AMD hosted their quarterly earnings conference call this afternoon to announce their financial results for the quarter ending March 2014. While they still reported a GAAP loss of $20 Million ($0.03 per share), year over year results showed a strong revenue gain of 28% and a substantial 86% increase in net income (though still a small loss).

Gross margins were 35% for the quarter which was flat compared to Q4 2013. These margins are in-line with AMD’s stated goals, and while they’d no doubt appreciate greater margins right now, the long term plan is to be profitable with these margins.

Non-GAAP numbers were slightly higher, with a small profit of $12M, or $0.02 per share.

The biggest decrease was in the Computing Solutions (CPUs & APUs) segment, where there was a decrease of 12% year-over-year, however the Graphics and Visual Solutions (GPUs & custom SoCs) segment had a huge year-over-year increase of 118% mostly due to semi-custom SoC production. This isn’t surprising with the very high sales of the Xbox One, and more so the PS4, both which have AMD silicon at the heart of their platform.

GPU operating income also increased year-over-year up $75M with the release of the popular Radeon R7 and R9 products and strong Average Selling Prices of those devices. Sequentially, GPU operating income fell $30M due to a decrease in semi-custom SoC sales. This isn’t surprising, since the PS4 and Xbox One both arrived in Q4 2013 – complete with the major production ramp-up and stockpiling that a console launch entails – and were a large boost to AMD’s sales numbers for that quarter.

Total debt combining long term and short term was up slightly at $2.14B, however Cash, cash equivalents, and marketable securities were hovering around the $1B mark which is where AMD wants to keep its cash reserves. This is in addition to making the final payment to GlobalFoundries of $200M for its previous wafer commitments for 2012, as well as fixing prices for their 2014 wafer purchases.

AMD is expecting a 3% revenue increase (plus or minus 3%) for the 2^nd quarter this year.

Overall this is a decent quarter for AMD. Consensus earnings for Q1 was $0.00 per share non-GAAP, which AMD beat at $0.02 per share. AMD shares are up 5.96% in after-hours trading at this time.

Going forward, AMD is expected to bring its ARM 64 bit server architecture out this year, and is hoping to make inroads in the profitable server market.

Rory Read – AMD’s president and CEO – must be pretty happy with the new fiscal outlook. There was a time in 2012 where people weren’t sure if AMD was going to be able to pull through but strong GPU and SoC sales, coupled with cost savings in the CPU division have brought AMD back.