thing AMD wants to enter into right now.
Alexvrb - Friday, February 3, 2017 - link
ATI owned it, but back then it was Imageon. That was so long ago they'd have to start over by scaling down GCN. Anyway, speaking of the cheap Chinese SoC problem - if QC is forced to license their stuff out for super cheap by the powers that be, that may even exacerbate the issue as the cutthroat firms will benefit the most.Meteor2 - Wednesday, February 1, 2017 - link
ARM servers are as dead as they ever were, so I don't expect AMD to have another go. Consortia have tried to put software stacks onto ARM but truth is, everything enterprise is on x86, and it's staying there. Why re-invent the wheel? On any given process node, in terms of performance/Watt, general purpose architectures have more or less converged.Alexvrb - Friday, February 3, 2017 - link
I wasn't really thinking about servers. Ryzen can pack a lot of cores/threads into a single chip, I think most of the server needs will be covered there. I was thinking more about network devices, IoT, etc.