NVIDIA continues to post strong growth as Pascal and deep learning demand is huge

NVIDIA keeps blowing it out of the park with big increases in both revenue and net income. For its fiscal Q2 2017, the GPU designer pulled in record revenue of $1.428 billion, up 24 percent year-over-year, and net income of $253 million, up 873 percent versus the year before.

Adjusted for what the company identifies as one-time items, NVIDIA earned $313 million last quarter, up 65 percent year-over-year, which results in earnings per share of 53 cents, up 56 percent versus last year. The company managed to beat analysts estimates, revenue was $80 million higher than consensus and earnings per share was 16 cents higher.

Next quarter, NVIDIA expects to pull in net sales of $1.68 billion, plus or minus two percent. NVIDIA attributes the good results to strong demand for Pascal-based GPUs and soaring sales of products for deep learning applications.

Versus the year-ago period, NVIDIA's GPU business revenue grew 25 percent while the Tegra business increased 30 percent. A look at NVIDIA's quarterly revenue trend can be seen below. With exception of the OEM & IP licensing division, all of NVIDIA's units are posting strong growth. Just versus the quarter before, Gaming GPU sales soared 13.7 percent, professional visualization revenue increased 13.2 percent, datacenter accelerator card sales rose 5.6 percent and auto chip sales increased 5.3 percent.



It is no surprise that NVIDIA's shares are trading at an all-time high in after-hours trading, the stock is currently up 3.13 percent to $61.57. NVIDIA shares have soared 159.79 percent over the last year.

NVIDIA (NASDAQ: NVDA) today reported revenue for the second quarter ended July 31, 2016, of $1.43 billion, up 24 percent from $1.15 billion a year earlier, and up 9 percent from $1.30 billion in the previous quarter.

GAAP earnings per diluted share for the quarter were $0.40, compared with $0.05 a year ago and up 21 percent from $0.33 in the previous quarter. Non-GAAP earnings per diluted share were $0.53, up 56 percent from $0.34 a year earlier and up 15 percent from $0.46 in the previous quarter.

"Strong demand for our new Pascal-generation GPUs and surging interest in deep learning drove record results," said Jen-Hsun Huang, co-founder and chief executive officer, NVIDIA. "Our strategy to focus on creating the future where graphics, computer vision and artificial intelligence converge is fueling growth across our specialized platforms -- Gaming, Pro Visualization, Datacenter and Automotive."

"We are more excited than ever about the impact of deep learning and AI, which will touch every industry and market. We have made significant investments over the past five years to evolve our entire GPU computing stack for deep learning. Now, we are well positioned to partner with researchers and developers all over the world to democratize this powerful technology and invent its future," he said.

Capital Return
During the first half of fiscal 2017, NVIDIA paid $509 million in share repurchases and $124 million in cash dividends.

NVIDIA will pay its next quarterly cash dividend of $0.115 per share on September 16, 2016, to all shareholders of record on August 25, 2016.

NVIDIA's outlook for the third quarter of fiscal 2017 is as follows:

Revenue is expected to be $1.68 billion, plus or minus two percent.

GAAP and non-GAAP gross margins are expected to be 57.8 percent and 58.0 percent, respectively, plus or minus 50 basis points.

GAAP operating expenses are expected to be approximately $530 million. Non-GAAP operating expenses are expected to be approximately $465 million.

GAAP and non-GAAP tax rates for the third quarter of fiscal 2017 are both expected to be 21 percent, plus or minus one percent.

Capital expenditures are expected to be approximately $35 million to $45 million.