Amidst the turbulent waters of the coronavirus pandemic, AMD posted record first-quarter 2020 revenue as the company raked in $1.79B in revenue, a 40% year-over-year increase, but 16% decline from the prior quarter.

AMD also expanded its gross margins to 46%, the twelfth straight quarter of growth (and the highest mark in eight years). That equated to profits of $222 million in the quarter, a $160 million increase from the year prior, but a $161 quarterly decline.

AMD says it remains on track for the Zen 3 and RDNA 2 GPUs in late 2020, with the latter offering a 50% performance-per-watt increase over current-gen AMD GPUs.

AMD cited robust sales of its Ryzen and EPYC processors as key drivers for its increased margins, while graphics cards and custom silicon sales for consoles dragged on revenue. The company also posted record notebook chip sales driven by the new Ryzen 4000 series processors. That's a key growth segment that comprises more than two-thirds of the addressable consumer market, so AMD's progress here is important.

AMD's computing and graphics segment, which includes revenue for both consumer CPUs and GPUs, weighed in at $1.44 billion, a 73% year-over-year increase but 13% decline on the quarter. AMD cited lower graphics sales and lower GPU average selling prices (ASPs) due to a shifting product mix.

"We saw some softness based on the COVID-19 situation in China that impacted PC-related sales in the first quarter. While both component and system demand were relatively strong at online vendors, offline channel sales were weaker than expected as many retail locations across China were closed for much of the quarter. PC demand in the rest of the world was strong, offsetting the softness in China. Client processor revenue grew significantly year-over-year as strong Ryzen processor demand resulted in significant double-digit percentage increases in unit shipments and ASP. As a result, we believe we gained client unit market share for the tenth straight quarter," AMD CEO Lisa Su said.

AMD's computing and graphics segment, responsible for both the EPYC server and console chips, generated $1.44 billion, a 21% year-over-year decline. AMD chalked this up to lower sales into the console market, while increased EPYC Rome sales reduced the impact.

In either case, the market's bullish prospects for AMD's EPYC Rome processors might be blunted by the lower revenue generation in this key segment. The unit posted a $26 million operating loss, compared to operating income of $45 million in the fourth quarter of 2019. AMD cited lower ASPs due to heightened cloud spending, and we know that Intel has been increasingly competitive as it slashed pricing on its competing Cascade Lake Refresh processors . Intel's server unit (DCG) also recently posted a 42.7% year-over-year sales increase due to coronavirus-spurred demand.

However, AMD cited a double-digit sequential increase in EPYC server chip sales, for a 3x year-over-year improvement. AMD expects its semi-custom revenue (i.e., console chip sales) to improve as it ramps for the PlayStation 5 and Xbox Series X launches later this year.

Unlike countless other companies this earnings season, AMD did provide guidance for both next quarter and the remainder of the year, albeit with cautionary statements about uncertain demand during the coronavirus pandemic.

AMD predicts second-quarter revenue at $1.85B (plus or minus $100 million), a 21% YoY increase driven by Ryzen and EPYC sales, with a reduction in gross margin to 44%. For the full year, AMD projects YoY revenue growth of 25%, plus or minus 5% points. That's a slight reduction (~5%) compared to the company's previous projections, which it attributes to uncertain demand due to the pandemic. AMD's gross margin projections for the full year remain unchanged at 44%.

"While demand indicators across commercial, education and data center infrastructure markets are strong, we expect some softness in consumer demand in the second half of the year depending on how overall macro-economic conditions evolve."

"We remain on track to launch our next-generation “Zen 3” CPUs and RDNA 2 GPUs in late 2020, and believe we can deliver another year of strong revenue growth and margin expansion based on the strength of our product portfolio and the diversity of markets we serve," Su said in her prepared remarks.

AMD's earnings call begins soon; we'll update as we learn more.