NVIDIA Earnings Report Q4 2019: Crypto Pain But Full Year Gain
by Brett Howse on February 14, 2019 8:35 PM EST- Posted in
- GPUs
- NVIDIA
- Financial Results
This afternoon, NVIDIA announced their earnings for the fourth quarter of their 2019 fiscal year, which ended January 27. As expected, revenues were sharply hit by the crash of the cryptocurrency markets, and the Santa Clara company faced a year-over-year revenue drop of $706 million, or 24%, with fourth-quarter revenues of $2.2 billion. Gross margin fell to 54.7%, down 7.2% from Q4 2018. Operating income was down a dramatic 73% to $294 million, although net income was only down 49%, coming in at $567 million. This resulted in diluted earnings-per-share of $0.92, down 48% from a year ago.
| NVIDIA Q4 2019 Financial Results (GAAP) | |||||
| Q4'2019 | Q3'2019 | Q4'2018 | Q/Q | Y/Y | |
| Revenue | $2205M | $3181M | $2911M | -31% | -24% |
| Gross Margin | 54.7% | 60.4% | 61.9% | -5.7% | -7.2% |
| Operating Income | $294M | $1058M | $1073M | -72% | -73% |
| Net Income | $567M | $1230M | $1118M | -54% | -49% |
| EPS | $0.92 | $1.97 | $1.78 | -53% | -48% |
For the full fiscal year though, earnings were still very solid, with revenue up 21% to $11.7 billion, and an overall gross margin of 61.2%, up 1.3% from 2018. Operating income was $3.8 billion, up 19%, and net income was $4.1 billion, up 36%. Earnings-per-share for all of 2019 came in at $6.63, 38% higher than 2018.
NVIDIA’s growth thanks to Cryptocurrency was mostly found in their gaming GPU lineup sales, so unsurprisingly the GPU business saw the biggest revenue drop of any segment. Year-over-year, NVIDIA’s GPU business fell 20%, and compared to the previous quarter, it’s down 29%. Still, the GPU side of the house still brought in $1.98 billion in revenue.
Tegra is the other business unit, and it had revenues of only $225 million, down 50% from a year ago. Tegra includes automotive, SoCs for consoles, and embedded devices, and NVIDIA states that most of this decline is due to declines in gaming platforms.
Breaking the units down into markets, Gaming continues to be the biggest segment of NVIDIA, although not by the wide margin we are accustomed to. Gaming brought in $954 million in revenue, down 45% from a year ago where Gaming was $1.7 billion in revenue.
Professional Visualization was up 15% from Q4 2018, with revenues of $293 million, and Automotive was up 23% to $163 million. OEM and IP was down 36% though, thanks to the drop in SoC sales for consoles.
Datacenter continues to be a growth market for NVIDIA, with revenue up 12% to $679 million, encroaching on Gaming as the highest revenue segment for the company. Clearly they’ve done well to diversify and create product segments for the datacenter, and it pays extra dividends when your core business has a weak quarter like this one.
| NVIDIA Quarterly Revenue Comparison (GAAP) ($ in millions) |
|||||
| In millions | Q4'2019 | Q3'2019 | Q4'2018 | Q/Q | Y/Y |
| Gaming | $954 | $1764 | $1739 | -46% | -45% |
| Professional Visualization | $293 | $305 | $254 | -4% | +15% |
| Datacenter | $679 | $792 | $606 | -14% | +50% |
| Automotive | $163 | $172 | $132 | -5% | +23% |
| OEM & IP | $116 | $148 | $180 | -31% | -24% |
For Q1 2020, NVIDIA is expecting revenues to be $2.2 billion, plus or minus 2%, with gross margins between 58.3% and 59.3%.
It will likely take a couple more quarters to get a feel for how everything has shaken out with the decline in Crypto GPU purchases clearly hitting the company hard. NVIDIA has made some pretty major gains that have certainly taken a beating, but they do have some new products on the market currently which might help alleviate the situation.
Source: NVIDIA Investor Relations
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BigMamaInHouse - Friday, February 15, 2019 - link
Aren't those numbers very bad? only crypto Income made their Y/Y positive, how the markets reqacts with stock price increase? Gaming GPU maker sinking in selling Gaming GPU's and the market is fine with it?A5 - Friday, February 15, 2019 - link
They had already warned about the sales slowdown post-crypto, so a lot of this had already been priced in to the stock price.frenchy_2001 - Friday, February 15, 2019 - link
Yes, those numbers are horrific and herald the fall and soon death of nvidia. /sHow could they survive $500M+ net income in their worst quarter in 4 years?
Joke aside, crypto has crashed and the hangover is lingering. Inventory for older cards is slowly receding and their new products are selling (if slower than they'd like).
The meteoric growth due to crypto demand is over, but even without it, nv is wildly profitable. Most electronic companies would kill for a 50%+ gross margins.
Expect them to stay the course and keep doing what they're currently doing.
TEAMSWITCHER - Friday, February 15, 2019 - link
Crypto mining went bust .. we all knew this was going to happen. Nvidia made money off the insanity and now things are returning to normal. I got my RTX 2080 FE just yesterday, and it is BY FAR the best video card I have ever owned. It's fast, quiet, with an awesome design and build quality that that makes the partners products look like cheap crap... So disappointed that EVGA went for a crappy clear plastic cover ... it looks terrible. Big thanks to nvidia for raising the bar in so many directions.PeachNCream - Friday, February 15, 2019 - link
"Big thanks to nvidia for raising the bar in so many directions."Including that price bar. Heh.
TEAMSWITCHER - Friday, February 15, 2019 - link
I really don't see what you are talking about. I was ready to buy a GTX 1080TI last year for $800 but the crypto-mining fiasco sent availability into the toilet and prices sky high. The RTX 2080 FE is every bit as fast as the 1080TI ... plus ... has new features like RT and Tensor cores. That's raising the bar ... for the same price.PeachNCream - Friday, February 15, 2019 - link
Hey, whatever makes you happy, I guess. Your life and all that.Farwalker2u - Friday, February 15, 2019 - link
I do not understand how the earnings chart above can have any numbers for the 2019 year. This article is dated February 14, 2019; yet the chart includes 4th quarter 2019, 3rd quarter 2019 which are out in the future! The 1st quarter of 2019 has not yet transpired.Phynaz - Friday, February 15, 2019 - link
Another idiot that doesn't know what a fiscal year is and is too stupid to Google it.Farwalker2u - Friday, February 15, 2019 - link
Phynaz,You evidently do not know the definition of "fiscal year".
"[A]ny yearly period without regard to the calendar year, at the end of which a firm, government, etc., determines its financial condition. https://www.dictionary.com/browse/fiscal-year
At best the above chart is to do with estimated earnings if the years are accurate.
All fiscal years actually have to occur or transpire.
Note the definition ". . . at the end of which . . ."!!!!!
Phynaz, you have revealed your stupidity/idiocy to all.