AMD Posts Q1 2015 Results: $180 Million Net Loss
by Brett Howse on April 16, 2015 6:45 PM EST- Posted in
- CPUs
- AMD
- GPUs
- Financial Results
Today AMD released their Q1 FY 2015 financial results, and the company reported revenue of $1.03 billion for the quarter. This is a 16.9% decrease as compared to Q4 2014, and a 26.4% decrease from the $1.40 billion recorded in Q1 2014. Operating income based on GAAP numbers was an operating loss of $137 million, which is a substantial decrease in loss as compared to Q4 2014, where they had an operating loss of $330 million, however in Q1 2014 they had a small operating income of $49 million, so although they have improved quarter-over-quarter, that is a significant reduction year-over-year. Net loss for the quarter was $180 million, or $0.23 per share, which once again is better than Q4 2014 where there was a $364 million ($0.47/share) loss, but much worse than the $20 million ($0.03/share) loss in Q1 2014.
| AMD Q1 2015 Financial Results (GAAP) | |||||
| Q1'2015 | Q4'2014 | Q1'2014 | |||
| Revenue | $1.03B | $1.24B | $1.40B | ||
| Gross Margin | 32% | 29% | 35% | ||
| Operating Income | -$137M | -$330M | $49M | ||
| Net Income | -$180M | -$364M | -$20M | ||
| Earnings Per Share | -$0.23 | -$0.47 | -$0.03M | ||
Part of these losses are due to the ongoing restructuring at AMD, which has contributed heavily to these numbers. One of the new restructuring fees is due to the exit from the Seamicro branded dense server business, which has cost them an additional $75 million this quarter, including $7 million in cash. Due to these hits, AMD also provides Non-GAAP results which exclude these numbers. On a Non-GAAP basis, AMD’s operating loss is just $30 million, however that is still down significantly from the $89 million operating income in Q1 2014, and the $52 million operating income from last quarter. Net loss on a Non-GAAP basis is $73 million, or $0.09 per share. This is a decline from Q4 2014 where there was a net income of $18 million ($0.02/share) and Q1 2014 where they were able to achieve a net income of $35 million ($0.05/share).
| AMD Q1 2015 Financial Results (Non-GAAP) | |||||
| Q1'2015 | Q4'2014 | Q1'2014 | |||
| Revenue | $1.03B | $1.24B | $1.40B | ||
| Gross Margin | 32% | 34% | 35% | ||
| Operating Income | -$30M | $52M | $89M | ||
| Net Income | -$73M | $18M | $35M | ||
| Earnings Per Share | -$0.09 | $0.02 | $0.05M | ||
AMD has also entered into a fifth amendment of their agreement with GlobalFoundries, and AMD is expecting to purchase about $1 billion in wafers in 2015.
Breaking down their product segments, the Computing and Graphics segment had a 20% decline in revenue quarter-over-quarter, and a 38% decrease year-over-year, with Q1 having net revenues of $532 million. The quarterly decrease was due to lower desktop and notebook processor sales, whereas the yearly decrease was due to lower desktop processor sales and GPU channel sales. The division had an operating loss of $75 million for the quarter, which is a significant change from the $56 million loss last quarter and the $3 million income in Q1 2014. The loss was partially offset by lower operating expenses, but clearly more work is needed. AMD is hoping for better success with their new APU, Carrizo, which they are expecting to deliver double digit performance increases and much better energy efficiency compared to Kaveri, which is the current APU.
| AMD Q1 2015 Computing and Graphics | |||||
| Q1'2015 | Q4'2014 | Q1'2014 | |||
| Revenue | $532M | $662M | $861M | ||
| Operating Income | -$75M | -$56M | $3M | ||
The Enterprise, Embedded and Semi-Custom segment had a year-over-year revenue decrease of 7%, and a quarter-over-quarter decrease of 14%, with Q1 2015 coming in at $498 million. The quarterly drop is due to a seasonal decrease in semi-custom SoC sales (read: Consoles had a ramp up for the holidays and are now back to lower sales) and the yearly decrease is due to lower numbers of server processors being sold. However this segment did have an operating income to report of $45 million for the quarter, but this is down from the $109 million in Q4 2014 and $85 million in Q1 2014.
| AMD Q1 2015 Enterprise, Embedded and Semi-Custom | |||||
| Q1'2015 | Q4'2014 | Q1'2014 | |||
| Revenue | $498M | $577M | $536M | ||
| Operating Income | $45M | $109M | $85M | ||
The “All Other” segment had an operating loss of $107 million. As compared to Q1 2014, this is $68 million more operating loss, which is primarily due to the $75 million hit for exiting the dense server business. In Q4 2014 this segment had a $383 million loss.
For Q2, AMD is forecasting revenue being down an additional 3%, plus or minus 3%, and non-GAAP Gross Margin to remain flat at 32%.
AMD is certainly not in a great position right now, and the new CEO Dr. Lisa Su has some work to do in order to get AMD back to a financially viable state. Part of that is diversifying revenues, especially with the PC market slowing again. AMD has not had a significant product launch in a few quarters, which has not helped either.
Source: AMD Investor Relations
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nunya112 - Friday, April 17, 2015 - link
AMD dropped to 20% last time I saw it. Also for context virtually no one is buying AMD premium GFX cards at all. they are old to power hungry and Maxwell does much better and more efficientlyAMD has been tanking last 6 months since maxwell, because its a much better architecture. and their lack of decent CPU, is now showing just how bad things are for AMD. they need to bring the 390X out in a months time. they need to start hyping, and showing it off, and kick start production. people are saying June release. That is too late. I dont think AMD will have enough cash to stay open. as you can see for the first time in a long time their operating income is in the negative. That means Hemorrhaging CASH.
It either means a hostile takeover is imminent or AMD will declare bankruptcy. either way 300 series wont be coming out if it isnt moved up
ppi - Friday, April 17, 2015 - link
AMD has certainly enough cash to stay afloat till June. They have some 900m cash+liquid securities (debt is $2.3bn, but of that only $235m short-term part), so they can afford to bleed a little bit. But they should slow down the rate nevertheless.THE product they are looking for is Zen/K12, that will come only in 2016 (if it fails, they are done for). AMD cannot really afford to lose $130m cash per quarter, as they did now, or else they will run dry just before they could turn the company around.
costeakai - Sunday, April 19, 2015 - link
i like it this waymedi03 - Sunday, April 19, 2015 - link
R9 vs 970 total system consumption is 370w vs 300w, while also being faster and much cheaper.medi03 - Sunday, April 19, 2015 - link
That looks dubious, to say the least.JonnyDough - Tuesday, April 21, 2015 - link
We'll see what happens with Mantle/DirectX 12.chizow - Thursday, April 16, 2015 - link
Yeah not premature at all, the results clearly show AMD has not been competitive in the marketplace the last few quarters since Nvidia launched their Maxwell-based GTX 970/980 parts. Not only was AMD forced to slash prices on their most relevant, highest margin SKUs (290/X), market indicators and AMD's own results show they still aren't selling enough GPUs.What used to be a segment that consistently turned a profit for them despite losses in the Compute segment, the GPU segment is now being cited as part of the reason this segment is posting losses and declining revenue.
Last quarter AMD fell to a 76/24 minority share to Nvidia in the dGPU market, that's the biggest the gap has ever been since Nvidia's dominant share during the time of G80/G92 when AMD didn't have a competitive part and R600 was late. These results all but confirm more of the same in Q1 for AMD. 80% marketshare for Nvidia is not unrealistic. To put that into perspective, that is Intel levels of dominance.
http://jonpeddie.com/publications/add-in-board-rep...
Similarly, AMD's loss will be Nvidia's gain this quarter. 970 and 980 will undoubtedly continue to post strong results and with the introduction and strong sales of some massive margin GM200 based parts (Titan X and Quadro M6000), it is not unrealistic to expect 2-3% increases in gross margins from Nvidia and another record quarter for revenues and profits for Q1 historical basis.
nunya112 - Friday, April 17, 2015 - link
exactly. I work for PC parts company, and no one is buying AMD high end. its stupid to. the GTX 9 series is on par or better and half the power usage almost. amd are just selling low end GFX for budget desktops etc. and Nvidia is dominating enthusiast segment in every caliber of performance. When I told Roy the VP of IP. all he had to say was. "that's interesting" surely he didnt know that. AMD is in bad shape.And as you said the GTX 9 series is only going to sell more. and I am one of them. I was waiting for R9 300 news, and this close to release NOTHING. means card is late or not going to be made.
so I am ordering 2X 970's or a 980 GTX next week. its a sad day, but running AMD like this is a crime, and I feel sorry. I sold my shares a while back after I lost about $2.10 per share. think about the poor share holders now !
medi03 - Sunday, April 19, 2015 - link
At anandtechs chart total system consumption of 970 was 300w, vs 370 on comparable AMD."Two times" eh? Maybe you meant price?
silverblue - Sunday, April 19, 2015 - link
I know, I'm also getting a little tired of this "AMD uses twice the power" crap. Not everybody games 24/7 (I certainly hope they don't), and when the 2xx series came out, its competition may have been cooler but used similar power. Idle power of AMD cards is usually very good, and if you do want a cooler card, you wouldn't buy reference... which is what everybody - except the detractors - has been saying anyway.