AMD reported strong earnings for the first quarter of 2020, though AMD executives acknowledged that lower consumer spending may offset the strong demand for its Ryzen CPUs and Radeon GPUs in the following quarters.

Chief executive Lisa Su said that AMD has already seen strong demand in the work-from-home category, specifically notebooks powered by the new new Ryzen 4000 series processors.

For the Q1, AMD reported $162 million in net income, about 10 times the $16 million it recorded for the same period a year ago. The company also reported $1.79 billion in revenue, up 40 percent from the same period. Revenue fell by 16 percent from the prior quarter, however, due to supply chain disruption caused by the coronavirus.

AMD’s primary source of revenue, the Computing and Graphics segment, recorded revenue of $1.44 billion, up 73 percent from a year ago, due to strong Ryzen and Radeon channel sales, AMD said. Sales fell 13 percent from the prior quarter due to lower GPU sales, the company added.

On the other hand, AMD didn’t fare as well in the Enterprise, Embedded, and Semi-Custom segment, though AMD is currently wallowing in the trough before the launch of the Microsoft Xbox Series X and the upcoming Sony PlayStation 5, both expected by the holiday season. In this segment, AMD reported revenue of $348 million, down 21 percent year over year. Epyc enterprise processor sales were up. The segment reported an operating loss of $26 million.

Su said that she expects the very first build plans for those consoles to begin in the second quarter, growing through the second half of the year until the eventual launch.

For the second quarter of 2020, AMD expects revenue to be approximately $1.85 billion, plus or minus $100 million, an increase of approximately 21 percent year-over-year and 4 percent sequentially.

The year-over-year increase is expected to be primarily driven by growth of Ryzen and EPYC processor sales. The sequential increase is expected to be primarily driven by EPYC processor and semi-custom sales. AMD expects non-GAAP gross margin to be approximately 44 percent in the second quarter of 2020. The sequential decrease is expected to be primarily due to the initial ramp of next-generation semi-custom products.

“We executed well in the first quarter, navigating the challenging environment to deliver 40 percent year-over-year revenue growth and significant gross margin expansion driven by our Ryzen and EPYC processors,” said Dr. Lisa Su, AMD president and CEO. “While we expect some uncertainty in the near-term demand environment, our financial foundation is solid and our strong product portfolio positions us well across a diverse set of resilient end markets. We remain focused on strong business execution while ensuring the safety of our employees and supporting our customers, partners and communities. Our strategy and long-term growth plans are unchanged.”

During a conference call, AMD’s Su said that "...we remain on track to launch our Zen 3 CPUs and RDNA2 GPUs in late 2020.” The RDNA 2 GPUs are offering a 50% performance-per-watt increase over current-gen AMD GPUs.

AMD said that the average selling price of its Ryzen processors rose compared to a year ago because of higher Ryzen processor sales. GPU prices fell during the same period, however, due to a cheaper product mix. AMD said it expects over 135 new Ryzen consumer and commercial notebooks from PC makers “in the coming quarters.”