Huang claims demand for GeForce 8800 GT GPUs continues to exceed their forecast and boosts ASPs. The good sales of the GeForce 8800 GT is one of the many products that boosted NVIDIA's fourth quarter profits from $163.5 million last year to $257 million - a 57 percent increase. Q4 revenue grew 37% year over year and annual revenue increased 34% year over year to a record $4.1 billion.
NVIDIA's annual income increased 78% year over year to a record $797.6 million and annual gross margin reached a new high of 45.6%, 3.2% more than a year ago.
Year over year, annual revenue of desktop GPUs grew 38%, notebook GPU revenue grew 114%, workstation grew 27% and MCP revenue grew 7%. For the next quarter NVIDIA expects better than seasonal financial results. NVIDIA's CFO Marvin D. Burkett said they're usually down about 5% in the first quarter and that this year it will be less than that.
Burkett also said there were some cost issues regarding the GeForce 8800 GT, they had to ramp up production really fast to meet demand and this caused some manufacturing challenges. According to Burkett yields of the 8800 GT should be much better going forward.
NVIDIA also shared some details about their acquisition of AGEIA, their plan is to port the physics engine onto CUDA so every CUDA-enabled GPU (like the GeForce 8 series) will be able to run physics after a software download. Huang said NVIDIA has already shipped 50 million CUDA-enabled processors and that a few hundred million more will be shipped over the next several years. He claims the ability to port the physics engine on top of CUDA and accelerate physics will provide gamers with a ton more value and will encourage people to buy even better GPUs and SLI or tri SLI configs.