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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jjj - Wednesday, January 20, 2016 - link
AMD would sell itself or the GPU division long before running out of cash.Zen is fundamental and does need to be ok but it doesn't have to be great . Intel has been offering less and less for more , they slowed the process shrink pace, they need to keep financials up to keep the stock price up so they are vulnerable. Intel can't afford too many price cuts or their stock price could drop 50-75%. And they have just 1 core going from 5W SoC to server. So AMD doesn't have to be good in all markets and Intel has given them a lot of extra room compared to 5-10 years ago.
As for your math and concerns , they are overblown. AMD has 785 million in cash, they are getting 320 mil in Q2 from a sale and they have 2.26B debt but what matter more is that if they are doing okish, it won't be difficult to get more debt. They are projecting " to return to non-GAAP operating profitability in 2H 2016"and " to generate positive free cash flow from operations in 2016."
Long term, the PC is dead and AMD needs to address glasses and robots in consumer or just server if they leave consumer. Intel seems to see robots as their savior long term.
SlyNine - Wednesday, January 20, 2016 - link
Pc is dead... believe it when I see it.Ammaross - Friday, January 22, 2016 - link
"Pc is dead... believe it when I see it."Because an iPad is a viable computing platform for anyone that does more than Facebook... FFS
Aspiring Techie - Wednesday, January 20, 2016 - link
Intel won't let AMD die. It would mean getting broken up into several smaller companies. Intel will probably do something to give AMD money if things get really bad. Maybe just giving AMD an "anonymous" donation...Either way, Zen is probably going to be make it or break it for AMD. The only way they can become profitable is to have a strong (relatively speaking) CPU market that can actually churn out a profit.
ShieTar - Thursday, January 21, 2016 - link
Because its the EBIT that defines the real success of your company towards your owners and investors, the "profit" or "loss" merely defines how much taxes you plan to pay.MartinT - Tuesday, January 19, 2016 - link
Makes you wonder how their stock close to doubled since late last summer, only to now be back to almost where it started.All in the fundamentals, right?
HighTech4US - Tuesday, January 19, 2016 - link
The run-up was pure speculation.The run-down is because reality set in.
Intel999 - Tuesday, January 19, 2016 - link
@authorYour table is presenting this quarter's GM as 23% instead of 30%.
I think Devander needs to learn that accrual accounting expects estimations of things like taxes to be made throughout the year instead of waiting until the end of the year to book all the tax in Q4. He's been there fifteen years so he should have at least a little bit of insight into what drives the tax expense throughout the year. Or maybe he doesn't.
Ryan Smith - Tuesday, January 19, 2016 - link
"Your table is presenting this quarter's GM as 23% instead of 30%."We realized that right when you did. Fixed.=)
jjj - Tuesday, January 19, 2016 - link
You guys missed a lot.First they posted a new roadmap, kinda.
About Zen they say high core count and multi-threading. On the server side they add about Zen - Disruptive Memory Bandwidth and High Native I/O Capacity.
They also mention in 2017 a server APU - Multi-Teraflops for HPC and Workstation with Transformational Memory Architecture and Scale-Up Graphics Performance - w/e that means, maybe HBM and CF with discrete GPUs...
In the call they said Zen server is for 2017 and they claimed to have secured several design wins with Zen in server. Polaris was always mentioned as shipping mid-year so nothing new there. At some point they said more than 40% IPC gain for Zen.
The new semi-custom win ramps in the second half , likely Nintendo , could be a big gain if Nintendo goes with a 4K capable GPU on finFET and maybe includes some VR glasses with a 500$ console.
As for the numbers , it's the second quarter the computing and graphics segment grows after tanking hard for quite a while and that's good. They also said they expect the PC market to be down low to mid single digits this year and they expect their units to be up.
This year Polaris, Zen in desktop and Nintendo are opportunities, next year Zen in server and APU and maybe a little ARM server.
Not too optimistic about Zen in single threaded, doubt it will beat Intel but they can offer decent perf at decent power at much better price per core(no GPU). If they beat Intel and offer 2-3 times more cores, even better but they can survive with less.