This afternoon, NVIDIA announced their earnings for the third quarter of their 2019 fiscal year. Revenue was up 21% year-over-year to $3.181 billion. NVIDIA had margins this quarter of 60.4%, up 0.9% from the same time last year. Operating income for the quarter was $1.058 billion, up 18% from a year ago, and due to a booked tax benefit of $149 million, net income was $1.23 billion, up 47% from a year ago. Earnings per share came in at $1.97, up 48%.

NVIDIA Q3 2019 Financial Results (GAAP)
  Q3'2019 Q2'2018 Q3'2018 Q/Q Y/Y
Revenue $3181M $3123M $2636M +2% +21%
Gross Margin 60.4% 63.3% 59.5% -2.9% +0.9%
Operating Income $1058M $1157M $895M -9% +18%
Net Income $1230M $1101M $838M +12% +47%
EPS $1.97 $1.76 $1.33 +12% +48%

Gaming revenue is still by far the largest part of NVIDIA’s earnings, with gaming revenue up 13% year-over-year to $1.764 million. NVIDIA of course released the GeForce RTX lineup this quarter, leapfrogging itself to remain at the top of the performance charts. However due to the quick fall of crypto currency, NVIDIA does have excess channel inventory of its older products due to vendors overstocking to try and keep up with the crypto boom which fell off so suddenly, but they expect to clear out that inventory soon.

Professional visualization had revenues of $305 million for the quarter, up 27.6% from Q3 2018. NVIDIA released Quadro RTX based on the new Turing architecture.

NVIDIA’s Datacenter group continues its rapid growth, delivering revenue of $792 million this quarter, up from $501 million a year ago, or a 58% gain. The company has delivered a lot of new products in this space over the last year, and has done an amazing job of delivering platforms for the fastest growing areas of computing.

Automotive based revenue was $172 million for the quarter, up 19.4% from Q3 2018. The company has achieved design wins for level-2 autopilot with Toyota, Volvo, and Isuzu, and have started production on Xavier which is the first single-chip autopilot SoC.

OEM & IP revenue was $148 million for the quarter, down from $191 million a year ago.

NVIDIA Quarterly Revenue Comparison (GAAP)
($ in millions)
In millions Q3'2019 Q2'2018 Q3'2018 Q/Q Y/Y
Gaming $1764 $1805 $1561 -2.3% +13.0%
Professional Visualization $305 $281 $239 +8.5% +27.6%
Datacenter $792 $760 $501 +4.2% +58.1%
Automotive $172 $161 $144 +6.8% +19.4%
OEM & IP $148 $116 $191 +27.6% -22.5%

Looking ahead to Q4 2019, NVIDIA is expecting revenues of $2.7 billion, plus or minus 2%. That would compare to $2.9 billion in Q4 2018.

Source: NVIDIA Investor Relations

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  • mode_13h - Friday, November 16, 2018 - link

    Wow, so Nvidia is projecting a 6.9% decline in revenues for Q4 2019?

    And do we have any idea what "OEM & IP revenue" covers? Is this possibly related to Intel's IP licensing deal lapsing, or was that already prior to Q3 2017?
  • Qwertilot - Friday, November 16, 2018 - link

    That decline for Q4 most likely Crypto currency related you'd imagine?
  • Da W - Friday, November 16, 2018 - link

    And overstock of GTX 10XX stuff, that retaillers will try to get rid of at discount prices. Will hurt sales of RTX 20xx
  • imaheadcase - Friday, November 16, 2018 - link

    R&D investment will fall into revenue decline.
  • mode_13h - Friday, November 16, 2018 - link

    Are you sure it would hit revenue? I thought that was the top line number, referring to the total amount of money they took in.

    I could understand if you meant profits.
  • IntelUser2000 - Friday, November 16, 2018 - link

    The financial world expects every company to grow at unsustainable rates forever. That drives companies to do everything to meet their expectations, and at some point it fails. The ever rising prices and heavy marketing towards "prosumer/enthusiast" is an example of this.

    I wouldn't be surprised if Turing's outrageous prices are going to play this role as well.
  • mode_13h - Friday, November 16, 2018 - link

    Maybe it's a bit premature to write the epitaph of Turing. Nvidia might yet be vindicated, in the long run.
  • Da W - Friday, November 16, 2018 - link

    This is when you do money my friend. When you compute the market is forecasting impossible growth numbers discounted at unrealisticly low interests rates. At that time, you get out and wait for the next correction! Nvidia is a good long term investment, just not at the price it has been for the past year.
  • Phil85 - Friday, November 16, 2018 - link

    Nvidia got too cozy with over charging consumers for GPU's. With weak competition from AMD and a once strong crypto mining market, Nvidia became complacent. But just like Intel had to do, Nvidia is going to have change it's ways. Long term Nvidia is still a great company, and I'd consider buying the stock after it sinks a bit more.

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