NVIDIA Q1 results blow it out of the park thanks to strong gaming and datacenter sales

Posted on Tuesday, May 09 2017 @ 22:41 CEST by Thomas De Maesschalck
NVIDIA just published the first quarter financial results of the company's fiscal 2018 and the company blew it out of the park once more. Quarterly revenue soared a whopping 48 percent to $1.94 billion while GAAP net income is up a massive 144 percent to $507 million.

On an adjusted non-GAAP basis (these massaged numbers filter out one-time items and other irregularities) NVIDIA pulled in net income of $533 million, or $0.85 per share. The non-GAAP EPS figure is up 85 percent versus the same period a year ago. The numbers are a lot better than what Wall Street analysts predicted, revenue was about $30 million better than expected but the earnings per share were a massive 18 cents better than anticipated.

NVIDIA attributes the good results to broad growth across all platforms and bangs the drums about the AI revolution, and with good reason when you check out the numbers below. With exception of the company's OEM and IP, all of NVIDIA's markets were up significantly versus the year before.

Sales of gaming GPU were seasonably down to a level of $1.03 billion this quarter, which is still massively more than the $687 million posted a year ago. I assume the Nintendo Switch revenue is included in the gaming figures, total Tegra revenue was up 108 percent year-over-year to $332 million (which include $140 million of automotive revenue).

Professional visualization and auto revenue saw steady growth but the datacenter segment really blew it out of the park. NVIDIA is now pulling in a whopping $409 million from the lucrative datacenter market, almost thrice as much as a year ago!

NVIDIA revenue segment split

For the current quarter, NVIDIA expects revenue to come in at $1.95 billion, plus or minus 2 percent. Investors reacted favorably to the news and send NVIDIA shares 11.07 percent higher to a level of $114.34 in after-hours trading.
NVIDIA (NASDAQ: NVDA) today reported revenue for the first quarter ended April 30, 2017, of $1.94 billion, up 48 percent from $1.30 billion a year earlier, and down 11 percent from $2.17 billion in the previous quarter.

GAAP earnings per diluted share for the quarter were $0.79, up 126 percent from $0.35 a year ago and down 20 percent from $0.99 in the previous quarter. Non-GAAP earnings per diluted share were $0.85, up 85 percent from $0.46 a year earlier and down 25 percent from $1.13 in the previous quarter.

"The AI revolution is moving fast and continuing to accelerate," said Jensen Huang, founder and chief executive officer of NVIDIA. "NVIDIA's GPU deep learning platform is the instrument of choice for researchers, internet giants and startups as they invent the future.

"Our Datacenter GPU computing business nearly tripled from last year, as more of the world's computer scientists engage deep learning. One industry after another is awakening to the power of GPU deep learning and AI, the most important technology force of our time," he said.

Capital Return
For fiscal 2018, NVIDIA intends to return $1.25 billion to shareholders through ongoing quarterly cash dividends and share repurchases. During the first quarter of fiscal 2018, NVIDIA paid $82 million in cash dividends.

NVIDIA will pay its next quarterly cash dividend of $0.14 per share on June 14, 2017, to all shareholders of record on May 23, 2017.

NVIDIA's outlook for the second quarter of fiscal 2018 is as follows:

  • Revenue is expected to be $1.95 billion, plus or minus two percent.
  • GAAP and non-GAAP gross margins are expected to be 58.4 percent and 58.6 percent, respectively, plus or minus 50 basis points.
  • GAAP operating expenses are expected to be approximately $605 million. Non-GAAP operating expenses are expected to be approximately $530 million.
  • GAAP other income and expense is expected to be an expense of approximately $8 million, inclusive of additional charges from early conversions of convertible notes. Non-GAAP other income and expense is expected to be an expense of approximately $3 million.
  • GAAP and non-GAAP tax rates for the second quarter of fiscal 2018 are both expected to be 17 percent, plus or minus one percent, excluding any discrete items.
  • Weighted average shares used in the GAAP and non-GAAP diluted EPS calculations are dependent on the weighted average stock price during the quarter.
  • Capital expenditures are expected to be approximately $55 million to $65 million.

  • About the Author

    Thomas De Maesschalck

    Thomas has been messing with computer since early childhood and firmly believes the Internet is the best thing since sliced bread. Enjoys playing with new tech, is fascinated by science, and passionate about financial markets. When not behind a computer, he can be found with running shoes on or lifting heavy weights in the weight room.

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