NVIDIA FY 2015 Q2 Financial Results
by Brett Howse on August 10, 2014 11:10 PM EST
On Thursday August 7th, NVIDIA released their results for the second quarter of their fiscal year 2015. Year-over-year, they had an excellent quarter based on strong growth in the PC GPU market, Datacenter and Cloud (GRID), and mobile with the Tegra line.
GAAP Revenue for the quarter came in at $1.103 billion which is flat from Q1 2015, but up 13% from $977 million at the same time last year. Gross margin for Q2 was up both sequentially and year-over-year at 56.1%. Net income for the quarter came in at $128 million, down 6% from Q1 and up 33% from Q2 2014. These numbers resulted in diluted earnings per share of $0.22, down 8% from Q1 and up 38% from Q2 last year but beating analysts expectations.
| NVIDIA Q2 2015 Financial Results (GAAP) | |||||
| In millions except EPS | Q2'2015 | Q1'2015 | Q2'2014 | Q/Q | Y/Y |
| Revenue | $1103 | $1103 | $977 | 0% | +13% |
| Gross Margin | 56.1% | 54.8% | 55.8% | +1.3% | +0.3% |
| Operating Expenses | $456 | $453 | $440 | +1% | +4% |
| Net Income | $128 | $137 | $96 | -6% | +33% |
| EPS | $0.22 | $0.24 | $0.16 | -8% | +38% |
| NVIDIA Q2 2015 Financial Results (Non-GAAP) | |||||
| In millions except EPS | Q2'2015 | Q1'2015 | Q2'2014 | Q/Q | Y/Y |
| Revenue | $1103 | $1103 | $977 | 0% | +13% |
| Gross Margin | 56.4% | 55.1% | 56.3% | +1.3% | +0.1% |
| Operating Expenses | $411 | $411 | $401 | 0% | +2% |
| Net Income | $173 | $166 | $133 | +4% | +30% |
| EPS | $0.30 | $0.29 | $0.23 | +3% | +30% |
The GPU business is the primary source of revenue for NVIDIA, and includes GeForce for desktops and notebook PCs, Quadro for workstations, Tesla for high performance computing, and GRID for cloud-enabled graphic solutions. This quarter, the GPU revenue rose 2% over Q2 2014 with $878 million in revenue. This is down 2% from the previous quarter due to the seasonal decline of consumer PCs. Revenue from the PC GPU line rose 10% over last year and was helped by the introduction of the GeForce GTX 750 and 750 Ti Maxwell based boards. They are also seeing growth in the Tesla datacenter business. Quadro revenue also increased, citing strong growth in mobile workstations.
The mobile side of NVIDIA hasn’t seen as many product wins compared to Qualcomm, but the Tegra business is still growing strongly for NVIDIA. Tegra revenue was up 14% from Q1 2015, and 200% from Q2 2014 with a total revenue of $159 million for the quarter. Tegra continues to have strong demand in the automotive infotainment sector, with a 74% growth in that market year-over-year. This could be a lucrative market, with automotive systems generally locking in for at least several years compared to the mobile sector which might see a product replaced in less than a single year. The Tegra K1 has just come to market though, and it has shown itself to be a capable performer and may win some more designs soon.
The last avenue of income for NVIDIA is $66 million per quarter in a licensing deal with Intel.
| NVIDIA Quarterly Revenue Comparison (GAAP) | |||||
| In millions | Q2'2015 | Q1'2015 | Q2'2014 | Q/Q | Y/Y |
| GPU | $878 | $898 | $858 | -2% | +2% |
| Tegra Processor | $159 | $139 | $53 | +14% | +200% |
| Other | $66 | $66 | $66 | flat | flat |
The company projected this quarter to be flat on revenue as compared to Q1, and they were exactly right. Projections for Q3 2015 are for revenue of $1.2 billion plus or minus 2%.
During the quarter, $47 million was paid in dividends and NVIDIA purchased 6.8 million shares back from investors. This brings them to $594 million of the $1 billion promised to shareholders for FY 2015. The next dividend of $0.085 per share will be paid on September 12th to all stockholders of record as of August 21st.
It was an excellent quarter for NVIDIA, and their stock prices jumped after the numbers were released. All segments of the company are growing at the moment, and with the recent release of the Tegra K1 they can only be hoping to have another strong quarter of mobile grown in Q3 after a great 200% jump in Tegra revenue since last year. The stronger than expected PC sales have helped their biggest business as well, with the GPU division up 2%. CEO Jen-Hsun Huang has worked to bring the company a more diversified portfolio, and with the recent gains in mobile and datacenter computing, the company has certainly had some recent success.
Source: NVIDIA Investor Relations
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Stephen Barrett - Sunday, August 10, 2014 - link
I wonder why tegea is so popular with automotiveA5 - Sunday, August 10, 2014 - link
I think the Tegra chips are cheaper than similarly-powered competition, and power consumption isn't really a concern when you're connected to a giant alternator.They also got a pretty early design win with Audi, which may make it easier to get in with other companies. If nothing else, getting in the other VW brands would be a big slice of the market for those systems.
jjj - Monday, August 11, 2014 - link
They have the Golf and the soon to be released Passat.As for why they got the wins ,they got into it early and JHH likes cars. Plus they got a big interest in using GPUs into robots,including self-driving cars, could become a huge segment for them. Others failed to notice the segment soon enough or have good enough products so they seem to have a bit of a head-start.
Dribble - Monday, August 11, 2014 - link
I guess software- an arm soc is required but getting it plugged into all the cars systems, and running all the correct software is probably the hardest part. Nvidia are strong when it comes to writing drivers and providing support.Hrel - Tuesday, August 12, 2014 - link
Everything A5 said is right, but to add to it. Tegra is a lot better at rendering graphics quickly than comparable solutions, and pretty much everything in a car's console is graphics based, not text based, because it needs to be easy to read and touch. So Nvidia has found a really strong niche application for their hardware. Hell, Tesla is using it too!twotwotwo - Sunday, August 10, 2014 - link
You know, last round almost no one but Qualcomm (and, of course, Apple) got into highish-end phones in the US, because no one else had great LTE basebands and maybe because Krait/Adreno were pretty good and pretty power-efficient. (And even Apple's using a Qualcomm baseband.)And US phone wins may have had a halo effect; if you've done one Snapdragon integration and made one big contract with Qualcomm, the existing integration and relationship might make it easier to go with them for something else.
Krait's probably no longer a factor because it sounds like the first 64-bit non-Apple ARMs will all be Cortex-A5x implementations. I wonder if basebands will quit working against everyone but Qualcomm, either because the Icera stuff works out for NVidia or because of acceptable licensed basebands or whatever. And, if US phones don't get more diverse, I wonder if NVidia or Samsung's chip division or Intel manage to get profitable-enough wins in tablets, non-US phones, mobile gaming, whatever to keep everyone investing.
jjj - Monday, August 11, 2014 - link
When talking Tegra you got to remember that last year was very poor and they just launched the Shield Tab. Not sure if they accounted for any Shield Tab revenue in Q2 but the thing has high ASP. You got the device at 300$ and costly accessories so ASP will be some 330-350$. If they ship 200k tabs ,that's up to 70 extra millions At the same time a TK1 got to be some 25-30$ so the tab compensates for quite a bit of chip volume. Ofc hard to say how many tabs they will manage to sell,they do seem to be expanding to other markets fast (shipping in a few days in the UK) so 200k units in a quarter seems doable if they expand to enough markets.Could be even higher volume and then coupled with a few more wins and new GPUs, Q3 could end up quite a bit better than 1.2B.MartinT - Monday, August 11, 2014 - link
Fascinating to see that more than half of their profits are the result of the Intel licencing agreement, while all their 'real' products merely eek out another 6x million on revenues of 1+ billion.jjj - Monday, August 11, 2014 - link
That's not accurate.Operating income before interest and other was 163 million and income before tax was 154.6.
Then again ,at least they make money unlike AMD that usually just breaks even on an operating level on GPUs.
They also invest plenty in R&D , 337 millions in Q2, over 25% of revenue in R&D is quite a lot
And Tegra is likely to be losing plenty of money for now on low volume and lower margins.
How about Intel's mobile division 1.2B loss on 51 million of revenue in Q2.
MartinT - Monday, August 11, 2014 - link
"That's not accurate. [...] income before tax was 154.6."That's true, thanks for the correction!