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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dragonsqrrl - Monday, April 20, 2015 - link
Nvidia doesn't need more bandwidth at the moment, but you're assuming that AMD's on par with Nvidia in terms of memory bandwidth requirements which hasn't been the case, even with the improvements made to GCN 1.2 (Tonga). And correct me if I'm wrong, but it also sounds like you're saying AMD would need to saturate their HBM interface in order to justify it's use, which isn't true. All AMD would need to justify HBM is a GPU that can saturate a 512-bit GDDR5 interface, and I have little doubt that Fiji can do this if its rumored specs are true. This is of course assuming that the color compression in GCN 1.3 hasn't improved over 1.2, which may not be the case. HBM has a number of efficiency advantages over GDDR5 (in terms of both power consumption and trace complexity) that make it worthwhile if your bandwidth demands make GDDR5 the less practical option, and I think at 512-bit you're hitting the limits of practicality for GDDR5. Make no mistake HBM is the superior interface in practically every way, and definitely in terms of costs if your bandwidth demands are really high."Memory bandwidth doesn't sell cards, the fps does" ... Actually I think we've seen a lot of evidence over past year that would suggest otherwise, unfortunately. That's certainly a noble aspiration, and current dGPU market share results certainly seem to support what you're saying, but I think you're also overlooking both AMD users and AMD's marketing department. There have been many recent examples of AMD marketing their "superior" memory interfaces over the competition, rather than relative real world performance, and I can give even more examples of both current and prospective AMD users parroting and buying into this spec sheet marketing. This is why I've said pretty much the only people buying AMD right now are those with either a single minded obsession with price/performance ratios, or the uninformed who think wider memory interfaces and more cores relative to the competition = greater value and performance.
"Compute crap is doing nothing for AMD besides winning junk stuff like F@H (who cares)" ... Actually Nvidia currently outperforms AMD in F@H by a pretty wide margin.
SeanJ76 - Friday, April 24, 2015 - link
I've been saying it for years.....Michael Bay - Thursday, April 16, 2015 - link
Time for intel to lose another lawsuit, eh.silverblue - Friday, April 17, 2015 - link
AMD didn't get a penny of that.chizow - Friday, April 17, 2015 - link
They did get $1.25Bn in settlement money actually, but many even at the time said they settled for far too little and should've also structured it as an annuity instead of lump-sum payment, like Nvidia did. That 1.25Bn spread over 5 years would've made AMD's financial statements look far better rather than the one banner year they had in 2009.http://www.nytimes.com/2009/11/13/technology/compa...
There was a story about the whole settlement discussion and AMD settling for too little, but at this point, it doesn't really matter.
silverblue - Friday, April 17, 2015 - link
Yes, but only because Intel didn't want to be hauled in front of regulators in the States. Their payment was to stop AMD dragging them through the courts, which to me looks like a bribe and a clear admission of guilt. Still, as you say, it doesn't matter now, and AMD's lack of new product lines over the past 18 months is killing them. So much for pursuing a more aggressive product release schedule.chizow - Friday, April 17, 2015 - link
Right, but AMD"s leverage against Intel relied on the fact Intel was being sued for anti-trust allegations. In reality, AMD should have waited to settle because they could've gotten a LOT more, but for some crazy reason they settled for a paltry sum before judgment was even handed down in the EU case.silverblue - Saturday, April 18, 2015 - link
They could have, though the EU judgement was handed down a few months before the settlement. Intel would have looked at that as a precursor to a real spanking and decided it wasn't worth the risk, so they settled (very smart move) and AMD were far too happy to grab what cash was on offer instead of refusing and leaving Intel out to dry. As such, AMD strengthened Intel's position even more - what's $1.25B to Intel? Two months revenue, tops? Could AMD have been awarded far more by the US courts following a successful case?AMD's real problem is its management which has strangled it for ten years and run off with its money. You need money for hardware and software development, marketing, research, and just as importantly, hiring and KEEPING talent to drive the aforementioned. Without at least two killer product launches over the next nine months, AMD are going to fade into irrelevance.
JumpingJack - Saturday, April 18, 2015 - link
Mr. Bay is incorrect, Intel did not lose any lawsuit, Intel and AMD settled out of court. The original lawsuit, which included the class action in addition to AMD was dropped as I recall. What AMD got in the settlement was 1.25 billion dollars and a written contact on what rebates and discounts Intel can and cannot offer to OEMs. In return, Intel got a promise from AMD that they would never again claim "unfair competition" and would withdraw all complaints to administrative bodies both domestic and internationally.jjj - Thursday, April 16, 2015 - link
Q1 was close enough to expectations but Q2 outlook is soft. Intel's outlook was 400 millions up on quarter but that is likely to mostly come from non PC . So the PC market being flat in Q2 was to be expected but AMD should have had some growth in console.It's also a bit surprising that AMD has less exposure to the business segment slowing down ,yet they keep sliding.
As tragic as it all is, i'm starting to be more optimistic about next year. If GloFo is already making the Exynos 7420 (likely at poor yields) , chances are AMD could go 14nm on the GPU side later this year and by next year the process will be mature enough for the new core. Remains to be seen how good the core is and if they manage to find something to mess up but maybe there is hope. Ofc Intel is killing them on the marketing side and the PC market lacks enthusiasm so AMD might need a fantastic product not just good to gain share and recover.
They got their yearly Analyst Day on May 6 so we should see some updated roadmaps then but i doubt they'll spill the beans on the new core.