AMD Reports 2015 Fourth Quarter and Annual Results

[btarunr]

AMD (NASDAQ: AMD) today announced revenue for the fourth quarter of 2015 of $958 million, operating loss of $49 million and net loss of $102 million, or $0.13 per share. Non-GAAP(1) operating loss was $39 million, non-GAAP net loss was $79 million and non-GAAP(1) loss per share was $0.10.

"AMD closed 2015 with solid execution fueled by the second straight quarter of double-digit percentage revenue growth in our Computing and Graphics segment and record annual semi-custom unit shipments," said Dr. Lisa Su, AMD president and CEO. "While 2015 was challenging from a financial perspective, key R&D investments and a sharpened focus on innovation position us well to deliver great products, improved financial results and share gains in 2016."



2015 Annual Results

• Revenue of $3.99 billion, down 28 percent year-over-year, primarily due to lower client processor sales.
• Gross margin of 27 percent, down 6 percentage points year-over-year and non-GAAP gross margin of 28 percent, down 7 percentage points year-over-year. The year-over-year declines were primarily due to lower unit volumes and product mix.
• Operating loss of $481 million and non-GAAP operating loss of $253 million, compared to a loss of $155 million and non-GAAP(1) operating income of $316 million in 2014 primarily due to lower revenue and gross margin.
• Net loss of $660 million, loss per share of $0.84, and non-GAAP net loss of $419 million, non-GAAP loss per share of $0.54, compared to a net loss of $403 million, loss per share of $0.53, and non-GAAP(1) net income of $132 million, non-GAAP earnings per share of $0.16 in 2014.

Q4 2015 Results

• Revenue of $958 million, down 10 percent sequentially primarily driven by seasonally lower sales of semi-custom SoCs and down 23 percent year-over-year, primarily due to lower client processor sales.
• Gross margin of 30 percent, up 7 percentage points sequentially. Q3 2015 gross margin was negatively impacted by an inventory write-down of $65 million, or 6 percentage points. Excluding the Q3 2015 inventory write-down, non-GAAP gross margin improved 1 percentage point sequentially, primarily due to improved product mix in the Computing and Graphics segment.
• Operating loss of $49 million, compared to an operating loss of $158 million for the prior quarter. Non-GAAP(1) operating loss of $39 million, compared to non-GAAP(1) operating loss of $97 million in Q3 2015, primarily due to higher gross margin and lower operating expenses.
• Net loss of $102 million, loss per share of $0.13, and non-GAAP(1) net loss of $79 million, non-GAAP(1) loss per share of $0.10, compared to a net loss of $197 million, loss per share of $0.25 and non-GAAP(1) net loss of $136 million, non-GAAP(1) loss per share of $0.17 in Q3 2015.
• Cash and cash equivalents were $785 million at the end of the quarter, up $30 million from the end of the prior quarter, primarily due to improved operating cash flow.
• Total debt at the end of the quarter was $2.26 billion, flat from the end of the prior quarter.

Quarterly Financial Segment Summary

• Computing and Graphics segment revenue of $470 million, an increase of 11 percent sequentially and a decrease of 29 percent from Q4 2014. The sequential increase was primarily due to higher notebook processor sales, and the year-over-year decrease was primarily driven by lower client processor sales.
  o Operating loss was $99 million, compared to an operating loss of $181 million in Q3 2015 and an operating loss of $56 million in Q4 2014. The sequential improvement was driven primarily by higher sales and the absence of a Q3 2015 inventory write-down and the year-over-year decrease was primarily driven by lower sales.
  o Client average selling price (ASP) increased sequentially driven by a richer notebook processor product mix and decreased year-over-year due to a lower notebook processor ASP.
  o GPU ASP increased sequentially and year-over-year primarily due to a higher AIB channel ASP.
• Enterprise, Embedded and Semi-Custom segment revenue of $488 million, a decrease of 23 percent sequentially primarily driven by seasonally lower sales of semi-custom SoCs. Revenue decreased 15 percent from Q4 2014 primarily driven by lower game console royalties, and server and embedded revenue.
• Operating income was $59 million compared with $84 million in Q3 2015 and $109 million in Q4 2014. The sequential decrease was primarily due to seasonally lower sales of semi-custom SoCs. The year-over-year decrease was primarily due to lower game console royalties, and server and embedded sales.
• All Other operating loss was $9 million compared with operating losses of $61 million in Q3 2015 and operating loss of $383 million in Q4 2014. The sequential improvement was primarily due to Q3 2015 restructuring and other special charges 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.

Recent Highlights

• AMD provided a glimpse at its next-generation GPU architecture and delivered innovative new graphics, embedded, and desktop component technologies.
  o AMD previewed its revolutionary 14nm FinFET Polaris GPU Architecture, highlighting significant architectural improvements including High Dynamic Range (HDR) monitor support and a 2x performance-per-watt improvement over the prior generation. The GPUs deliver a remarkable generational jump in power efficiency, and are designed for fluid frame rates in graphics, gaming, VR, and multimedia applications on small form-factor thin and light computer designs.
  o AMD released its re-architected graphics software suite, Radeon Software Crimson Edition, giving users 12 new or enhanced features, up to 20 percent more graphics performance2, adjustability that can nearly double generational energy efficiency3, and stability across the full spectrum of AMD graphics products.
  o AMD introduced the AMD Radeon R9 380X GPU, conceived to play the most detailed and demanding games at 1080p and 1440p. The GPU offers a 256-bit interface and 4GB of high-performance GDDR5 memory and features including compatibility for both AMD FreeSync and AMD LiquidVR technologies plus Virtual Super Resolution.
  o AMD announced the new AMD FirePro W4300 graphics card, its highest performing professional graphics card optimized for Computer-Aided Design (CAD) that fits in both small and full-size workstations, offering unprecedented flexibility in its class.
  o AMD achieved high-end embedded performance leadership with the introduction of the AMD Embedded R-Series SOC processors designed for digital signage, retail signage, medical imaging, electronic gaming, media storage, and communications and networking.
  o AMD announced the AMD FX 6330 CPU for the China market with a new, near-silent stock cooler and offering excellent 6-core performance, control, and reliability for productivity, entertainment, and multi-tasking workloads.
• AMD launched its first 64-bit ARM based product -- the AMD Opteron A1100 SoC - designed to accelerate time-to-market deployment of ARM-based systems for the datacenter and improve enterprise-class ecosystem support for 64-bit ARM in key markets. AMD is working with technology partners and customers including Red Hat, Silver Lining Solutions, SoftIron, and SUSE on AMD Opteron A1100 SoC-based hardware and software solutions that provide high-speed network and storage connectivity, energy efficiency, and a balanced total cost of ownership for storage, web, and networking workloads.
• AMD collaborated with industry leaders to bring powerful new embedded, professional graphics, and gaming solutions to market.
  o AMD further solidified its No. 1 position in the thin client space with the introduction of the new AMD Embedded R-Series and AMD FirePro-based HP t730, the world's first thin client with native quad UHD/4K support.
  o AMD announced several new AMD FirePro professional graphics design wins with Dell, including the new Dell Precision 3510, 7510, and 7710 mobile workstations delivering exceptional graphics performance and GPU compute capability. In particular the Dell Precision 7710 features nearly 3 TFLOPS of single-precision GPU compute power for GPU-accelerated applications and workflows.
  o AMD expanded its leadership position in virtual reality (VR), announcing a collaboration with Oculus and Dell to equip Oculus Ready PCs with AMD Radeon GPUs.
  o Lenovo introduced the AMD FX CPU and Radeon R9 graphics-based Lenovo Y700, the first notebook validated to support AMD FreeSync technology.
• AMD provided developers with new tools designed to simplify software development and more fully harness the capabilities of its GPUs.
  o AMD launched the "Boltzmann Initiative", a suite of tools designed to dramatically simplify GPU computing on AMD FirePro Graphics by leveraging Heterogeneous Systems Architecture's (HSA's) ability to harness both CPU and GPU for maximum compute efficiency through software.
  o AMD announced the GPUOpen initiative to help address the evolving demands of graphics and unlock game and application development through open source software. The initiative enables game developers to better harness the investments they've made on console development, introduces a new compiler for heterogeneous computing, and demonstrates AMD's renewed commitment to Linux with its Linux Open Source Strategy.

View at TechPowerUp Main Site

 

[alucasa]

......

 

[HumanSmoke]

Still bleeding revenue....thank god for those console contracts

 

[64K]

It must be disturbing for anyone that has a lot of money invested with AMD. Their stock has fallen 35% from a high of $3 to $1.95 per share in the last month and another 6% in after hours trading today. Still it's above their low for the past year of $1.62 per share.

Most of what I've read is that they will do a little better in 2016 but probably still be well into the red. If Zen is decent competition for Skylake/ Kaby Lake and they can get them to market months before Cannonlake and most importantly get computer manufacturers to buy more of their chips and use them then things may not look so grim for AMD by the end of 2016 but that's a whole lot of "if". I suspect Radeon Group will do fairly well. Polaris will probably rock but I wonder how much of the profits AMD is taking from Radeon Group to offset losses in their CPU division and not investing the money into GPU R&D.

 

[geon2k2]

We just had both AMD and Intel reports one after another.
What I can see is:
- 14.9 billion revenue vs 0.95 billion (cpu+gpu, probably the cpu part is ... 0.2)
- 3.6 billion profit vs 0.049 billion loss.

If this doesn't qualify as a monopoly ... I don't know what does.

Also the fact that arm is competitor doesn't stand ... see the server market share ... see the desktop market share. On those markets and with that kind of products Intel is pure monopoly.

 

[Assimilator]

We just had both AMD and Intel reports one after another.
What I can see is:
- 14.9 billion revenue vs 0.95 billion (cpu+gpu, probably the cpu part is ... 0.2)
- 3.6 billion profit vs 0.049 billion loss.

If this doesn't qualify as a monopoly ... I don't know what does.

Also the fact that arm is competitor doesn't stand ... see the server market share ... see the desktop market share. On those markets and with that kind of products Intel is pure monopoly.

If Intel is a monopoly, it's because AMD has consistently failed to provide adequate competition. You can't punish a company that's executing well and making money simply because their competitor is not.

 

[the54thvoid]

We just had both AMD and Intel reports one after another.
What I can see is:
- 14.9 billion revenue vs 0.95 billion (cpu+gpu, probably the cpu part is ... 0.2)
- 3.6 billion profit vs 0.049 billion loss.

If this doesn't qualify as a monopoly ... I don't know what does.

Also the fact that arm is competitor doesn't stand ... see the server market share ... see the desktop market share. On those markets and with that kind of products Intel is pure monopoly.

It's not a monopoly. It's just that Intel is too far ahead on CPU. It's integrated GPU has increased in performance significantly through R&D, to the point it can match AMD and beat it.
AMD hasn't improved its base CPU product anywhere near enough to match Intel which left Intel to increase its iGPU.
There are still two players, just like in discrete gfx, so it can't be called a monopoly, even with questionable business practises from Intel (as I'm sure someone will go down that route).
Still, I can't do business results at 7am but does it look like AMD's bottom line is getting 'less' bad? Light at the end of the tunnel, all be it a pin prick?

 

[geon2k2]

It's not a monopoly. It's just that Intel is too far ahead on CPU. It's integrated GPU has increased in performance significantly through R&D, to the point it can match AMD and beat it.

Fine, let's say its not monopoly, then my question is when does this becomes a monopoly? What are the conditions to be considered a monopoly?

From my perspective in order to have a functional market you need at least 3 strong competitors. In rare cases it could be done with 2, but those 2 must be evenly matched and very strong.
So in our scenario the capitalism has failed for the CPU market, as we don't have functional competition.

 

[the54thvoid]

Fine, let's say its not monopoly, then my question is when does this becomes a monopoly? What are the conditions to be considered a monopoly?

From my perspective in order to have a functional market you need at least 3 strong competitors. In rare cases it could be done with 2, but those 2 must be evenly matched and very strong.
So in our scenario the capitalism has failed for the CPU market, as we don't have functional competition.

This is the difference. No single player. Consumers have a choice and the secondary choice is cheaper. Not monopoly.

Capitalism hadn't failed. It won, for Intel and its shareholders. Supply and demand, shares and dividends.
From being distinct and competitive companies, if anything, AMD caused the problems by buying ATI. They then focussed diminished budget on two fronts and lost huge ground to Intel.
They have too many IP's to fail though so the future (Zen and Polaris dependent) could be brighter.

 

[john_]

AMD is 9 months away from a good financial quarter or at least a positive guidance for the last quarter of this year. The only way they post good news before September is if they manage to bring Polaris in the markets in 3-4 months or if VR becomes an instant hit with people lining up in stores to buy a hi end graphics card. AM4 could also help to stabilize CPU sales and stop them from keep falling.

 

[RCoon]

it look like AMD's bottom line is getting 'less' bad?

They lost less, but equally are making less. In terms of numbers it looks like the holes are being plugged, but proportionally it's not that much of a reduction over the last 5 years in terms of revenue:loss ratio. Still, even if they plug all the holes and make a $0.00 loss, they still have debt that surmounts to twice the company's overall worth, which is... shocking.

Also saying Intel has an illegitimate monopoly is stupid. Punishing a company because it's doing better than a prior competitor that was severely mismanaged is backwards. It's like fining Aldi because they're making bigger profits than Morrison's.

 

[librin.so.1]

If Intel is a monopoly, it's because AMD has consistently failed to provide adequate competition. You can't punish a company that's executing well and making money simply because their competitor is not.

I'll just leave this here:

Spoiler

Spoiler

Keep in mind that the amounts they paid to AMD are laughably small compared to the long-lasting damage Intel done to AMD with this

 

[EarthDog]

We just had both AMD and Intel reports one after another.
What I can see is:
- 14.9 billion revenue vs 0.95 billion (cpu+gpu, probably the cpu part is ... 0.2)
- 3.6 billion profit vs 0.049 billion loss.

If this doesn't qualify as a monopoly ... I don't know what does.

Also the fact that arm is competitor doesn't stand ... see the server market share ... see the desktop market share. On those markets and with that kind of products Intel is pure monopoly.

I guess you do not know what does..

Being serious, I had no idea that PnL had anything to do with a monopoly...there is competition in the market and they do not have complete control of the entire supply of goods or services in a particular market.

 

[Eroticus]

I feel sad for AMD =[.

If crash won't be big problem for me , i will try to get 2 high end cards in summer =].

 

[medi01]

If this doesn't qualify as a monopoly ... I don't know what does.

Note that being a monopoly is not illegal (in most countries), leveraging your dominant position to do "bad things" is.
Intel did that (might still be doing it at smaller scale) and was (sadly, only mildly) fined for that. (check Vinska's post)

If Intel is a monopoly, it's because AMD has consistently failed to provide adequate competition.

It's not a monopoly. It's just that Intel is too far ahead on CPU.

Vinska's post sums it up pretty well:
http://www.techpowerup.com/forums/t...arter-and-annual-results.219376/#post-3404632

Prescott was slower than Athlon64, consumed more power, still was pricier and nevertheless vastly outsold it.

Because of anti-competitive practices of Intel, AMD, despite having vastly superior products, couldn't gain momentum, couldn't grab adequate market share, profits. Smaller profits, smaller investments in R&D, need to outsource fab business etc etc.

-----------------------------------------------------------------

What's worse, though, is the how quickly AMD had lost GPU market share this year, despite having competitive products.

 

[gaximodo]

I'll just leave this here:

Spoiler

View attachment 71229

Spoiler

Keep in mind that the amounts they paid to AMD are laughably large compared to the long-lasting damage Intel done to AMD with this

All Intel's violation/charges is against AMD, its competitor; whereas 50% of charges whoever made this chart (obviously pro AMD) put in there, is against their own investors/potential investors - in my book thats 'eviler'.

If AMD were trying to bribe anyone not to buy Intel products, they will take it as a joke and that's why it never happened.

 

[GhostRyder]

This is the difference. No single player. Consumers have a choice and the secondary choice is cheaper. Not monopoly.

Capitalism hadn't failed. It won, for Intel and its shareholders. Supply and demand, shares and dividends.
From being distinct and competitive companies, if anything, AMD caused the problems by buying ATI. They then focussed diminished budget on two fronts and lost huge ground to Intel.
They have too many IP's to fail though so the future (Zen and Polaris dependent) could be brighter.

Your correct, buying ATI for such an outrageous price was a big misstep and showed poor management on their part. However they are not all to blame for everything. Multiple cases have been settled by Intel's constant Anti-Competitive practices that pushed AMD out of most OEM's for awhile even when they were competitive or better. They have made a multitude in mistakes on the CPU front of course (Bulldozer+) but they were already really down before even that and only managed to make it worse by taking a huge gamble that completely backfired.

What's worse, though, is the how quickly AMD had lost GPU market share this year, despite having competitive products.

OEM's are the main problem for continued loss in market share. How many major OEM's can you name that have GPU's in their desktops, laptops, servers, etc... Even the ones we see for sale are only a small portion of the devices the companies sell. If I walk into somewhere like BestBuy or Frys I see about 10% of the laptops and desktops there have an AMD CPU/APU or GPU while the rest contain Intel CPU's and either an Intel Integrated or NVidia GPU.

I'll just leave this here:

Spoiler

View attachment 71229

Spoiler

Keep in mind that the amounts they paid to AMD are laughably large compared to the long-lasting damage Intel done to AMD with this

Exactly, they got no real reprimand for doing what they did. Its unfortunate but how the system works. Even if they were fined 1 billion + dollars it would still be a win for Intel.

Fine, let's say its not monopoly, then my question is when does this becomes a monopoly? What are the conditions to be considered a monopoly?

From my perspective in order to have a functional market you need at least 3 strong competitors. In rare cases it could be done with 2, but those 2 must be evenly matched and very strong.
So in our scenario the capitalism has failed for the CPU market, as we don't have functional competition.

It becomes a monopoly only when there is 0 competition. You still have a choice currently so its not a monopoly. If AMD disappeared then Intel still could be argued not to be a monopoly since there are alternatives to Intel's X86 CPU's but it still would be a lot closer to one than it is now. Right now its just Intel has a vastly superior architecture currently on the CPU side and more OEM's under the belt.

Either way, least they are losing less. Hopefully the new Zen architecture can win something back and the Polaris GPU's are able to be what they claim (or at least close).

 

[Octavean]

If this doesn't qualify as a monopoly ... I don't know what does.

I believe the word you are looking for is "Oligopoly".

An Oligopoly is a market in which only a few firms dominate. Since AMD is still in the market when others have virtually disappears (such as Cyrix for example) there is still competition in some form.

AMD's ability to compete well not withstanding,.....

For what its worth, I invested in AMD about the time they were racing with Intel to get to 1GHz. I made a profit and built a new system with some of that money. That system was an Intel based system but I have owned a number of AMD based products since then and still do.

If AMD goes under or is bought by a tech company that wouldn't advance / contribute to the PC market (like Apple using AMD hardware exclusively for Apple products for example) then perhaps it would be a monopoly. If that were to happen then maybe Intel would be forced into being broken into smaller companies. Maybe not though,....

 

[gaximodo]

At Intel's position, where competition is virtually non-existing, they still try to keep up with their own moore's law and competing with themselves, and is taking all the blame of AMD's failures? WTF? Even a high school student would easily understand why monopoly is bad. But keeping a non-performing competitor alive in a duopoly/oligopoly is worse hello? AMD has had problems since when? STOP buying all this monopoly bullsh!t and stop supporting AMD, let it fail, let someone else takes on the competition against Intel.

 

[librin.so.1]

Keep in mind that the amounts they paid to AMD are laughably large compared to the long-lasting damage Intel done to AMD with this

I meant laughably small, dang it
damn typos, changed the whole meaning by accident

 

[gaximodo]

I meant laughably small, dang it
damn typos, changed the whole meaning by accident

And support to your statement?

Edit: I agree it is a reasonable assumption, but it is just your assumption without any sort of support.

 

[medi01]

If AMD were trying to bribe anyone not to buy Intel products, they will take it as a joke and that's why it never happened.

Oh, bribe? So that's what Intel did to Compaq? You know, when they've refused to get AMD's CPUs offered FOR FREE.
So AMD couldn't do it (you know, "bribe"), because "it would look like a joke" for some reason. That's a reason enough...

At Intel's position, where competition is virtually non-existing, they still try to keep up with their own moore's law and competing with themselves, and is taking all the blame of AMD's failures? WTF?

Yeah, reading comprehension problems, WTF.
Try to read #12, maybe #15 too.

And those 7-11% bumps surely "rock", still on my i5 750, thanks.

OEM's are the main problem for continued loss in market share. How many major OEM's can you name that have GPU's in their desktops, laptops, servers, etc... Even the ones we see for sale are only a small portion of the devices the companies sell. If I walk into somewhere like BestBuy or Frys I see about 10% of the laptops and desktops there have an AMD CPU/APU or GPU while the rest contain Intel CPU's and either an Intel Integrated or NVidia GPU.

Well, check, say, amazon. Search for "PCIe graphic card".
On amazon.de only 2 out of 24 card on the first page are AMD. (380 somewhere at the end of a first dozen, and 5450 on position 4.
=/

 

[gaximodo]

Oh, bribe? So that's what Intel did to Compaq? You know, when they've refused to get AMD's CPUs offered FOR FREE.
So AMD couldn't do it (you know, "bribe"), because "it would look like a joke" for some reason. That's a reason enough...



Yeah, reading comprehension problems, WTF.
Try to read #12, maybe #15 too.

And those 7-11% bumps surely "rock", still on my i5 750, thanks.

I read #12, #15 was rather pointing out the obvious - and the conclusion the first time AMD made something better than their competition who has a brand and record of success, consumers should jump platform is just, not very well thought thru.

I'm not defending Intel, I'm simply telling my opinion that supporting AMD is not doing anything good to the consumers.

AMD should fall and have someone take over the company and competition.

 

[Eroticus]

I read #12, #15 was rather pointing out the obvious.

I'm not defending Intel, I'm simply telling my opinion that supporting AMD is not doing anything good to the consumers.

AMD should fall and have someone take over the company and competition.

"Nothing good"

Nah Intel and specially Nvidia just overrated companies.

 

[EarthDog]

I believe the word you are looking for is "Oligopoly".

An Oligopoly is a market in which only a few firms dominate. Since AMD is still in the market when others have virtually disappears (such as Cyrix for example) there is still competition in some form.

AMD's ability to compete well not withstanding,.....

I teach a man to fish, you gave him the fish, LOL!!!!!