Much of the PC industry has been reporting less than strong results, with declines in PC unit sales leading to lower earnings for many of the big players such as Intel, AMD, and even Apple. NVIDIA has bucked this trend though with a strong quarter to start their fiscal year 2017. Revenue for the quarter was $1.305 billion, up 13% from Q1 FY 2016, with growth in NVIDIA’s GPU business, datacenter, automotive, and professional visualization all showing strong sales. Gross margin for the quarter was 57.5%, up 0.8% from a year ago. Operating income was up 39% to $245 million, and net income came in up 46% to $196 million. This resulted in earnings per share of $0.33.

NVIDIA Q1 2017 Financial Results (GAAP)
  Q1'2017 Q4'2016 Q1'2016 Q/Q Y/Y
Revenue (in millions USD) $1305 $1401 $1151 -7% +13%
Gross Margin 57.5% 56.5% 56.7% +1.0% +0.8%
Operating Income (in millions USD) $245 $252 $176 -3% +39%
Net Income $196 $207 $134 -5% +46%
EPS $0.33 $0.35 $0.24 -6% +38%

NVIDIA also reports Non-GAAP results, which exclude stock based compensation, warranty charges, restructuring fees, and other fees. The Non-GAAP results had revenue of $1.305 billion, which is up 13%. Gross margin was 58.6%, which is up 1.7%. Operating income was up 39% to $322 million, and net income was up 41% to $263 million. Non-GAAP earnings per share were $0.46.

NVIDIA Q1 2017 Financial Results (Non-GAAP)
  Q1'2017 Q4'2016 Q1'2016 Q/Q Y/Y
Revenue (in millions USD) $1305 $1401 $1151 -7% +13%
Gross Margin 58.6% 57.2% 56.9% +1.4% +1.7%
Operating Income (in millions USD) $322 $356 $231 -10% +39%
Net Income $263 $297 $187 -11% +41%
EPS $0.46 $0.52 $0.33 -12% +39%

GPUs accounted for most of the revenue, with GPU revenue coming in at $1.08 billion for the quarter. This is a gain of 15% year-over-year, driven by strong growth in the GeForce lineup. NVIDIA has recently announced their latest Pascal architecture with the GTX 1080 and GTX 1070, with cards coming soon, so I would expect strong sales to continue. Tegra processor revenue for the quarter was $160 million, up 10% compared to Q1 2016, thanks to continued growth in Tegra automotive.

Gaming platform revenue was up 17% to $687 million, consistent with the strong growth in PC gaming compared to the rest of the PC market. Quadro revenue, filed under Professional Visualization, was up 4% to $189 million.

Datacenter revenue which includes Tesla and GRID results were a record $143 million for the quarter, up 63% from a year ago, driven by demand for GPU acceleration for deep learning.

Automotive revenue was $113 million of the $160 million for Tegra, up 47% year-over-year. It appears that NVIDIA made the right call with Tegra by mostly abandoning the mobile market where competition is pretty fierce, and they’ve really gained a good diversified foothold in the automotive sector where higher TDPs can let them drive larger GPUs.

Finally, the licensing deal with Intel, which is going to end soon, accounted for $66 million in revenue.

NVIDIA Quarterly Revenue Comparison (GAAP)
In millions Q1'2017 Q4'2016 Q1'2016 Q/Q Y/Y
GPU $1079 $1178 $940 -8% +15%
Tegra Processor $160 $157 $145 +2% +10%
Other $66 $66 $66 flat flat

NVIDIA has had a pretty successful run since the introduction of their Maxwell products, and these results are all prior to Pascal even coming on the market in a consumer card. NVIDIA’s outlook for Q2 is revenue of $1.35 billion plus or minus 2%, and GAAP gross margin of 57.7%, plus or minus 0.5%.

Source: NVIDIA Investor Relations

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  • BedfordTim - Friday, May 13, 2016 - link

    US accounting dates are weird so while it is 2016 the accounting year is called 2017. Reply
  • HighTech4US - Friday, May 13, 2016 - link

    Any yet again every time Nvidia posts an earning report someone who doesn't understand FISCAL years (FY) posts their uninformed rant when it is themselves who show they lack even basic knowledge.

    What is a 'Fiscal Year - FY'

    A fiscal year (FY) is a period that a company or government uses for accounting purposes and preparing financial statements. The fiscal year may or may not be the same as a calendar year.

    http://www.investopedia.com/terms/f/fiscalyear.asp

    Nvidia's current FY ends January 2017, so yes this is their FY2017 Q1.
    Reply
  • jwcalla - Friday, May 13, 2016 - link

    The company was incorporated in February 1998. This means their fiscal year runs from February to February. Their first quarter involves February, March and April. Reply
  • lefty2 - Friday, May 13, 2016 - link

    The Tegra division makes a loss every quarter. The automotive sector does not generate enough revenue to make the group profitable. They needed smartphone design wins to make that happen and they failed it that respect. So, the comment about the "good call" in leaving the mobile market is bullshit. Reply
  • jwcalla - Friday, May 13, 2016 - link

    How much of a loss does the Tegra division make every quarter? Reply
  • lefty2 - Friday, May 13, 2016 - link

    They try to hide that information. You have to look at their 10-Q form here: http://investor.nvidia.com/financials.cfm
    loss was $239 million for 2016
    Reply
  • Yojimbo - Friday, May 13, 2016 - link

    The automotive sector is growing and should soon generate enough revenue to make the group profitable. The mobile market is under pricing pressure, I believe, but I am sure NVIDIA would rather be involved in it than not. That doesn't mean it wasn't a good call to leave. Not because they wouldn't want to be there, but because they were unsuccessful and it may have been better to find an alternative market than to continue with frivolity. Consider also that they most likely have pursued automotive with more fervor than they otherwise would have if they had been successful with mobile (look at Qualcomm's automotive efforts by comparison, for instance). Pursuing the automotive infotainment market has perhaps allowed them to establish relationships they would not have otherwise had with automakers for ADAS and self-driving cars, which present opportunities for revenue, not just for Tegra, but for the data center as well. Reply
  • lefty2 - Friday, May 13, 2016 - link

    Sorry, that's bullshit. Tegra lost $239M on $559M sales last year. There is no way Automotive is going to make it profitable in the forseeable future. They would have to triple sales Reply
  • HighTech4US - Friday, May 13, 2016 - link

    The only BS is what you are spewing. Reply
  • jasonelmore - Friday, May 13, 2016 - link

    you realize we are in the cusp of a EV and Self Driving Car revolution right? Reply

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