10-QPeriod: Q1 FY2016

ADVANCED MICRO DEVICES INC Quarterly Report for Q1 Ended Mar 26, 2016

Filed April 28, 2016For Securities:AMD

Summary

Advanced Micro Devices (AMD) reported a net loss of $109 million for the first quarter of 2016, a decrease from the $180 million net loss in the same period of the prior year. Net revenue also declined by 19% year-over-year to $832 million, primarily driven by lower sales in both the Computing and Graphics segment and the Enterprise, Embedded and Semi-Custom segment. Despite the revenue decline, gross margin remained stable at 32%. The company highlighted progress on its product roadmap, including the demonstration of its Polaris GPU architecture and the launch of new APUs and processors. Significant strategic developments include the formation of two joint ventures in China related to intellectual property licensing and ATMP services, expected to close in Q2 2016. AMD also continues to manage its debt, maintaining a cash balance of $716 million, with management expressing confidence in its ability to fund operations over the next 12 months.

Financial Statements
Beta

Key Highlights

  • 1Net loss narrowed to $109 million from $180 million in Q1 2015.
  • 2Net revenue decreased 19% year-over-year to $832 million.
  • 3Gross margin remained flat at 32%.
  • 4Continued execution on product roadmap with new GPU and processor introductions.
  • 5Two joint ventures formed in China for IP licensing and ATMP services, with expected closing in Q2 2016.
  • 6Cash and cash equivalents stood at $716 million, with management confident in liquidity for the next 12 months.
  • 7Total debt remained stable at approximately $2.2 billion.

Frequently Asked Questions

AMD's net revenue for the first quarter of 2016 was $832 million, a 19% decrease compared to $1,030 million in the first quarter of 2015. This decline was attributed to lower sales in both the Computing and Graphics segment (-14%) and the Enterprise, Embedded and Semi-Custom segment (-25%).

The company reported a net loss of $109 million for the first quarter of 2016, which is an improvement from the net loss of $180 million in the same period of 2015. Despite lower revenue, the gross margin remained stable at 32% year-over-year.

AMD is focused on executing its product roadmap with new technology introductions like the Polaris GPU architecture. Strategically, the company is forming joint ventures in China for IP licensing and ATMP services, which are expected to close in Q2 2016. These initiatives aim to expand its market presence and potentially improve its financial structure.

As of March 26, 2016, AMD had $716 million in cash and cash equivalents. Total debt remained stable at approximately $2.2 billion. The company believes its current cash balance, combined with savings from restructuring plans and its revolving line of credit, is sufficient to fund operations for the next 12 months.