This afternoon, NVIDIA announced their earnings for the first quarter of their 2018 fiscal year. NVIDIA has been having a lot of success moving their core GPU business away from just PC gaming, and into far more categories, and the earnings today suggest that they’ve made some excellent strategic moves, coupled with solid product launches. Revenue for the quarter came in at $1.94 billion, which is an increase of 48% from Q1 2017. Gross margin was up 1.9% from a year ago, with 59.4% for the quarter. Operating income was up a staggering 126% to $554 million, and net income was up 144% to $507 million. This resulted in earnings per share of $0.79, up 126% from a year ago when they were $0.35. Last year, NVIDIA had record revenues, and this fiscal year they are off to an even better start.

NVIDIA Q1 2018 Financial Results (GAAP)
  Q1'2018 Q4'2017 Q1'2017 Q/Q Y/Y
Revenue (in millions USD) $1937 $2173 $1305 -11% +48%
Gross Margin 59.4% 60.0% 57.5% -0.6% +1.9%
Operating Income (in millions USD) $554 $733 $245 -24% +126%
Net Income $507 $655 $208 -23% +144%
EPS $0.79 $0.99 $0.35 -20% +126%

Despite NVIDIA diversifying, and creating new markets for their GPUs, gaming is still the core of the company. They have come a long way in some of their segments, but gaming still accounts for 53% of their revenue, meaning it is larger than every other segment combined. Interestingly, despite the high gains in practically all other segments, the growth in gaming was higher. Last year at the end of Q1 2017, gaming accounted for only 52.6% of their revenue. For this quarter, revenue from gaming was $1.027 billion, compared to $687 million a year ago. A strong year of Pascal under their belt, and the launch of the GeForce GTX 1080 Ti, shows that there’s still room for growth in the PC market.

Professional Visualization, which is the segment for Quadro, had much lower growth than GeForce, but still increased revenues from $189 million a year ago, to $205 million today. That’s reasonable growth of 8.4%, but compared to pretty much every other NVIDIA segment, it seems like it’s not growing at all.

Datacenter is where NVIDIA has really found a great home for their GPU business, especially with the growth in machine learning and AI. NVIDIA’s Tesla business was once an afterthought for the company (well, maybe not the company, but outsiders looking in), but with the launch of the Tesla P100 and smaller variants, and DGX-1, NVIDIA has found some big customers for their datacenter compute products, including Microsoft, Google, and several other cloud vendors. Datacenter revenue was up 186% to $409 million. To put that in perspective, NVIDIA didn’t even discuss datacenter revenues even two years ago, and it’s now their second largest business. Not only that, it’s very likely one of their highest margin businesses as well.

Automotive, which came out of the failed Tegra smartphone and tablet business, is still showing strong growth as well. There’s a great saying about making lemonade, and NVIDIA has certainly done that. Revenue for this segment was up almost 24% to $140 million for the quarter.

Finally, OEM and IP is the only segment to have a falling quarter, with revenues down about 10% to $156 million.

NVIDIA Quarterly Revenue Comparison (GAAP)
In millions Q1'2018 Q4'2017 Q1'2017 Q/Q Y/Y
Gaming $1027 $1348 $687 -23.8% +49.5%
Professional Visualization $205 $225 $189 -8.9% +8.5%
Datacenter $409 $296 $143 +38.2% +186%
Automotive $140 $113 $93 +23.9% +50.5%
OEM & IP $156 $176 $173 -11.4 -9.8%

NVIDIA has followed up strong product launches with solid diversification of their core business, and the results speak for themselves. The last couple of years have been very strong, and it appears that growth is going to continue for at least the near term. NVIDIA is expecting revenues for next quarter to be $1.95 billion, plus or minus 2%, with a gross margin of 58.4% plus or minus 0.5%.

Source: NVIDIA Investor Relations

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  • SaberKOG91 - Wednesday, May 10, 2017 - link

    No. The CUDA cores are very good for highly parallel (matrix/vector) calculations. The Titan Xp costs far less than a Tesla card and is designed to go in a workstation instead of a server. The Machine Learning crowd are crazy about these cards.
  • Tamz_msc - Wednesday, May 10, 2017 - link

    There is nothing the Titan Xp offers over a GTX 1080Ti for those applications. It's just a gaming card being given a spin by NVIDIA to justify its existence and price.

    You didn't hear the same marketing for the Titan X(Pascal), did ya?
  • SaberKOG91 - Wednesday, May 10, 2017 - link

    They didn't need to do any marketing spin on the Titan X(Pascal) because it's nearly twice as fast as the Maxwell version in Single-precision and was the first Titan card with FP16, which is actually better for machine learning. Whereas the Titan Xp is just the fully enabled GP102 die, which isn't that much better than the Titan X Pascal.

    As for the Titan Xp vs the 1080Ti, any gaming enthusiast who buys it is just throwing away their money. I can definitely see researchers upgrading from the Maxwell Titan X to the Titan Xp. The extra 60GB/s of memory bandwidth and 1GB of memory (compared to the 1080 Ti) can make a fair difference when working with larger data sets.
  • Tamz_msc - Thursday, May 11, 2017 - link

    1080Ti has support for FP16 as well. The extra 9% memory and 60GB/s bandwidth would not ultimately matter that much.

    It is a marketing spin to lure gullible customers. There are exactly zero reasons to buy Titan X cards since GK110, unless you want to pay the NVIDIA tax for early adoption and the absolute best performance..
  • Tamz_msc - Thursday, May 11, 2017 - link

    Titan X Maxwell had FP16 support which NVIDIA felt that it cannibalized sales of the M40. Since Pascal there is very limited support for FP16 on Titan XP and Titan Xp.
  • helvete - Monday, July 31, 2017 - link

    TITAN Xp cannot run AAA games at 4K 60FPS..

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