This afternoon, NVIDIA announced their quarterly earnings for the second quarter of their 2017 fiscal year, which ended July 31. NVIDIA had record revenues for the quarter, coming in at $1.43 billion, which is up 24% from a year ago. Gross margin for the quarter was 57.9%, up 2.9% from a year ago, while operating expenses fell 9% to $509 million. Operating income for the quarter was $317 million, up 317% from Q2 2016 where it was just $76 million due to a write-down of the Icera modem division. This also impacted net income, which was up 873% to $253 million, and earnings per share of $0.40 was up 700% compared to the Q2 2016 results.

NVIDIA Q2 2017 Financial Results (GAAP)
  Q2'2017 Q1'2017 Q2'2016 Q/Q Y/Y
Revenue (in millions USD) $1428 $1305 $1153 +9% +24%
Gross Margin 57.9% 57.5% 55.0% +0.4% +2.9%
Operating Income (in millions USD) $317 $245 $76 +29% +317%
Net Income $253 $196 $26 +29% +873%
EPS $0.40 $0.33 $0.05 +21% +700%

NVIDIA also released Non-GAAP measures, which “exclude stock-based compensation, legal settlement costs, product warranty charge, acquisition-related costs, contributions, restructuring and other charges, gains from non-affiliated investments, interest expense related to amortization of debt discount, and the associated tax impact of these items, where applicable” and therefore don’t factor in the Icera write-down. In Non-GAAP measures, revenue was the same $1.428 billion, and gross margin was 58.1% which was up 1.5% from the Q2 2016 Non-GAAP results. Operating income was up 65% to $328 million, and net income was up the same 65% to $313 million. Earnings per share were up 56% to $0.53 compared to last year’s Non-GAAP results.

NVIDIA Q2 2017 Financial Results (Non-GAAP)
  Q2'2017 Q1'2017 Q2'2016 Q/Q Y/Y
Revenue (in millions USD) $1428 $1305 $1153 +9% +24%
Gross Margin 58.1% 58.6% 56.6% -0.5% +1.5%
Operating Income (in millions USD) $382 $322 $231 +19% +65%
Net Income $313 $263 $190 +19% +65%
EPS $0.53 $0.46 $0.34 +15% +56%

At the heart of this is NVIDIA’s GPU business, which has diversified quite a bit over the last several years. For Q2 2017, NVIDIA’s GPU business brought in $1.196 billion in revenue, up 18% from last year and up 14% over last quarter. NVIDIA’s Tegra platform, which is primarily automotive now, but still powering a couple of consumer devices like the SHIELD Tablet K1 and the SHIELD Android TV, brought in revenues of $166 million, which is up 30% from a year ago. NVIDIA’s “other” category is the $66 million they report per quarter for the payment from Intel for licensing.

Broken down by market, gaming is still the largest market for NVIDIA, with revenues of $781 million attributed to gaming, which is up 18% year-over-year. This has been spurred by the recent releases of their latest Pascal GPUs for the desktop, which hold the current performance crown with the move to a new FinFET node. Professional Visualization brought in $214 million, up 22% from a year ago, and NVIDIA just announced Pascal based Quadro cards as well, so I would expect this growth to continue if Quadro matches GeForce. The Datacenter revenue had the biggest jump, up 110% year-over-year to $151 million, and NVIDIA has put a lot of effort and marketing into deep learning to achieve this kind of growth. Automotive accounted for $119 million in revenue, up 68% from a year ago, and NVIDIA’s OEM and IP market was the only one to see a small loss of 6% revenue compared to last year, down to $163 million.

NVIDIA Quarterly Revenue Comparison (GAAP)
In millions Q2'2017 Q1'2017 Q2'2016 Q/Q Y/Y
GPU $1196 $1079 $959 +11% +25%
Tegra Processor $166 $160 $128 +4% +30%
Other $66 $66 $66 flat flat

For next quarter, NVIDIA is expecting revenues of $1.68 billion, plus or minus 2%, with GAAP margins of 57.8% and non-GAAP margins of 58.0%, plus or minus 0.5%.

With record revenue, a more diversified platform, and the current GPU performance crown, NVIDIA has been easily outperforming the PC market with their strong focus on one of the few bright spots in the PC market – gaming. We’ve seen several companies transition to practically only selling gaming computers, and that is because of the higher margins and strong sales they’ve seen. NVIDIA has been riding this wave with successful launches of it’s Maxwell products, and now Pascal.

Source: NVIDIA Investor Relations

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  • Zaxx420 - Thursday, August 11, 2016 - link

    Looks like all the 1070/1080 price gouging paid off...lol Reply
  • euskalzabe - Friday, August 12, 2016 - link

    Not trying to be pedantic, but this isn't funny at all. Nvidia's pricing practices are shameless this generation. How I wish AMD could figure it out and compete again, then this pricing insanity would stop. After 9 GPUs bought from Nvidia, I'm seriously considering not buying from them until these insulting practices end. Reply
  • webdoctors - Friday, August 12, 2016 - link

    Newegg has an ASUS GTX970 for $199 after rebate. That's a pretty good deal, and it might be cheaper if you get settlement money too.

    I think the issue is they're competing with their previous gen stuff too which wasn't bad. The GTX970 and 980 are amazing cards (I'd love to upgrade to either of them if I had time to actually game).
    Reply
  • dsumanik - Friday, August 12, 2016 - link

    You realize what this means?

    1. Nvidia is going to gouge even worse the next product cycle
    2. The next product cycle just got 'delayed' 12 months
    3. If you bought a 10 series card, you have no one to blame but yourself

    There was a golden era in the tech scene when AMD had a faster Athlon than Intel, and ATI first dropped the Radeon. FSB overclocking was not only 'allowed' but was considered normal and encouraged. Ultimately, this downhill greedy slide can be blamed on 2 things:

    1. Media sites like this one, promoting the shameless business models of companies like Apple
    2. You, the consumer for buying into it.

    And yes, I do blame AT directly...remember when Intel locked down FSB overclocking and AT wrote a puff piece about how this would be a good thing because it would have been 'too much work' for reviewers and 'unsafe' for system integrators lol... Just disgusting.

    It's a 2 stage system now, wealthy tech companies are paying big $$$ to try and have tech sites influence your purchasing habits, quite literally punishing sites that don't get on board.

    See through it people, be smarter.

    For the love of God, vote with your wallet or this is just going to be the tip of the iceberg.
    Reply
  • TheJian - Saturday, August 13, 2016 - link

    For the love of god, get a better job and quit whining. If you can't afford a $300-1000 card every 3-5yrs (which seems to be my gpu upgrade cycle though my current one is far longer waiting all 14nm chips, IE vega/1080ti maybe), you clearly need to work on yourself.

    How much does your cell phone cost OFF contract (and that thing costs you $1500-2400 for 2yrs to own on contract!)? If you're that broke that a 1070 etc is out of your range, improve your earnings ability. I will be buying my 10 series card soon, or Vega if it WINS (win or bust, period). I have no problem with pricing and AMD really needs to charge more. I can easily afford a TitanX if I see some benchmarks showing it's anywhere close to Quadro's in pro app stuff for content creation (3dsmax/blender/adobe/maya etc) and far better than 1080/1070. Since it's a pro card I'm waiting on those tests and Vega to see where it lands. BTW, I am by no means rich or anywhere near it. Saving $300-1000 for me is a one month affair though :) If that isn't the case for you (or close, maybe another month or two) again, improve your job. I'm middle class for crying out loud, but I live within my means (basically means very little to no debt!). :) All I've done is lengthen my cycle from 2yrs to 3-5 depending on what I want in an increase in perf etc. I love the fact that people are buying high, and giving me a great deal below if I choose not to go $400+. I love that there are rich people who can afford these $1000-1200 cards EVERY year…LOL. They pay for all the R&D.

    If you take out Intel's 266mil a year payments (coming next year to an end) they still wouldn't make 1B (far from it). Just exactly how much money is a company supposed to be able to make in your opinion? We're not talking apple/intel/samsung etc here (who make 10-50x NV) either. So how much is an OK amount for a tech leader?

    The only thing disgusting here is you whining about your own position in life ;) There are cards that are very high performing from $200 and up. If that is really a problem for you every few years you have major issues. The market sets the price not NV and their job is to find the highest price they can get IN that market, no matter what company we're talking about. Price what the market will handle, anything less is silly. The fact that AMD seems to be failing in this is their own management problem (or lack of product perf currently on the high end and cpu).

    AMD's current situation is lack of R&D in CORE products. They gave up the cpu race 5yrs ago (and lost the gpu race pretty much 77% share for NV) due to chasing consoles, apus etc. They did it again with consoles rev2 coming up. If they don't charge appropriately for ZEN (assuming it's a LARGER chip than Intel HEDT) they have failed themselves and their customers as they'll have no R&D cash for the future. They have billions in debt (less than 800mil cash too) and need to make a billion or two for a few years to get that paid off and get back in the game for real. I really hope ZEN is bigger than xbox1 (363mm^2 and they make it for $100! sony's is slightly smaller but made for $90 sold for $100-105 probably) or they'll YET AGAIN be relegated to under $200 and priced to death by Intel who can bleed until AMD is beaten down yet again. They also better be aiming for Intels 24 core $7000 server chips soon next year. They will have pricing power if they put out a WINNER. After 8B in losses in the last ~15yrs they need a freaking winner in CPU again. Besides yourself, blame AMD for not making better products to compete.
    ***prays for HUGE die sizes*** :)
    Reply
  • dsumanik - Saturday, August 13, 2016 - link

    poor lil baby go cry cry...peeps only rage when you hit that nerve of truth. Reply
  • HighTech4US - Saturday, August 13, 2016 - link

    Yea you do seem to cry and whine alot.

    TheJian speaks the truth.
    Reply
  • slickr - Sunday, August 14, 2016 - link

    Get a life you worthless basement dweller. Rather than spending hundreds of dollars on a video card that becomes obsolete in just two years, that is already $100-$200 overpriced already, if you had a life you could spend it going outside, having drinks and eating with friends and having a good time.

    Only lifeless trash would spend hundreds and hundreds of dollars on an overpriced GPU.
    Reply
  • Michael Bay - Saturday, August 20, 2016 - link

    >Life=gut

    You`re exactly like him.
    Reply
  • Gigaplex - Monday, August 15, 2016 - link

    Why would you get settlement money? The only "settlement" regarding these cards I've heard of were over 'false advertising' of the specs, which had a cutoff date. The issue is well known now, so if you buy a card with full knowledge, you're not eligible. Reply

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