NVIDIA Announces Record Q1 FY 2019 Resultsby Brett Howse on May 10, 2018 9:40 PM EST
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- Financial Results
In what seems like a never-ending trend, NVIDIA today announced record results for their first quarter of their 2019 fiscal year. NVIDIA had revenue of $3.21 billion for the quarter, up an astounding 66% from a year ago. The company had margins of 64.5%, up 5.1% from last year. Operating income came in at $1.295 billion, which is up 134% from the same quarter of FY 2018, and net income was up even higher: 145% to $1.244 billion. Earnings per share were up 151% to $1.98.
|NVIDIA Q1 2019 Financial Results (GAAP)|
NVIDIA has diversified, but gaming is still central to the company, and this quarter gaming revenue was up 67.7% from a year ago to $1.723 billion. Some of that growth was certainly attributed to cryptocurrency, but the company cited games such as PUBG and Fortnite as driving factors for revenue growth. And this is with a GPU lineup that is closing in on being two years old as well.
The Datacenter segment grew 71% from a year ago to $701 million. In Q1 FY 2018, revenue was $409 million, and Q1 2017 it was $143 million, that’s 390% growth in just two years. Datacenter is now easily the second largest source of revenue for NVIDIA, and a strong lineup of products like the Tesla V100, along with an increased demand for GPUs in the datacenter, likely means this growth will continue.
Professional Visualization also saw strong growth of 22.4% year-over-year, with $251 million in revenue for the quarter. The company announced the first Volta products in May of last year, including the GV100 with it’s 21.1 billion transistors, which is targeted at this market.
Automotive, where NVIDIA found a lot of growth with their Tegra products, had much more modest growth at 3.57%, with revenues for the quarter of $145 million. The company was able to secure platform wins with several car manufacturers, but even with the addition of driving assists, automotive revenue has been more or less flat over the last year. NVIDIA did announce the DRIVE Constellation system at GTC 2018 just over a month ago, so the automotive end hasn’t been forgotten by the company, but it’s certainly been eclipsed by their other ventures in recent years.
Finally, the OEM & IP revenue for the quarter was up 148% to $387 million for the quarter. NVIDIA is reaping the rewards of a successful partnership with Nintendo in the Switch console, and Tegra processor revenue was up 33%. Also, NVIDIA is including $289 million in revenue related to GPUs for cryptocurrency mining.
|NVIDIA Quarterly Revenue Comparison (GAAP)
($ in millions)
|OEM & IP||$387||$180||$156||+115%||+148%|
For the second quarter of FY 2019, NVIDIA is expecting revenues of $3.10 billion, plus or minus 2%, with margins of 63.3% plus or minus 0.5%.
Source: NVIDIA Investor Relations
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Farfolomew - Friday, May 11, 2018 - linkHow is it that all these tech companies are posting record quarterly results? It seems like every one of them is like that for every quarter. Even AMD has jumped on the bandwagon! Maybe it's inflation finally coming to haunt us...
Yojimbo - Friday, May 11, 2018 - linkInflation has been low. The goods and services provided by the tech companies have increased the productivity of the economy. Also, consumers are spending a greater percentage of their disposable income on entertainment that's supported by technology (such as games, movies with CGI, internet streaming, etc).
Yojimbo - Friday, May 11, 2018 - linkOh, there's also cryptocurrency, which probably hasn't provided much of value at this point, but has attracted speculative investments, leading to a swell in mining operations that require an investment in technology.
edzieba - Friday, May 11, 2018 - linkHuge demand, supply is constrained (building DRAM fabs takes time, and everyone is hitting process scaling problems).
shabby - Friday, May 11, 2018 - linkIf by everybody you mean intel then yes.
MrSpadge - Friday, May 11, 2018 - link"The winner takes it all", rule nr. 1 of the internet.
Opencg - Friday, May 11, 2018 - linkPrices rising across the market due to multiple factors including increased costs/ reduced gains associated with transistor size shrinks, and cryptocurrency mining. Simultaneuosly demand from the traditional gaming market has not shrunk in the face of gpu price increases. The computer market in general is seeing the results of aging generations that grew up with gaming. They now have more income and are willing to spend a large portion of it on gaming hardware. Manufacturers are realizing a new confidence in demand. Some areas even seem to be abusing it like memory manufacturers. Unfortunately it looks like gaming may face much more price inflation due to hitting extreme limitations in transistor size reduction along with manufacturers reassesing their understanding of demand in the gaming market along with other sectors taking up priority over gaming along with the increasing monderization nd growth of global markets along with resource limitations.
darkich - Friday, May 11, 2018 - linkAh if only I were a stock trader..3 years ago I was looking at the trends and thought, there's just no way Nvidia will not grow like crazy in the upcoming years..and I still don't see the end.
Graphics processing market is actually only about to explode, and not because of the games.
Pneumothorax - Friday, May 11, 2018 - link"this quarter gaming revenue was up 67.7% from a year ago to $1.723 billion. Some of that growth was certainly attributed to cryptocurrency,"
I think the majority of that growth came from crypto, none of my gaming buddies have bought a new GPU in close to 2 years due to the insane pricing. I have a few still stuck on 290's & 780's waiting for prices to come down to MSRP. I know Nvidia had a few for sale yesterday, but by the time we got off work, they were all gone!
Kakti - Friday, May 11, 2018 - linkNot sure why it was placed there, but the very last sentence of the article states "NVIDIA is including $289 million in revenue related to GPUs for cryptocurrency mining."
Based on the numbers provided (here and elsewhere):
2019 Q1 Total Revenue = $3,210,000,000
2019 Q1 Gaming Revenue = $1,723,000,000
2019 Q1 Crypto Revenue = $289,000,000
2019 Q1 Crypto Growth YoY = 148%
2019 Q2 Total Revenue Projection = $3,100,000
We can calculate the following:
2018 Q1 Crypto Sales = $116.5m (289m / 2.48) <- 148% growth
2019 Q1 Gaming Revenue as a percentage of Total Sales = 53.676%
2019 Q1 Crypto Sales as a percentage of Total Sales = 9.00%
2019 Q1 Crypto Sales as a percentage of Gaming Sales = 16.77%
To bring this all together:
Q1 2018 to Q1 2019 GPU sales growth = $695,570,000
Q1 2018 to Q1 2019 Crypto sales growth = $172,467,000
Percentage of GPU sales growth attributed to Crypto sales growth = 24.79%.
They also predicted Crypto sales in the current quarter (2019 Q2) will drop by 2/3. Given the Q2 Total Revenue projection of 3.1B (a 3.42% drop from Q1), we can calculate the following figures:
2019 Q2 Crypto Sales = $96,333,333 (Q1 crypto sales * (1/3))
2019 Q2 Crypto Sales as a percentage of Total Sales = 3.1075% (96.3m / 3.1b)
Basically Crypto sales as a percentage of total sales will drop from 9% in Q1 to 3% in Q2. Interested to see how that drop affects both GPU sales figures and total revenue figures going forward, particularly in Q3 and Q4. Looks like NV at least thinks it's going to drop pretty steeply.
Disclosure – I own NVDA stock.