AMD Releases Lacklustre Q1 Results

Nearing the end of the cycle for their current generation products, its not surprising to see poor financial results come out from AMD. Last year was a terrible one and it looks like 2016 won’t be much better, at least for Q1. For the first quarter of 2016, AMD posted a net loss of  $109 million from an operating revenue of $832 million. Unsurprisingly, it is better than 2015 as that year was arguably the worst ever.

AMD blames the revenue drop of 13% sequentially and 19% year-over-year as lower semi-custom sales. This is somewhat expected as we continue the PS4 and Xbox One lifecycle. The bright side is that Sony is set to release the PlayStation 4 Neo and even the Xbox One will see new revisions if not a full upgrade. Combined with the Nintendo NX, those should bounce back the semi-custom segment as consumers buy more consoles again.

Even though margins improved slightly to 32% (Intel posts around 60%), the increase in expenses led to the loss. This is reportedly due to increased R&D for upcoming products, which in my mind are due to Vega/Navi and Zen+ since Zen and Polaris are all set in stone by now. With Polaris 10 and Zen coming this year and even an Apple deal in the works, AMD has a good chance to turn things around as long as they can execute and head back to the black.