NVIDIA Q1 FY2015 Financial Results
by Brett Howse on May 8, 2014 10:00 PM EST
This afternoon NVIDIA announced their quarterly earnings for Q1 2015. Overall GAAP revenue came in at $1.1B, up 16% year over year and down 4% sequentially. Gross margin was up slightly to 54.8%, up from 54.3% from Q1 2014, and up 0.7% from the previous quarter.
Most impressive of the numbers was the rise in net income, up 75% from Q1 2014 and coming in at $137M. Operating expenses were relatively flat sequentially, but up 4% from a year ago. This lead to an Earnings Per Share (EPS) of $0.24, an 85% increase from Q1 2014, although down $0.01 from last quarter. Non-GAAP EPS came in at $0.29, handily beating the analysts’ estimates of $0.17.
| NVIDIA Q1 2015 Financial Results (GAAP) | |||||
| In millions except EPS | Q1'2015 | Q4'2014 | Q1'2014 | Q/Q | Y/Y |
| Revenue | $1103 | $1144 | $955 | -4% | +16% |
| Gross Margin | 54.8% | 54.1% | 54.3% | +0.7% | +0.5% |
| Operating Expenses | $453 | $452 | $436 | flat | +4% |
| Net Income | $137 | $147 | $78 | -7% | +75% |
| EPS | $0.24 | $0.25 | $0.13 | -4% | +85% |
| NVIDIA Q1 2015 Financial Results (Non-GAAP) | |||||
| In millions except EPS | Q1'2015 | Q4'2014 | Q1'2014 | Q/Q | Y/Y |
| Revenue | $1103 | $1144 | $955 | -4% | +16% |
| Gross Margin | 55.1% | 53.8% | 54.6% | +1.3% | +0.5% |
| Operating Expenses | $411 | $408 | $396 | +1% | +4% |
| Net Income | $166 | $187 | $114 | -11% | +46% |
| EPS | $0.29 | $0.32 | $0.18 | -9% | +61% |
The GPU business is still the dominant division of NVIDIA, coming in at over 81% of the company’s entire revenue with $898M. GPU sales were strong for Q1, with revenue up 14% year over year, but down from Q4 2014. Most impressively, GeForce GTX GPUs for both desktops and notebooks grew 57% with strong demand for the newly released GTX 750 which is the first GPU based on Maxwell. NVIDIA stated that demand was strong in all markets for Desktop GPUs, and high-end notebook GPU volume also grew, but overall notebook GPU revenue was down. NVIDIA stated the seasonal decline in the desktop market more than offset the GTX GPU sales, contributing to the quarter over quarter decline.
Also on the GPU side, Quadro revenue increased with demand from all major OEM desktop and mobile workstation vendors. GRID sales were strong, and Tesla was also up. Tesla and GRID revenue increases was attributed to GPU acceleration opportunities, VDI deployments supporting Citrix, and streaming gaming providers.
Tegra Processor sales, which account for 12.6% of revenue, were up 35% year over year, and unlike GPU sales they were also up quarter over quarter 6%. The strong quarter for Tegra was attributed to a volume increase for smartphone and auto infotainment systems, but Android tablet SoCs were down partially offsetting the revenue gains. Automotive systems was up a healthy 60% year over year. Game consoles and embedded devices were down from Q1 2014, but the sequential growth of the Tegra division was attributed to the strong auto infotainment and embedded devices, so while embedded is down year over year, it’s recovered somewhat from the previous quarter.
NVIDIA has one other source of revenue which it reports on, which is $66M from patent license agreements with Intel.
| NVIDIA Quarterly Revenue Comparison (GAAP) | |||||
| In millions | Q1'2015 | Q4'2014 | Q1'2014 | Q/Q | Y/Y |
| GPU | $898 | $947 | $786 | -5% | +14% |
| Tegra Processor | $139 | $131 | $103 | +6% | +35% |
| Other | $66 | $66 | $66 | flat | flat |
NVIDIA is projecting their Q2 revenue will be flat at $1.1B plus or minus 2%.
Overall it was a good quarter for NVIDIA. The strong demand for their new Maxwell GPUs. NVIDIA’s share of notebook computers is the highest since 2010. Although uptake of the Tegra 4 has been slow in tablets, NVIDIA has seen growth in Smartphone adoption as well as a strong automotive presence which is becoming more important with the growth in automotive infotainment systems in every single automotive brand. I’m sure they are hoping for some design wins with the Tegra K1, which looks like a nice upgrade over the Tegra 4, however there was no mention of it in the earnings release. We still have a few months for them to hit their target for the first half of 2014.
Source: NVIDIA
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melgross - Monday, May 12, 2014 - link
I do t expect much from this—period. We've heard this before from them. They sound more like AMD every day.Da W - Friday, May 9, 2014 - link
AMD did post good resultst too, with the GPU division doing extremely well also.#1 My take on this is that if you bought a core i7 2600k years ago, it's still good enough. GPU performance is now the important factor in computing performance, and if your CPU can old longer than the usual 18 months it used to, you have spare money to spend on a beefy GPU upgrade.
Intel is the looser here.
#2 With game streaming from your powerful desktop coming (Shield / Steam OS / i'm sure AMD will follow), notebook GPU will begin to be less important. And the rise of 500+W GPU cards shows that mobile GPU can't give you all the power you need due to power contraint, contrary to CPU. All you need is a potent SoC (tegra K1 / Mullins) and a powerful desktop.
CiccioB - Friday, May 9, 2014 - link
AMD results were quite not that good at all.All the profits they advertise are all compensated by an almost equal long term debt increment.
CiccioB - Friday, May 9, 2014 - link
And by a constant reduction in research investments.And they showed the best quarter of the future incoming ones, as the request for APUs for consoles was at its maximum.
Still they didn't get a profit. nvidia gets 66x4 millions by licensing their old IP to Intel in a year. And that's without investing anything in silicon or future shrinking and so. You can see who made the deal when nvidia said that doing SoC for console market was not profitable at all (or not as it would be investing the same money and brains in other things).
theqnology - Saturday, May 10, 2014 - link
Why nobody pointed out that Tegra4 was based on over a decade old GeForce ULP? And that TK1 is NVidia's first product with a modern GPU architecture? Why nobody pointed out that OEMs were also drawn to Snapdragons because of on chip LTE? Really, previous tegras were incremental changes, thats why im excited to see where K1 can take us. Stop the hate, sit back end enjoy... Not like you lost large sums of money on Nvidia shares.theqnology - Saturday, May 10, 2014 - link
Oops, meant for everyone, not on your comment.. :P Sorry hard to distinguish, using a phone.Hrel - Monday, May 12, 2014 - link
ok Nvidia, you made plenty of money, now lower the prices of your desktop GPU's significantly. GTX760 should be <200.CiccioB - Monday, May 12, 2014 - link
As long as they can sell them at >$200 they will keep that price.People do not understand the basic business law of offer and demand: you have to sell your product at a low price only if it cannot be sold at a higher one.
nvidia sells tons of their GPUs at high prices.
AMD fanboys cannot understand this and keep on speaking of perf/dollar nonsense. They just cannot understand that criteria is not the only one, and for those that really understand something, it is also not the most important.
If perf/cost was the only criteria used when buying something we would all drive Skoda and KIA cars. Or have Samsung electronics devices.
nvidia can sell a lot at a higher price making money (well, not plenty but enough), while AMD not to have a one digit market share must keep its prices so low that they cannot have a gain even at what it probably was the best quarter of the year.