AMD announced their fourth quarter earnings for their 2018 fiscal year today, and the company has continued its upward trajectory, with revenue gains of 6% year-over-year to $1.42 billion. Gross margin, which was long a burden for the company, is now right in the sweet spot at 38%, up 4% from a year ago. Operating income for the quarter was $28 million, compared to an operating loss of $2 million last year, and net income is now in the black as well at $38 million, compared to a net loss of $19 million a year ago. That resulted in earnings per share of $0.04, compared to a $0.02 loss per share in Q4 2017.

AMD Q4 2018 Financial Results (GAAP)
  Q4'2018 Q3'2018 Q4'2017
Revenue $1419M $1653M $1340M
Gross Margin 38% 40% 34%
Operating Income $28M $150M -$2M
Net Income $38M $102M -$19M
Earnings Per Share $0.04 $0.09 -$0.02

Computing and Graphics has been the main contributor of AMD’s resurgence ever since AMD’s Ryzen CPU was launched, and revenue for this segment was up 8.6% to $986 million. Even more important, operating income for the segment was up 248% to $115 million. AMD sounds to have a busy year for 2019 which should be great news for its investors and customers.

AMD Q4 2018 Computing and Graphics
  Q4'2018 Q3'2018 Q4'2017
Revenue $986M $938M $908M
Operating Income $115M $100M $33M

Enterprise, embedded, and semi-custom didn’t perform quite as well, with revenue more or less flat year-over-year at $433 million. AMD’s APU wins in both the Xbox and PlayStation have contributed a lot to this segment over the last couple of years, but the enterprise CPU space may be a bit tougher nut to crack than the consumer market, but the flat revenue is deceiving, since EPYC sales are offsetting lower semi-custom sales. AMD’s operating loss for this segment did improve though, with a $6 million loss this quarter compared to a $13 million loss a year ago, thanks to the higher margins in enterprise processors.

AMD Q4 2018 Enterprise, Embedded, and Semi-Custom
  Q4'2018 Q3'2018 Q4'2017
Revenue $433M $715M $432M
Operating Income -$6M $86M -$13M

AMD’s All Other had a sizeable loss this quarter at $81 million, compared to a $22 million loss a year ago. AMD chalks this up to a $45 million charge related to older technology licenses.

Meanwhile, as Q4 is the final quarter of AMD's fiscal year, it means that AMD is reporting their overall performance for the year. Much like AMD's performance in their recent quarter, 2018 was a strong year for the company – bouyed in part by their best quarter in seven years – giving AMD it's first fully profitable year in quite some time.

AMD FY 2018 Financial Results (GAAP)
  2018 2017 2016
Revenue $6.48B $5.25B $4.27B
Gross Margin 38% 34% 23%
Operating Income $451M $127M -$372M
Net Income $337M -$33M -$497M
Earnings Per Share $0.32 -$0.03 -$0.60

Overall the company came close to profitability in 2017, however on a GAAP basis, fell a bit short for the year. 2018 however had no such issues, with AMD booking a net income of $337 for the year. AMD has now been profitable for several quarters, marking a significant turnaround for a company that was previously losing hundreds of millions of dollars every year.

In addition to their earnings, AMD also announced a seventh amendment to their wafer agreement with Global Foundries, outlining costs for the next couple of years.

For Q1 2019, AMD expects revenue to be about $1.25 billion, plus or minus $50 million, which will be a 24% decrease over Q1 2018, due to the lack of cryptocurrency sales, but offset but CPU sales.

Source: AMD Investor Relations

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  • vanilla_gorilla - Wednesday, January 30, 2019 - link

    Same, for my use case Ryzen was clearly a better solution for me (linux desktop, lots of multithreaded compiling and video encoding) and it means I get to support a company that is forcing Intel to actually compete. Win/win. Even if you do not like AMD products and are an Intel customer you should be happy that your prices are lower and your products better because AMD exists.
  • azazel1024 - Friday, February 1, 2019 - link

    Me too. Or it will be. I plan to upgrade once Zen 2 is out this year. A top end Ryzen should hit the spot nicely if Zen 2 lives up to rumors (heck, a top end Ryzen would be a great upgrade from my i5-3570 I have right now). I am in a windows environment, but I do a boat load of video transcoding and image manipulation that is heavily multithreaded. My gaming demands are light (I have a GTX750...and I don't generally find it holding me back. So now you have some idea of my gaming needs. That will probably get upgraded as well just because I will also likely move to a 1440p monitor, but I don't need all the dials turned to max at 1440p).

    Lower price, great performance and supporting a competitor to Intel is just the ticket. Heck, my server is likely to get upgraded to an Athlon soon due to the reasonable amount lower cost AND power consumption compared to the current Intel Pentium (I am running a G1610 right now. It is mostly file serving and download box, but I do do some other things, like MKV to MP4 muxing, encrypt/decryption and a handful of other reasonably heavy compute tasks, even if they aren't long running. Shaving a minute off a 2 minute task isn't exactly shabby).
  • zodiacfml - Wednesday, January 30, 2019 - link

    They got 2019 for themselves. They got to milk it till Intel and Nvidia starts doing something next year
  • Targon - Monday, February 4, 2019 - link

    AMD isn't Intel, so won't "milk it". AMD will be going full speed ahead with development, but not just to make each individual component faster, but to work on the overall system to make it faster and more responsive.

    Things like Gen-Z, and the ability to put HBM2 memory on the motherboard for video cards to use(compared to DDR4 or DDR5), and even to move away from needing direct point to point connections from the CPU to different system components due to the way Gen-Z works would be a game changer, much the way that the chiplet approach is leading Intel in that direction.
  • Bill The Cat - Thursday, January 31, 2019 - link

    When the money people were talking about AMD going bankrupt a couple of years ago seeing how they have come back is great. We have a place that is making very good cpu's at a reasonable price where before Intel was charging a lot for them. And at least now AMD will have more money to invest in CPU and GPU R&D so I think we will be seeing better GPU's out of the them and hope they can give us a good Video card as a reasonable price as well, as Nvidia isn't being reasonable with their prices.
    Good going AMD, very glad to see ya back.
  • Targon - Monday, February 4, 2019 - link

    Key things that relate to Q1 and Q2 2019 were not mentioned, and while they are common sense for those who stay on top of the industry, are often missed. AMD has been releasing Ryzen chips in late Q1 for the past two years, and this will be slipping to a late Q2 or early Q3(middle of the year). This will cause an impact on the AMD financials that is the reason why AMD expects 2019 to be a good year overall, but why anyone paying attention to the company financials should expect that things will be a bit weak for Q1 and Q2, and even Q3 may be a bit weaker on paper, even while sales will be through the roof throughout Q3 as the new Ryzen, Threadripper, and Epyc chips hit the market. In addition to this, Navi should also show up in Q2/Q3 which should generate significant income for AMD.

    There are other things that COULD potentially happen in 2019, including an earlier than normal release of the next generation laptop APUs(due to TSMC having the available fab capacity). If that happens and Ryzen 4500U and 4700U starts shipping in November of 2019, even though consumers won't see those chips in 2019, the sales of those chips would show up in Q4 2019 revenues, which could potentially be a big influx of money.

    The key to much of this is that the new chips should be compatible with first and second generation motherboards, which will speed up the adoption of the new chips. For the 4500U and 4700U, this may be a bit more interesting since some of the newer technologies showing up could potentially make laptop makers delay things for new motherboards/chipsets as well. We know that the 3500U and 3700U are small improvements over the prior generation, but what shows up at the end of 2019 or beginning of 2020 may have some newer technologies that deserve new motherboards.

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