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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JumpingJack - Saturday, April 18, 2015 - link
The license agreement is available on the SEC website if you search for it. AMD is free to manufacture at any foundry. http://www.sec.gov/Archives/edgar/data/2488/000119...The prior agreement Intel limited AMD to only a certain percentage of their products to be made at a foundry, the exact percentage was not public but redacted.
jwcalla - Thursday, April 16, 2015 - link
We're essentially looking at a tech company with no fresh products.silverblue - Friday, April 17, 2015 - link
Well, they do have Carrizo-L, but considering it usually takes AMD a good six to nine months to get their mobile APUs out into the market, it doesn't bode well for full fat Carrizo. Look what happened to their ARM server chips...FlushedBubblyJock - Saturday, April 25, 2015 - link
They've been going mADDDD over Liquid VR !!!!Oh boy, 3D headache speed for 1%ers !!!!
They care about the gamers ! Gamer's Manifesto !
/sarc !
agentbb007 - Thursday, April 16, 2015 - link
Oh man not looking good for amd. I'm fully invested in nvidia with 3 ROG Swift monitors and 2 Titan x's but I really want amd to stay competitive in the CPU and GPU markets to help push innovation and keep pricing honest.person749 - Friday, April 17, 2015 - link
I hear this kind of thing a lot, but honestly if you feel that way, why did you buy dual Titan X's? R9 295x2 offers better performance for half the price. Supporting Nvidia gouging is not helping to keep pricing honest.HighTech4US - Friday, April 17, 2015 - link
Nvidia is not gouging if the buyer is happy with their purchase and feel they got good value for their dollars.Dual R9 295's would be a major pain as quad crossfire really does not scale. Then take into account the added heat, noise, a bigger case to handle the two water coolers, 1200+ KW power supplies and the R9 295x2 looks even less desirable. 24 GB for the dual Titan X's is also a plus.
And then you have the AMD drivers.
chizow - Friday, April 17, 2015 - link
Because what AMD and their fans have failed to grasp over the last decade is that end-user experience and satisfaction extends beyond FPS numbers on a bar graph or simple price:performance metrics.People are willing to pay a premium for the better product, and Nvidia delivers this over AMD in multiple ways.
silverblue - Friday, April 17, 2015 - link
Yes, but NVIDIA was also affected by frame pacing, heat, power consumption etc., just two years removed from AMD, not to mention the odd driver which caused issues with fan profiles.Neither firm is perfect, with drivers it's certainly a case of YMMV, but I'll definitely concede that higher end NVIDIA cards are better packaged and, currently, better cooled and more frugal. Still, NVIDIA are all too ready to stop optimising for their last generation; I'd feel cheated if I owned a 780 or a 780 Ti right about now.
chizow - Friday, April 17, 2015 - link
Eh, Nvidia knew about framepacing long before AMD even acknowledged it was a problem with CF, so not sure what you are referring to there. Indeed, it was Nvidia's own framepacing profile tools that clearly showed the problem on AMD's solutions. Heat and power consumption have clearly been going the opposite directions since Fermi, which is now 2 generations in the rear-view mirror and the improvements Nvidia has made with Maxwell on the same 28nm process as Kepler are nothing short of astonishing.But that's really only the surface of things, Nvidia provides a number of value add features in their ecosystem that end-users come to rely on and enjoy. Even the OP of this thread refers to G-Sync for example, which we have recently seen, is still superior to AMD's FreeSync solution.
And what proof do you have of Nvidia stopping optimizations on last-gen? Certainly you can't say AMD is any better in this regard as their track record of cutting support for VLIW4/5 is well documented, as well as their spotty support on older generations for FreeSync, Mantle, CF framepacing and various other driver-level enhancements like DX9/10 SSAA and VSR. Indeed, if anything, AMD has proven they are far worst when it comes to supporting new initiatives and features on older hardware.