AMD Reports 2016 First Quarter Results

[Cristian_25H]

AMD today announced revenue for the first quarter of 2016 of $832 million, operating loss of $68 million, and net loss of $109 million, or $0.14 per share. Non-GAAP operating loss was $55 million and non-GAAP net loss was $96 million, or $0.12 per share.

"Our strategy to build a strong business foundation and improve financial performance through delivering great products is beginning to show benefits," said Lisa Su, AMD president and CEO. "We continued to strengthen the performance of our Computing and Graphics business as our customers and partners show a growing preference for AMD. We are optimistic about our growth prospects in the second half of the year across our businesses based on new product introductions and design wins."





Q1 2016 Results

• Q1 2016 was a 13-week fiscal quarter.
• Revenue of $832 million, down 13 percent sequentially and down 19 percent year-over-year. The sequential decrease was primarily due to lower sales of semi-custom SoCs. The year-over-year decline was primarily due to lower sales of semi-custom SoCs and client notebook processors.
• Gross margin of 32 percent, up 2 percentage points sequentially, due primarily to a richer product mix and the mix of revenue between business segments.
• Operating expenses of $344 million, compared to $332 million for the prior quarter. Non-GAAP operating expenses of $332 million, compared to non-GAAP operating expenses of $323 million in Q4 2015, primarily due to increased R&D expenses related to new products, partially offset by lower SG&A expenses.
• Operating loss of $68 million, compared to an operating loss of $49 million for the prior quarter. Non-GAAP operating loss of $55 million, compared to non-GAAP operating loss of $39 million in Q4 2015, primarily due to lower sales.
• Net loss of $109 million, loss per share of $0.14, and non-GAAP net loss of $96 million, non-GAAP loss per share of $0.12, compared to a net loss of $102 million, loss per share of $0.13 and non-GAAP net loss of $79 million, non-GAAP loss per share of $0.10 in Q4 2015.
• Cash and cash equivalents were $716 million at the end of the quarter, down $69 million from the end of the prior quarter, due to lower sales and higher debt interest payments, partially offset by $52 million of cash received related to our newly announced IP licensing agreement.
• Total debt at the end of the quarter was $2.24 billion, flat from the prior quarter.

Financial Segment Summary

• Computing and Graphics segment revenue of $460 million decreased 2 percent sequentially and decreased 14 percent from Q1 2015. The sequential decrease was primarily due to decreased sales of client desktop processors and the year-over-year decrease was driven primarily by decreased sales of client notebook processors.
  Operating loss was $70 million, compared with an operating loss of $99 million in Q4 2015 and an operating loss of $75 million in Q1 2015. The sequential improvement was primarily driven by lower operating expenses. The year-over-year improvement was primarily driven by lower operating expenses.
  Client processor average selling price (ASP) decreased sequentially driven by a lower desktop processor ASP and decreased year-over-year primarily due to a lower notebook processor ASP.
  GPU ASP decreased sequentially driven by lower consumer GPU ASPs and increased year-over-year due to higher channel and professional graphics ASPs.
• Enterprise, Embedded and Semi-Custom segment revenue of $372 million decreased 24 percent sequentially and 25 percent year-over-year. The decreases were primarily driven by lower sales of semi-custom SoCs.
  Operating income was $16 million compared with $59 million in Q4 2015 and $45 million in Q1 2015. The sequential and year-over-year decrease was primarily due to lower sales and higher R&D expenses associated with new product investments, partially offset by a $7 million IP licensing gain.
• All Other category operating loss was $14 million compared with operating losses of $9 million in Q4 2015 and $107 million in Q1 2015. The year-over-year decrease was primarily due to the absence of restructuring and other special charges associated with the exit from the dense server systems business.

IP Licensing Agreement and JV with THATIC
AMD licensed high-performance processor and SoC technology to a newly-created JV it has formed with THATIC (Tianjin Haiguang Advanced Technology Investment Co., Ltd.) to develop SoCs tailored to the Chinese server market that will complement AMD's own offerings. The $293 million licensing agreement is a meaningful step in AMD's IP monetization strategy intended to accelerate the Company's growth and better monetize its valuable assets. Payments are contingent upon the JV achieving certain milestones. AMD also expects to receive royalty payments from the JV's future product sales.

"Our new licensing agreement is a great example of leveraging our strong IP portfolio to accelerate the adoption of our technologies more broadly," said Dr. Su. "The joint venture with THATIC provides AMD with a differentiated approach to help gain share in the fastest growing region of the server market."

Recent Highlights

• AMD's Assembly, Test, Mark and Pack (ATMP) JV transaction received approval from Nantong Fujitsu Microelectronics Co., Ltd. shareholders and the transaction remains on track to close in Q2 2016.
• AMD momentum continued for its mobile client solutions and technologies, starting shipments of the 7th Generation AMD A-Series Processors (codenamed "Bristol Ridge") and securing notable commercial and consumer design wins.
  AMD 7th Generation APUs are equipped with advanced video, graphics performance, security and energy efficiency features and will first appear in the HP ENVY x360, with other ultrathin notebook, convertible, and all-in one OEM designs planned to launch throughout the year.
  AMD secured new HP notebook design wins and continued to expand in the commercial PC market with new large-scale enterprise deployments for its 6th Generation PRO A-Series mobile processors.
• AMD launched new desktop component solutions, including the flagship AMD Wraith Cooler and its fastest APU ever, the AMD A10-7890K. Other new additions to the 2016 Desktop processor family include the new AMD A10-7870K and AMD A10-7860K APUs, and new AMD Athlon X4 880K and AMD Athlon X4 845 CPUs.
• AMD disclosed its upcoming GPU architecture roadmap, including "Vega" featuring High Bandwidth Memory 2, which the company plans to follow with the release of "Navi" which will be designed with scalability and next-generation memory.
• AMD demonstrated its "Polaris" 10 and 11 next-generation GPUs, with Polaris 11 targeting the notebook market and "Polaris" 10 aimed at the mainstream desktop and high-end gaming notebook segment. "Polaris" architecture-based GPUs are expected to deliver a 2x performance per watt improvement over current generation products and are designed for intensive workloads including 4K video playback and virtual reality (VR).
• AMD continued to expand its leadership position in VR, unveiling new technologies and collaborations across a variety of sectors, including gaming, education, and media.
  AMD introduced the Radeon Pro Duo GPU, part of the world's most powerful platform for VR designed for creating and consuming VR content. AMD's Radeon Pro Duo GPU with its LiquidVR SDK is a platform aimed at most all aspects of VR content creation: from entertainment to education, journalism, medicine, and cinema.
  20th Century Fox, New Regency, Ubisoft Motion Pictures, and VR development studio Practical Magic chose the AMD Radeon Pro Duo GPU featuring the AMD LiquidVR SDK to bring the upcoming ASSASSIN'S CREED movie VR experience to life.
  Sulon Technologies announced the Sulon Q, the world's only all-in-one, tether-free "wear and play" headset for VR, Augmented Reality (AR) and spatial computing -- powered by the AMD FX-8800P processor.
  AMD joined with The Associated Press to create a new VR experience channel to fuel next-generation journalism.
  AMD announced it is helping colleges and universities create dedicated AMD Radeon graphics-equipped VR labs as Crytek's exclusive technology partner for the VR First initiative.
  AMD released the Radeon Software Crimson Edition 16.3.2 Driver with support for the Oculus Rift SDK v1.3 -- offering AMD's most stable and compatible driver for developing VR experiences on the Rift to-date.
• AMD demonstrated its continued dedication to enabling gamers and game developers with the best possible graphics experiences.
  MD's performance leadership in DirectX 12 was re-affirmed through the Ashes of the Singularity benchmark. AMD also announced its association with several DirectX 12 games including Hitman and Total War: Warhammer.
• AMD further established its presence in the professional graphics market with the introduction of new technologies, design wins, and relationships.
  AMD revealed the world's first hardware virtualized GPU products -- AMD FirePro S-Series GPUs with Multiuser GPU (MxGPU) technology that enables a precise, secure, high performance, and enriched graphics user experience.
  AMD FirePro graphics were selected to drive fast, cost-effective GPU-compute installations for the Canadian Hydrogen Intensity Mapping Experiment, global geophysical services and equipment company CGG, and the Institute of System Research of the Russian Academy of Sciences.

Current Outlook
For Q2 2016, AMD expects revenue to increase 15 percent, plus or minus 3 percent, sequentially.

View at TechPowerUp Main Site

 

[Fluffmeister]

So... what sort of deal do they have with Sony and Microsoft FFS?

 

[mcraygsx]

I was sincerely hoping that console market (Microsoft and Sony) to turn things around for AMD. Almost sounds like they have been running on fumes.

 

[cadaveca]

I was sincerely hoping that console market (Microsoft and Sony) to turn things around for AMD. Almost sounds like they have been running on fumes.

The sarcastic answer is here:

So... what sort of deal do they have with Sony and Microsoft FFS?

The real answer is... the same deal they have had since day one (Fabs suck, that's why they sold them to GloFo). However, there is this glimmer of admission:

AMD momentum continued for its mobile client solutions and technologies, starting shipments of the 7th Generation AMD A-Series Processors (codenamed "Bristol Ridge") and securing notable commercial and consumer design wins.

As you can tell by the "fluff" in AMD's statements, there is no mention of Zen, just Bristol Ridge. There is VOLUMES of info as to what's up with AMD there. They need to fire Dr Su. I hope she has a limited-time contract. THATIC is nice, but not enough.

 

[vega22]

So... what sort of deal do they have with Sony and Microsoft FFS?

they need to get them on the shunk stuff so they turn profit it seems.

 

[ensabrenoir]

.............its bewildering to me that a company with so many recent huge contracts and even that ridiculous mining craze in its recent history has yet to pull it into the black. I know it takes time but....how much? I get excited when i hear of new partnerships and collaborations and everything concerning Amd.....but where's the money? Is it spent before they even got it so it makes no difference?

some sorta evil sorcery going on here....

 

[cadaveca]

They aren't supposed to be making money. Nearly no research division does. Making money is the job of other entities.

That might be hard for a "fan" of AMD to swallow, but you shouldn't expect a corporate entity to have the same ideals/goals as a person.

 

[HumanSmoke]

I was sincerely hoping that console market (Microsoft and Sony) to turn things around for AMD. Almost sounds like they have been running on fumes.

The console market adds revenue, but net profit is pretty sad (around $20 per APU) since MS and Sony were in the driving seat during contract negotiation. The only real plus is that MS and Sony stumped up for R&D costs on console specific logic.

As you can tell by the "fluff" in AMD's statements, there is no mention of Zen, just Bristol Ridge. There is VOLUMES of info as to what's up with AMD there.

Most certainly. AMD is paying for promising the moon and delivering a Bulldozer and Piledriver. OEM's got burnt and regaining their confidence I suspect will involve not only delivering working silicon that matches the hype, but guaranteed volume on time- particularly of better binned SKUs. Enterprise and consumer OEMs wont invest their future given Globalfoundries rather optimistic claims of the past which have born little in common with the resultant reality. Cray taking AMD and Glofo at their word in 2010 and committing their XE6/XK6 to Opteron basically condemned the line as soon as the pre-orders were fulfilled, so its understandable the OEMs will take a "wait and see" attitute with Zen.

THATIC is nice, but not enough.

Not by a long chalk. $293m certainly helps, but AMD have just loaded the first $52m payment into this quarters financials which have basically just made the quarters returns look less sad than it would have been.

They need to fire Dr Su. I hope she has a limited-time contract.

Can they afford to do that? Firstly, they would need to find a good replacement candidate, and secondly unless Su's contract is dependent upon hitting performance criteria, she probably wouldn't be up for any less of a golden parachute severance package than Read who pocketed $7.7 million ($5m lump sum plus $2.7m in bonuses).

 

[cadaveca]

Can they afford to do that? Firstly, they would need to find a good replacement candidate, and secondly unless Su's contract is dependent upon hitting performance criteria, she probably wouldn't be up for any less of a golden parachute severance package than Read who pocketed $7.7 million ($5m lump sum plus $2.7m in bonuses).

I can't answer that question. It depends who would be next in line, as you said. I won't volunteer myself for that anymore... I can't predict the future, just simply matching the writing on the walls to the hand that wrote it.

 

[cdawall]

AMD's entire pr department needs to be fired. That would be a good start to fixing their issues. Second releasing things people want to buy would be nice. AM1 has 3 CPU's. AM3+ is a legacy socket, fm2+ is limited to essentially dual module cpus. What on earth are they thinking and why on God's green earth can't they release something worth while?

Jesus want more money in entry level? Sell an athlon whatever black edition for am1 and ramp the graphics up a hair you know using the mobile cpus they sell as bga only and share the socket.

Want more money mid range? Sell the ps4 cpu/gpu for fm2+ plenty of people would buy an 8 core jaguar based cpu with a 7870 glued to it.

Want more money top end? Mix the server market into the fx crap. It's a server based chip. Can't beat Intel with single ipc so just give everyone more cores. There is no reason single socket g34 shouldn't allow overclocking and there should not be fx series 16 core cpu's with real quad channel no more of this pr made up nonsense quoting dual, dual channel controllers as quad channel. It doesn't work like that and memory bandwidth proves this.

I'm sorry amd as of late you have had some cool trinkets, but you killed yourself from within.

 

[GhostRyder]

This is what happens when you don't do anything... Nothing has happened recently for them to get any increase in well any area significant.

 

[Xzibit]

Not by a long chalk. $293m certainly helps, but AMD have just loaded the first $52m payment into this quarters financials which have basically just made the quarters returns look less sad than it would have been.

Off by 45million.

Financial Segment Summary

• Computing and Graphics segment revenue of $460 million decreased 2 percent sequentially and decreased 14 percent from Q1 2015. The sequential decrease was primarily due to decreased sales of client desktop processors and the year-over-year decrease was driven primarily by decreased sales of client notebook processors.
  Operating loss was $70 million, compared with an operating loss of $99 million in Q4 2015 and an operating loss of $75 million in Q1 2015. The sequential improvement was primarily driven by lower operating expenses. The year-over-year improvement was primarily driven by lower operating expenses.
  Client processor average selling price (ASP) decreased sequentially driven by a lower desktop processor ASP and decreased year-over-year primarily due to a lower notebook processor ASP.
  GPU ASP decreased sequentially driven by lower consumer GPU ASPs and increased year-over-year due to higher channel and professional graphics ASPs.
• Enterprise, Embedded and Semi-Custom segment revenue of $372 million decreased 24 percent sequentially and 25 percent year-over-year. The decreases were primarily driven by lower sales of semi-custom SoCs.
  Operating income was $16 million compared with $59 million in Q4 2015 and $45 million in Q1 2015. The sequential and year-over-year decrease was primarily due to lower sales and higher R&D expenses associated with new product investments, partially offset by a $7 million IP licensing gain.

AMD said it has received $52 million so far from the China deal, recognizing $7 million on its income statement for the first quarter.

 

[silentbogo]

AMD's entire pr department needs to be fired.

^^^That^^^

Overall AMD products are decent and get the job done (especially in low-to-mid budget segment), but they need to stop doing at least 2 things:
1) Blame competitors and third-party reviewers for biased point of view, and using the same defensive stance in marketing
2) Use their own shamelessly biased foundation and directed misinformation to do marketing

Just like with FX-8800P redemption campaign, just like with APU gaming, and even like the latest Polaris demo.
Haven't been following AMD server hardware, but I'm pretty sure there are some signs of marketing foul-play in there too.

Simply marketing their products for what they are would've been much better, probably for both consumer and enterprise market segment.

 

[Cataclysm_ZA]

Jesus want more money in entry level? Sell an athlon whatever black edition for am1 and ramp the graphics up a hair you know using the mobile cpus they sell as bga only and share the socket.

There is an Athlon 5350 successor coming this year. Might even be next month. They might actually have a new gen of AM1 chips that are Jaguar refreshes, and they're just waiting for the right moment to release them.

Want more money mid range? Sell the ps4 cpu/gpu for fm2+ plenty of people would buy an 8 core jaguar based cpu with a 7870 glued to it.

They'd have to shrink down the die first to be able to fit it into a FM2+ socket, and then they'd strangle the GPU with two 64-bit DDR3 memory controllers. The A10-6800K die size is 246mmsq., while the Xbox One's APU is 363mmsq. I don't think that socket is engineered for a 200W-ish TDP either.

I think their PR department has been doing just fine this year, TBH. Putting graphics into RTG really seems to have paid off from a PR standpoint, and people that I've spoken seem to have an impression now that they're serious about being leaders in their field. Which, to be fair, they always were, they just had their marketing department let their imaginations run a bit too wild on several occasions.

 

[cdawall]

There is an Athlon 5350 successor coming this year. Might even be next month. They might actually have a new gen of AM1 chips that are Jaguar refreshes, and they're just waiting for the right moment to release them.

Releasing the athlon 5370 isn't exactly exciting. Might as well release an fx 8390 while they are at it. Maybe throw in a cooler with an 80mm fan taped to it? Oh wait they already did that with the 8370.

They'd have to shrink down the die first to be able to fit it into a FM2+ socket, and then they'd strangle the GPU with two 64-bit DDR3 memory controllers. The A10-6800K die size is 246mmsq., while the Xbox One's APU is 363mmsq. I don't think that socket is engineered for a 200W-ish TDP either.

I don't believe am3+ was engineered for it either yet we have the 9370/9590. Simple fix for the memory issue is a refresh that adds amds "sideport" to the motherboard. Throw 2gb of gddr5 onto the board. Allow the apu to use it. That same gddr5 controller is part of why the die is larger on the xbox/ps4 chip. You are correct it would need a die shrink, but I fail to see why amd hasn't done that as well. It's almost as if they are stuck in 2012.

I think their PR department has been doing just fine this year, TBH. Putting graphics into RTG really seems to have paid off from a PR standpoint, and people that I've spoken seem to have an impression now that they're serious about being leaders in their field. Which, to be fair, they always were, they just had their marketing department let their imaginations run a bit too wild on several occasions.

AMD has always tried new things and their PR department has always failed miserably to market them. Just the PR slides alone are a joke. Cherry picked benchmarks with Intel chips that have intentionally been limited. I stand by what I said and those clowns need to be fired and amd needs to clean slate.

 

[cadaveca]

AMD has always tried new things and their PR department has always failed miserably to market them. Just the PR slides alone are a joke. Cherry picked benchmarks with Intel chips that have intentionally been limited. I stand by what I said and those clowns need to be fired and amd needs to clean slate.

AMD has a decent presence on Twitch, and twitter "giving away" hardware pretty often. Not all their marketing is bad, but most is misplaced for sure.

 

[cdawall]

AMD has a decent presence on Twitch, and twitter "giving away" hardware pretty often. Not all their marketing is bad, but most is misplaced for sure.

Giving away free hardware doesn't make up for the pity me and lies. I guess you can say I'm just fed up with it by now. I have stood behind amd for quite a few years now as the underdog making their way in the world, but you know what Intel is making a joke of them.

All I have to say is I hope zen is good but judging from the tight lips broadwell probably performs better.

 

[cadaveca]

Giving away free hardware doesn't make up for the pity me and lies. I guess you can say I'm just fed up with it by now. I have stood behind amd for quite a few years now as the underdog making their way in the world, but you know what Intel is making a joke of them.

All I have to say is I hope zen is good but judging from the tight lips broadwell probably performs better.

I understand why you'd feel that way. That's why they are doing what they do in social media; they want to win people over, and an easy way is to give some free hardware to those that interact with them. It doesn't matter that that interaction is with the peons, and not the management, and it doesn't matter that those peons can then have "all the happy users and comments" to report rather than the negatives, so it seems like they are doing a good job, but the way I look at it, something is better than nothing.

I also don't think that AMD needs to compete with Intel directly. There's absolutely no need for the grunt that modern CPUs offer at this point; software is where the real difference can be made. Both AMD and Intel are in the land of diminishing returns when it comes to performance by dropping nodes, and AMD specifically is limited by the fabs they have access to that are affordable. I have ben wanting AMD to move GPU production away from TSMC for many many years, but the fact of the matter is that TSMC has been the sole option they have had in the past, and today TSMC isn't the sole supplier of GPUs for AMD.

So while AMD's marketing isn't that appealing to us, it is obviously appealing the newer users and those that follow their social media, and they are trying to make improvements where they can. Unfortunately, they don't have access to finds to truly become the company that many want them to be, and I can't hold that against them. They got the console wins, they got great GPUs, and they have great potential to be a long-lasting part of the industry, even while not making a profit. It's been a long time (like nearly a decade) since AMD has posted true profits consistently, and not all of that is their fault. They won their lawsuit against Intel for underhanded business practices, and that alone had an effect on their potential today and forever.

I can't believe I'm defending AMD myself, but it's not all bad, so I don't mind.

 

[cdawall]

It has never been all bad, but they have a lot of ground to make up now. We know they can compete, but it's a matter of cutting fluff and actually updating some. Limping along amds p4 just like Intel did when they don't have the resources Intel did isn't good.

 

[lemkeant]

I tell you what, I made some cash off the stock today, that's for sure. I guess Wall Street is looking at it as a good deal

 

[cdawall]

I tell you what, I made some cash off the stock today, that's for sure. I guess Wall Street is looking at it as a good deal

I doubled my money on them a year or two ago lol

 

[john_]

Nvidia and Intel fanboys where right after all.

Proof that AMD is near bankruptcy

 

[cdawall]

Nvidia and Intel fanboys where right after all.

Proof that AMD is near bankruptcy

View attachment 73934

sub $4 a share. Showing a graph of a low cost company going up less than a dollar great.

 

[Fluffmeister]

sub $4 a share. Showing a graph of a low cost company going up less than a dollar great.

We bailed the Greeks out too, the world has gone mad... and is truly upside down.

 

[Aquinus]

I tell you what, I made some cash off the stock today, that's for sure. I guess Wall Street is looking at it as a good deal

This is the second time that I decided not to throw some money at AMD and I'm feeling kind of stupid for not doing it both times knowing that this same stunt would occur.