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NVIDIA Tops Forecasts

August 20, 2020

NVIDIA reported record revenue for the second quarter ended July 26, 2020, of $3.87 billion, up 50 percent from $2.58 billion a year earlier, and up 26 percent from $3.08 billion in the previous quarter.

GAAP earnings per diluted share for the quarter were $0.99, up 10 percent from $0.90 a year ago, and down 33 percent from $1.47 in the previous quarter. Non-GAAP earnings per diluted share were $2.18, up 76 percent from $1.24 a year earlier, and up 21 percent from $1.80 in the previous quarter.

NVIDIA's earnings of $2.18 per share were more than $1.97 which was expected. On the top line, the firm's revenue of $3.87 billion was also better than the $3.65 billion which was expected.

NVIDIA closed its acquisition of Mellanox Technologies Ltd. on April 27, 2020.

“Adoption of NVIDIA computing is accelerating, driving record revenue and exceptional growth,” said Jensen Huang, founder and CEO of NVIDIA. “Growth in GeForce gaming accelerated as gamers increasingly immerse themselves in realistic virtual worlds created by NVIDIA RTX ray tracing and AI.

“Our new Ampere GPU architecture is sprinting out of the blocks, with the world’s top cloud service providers and server makers moving quickly to offer NVIDIA accelerated computing. Mellanox grew sharply, driven by the need for high-speed networking in cloud data centers to scale-out AI services. And Mercedes-Benz’s partnership with NVIDIA to power its next-generation fleet of luxury cars -- from the computer to the AI software, and from the cloud to the car -- is transformative.

“Despite the pandemic’s impact on our professional visualization and automotive platforms, we are well positioned to grow, as gaming, AI, cloud computing and autonomous machines drive the next industrial revolution around the world,” he said.

NVIDIA paid $99 million in quarterly cash dividends in the second quarter. It will pay its next quarterly cash dividend of $0.16 per share on September 24, 2020, to all shareholders of record on September 2, 2020.

NVIDIA’s outlook for the third quarter of fiscal 2021 is as follows:

  • Revenue is expected to be $4.40 billion, plus or minus 2 percent.
  • GAAP and non-GAAP gross margins are expected to be 62.5 percent and 65.5 percent, respectively, plus or minus 50 basis points.
  • GAAP and non-GAAP operating expenses are expected to be approximately $1.54 billion and $1.09 billion, respectively.
  • GAAP and non-GAAP other income and expense are both expected to be an expense of approximately $55 million.
  • GAAP and non-GAAP tax rates are both expected to be 8 percent, plus or minus 1 percent, excluding any discrete items. GAAP discrete items include excess tax benefits or deficiencies related to stock-based compensation, which are expected to generate variability on a quarter by quarter basis.

Highlights

Since its previous earnings report, NVIDIA has achieved progress in these areas:

Data Center

Gaming

  • Second-quarter revenue was $1.65 billion, up 24 percent from the previous quarter and up 26 percent from a year earlier.
  • Ramped 100+ new GeForce laptops to deliver outstanding performance to students, creators and gamers across a range of price points.
  • Announced a range of games now supporting NVIDIA RTX ray tracing and DLSS AI super resolution, including, Justice, Cyberpunk 2077 and Death Stranding. Introduced new worlds for Minecraft with RTX
  • Expanded GeForce NOW™ to Chromebooks, enabling millions of users to play games in the cloud.
  • Announced that Square Enix is adding its extensive catalog to GeForce NOW, including franchises such as Deus Ex and Just Cause, plus Shadow of the Tomb Raider, which returned with RTX On.

Professional Visualization

  • Second-quarter revenue was $203 million, down 34 percent from the previous quarter and down 30 percent from a year earlier.
  • Launched with Acer, Dell, Lenovo and Microsoft new mobile workstations for professional creators, based on NVIDIA Quadro® graphics. Powered new AI features in the latest releases of Substance Alchemist and Blender, improving material creation and incorporating AI denoising.
  • Announced that NVIDIA RTX™ has been implemented in the latest application releases from Foundry, Chaos Group and Redshift by Maxon, giving creators access to faster ray tracing and accelerated performance.
  • Released NVIDIA Quadro View™, the latest application in the NVIDIA Quadro Experience platform, which aids in streamlining workflows with a suite of desktop management tools.

Automotive

  • Second-quarter revenue was $111 million, down 28 percent from the previous quarter and down 47 percent from a year earlier.
  • Announced with Mercedes-Benz that the carmaker is integrating into every vehicle in its lineup, beginning in 2024, a new software-defined vehicle architecture that is perpetually upgradeable and built on the NVIDIA DRIVE AV autonomous driving software and NVIDIA AGX Orin™ AV computer

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