NVIDIA Announces Q3 FY 2020 Earnings
by Brett Howse on November 14, 2019 9:00 PM EST- Posted in
- GPUs
- NVIDIA
- Financial Results
Today NVIDIA announced their results for the third quarter of their 2020 fiscal year, and the company’s results took a hit compared to their Q3 2019 results with earnings of $3.014 billion this quarter, down 5% year-over-year. Gross margin was up though to a very healthy 63.6%, up 3.2% from a year ago. Operating income was down 12% to $927 million, with net income down 27% to $899 million. Earnings-per-share fell to $1.45, down 26% from $1.97 a year ago.
| NVIDIA Q3 2020 Financial Results (GAAP) | |||||
| Q3'2020 | Q2'2020 | Q3'2019 | Q/Q | Y/Y | |
| Revenue | $3014M | $2579M | $3181M | +17% | -5% |
| Gross Margin | 63.6% | 59.8% | 60.4% | +3.8% | +3.2% |
| Operating Income | $927M | $571M | $1058M | +62% | -12% |
| Net Income | $899M | $552M | $1230M | +63% | -27% |
| EPS | $1.45 | $0.90 | $1.97 | +61% | -26% |
NVIDIA breaks its business into two high-level categories, with GPU and Tegra. GPU revenue was down 8% to $2.565 million, while Tegra was up 10% to $449 million.
Breaking these down into markets, NVIDIA’s Gaming revenue was down 6% to $1.659 billion, with NVIDIA attributing this to a decline in desktop GPU sales. A year ago, NVIDIA launched their Turing platform, meaning they are now a year into their latest platform, with sales not quite as high as when it launched. However, the desktop GPU sales drop was partially offset by increased notebook GPUs as well as gaming platform SoCs.
Professional Visualization set a record for revenue, up 6% from a year ago and coming in at $324 million. NVIDIA has stated that they’ve had strong sales in mobile workstation products.
Data Center revenue was down 8% to $726 million. NVIDIA has seen lower enterprise revenue, and sales of products with lower margins than some of their top-tier datacenter products, but this drop was partially offset by increased hyperscale demand.
Automotive revenue was down 6% to $162 million, with lower sales of autonomous vehicle solutions and legacy infotainment modules being singled out, but growth in AI cockpit solutions helped stem the decline.
Finally, OEM and Other revenue was $143 million, down 3% from a year ago.
| NVIDIA Quarterly Revenue Comparison (GAAP) ($ in millions) |
|||||
| In millions | Q3'2020 | Q2'2020 | Q3'2019 | Q/Q | Y/Y |
| Gaming | $1659 | $1313 | $1764 | +26% | -6% |
| Professional Visualization | $324 | $291 | $305 | +11% | +6% |
| Datacenter | $726 | $655 | $792 | +11% | -8% |
| Automotive | $162 | $209 | $172 | -22% | -6% |
| OEM & IP | $143 | $111 | $148 | +29% | -3% |
NVIDIA has been riding a large wave of success over the last several years, and the company has diversified itself significantly, but the last couple of quarters have seen the company fall back to earth somewhat. But with strong margins, they are investing heavily in R&D, with $53 million more spent in this quarter than a year ago, and for first nine months of their 2020 fiscal year, they’ve spent and additional $163 million so far, bringing the total for 2020 to $400 million.
Looking ahead to Q4, NVIDIA is expecting revenue of $2.95 billion, plus or minus 2% with a gross margin of 64.1%, plus or minus 0.5%.
Source: NVIDIA Investor Relations
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Phynaz - Saturday, November 16, 2019 - link
What’s AMD’s solution?rahvin - Friday, November 15, 2019 - link
This is absolutely incorrect. Most of the automakers are choosing to user their own developed IP rather than rely on and be at the mercy of nVidia.Anyone with any knowledge of the automotive industry knew they would go that direction. The Automotive manufacturers learned a long time ago that it's bad for business if your business is dependent on an external company for an essential part. Where would they be if there was only one brake manufacturer and they decided to raise prices 400%?
Each company is investing billions to develop their own solutions, some like Tesla, Toyota and Daimler are even working on their own silicon. I don't know if the others are, but they will be if not now, soon. Their business model is mostly to use the nVidia product to jumpstart their development then move to their own or commodity silicon.
In fact that huge drop in the automotive sector was the loss of Tesla as they have already deployed their own silicon in the Model 3 and all newly produced vehicles. It will be interesting to see if nVidia ever recovers their Tegra investments.
michael2k - Friday, November 15, 2019 - link
Considering the hottest gaming system now, the Switch, runs on the Tegra, I'm fairly certain they aren't losing money in their continuing Tegra investments.And yes, even if companies are using Tegra to kickstart their internal development, they are still using Tegra:
https://nvidianews.nvidia.com/news/nvidia-and-toyo...
Smaller companies really don't have the resources to DIY:
https://blogs.nvidia.com/blog/2018/11/20/delivery-...
https://nvidianews.nvidia.com/news/volvo-selects-n...
https://nvidianews.nvidia.com/news/yamaha-motor-ad...
https://nvidianews.nvidia.com/news/leading-japanes...
And, to be clear, these things will take 4 or 5 years to have any impact on NVIDIA's bottom line.
eva02langley - Friday, November 15, 2019 - link
However, the rest of the game industry develop games on AMD hardware... surprise surprise...michael2k - Friday, November 15, 2019 - link
So what? NVIDIA makes 1.6x the revenue (3.014b vs 1.8b), 50% more efficient at generating revenue (63.6% vs 43%), and 7.5x as much net income. Both companies make GPUs and CPUs, license IP, have console HW, and cluster compute solutions, but only one of them is profitable, as AMD has reported an operating loss of $152m for the last nine months this year, and an operating loss for the same 9 month period last yearAMD's quarterly results: http://ir.amd.com/news-releases/news-release-detai...
I certainly wouldn't bet on AMD to win any races, they are constantly fighting just to stay alive.
Phynaz - Saturday, November 16, 2019 - link
Your point? I mean besides continuing to point point out how ignorant you are.michael2k - Friday, November 15, 2019 - link
The average age of cars in the US is 11 years. That means even if everyone released only self driving cars today, it would take 11 years for the majority of cars to be self driving.So given that constraint, if it takes 11 years for everyone to have a single self driving car, and another 11 years for all cars to be self driving, then it would be about 30 years before all cars on the road are self driving cars.
TelstarTOS - Friday, November 15, 2019 - link
Arkturus is absolutely right. Exactly last year NV moved up segments and midrange gpus became highend. This year they continued the same bullsnit but consumers got fed up. Only strong competition from AMD will make this trend stop.eva02langley - Friday, November 15, 2019 - link
I don't understand how they can have gross margins of 63% and only have 900M$ of net income.madwolfa - Friday, November 15, 2019 - link
They're reinvesting heavily in R&D.