AMD reports impressive Q1 2020 Financials, but COVID-19 will impact their 2020 gains

AMD has just released its Q1 2020 financial report, and it is impressive, revealing a 40% year-over-year increase in revenue over Q1 2019, showcasing strong revenue gains after the release of their Zen 2 and RDNA CPU and graphics products. 

In Q1 2020, AMD earned $1.79 billion in revenue, representing a revenue drop of 16 percent decrease in revenue over Q4 2019, as should be expected of the post-Christmas season. This quarter saw AMD’s gross margin increase to 46%, which is up five percentage points over Q1 2019 and one percent over Q4 2019. 

AMD’s revenue gains come primarily due to AMD’s growth in Ryzen and EPYC processor sales. Computing and Graphics say revenue growth of 73% year-over-year and down 13% quarter-over-quarter. Enterprise, Embedded and Semi-Custom (EES) is down 21% year-over-year and down 13% quarter-over-quarter. This decrease in EES sales is primarily due to lower semi-custom sales (due to lower console sales), though this is somewhat offset by increase EPYC processor sales. 

At the start of the last quarter, AMD expected lower is 2020 revenue guidance, lowering its expected 28-30% growth expectations to 25%. This change in 2020 revenue guidance is due to the expected impact of the COVID-19 pandemic and its effects on the global financial market. 

AMD’s Q2 2020 revenues are expected to be approximately $1.85 billion, which represents an increase of 21% over Q2 2019.