Delaware | 001-07882 | 94-1692300 | ||
(State of Incorporation) | (Commission File Number) | (IRS Employer Identification Number) |
o | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
o | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
o | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
o | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
EXHIBIT INDEX | ||
Exhibit No. | Description | |
99.1 | Press release dated January 19, 2016 | |
99.2 | CFO Commentary on 2015 Fourth Quarter and Annual Results |
Date: January 19, 2016 | ADVANCED MICRO DEVICES, INC. | |
By: | /s/ Devinder Kumar | |
Name: | Devinder Kumar | |
Title: | Chief Financial Officer, Senior Vice President & Treasurer |
Q4-15 | Q3-15 | Q4-14 | 2015 | 2014 | ||||||
Revenue | $958M | $1.06B | $1.24B | $3.99B | $5.51B | |||||
Operating loss | $(49)M | $(158)M | $(330)M | $(481)M | $(155)M | |||||
Net loss / Loss per share | $(102)M/$(0.13) | $(197)M/$(0.25) | $(364)M/$(0.47) | $(660)M/$(0.84) | $(403)M/$(0.53) |
Q4-15 | Q3-15 | Q4-14 | 2015 | 2014 | ||||||
Revenue | $958M | $1.06B | $1.24B | $3.99B | $5.51B | |||||
Operating income (loss) | $(39)M | $(97)M | $52M | $(253)M | $316M | |||||
Net income (loss) / Earnings (loss) per share | $(79)M/$(0.10) | $(136)M/$(0.17) | $18M/$0.02 | $(419)M/$(0.54) | $132M/$0.16 |
• | 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(1) 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(1) 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(1) net loss of $419 million, non-GAAP(1) 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(1) 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. |
• | 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 |
◦ | 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. |
◦ | 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. |
◦ | 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. |
• | AMD provided a glimpse at its next-generation GPU architecture and delivered innovative new graphics, embedded, and desktop component technologies. |
◦ | 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. |
◦ | 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. |
◦ | 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. |
◦ | 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. |
◦ | 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. |
◦ | 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. |
◦ | 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. |
◦ | 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. |
◦ | 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. |
◦ | 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. |
◦ | 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. |
◦ | 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. |
(Millions except percentages) | Q4-15 | Q3-15 | Q4-14 | 2015 | 2014 | |||||||||||||||
GAAP Gross Margin | $ | 283 | $ | 239 | $ | 360 | $ | 1,080 | $ | 1,839 | ||||||||||
GAAP Gross Margin % | 30 | % | 23 | % | 29 | % | 27 | % | 33 | % | ||||||||||
Technology node transition charge | — | — | — | 33 | — | |||||||||||||||
Stock-based compensation* | 1 | — | — | 3 | 3 | |||||||||||||||
Lower of cost or market inventory adjustment | — | — | 58 | — | 58 | |||||||||||||||
Non-GAAP Gross Margin | $ | 284 | $ | 239 | $ | 418 | $ | 1,116 | $ | 1,900 | ||||||||||
Non-GAAP Gross Margin % | 30 | % | 23 | % | 34 | % | 28 | % | 35 | % |
(Millions) | Q4-15 | Q3-15 | Q4-14 | 2015 | 2014 | |||||||||||||||
GAAP operating loss | $ | (49 | ) | $ | (158 | ) | $ | (330 | ) | $ | (481 | ) | $ | (155 | ) | |||||
Goodwill impairment | — | — | 233 | — | 233 | |||||||||||||||
Technology node transition charge | — | — | — | 33 | — | |||||||||||||||
Lower of cost or market inventory adjustment | — | — | 58 | — | 58 | |||||||||||||||
Restructuring and other special charges, net | (6 | ) | 48 | 71 | 129 | 71 | ||||||||||||||
Workforce rebalancing severance charges | — | — | — | — | 14 | |||||||||||||||
Amortization of acquired intangible assets | — | — | 4 | 3 | 14 | |||||||||||||||
Stock-based compensation* | 16 | 13 | 16 | 63 | 81 | |||||||||||||||
Non-GAAP operating income (loss) | $ | (39 | ) | $ | (97 | ) | $ | 52 | $ | (253 | ) | $ | 316 |
(Millions except per share amounts) | Q4-15 | Q3-15 | Q4-14 | 2015 | 2014 | |||||||||||||||||||||||||||||||||||
GAAP net loss /loss per share | $ | (102 | ) | $ | (0.13 | ) | $ | (197 | ) | $ | (0.25 | ) | $ | (364 | ) | $ | (0.47 | ) | $ | (660 | ) | $ | (0.84 | ) | $ | (403 | ) | $ | (0.53 | ) | ||||||||||
Goodwill impairment | — | — | — | — | 233 | 0.30 | — | — | 233 | 0.30 | ||||||||||||||||||||||||||||||
Technology node transition charge | — | — | — | — | — | — | 33 | 0.04 | — | — | ||||||||||||||||||||||||||||||
Lower of cost or market inventory adjustment | — | — | — | — | 58 | 0.07 | — | — | 58 | 0.07 | ||||||||||||||||||||||||||||||
Restructuring and other special charges, net | (6 | ) | (0.01 | ) | 48 | 0.06 | 71 | 0.09 | 129 | 0.16 | 71 | 0.09 | ||||||||||||||||||||||||||||
Workforce rebalancing severance charges | — | — | — | — | — | — | — | — | 14 | 0.02 | ||||||||||||||||||||||||||||||
Loss on debt redemption | — | — | — | — | — | — | — | — | 64 | 0.08 | ||||||||||||||||||||||||||||||
Tax settlement in foreign jurisdiction | 13 | 0.02 | — | — | — | — | 13 | 0.02 | — | — | ||||||||||||||||||||||||||||||
Amortization of acquired intangible assets | — | — | — | — | 4 | — | 3 | — | 14 | 0.02 | ||||||||||||||||||||||||||||||
Stock-based compensation* | 16 | 0.02 | 13 | 0.02 | 16 | 0.02 | 63 | 0.08 | 81 | 0.11 | ||||||||||||||||||||||||||||||
Non-GAAP net income (loss) / earnings (loss) per share | $ | (79 | ) | $ | (0.10 | ) | $ | (136 | ) | $ | (0.17 | ) | $ | 18 | $ | 0.02 | $ | (419 | ) | $ | (0.54 | ) | $ | 132 | $ | 0.16 |
* | Beginning in Q1 2015, AMD started excluding the impact of stock-based compensation from non-GAAP results. Prior periods have been adjusted accordingly. |
1. | In this earnings press release, in addition to GAAP financial results, AMD has provided non-GAAP financial measures including non-GAAP gross margin, non-GAAP operating income (loss), non-GAAP net income (loss) and non-GAAP earnings (loss) per share. These non-GAAP financial measures reflect certain adjustments as presented in the tables in this earnings press release. AMD also provided adjusted EBITDA and non-GAAP free cash flow as supplemental measures of its performance. These items are defined in the footnotes to the selected corporate data tables provided at the end of this earnings press release. AMD is providing these financial measures because it believes this non-GAAP presentation makes it easier for investors to compare its operating results for current and historical periods and also because AMD believes it assists investors in comparing AMD’s performance across reporting periods on a consistent basis by excluding items that it does not believe are indicative of its core operating performance and for the other reasons described in the footnotes to the selected data tables. Refer to the data tables at the end of this earnings press release. |
2. | AMD Internal Lab testing as of Oct 22, 2015 with an Intel Core i7 5960X with 2x8GB DDR4-2666 MHz memory, Gigabyte X99-UD4PC, AMD Radeon™ R9 Fury X, Windows 10 64bit. PC manufacturers may vary configurations yielding different results. Fable Legends @ 1080p scored 63.99 fps with AMD Catalyst™ 15.7.1 Driver and 76.88 fps with Radeon Software Crimson Edition. RS-2 |
3. | AMD Internal Lab testing as of Nov 2, 2015 with an Intel Core i7 5960X with 2x8GB DDR4-2666 MHz memory, Gigabyte X99-UD4, AMD Radeon™ R9 380, Windows 10 64bit. PC manufacturers may vary configurations yielding different results. Frame Rate Target Control (FRTC) enables users to set a target maximum frame rate when playing an application in full screen mode, thereby reducing GPU power consumption, heat generation and fan speeds/noise. FRTC caps performance not only in 3D rendered in-game scenes, but also in splash screens, loading screens and menus. See http://www.amd.com/en-us/innovations/software-technologies/technologies-gaming/frtc for full details on FRTC. Rocketleague at 1080p Max quality consumed 180W using AMD Catalyst 15.7.1 Driver, 175W with Radeon Software Crimson Edition, and 61W when using FRTC=55fps in Radeon Software Crimson Edition. RS-7 |
Three Months Ended | Year Ended | |||||||||||||||||||
December 26, 2015 | September 26, 2015 | December 27, 2014 | December 26, 2015 | December 27, 2014 | ||||||||||||||||
Net revenue | $ | 958 | $ | 1,061 | $ | 1,239 | $ | 3,991 | $ | 5,506 | ||||||||||
Cost of sales | 675 | 822 | 879 | $ | 2,911 | $ | 3,667 | |||||||||||||
Gross margin | 283 | 239 | 360 | 1,080 | 1,839 | |||||||||||||||
Gross margin % | 30 | % | 23 | % | 29 | % | 27 | % | 33 | % | ||||||||||
Research and development | 229 | 241 | 238 | 947 | 1,072 | |||||||||||||||
Marketing, general and administrative | 109 | 108 | 144 | 482 | 604 | |||||||||||||||
Amortization of acquired intangible assets | — | — | 4 | 3 | 14 | |||||||||||||||
Restructuring and other special charges, net | (6 | ) | 48 | 71 | 129 | 71 | ||||||||||||||
Goodwill impairment charge | — | — | 233 | — | 233 | |||||||||||||||
Operating loss | (49 | ) | (158 | ) | (330 | ) | (481 | ) | (155 | ) | ||||||||||
Interest expense | (41 | ) | (39 | ) | (41 | ) | (160 | ) | (177 | ) | ||||||||||
Other income (expense), net | (2 | ) | — | 4 | (5 | ) | (66 | ) | ||||||||||||
Loss before income taxes | (92 | ) | (197 | ) | (367 | ) | (646 | ) | (398 | ) | ||||||||||
Provision (benefit) for income taxes | $ | 10 | $ | — | $ | (3 | ) | $ | 14 | $ | 5 | |||||||||
Net loss | (102 | ) | (197 | ) | (364 | ) | (660 | ) | (403 | ) | ||||||||||
Net loss per share | ||||||||||||||||||||
Basic | $ | (0.13 | ) | $ | (0.25 | ) | $ | (0.47 | ) | $ | (0.84 | ) | $ | (0.53 | ) | |||||
Diluted | $ | (0.13 | ) | $ | (0.25 | ) | $ | (0.47 | ) | $ | (0.84 | ) | $ | (0.53 | ) | |||||
Shares used in per share calculation | ||||||||||||||||||||
Basic | 791 | 785 | 776 | 783 | 768 | |||||||||||||||
Diluted | 791 | 785 | 776 | 783 | 768 | |||||||||||||||
ADVANCED MICRO DEVICES, INC. CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (Millions) | ||||||||||||||||||||
Three Months Ended | Year Ended | |||||||||||||||||||
December 26, 2015 | September 26, 2015 | December 27, 2014 | December 26, 2015 | December 27, 2014 | ||||||||||||||||
Total comprehensive loss | $ | (95 | ) | $ | (207 | ) | $ | (368 | ) | $ | (663 | ) | $ | (406 | ) |
December 26, 2015 | September 26, 2015 | December 27, 2014 | ||||||||||
Assets | ||||||||||||
Current assets: | ||||||||||||
Cash and cash equivalents | $ | 785 | $ | 755 | $ | 805 | ||||||
Marketable securities | — | — | 235 | |||||||||
Accounts receivable, net | 533 | 648 | 818 | |||||||||
Inventories, net | 678 | 761 | 685 | |||||||||
Prepayment and other - GLOBALFOUNDRIES | 33 | 20 | 113 | |||||||||
Prepaid expenses | 43 | 63 | 32 | |||||||||
Other current assets | 248 | 206 | 48 | |||||||||
Total current assets | 2,320 | 2,453 | 2,736 | |||||||||
Property, plant and equipment, net | 188 | 194 | 302 | |||||||||
Acquisition related intangible assets, net | — | — | 65 | |||||||||
Goodwill | 278 | 283 | 320 | |||||||||
Other assets | 323 | 286 | 344 | |||||||||
Total Assets | $ | 3,109 | $ | 3,216 | $ | 3,767 | ||||||
Liabilities and Stockholders' Equity (Deficit) | ||||||||||||
Current liabilities: | ||||||||||||
Short-term debt | $ | 230 | $ | 230 | $ | 177 | ||||||
Accounts payable | 279 | 388 | 415 | |||||||||
Payable to GLOBALFOUNDRIES | 245 | 226 | 218 | |||||||||
Accrued liabilities | 472 | 395 | 518 | |||||||||
Other current liabilities | 124 | 137 | 40 | |||||||||
Deferred income on shipments to distributors | 53 | 60 | 72 | |||||||||
Total current liabilities | 1,403 | 1,436 | 1,440 | |||||||||
Long-term debt | 2,032 | 2,030 | 2,035 | |||||||||
Other long-term liabilities | 86 | 86 | 105 | |||||||||
Stockholders' equity (deficit): | ||||||||||||
Capital stock: | ||||||||||||
Common stock, par value | 8 | 8 | 8 | |||||||||
Additional paid-in capital | 7,017 | 6,997 | 6,949 | |||||||||
Treasury stock, at cost | (123 | ) | (122 | ) | (119 | ) | ||||||
Accumulated deficit | (7,306 | ) | (7,204 | ) | (6,646 | ) | ||||||
Accumulated other comprehensive loss | (8 | ) | (15 | ) | (5 | ) | ||||||
Total Stockholders' equity (deficit) | (412 | ) | (336 | ) | 187 | |||||||
Total Liabilities and Stockholders' Equity (Deficit) | $ | 3,109 | $ | 3,216 | $ | 3,767 |
Three Months Ended | Year Ended | |||||||
December 26, 2015 | December 26, 2015 | |||||||
Cash flows from operating activities: | ||||||||
Net Loss | $ | (102 | ) | $ | (660 | ) | ||
Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
Depreciation and amortization | 34 | 167 | ||||||
Stock-based compensation expense | 16 | 63 | ||||||
Non-cash interest expense | 3 | 11 | ||||||
Restructuring and other special charges, net | — | 83 | ||||||
Other | (10 | ) | (3 | ) | ||||
Changes in operating assets and liabilities: | ||||||||
Accounts receivable | 116 | 280 | ||||||
Inventories | 82 | (11 | ) | |||||
Prepayment and other - GLOBALFOUNDRIES | (13 | ) | 84 | |||||
Prepaid expenses and other assets | (9 | ) | (122 | ) | ||||
Accounts payable, accrued liabilities and other | (82 | ) | (156 | ) | ||||
Payable to GLOBALFOUNDRIES | 18 | 27 | ||||||
Net cash provided by (used in) operating activities | $ | 53 | $ | (237 | ) | |||
Cash flows from investing activities: | ||||||||
Purchases of available-for-sale securities | — | (227 | ) | |||||
Purchases of property, plant and equipment | (32 | ) | (96 | ) | ||||
Proceeds from maturities of available-for-sale securities | — | 462 | ||||||
Proceeds from sale of property, plant and equipment | — | 8 | ||||||
Net cash provided by (used in) investing activities | $ | (32 | ) | $ | 147 | |||
Cash flows from financing activities: | ||||||||
Net proceeds from grants | 6 | 14 | ||||||
Proceeds from issuance of common stock | 3 | 4 | ||||||
Proceeds from borrowings, net | — | 100 | ||||||
Repayments of long-term debt and capital lease obligations | — | (44 | ) | |||||
Other | — | (4 | ) | |||||
Net cash provided by financing activities | $ | 9 | $ | 70 | ||||
Net increase (decrease) in cash and cash equivalents | 30 | (20 | ) | |||||
Cash and cash equivalents at beginning of period | $ | 755 | $ | 805 | ||||
Cash and cash equivalents at end of period | $ | 785 | $ | 785 |
Three Months Ended | Year Ended | |||||||||||||||||||
December 26, 2015 | September 26, 2015 | December 27, 2014 | December 26, 2015 | December 27, 2014 | ||||||||||||||||
Segment and Category Information | ||||||||||||||||||||
Computing and Graphics (1) | ||||||||||||||||||||
Net revenue | $ | 470 | $ | 424 | $ | 662 | $ | 1,805 | $ | 3,132 | ||||||||||
Operating loss | $ | (99 | ) | $ | (181 | ) | $ | (56 | ) | $ | (502 | ) | $ | (76 | ) | |||||
Enterprise, Embedded and Semi-Custom (2) | ||||||||||||||||||||
Net revenue | 488 | 637 | 577 | 2,186 | 2,374 | |||||||||||||||
Operating income | 59 | 84 | 109 | 215 | 399 | |||||||||||||||
All Other (3) | ||||||||||||||||||||
Net revenue | — | — | — | — | — | |||||||||||||||
Operating loss | (9 | ) | (61 | ) | (383 | ) | (194 | ) | (478 | ) | ||||||||||
Total | ||||||||||||||||||||
Net revenue | $ | 958 | $ | 1,061 | $ | 1,239 | $ | 3,991 | $ | 5,506 | ||||||||||
Operating loss | $ | (49 | ) | $ | (158 | ) | $ | (330 | ) | $ | (481 | ) | $ | (155 | ) | |||||
Other Data | ||||||||||||||||||||
Depreciation and amortization, excluding amortization of acquired intangible assets | $ | 34 | $ | 42 | $ | 44 | $ | 164 | $ | 189 | ||||||||||
Capital additions | $ | 32 | $ | 25 | $ | 22 | $ | 96 | $ | 95 | ||||||||||
Adjusted EBITDA (4) | $ | (5 | ) | $ | (55 | ) | $ | 96 | $ | (89 | ) | $ | 505 | |||||||
Cash, cash equivalents and marketable securities | $ | 785 | $ | 755 | $ | 1,040 | $ | 785 | $ | 1,040 | ||||||||||
Non-GAAP free cash flow (5) | $ | 21 | $ | (84 | ) | $ | 94 | $ | (333 | ) | $ | (193 | ) | |||||||
Total assets | $ | 3,109 | $ | 3,216 | $ | 3,767 | $ | 3,109 | $ | 3,767 | ||||||||||
Total debt | $ | 2,262 | $ | 2,260 | $ | 2,212 | $ | 2,262 | $ | 2,212 | ||||||||||
Headcount | 9,139 | 9,475 | 9,687 | 9,139 | 9,687 |
(1 | ) | Computing and Graphics segment primarily includes desktop and notebook processors, chipsets, discrete graphics processing units (GPUs) and professional graphics. | |||||||||
(2 | ) | Enterprise, Embedded and Semi-Custom segment primarily includes server and embedded processors, semi-custom System-on-Chip (SoC) products, development services and technology for game consoles. | |||||||||
(3 | ) | All Other category primarily includes certain expenses and credits that are not allocated to any of the operating segments. Also included in this category are amortization of acquired intangible assets and stock-based compensation expense. In addition, the Company also included the following adjustments for the indicated periods: for the fourth and third quarters of 2015 and for 2015, the Company included restructuring and other special charges, net; for the fourth quarter of 2014, the Company included a goodwill impairment, net restructuring and other special charges and a lower of cost or market inventory adjustment; and for 2014, the Company included a goodwill impairment, net restructuring and other special charges, a lower of cost or market inventory adjustment and workforce rebalancing severance charges; | |||||||||
(4 | ) | Reconciliation of GAAP Operating Loss to Adjusted EBITDA* |
Three Months Ended | Year Ended | |||||||||||||||||||
December 26, 2015 | September 26, 2015 | December 27, 2014 | December 26, 2015 | December 27, 2014 | ||||||||||||||||
GAAP operating loss | $ | (49 | ) | $ | (158 | ) | $ | (330 | ) | $ | (481 | ) | $ | (155 | ) | |||||
Goodwill impairment | — | — | 233 | — | 233 | |||||||||||||||
Restructuring and other special charges, net | (6 | ) | 48 | 71 | 129 | 71 | ||||||||||||||
Workforce rebalancing severance charges | — | — | — | — | 14 | |||||||||||||||
Lower of cost or market inventory adjustment | — | — | 58 | — | 58 | |||||||||||||||
Technology node transition charge | — | — | — | 33 | — | |||||||||||||||
Stock-based compensation expense | 16 | 13 | 16 | 63 | 81 | |||||||||||||||
Amortization of acquired intangible assets | — | — | 4 | 3 | 14 | |||||||||||||||
Depreciation and amortization | 34 | 42 | 44 | 164 | 189 | |||||||||||||||
Adjusted EBITDA | $ | (5 | ) | $ | (55 | ) | $ | 96 | $ | (89 | ) | $ | 505 |
Three Months Ended | Year Ended | ||||||||||||||||||
December 26, 2015 | September 26, 2015 | December 27, 2014 | December 26, 2015 | December 27, 2014 | |||||||||||||||
GAAP net cash provided by (used in) operating activities | $ | 53 | $ | (59 | ) | $ | 116 | $ | (237 | ) | $ | (98 | ) | ||||||
Purchases of property, plant and equipment | (32 | ) | (25 | ) | (22 | ) | (96 | ) | (95 | ) | |||||||||
Non-GAAP free cash flow | $ | 21 | $ | (84 | ) | $ | 94 | $ | (333 | ) | $ | (193 | ) |
* | The Company presents “Adjusted EBITDA” as a supplemental measure of its performance. Adjusted EBITDA for the Company is determined by adjusting operating income (loss) for depreciation and amortization, stock-based compensation expense and restructuring and other special charges, net. In addition, the Company also excluded the following adjustments for the indicated periods: for 2015, the Company excluded a technology node transition charge and amortization of acquired intangible assets; for the fourth quarter of 2014 and for 2014, the Company excluded an adjustment for a goodwill impairment charge, lower of cost or market inventory adjustment and amortization of acquired intangible assets. In addition, for 2014, the Company also excluded workforce rebalancing severance charges. The Company calculates and communicates Adjusted EBITDA because the Company’s management believes it is of importance to investors and lenders in relation to its overall capital structure and its ability to borrow additional funds. In addition, the Company presents Adjusted EBITDA because it believes this measure assists investors in comparing its performance across reporting periods on a consistent basis by excluding items that the Company does not believe are indicative of its core operating performance. The Company’s calculation of Adjusted EBITDA may or may not be consistent with the calculation of this measure by other companies in the same industry. Investors should not view Adjusted EBITDA as an alternative to the GAAP operating measure of operating income (loss) or GAAP liquidity measures of cash flows from operating, investing and financing activities. In addition, Adjusted EBITDA does not take into account changes in certain assets and liabilities as well as interest and income taxes that can affect cash flows. | |||||||||
** | The Company also presents non-GAAP free cash flow as a supplemental measure of its performance. Non-GAAP free cash flow is determined by adjusting GAAP net cash provided by (used in) operating activities for capital expenditures. The Company calculates and communicates non-GAAP free cash flow in the financial earnings press release because the Company’s management believes it is of importance to investors to understand the nature of these cash flows. The Company’s calculation of non-GAAP free cash flow may or may not be consistent with the calculation of this measure by other companies in the same industry. Investors should not view non-GAAP free cash flow as an alternative to GAAP liquidity measures of cash flows from operating activities. The Company has provided reconciliations within the earnings press release of these non-GAAP financial measures to the most directly comparable GAAP financial measures. |
• | AMD revenue of $3.99 billion, down 28% year-over-year. |
• | Gross margin of 27%, down 6 percentage points year-over-year and non-GAAP gross margin of 28%, down 7 percentage points year-over-year. |
• | Operating loss of $481 million and non-GAAP operating loss of $253 million, compared to GAAP operating loss of $155 million and non-GAAP operating income of $316 million in 2014. |
• | 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 GAAP net loss of $403 million, loss per share of $0.53 and non-GAAP net income of $132 million, non-GAAP earnings per share of $0.16 in 2014. |
AMD 2015 and Q4-15 CFO Commentary | Page 1 | January 19, 2016 |
• | Non-GAAP R&D was $911 million, 23% of revenue. |
• | Non-GAAP SG&A was $458 million, 11% of revenue. |
• | Revenue of $958 million, down 10% sequentially and 23% year-over-year. |
• | Gross margin of 30%, up 7 percentage points sequentially. |
AMD 2015 and Q4-15 CFO Commentary | Page 2 | January 19, 2016 |
• | Operating loss of $49 million, compared to an operating loss of $158 million in Q3 2015 and non-GAAP operating loss of $39 million, compared to non-GAAP operating loss of $97 million in Q3 2015. |
• | Net loss of $102 million, loss per share of $0.13, compared to a net loss of $197 million, loss per share of $0.25 in Q3 2015 and non-GAAP net loss of $79 million, loss per share of $0.10, compared to non-GAAP net loss of $136 million, loss per share of $0.17 in Q3 2015. |
• | Non- GAAP R&D was $220 million, 23% of revenue. |
• | Non-GAAP SG&A was $103 million, 11% of revenue. |
Q415 | Q3-15 | Q2-15 | Q1-15 | Q4-14 | 2015 | 2014 | |||||||
GAAP | $332M | $397M | $369M | $463M | $690M | $1,561M | $1,994M | ||||||
Non-GAAP | $323M | $336M | $353M | $357M | $366M | $1,369M | $1,584M |
AMD 2015 and Q4-15 CFO Commentary | Page 3 | January 19, 2016 |
• | Client processor sales increased sequentially and chipset sales were flat sequentially. |
• | Client average selling price (ASP) increased sequentially driven by a richer mix of notebook processor sales and decreased year-over-year due to a lower notebook processor ASP. |
• | GPU ASP increased sequentially and year-over-year, primarily due to a higher channel ASP. |
AMD 2015 and Q4-15 CFO Commentary | Page 4 | January 19, 2016 |
Q4-15 | Q3-15 | Q2-15 | Q1-15 | Q4-14 | ||||
$785M | $755M | $829M | $906M | $1,040M |
AMD 2015 and Q4-15 CFO Commentary | Page 5 | January 19, 2016 |
(Millions) | Q4-15 | Q3-15 | ||||||
6.75% Senior Notes due 2019 | $ | 600 | $ | 600 | ||||
6.75% Senior Notes due 2019—Interest Rate Swap | 7 | 5 | ||||||
7.75% Senior Notes due 2020 | 450 | 450 | ||||||
7.50% Senior Notes due 2022 | 475 | 475 | ||||||
7.00% Senior Notes due 2024 | 500 | 500 | ||||||
Borrowings from secured revolving line of credit, net | 230 | 230 | ||||||
Total Debt | $ | 2,262 | $ | 2,260 |
• | Revenue to decrease 14% sequentially, +/- 3%, driven by game console seasonality and a cautious macro environment in China. |
• | Gross margin to be approximately 32%. |
• | Non-GAAP operating expenses to be approximately $320 million. |
• | Interest expense, taxes and other to be approximately $42 million. |
• | Inventory to be flat from Q4 2015 levels. |
AMD 2015 and Q4-15 CFO Commentary | Page 6 | January 19, 2016 |
• | Revenue to grow year-over-year. |
• | Non-GAAP operating expenses to be approximately between $320 million and $340 million per quarter, as we continue to invest in leadership products and in line with expected revenue profile. |
• | Taxes of approximately $3 million per quarter. |
• | Interest expense, taxes and other to be approximately $45 million per quarter, with the exception of Q1 2016, which is expected to be $42 million. |
• | Cash and cash equivalents balances to be in the optimal zone of $600 million to $1 billion. |
• | Capital expenditures of approximately $70 million. |
• | Inventory to be down year-over-year. |
• | To return to non-GAAP operating profitability in 2H 2016. |
• | To generate positive free cash flow from operations in 2016. |
AMD 2015 and Q4-15 CFO Commentary | Page 7 | January 19, 2016 |
AMD 2015 and Q4-15 CFO Commentary | Page 8 | January 19, 2016 |
(Millions except percentages) | Q4-15 | Q3-15 | Q4-14 | 2015 | 2014 | |||||||||||||||
GAAP Gross Margin | $ | 283 | $ | 239 | $ | 360 | $ | 1,080 | $ | 1,839 | ||||||||||
GAAP Gross Margin % | 30 | % | 23 | % | 29 | % | 27 | % | 33 | % | ||||||||||
Technology node transition charge | — | — | — | 33 | — | |||||||||||||||
Stock-based compensation* | 1 | — | — | 3 | 3 | |||||||||||||||
Lower of cost or market inventory adjustment | — | — | 58 | — | 58 | |||||||||||||||
Non-GAAP Gross Margin | $ | 284 | $ | 239 | $ | 418 | $ | 1,116 | $ | 1,900 | ||||||||||
Non-GAAP Gross Margin % | 30 | % | 23 | % | 34 | % | 28 | % | 35 | % |
(Millions) | Q4-15 | Q3-15 | Q2-15 | Q1-15 | Q4-14 | 2015 | 2014 | |||||||||||||||||||||
GAAP operating expenses | $ | 332 | $ | 397 | $ | 369 | $ | 463 | $ | 690 | $ | 1,561 | $ | 1,994 | ||||||||||||||
Goodwill impairment | — | — | — | — | 233 | — | 233 | |||||||||||||||||||||
Restructuring and other special charges, net | (6 | ) | 48 | — | 87 | 71 | 129 | 71 | ||||||||||||||||||||
Workforce rebalancing severance charges | — | — | — | — | — | — | 14 | |||||||||||||||||||||
Amortization of acquired intangible assets | — | — | — | 3 | 4 | 3 | 14 | |||||||||||||||||||||
Stock-based compensation* | 15 | 13 | 16 | 16 | 16 | 60 | 78 | |||||||||||||||||||||
Non-GAAP operating expenses | $ | 323 | $ | 336 | $ | 353 | $ | 357 | $ | 366 | $ | 1,369 | $ | 1,584 |
(Millions) | Q4-15 | Q3-15 | Q4-14 | 2015 | 2014 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
R&D | SG&A | Total | R&D | SG&A | Total | R&D | SG&A | Total | R&D | SG&A | Total | R&D | SG&A | Total | |||||||||||||||||||||||||||||||||||||||||||||
GAAP R&D & SG&A | $ | 229 | $ | 109 | $ | 338 | $ | 241 | $ | 108 | $ | 349 | $ | 238 | $ | 144 | $ | 382 | $ | 947 | $ | 482 | $ | 1,429 | $ | 1,072 | $ | 604 | $ | 1,676 | |||||||||||||||||||||||||||||
Stock-based compensation* | 9 | 6 | 15 | 7 | 6 | 13 | 10 | 6 | 16 | 36 | 24 | 60 | 44 | 34 | 78 | ||||||||||||||||||||||||||||||||||||||||||||
Workforce rebalancing severance charges | — | — | — | — | — | — | — | — | — | — | — | — | 9 | 5 | 14 | ||||||||||||||||||||||||||||||||||||||||||||
Non-GAAP R&D & SG&A | $ | 220 | $ | 103 | $ | 323 | $ | 234 | $ | 102 | $ | 336 | $ | 228 | $ | 138 | $ | 366 | $ | 911 | $ | 458 | $ | 1,369 | $ | 1,019 | $ | 565 | $ | 1,584 |
(Millions) | Q4-15 | Q3-15 | Q4-14 | 2015 | 2014 | |||||||||||||||
GAAP operating loss | $ | (49 | ) | $ | (158 | ) | $ | (330 | ) | $ | (481 | ) | $ | (155 | ) | |||||
Goodwill impairment | — | — | 233 | — | 233 | |||||||||||||||
Technology node transition charge | — | — | — | 33 | — | |||||||||||||||
Lower of cost or market inventory adjustment | — | — | 58 | — | 58 | |||||||||||||||
Restructuring and other special charges, net | (6 | ) | 48 | 71 | 129 | 71 | ||||||||||||||
Workforce rebalancing severance charges | — | — | — | — | 14 | |||||||||||||||
Amortization of acquired intangible assets | — | — | 4 | 3 | 14 | |||||||||||||||
Stock-based compensation* | 16 | 13 | 16 | 63 | 81 | |||||||||||||||
Non-GAAP operating income (loss) | $ | (39 | ) | $ | (97 | ) | $ | 52 | $ | (253 | ) | $ | 316 |
AMD 2015 and Q4-15 CFO Commentary | Page 9 | January 19, 2016 |
(Millions except per share amounts) | Q4-15 | Q3-15 | Q4-14 | 2015 | 2014 | |||||||||||||||||||||||||||||||||||
GAAP net loss /loss per share | $ | (102 | ) | $ | (0.13 | ) | $ | (197 | ) | $ | (0.25 | ) | $ | (364 | ) | $ | (0.47 | ) | $ | (660 | ) | $ | (0.84 | ) | $ | (403 | ) | $ | (0.53 | ) | ||||||||||
Goodwill impairment | — | — | — | — | 233 | 0.30 | — | — | 233 | 0.30 | ||||||||||||||||||||||||||||||
Technology node transition charge | — | — | — | — | — | — | 33 | 0.04 | — | — | ||||||||||||||||||||||||||||||
Lower of cost or market inventory adjustment | — | — | — | — | 58 | 0.07 | — | — | 58 | 0.07 | ||||||||||||||||||||||||||||||
Restructuring and other special charges, net | (6 | ) | (0.01 | ) | 48 | 0.06 | 71 | 0.09 | 129 | 0.16 | 71 | 0.09 | ||||||||||||||||||||||||||||
Workforce rebalancing severance charges | — | — | — | — | — | — | — | — | 14 | 0.02 | ||||||||||||||||||||||||||||||
Loss on debt redemption | — | — | — | — | — | — | — | — | 64 | 0.08 | ||||||||||||||||||||||||||||||
Tax settlement in foreign jurisdiction | 13 | 0.02 | — | — | — | — | 13 | 0.02 | — | — | ||||||||||||||||||||||||||||||
Amortization of acquired intangible assets | — | — | — | — | 4 | — | 3 | — | 14 | 0.02 | ||||||||||||||||||||||||||||||
Stock-based compensation* | 16 | 0.02 | 13 | 0.02 | 16 | 0.02 | 63 | 0.08 | 81 | 0.11 | ||||||||||||||||||||||||||||||
Non-GAAP net income (loss) / earnings (loss) per share | $ | (79 | ) | $ | (0.10 | ) | $ | (136 | ) | $ | (0.17 | ) | $ | 18 | $ | 0.02 | $ | (419 | ) | $ | (0.54 | ) | $ | 132 | $ | 0.16 |
(Millions) | Q4-15 | Q3-15 | Q4-14 | 2015 | 2014 | |||||||||||||||
GAAP operating loss | $ | (49 | ) | $ | (158 | ) | $ | (330 | ) | $ | (481 | ) | $ | (155 | ) | |||||
Goodwill impairment | — | — | 233 | — | 233 | |||||||||||||||
Restructuring and other special charges, net | (6 | ) | 48 | 71 | 129 | 71 | ||||||||||||||
Workforce rebalancing severance charges | — | — | — | — | 14 | |||||||||||||||
Lower of cost or market inventory adjustment | — | — | 58 | — | 58 | |||||||||||||||
Technology node transition charge | — | — | — | 33 | — | |||||||||||||||
Stock-based compensation expense | 16 | 13 | 16 | 63 | 81 | |||||||||||||||
Amortization of acquired intangible assets | — | — | 4 | 3 | 14 | |||||||||||||||
Depreciation and amortization | 34 | 42 | 44 | 164 | 189 | |||||||||||||||
Adjusted EBITDA | $ | (5 | ) | $ | (55 | ) | $ | 96 | $ | (89 | ) | $ | 505 |
(Millions) | Q4-15 | Q3-15 | Q4-14 | 2015 | 2014 | |||||||||||||||
GAAP net cash provided by (used in) operating activities | $ | 53 | $ | (59 | ) | $ | 116 | $ | (237 | ) | $ | (98 | ) | |||||||
Purchases of property, plant and equipment | (32 | ) | (25 | ) | (22 | ) | (96 | ) | (95 | ) | ||||||||||
Non-GAAP free cash flow | $ | 21 | $ | (84 | ) | $ | 94 | $ | (333 | ) | $ | (193 | ) |
AMD 2015 and Q4-15 CFO Commentary | Page 10 | January 19, 2016 |
AMD 2015 and Q4-15 CFO Commentary | Page 11 | January 19, 2016 |
AMD 2015 and Q4-15 CFO Commentary | Page 12 | January 19, 2016 |