NVIDIA Releases Q4 FY2020 Earnings: A Strong Quarter Closes Out A Weaker Year
by Ryan Smith on February 14, 2020 12:45 AM EST- Posted in
- GPUs
- NVIDIA
- Financial Results
Always punctual but moving at their own pace, NVIDIA this afternoon wrapped up their 2020 fiscal year with the release of their earnings for both Q4 and the year. For the last quarter of their fiscal year, NVIDIA booked just over $3.1B in revenue with a profit of $950M, marking a strong end to a weaker fiscal year. On which note, for the year NVIDIA will close the books on $10.9B in revenue, for a net income a hair under $2.8B.
| NVIDIA Q4 2020 Financial Results (GAAP) | |||||
| Q4'2020 | Q3'2020 | Q4'2019 | Q/Q | Y/Y | |
| Revenue | $3105M | $3014M | $2205M | +3% | +41% |
| Gross Margin | 64.9% | 63.6% | 54.7% | +1.3% | +10.2% |
| Operating Income | $990M | $927M | $294M | +7% | +237% |
| Net Income | $950M | $899M | $567M | +6% | +68% |
| EPS | $1.53 | $1.45 | $0.92 | +6% | +66% |
Beating analyst expectations, NVIDIA closed their year on a relative high note. The $3.1B in revenue they booked was their best quarter in more than a year, blasting past a particular weak Q4’FY19 for a 44% jump in revenue, and even edging out the traditionally strong Q3. Similarly, the quarter was one of the most profitable for the company in quite some time, beating Q4’FY19’s net income by 68%, and leaving the company just a few percent short of claiming a full billion dollars in net income for the quarter.
This profitability is reflected in NVIDIA’s gross margin as well. At 64.9% for the quarter it’s the highest margins NVIDIA has attained in over a year, beating both Q3 and last year’s Q4. And while there’s no strict limitation for gross margins, it’s worth noting that these kinds of margins are close to some of Intel’s best in previous years, which is often used as a barometer for the overall strength of a major chip company.
| NVIDIA Quarterly Revenue Comparison (GAAP) ($ in millions) |
|||||
| In millions | Q4'2020 | Q3'2020 | Q4'2019 | Q/Q | Y/Y |
| Gaming | $1491 | $1659 | $954 | -10% | +56% |
| Professional Visualization | $331 | $324 | $293 | +2% | +13% |
| Datacenter | $968 | $726 | $679 | +33% | +43% |
| Automotive | $163 | $162 | $163 | +1% | 0% |
| OEM & IP | $152 | $143 | $116 | +6% | +31% |
Breaking down their revenue by segment, the big surprise here in NVIDIA’s earnings is data center revenue. At $968M for the quarter, it’s the best showing from NVIDIA’s data center operations since the inception of the current reporting structure, shooting well past the previous record. According to NVIDIA, the company is seeing a surge in demand for AI hardware, which has been a lucrative and rather profitable venture for NVIDIA over the last several years. This growth comes after data center spending (and AI-related spending in general) plateaued a bit over the past year, as it seems hyperscalers and other data center operators have ramped up their overall buying for 2020.
Otherwise gaming remained NVIDIA’s single biggest segment. Like the quarter overall, gaming revenue is up significantly year-over-year, with NVIDIA booking over $500M more than in Q4’FY19. But it’s a bit of a mixed bag overall, as revenue did drop versus the previous quarter, and NVIDIA is well off their Q4’FY18 performance. Ultimately, data center revenue proved to be NVIDIA’s trump card here, helping to cover for any weakness in gaming revenue.
| NVIDIA FY2020 Full Year Financial Results (GAAP) | |||
| FY2020 | FY2019 | Q/Q | |
| Revenue | $10918M | $11716M | -7% |
| Gross Margin | 62.0% | 61.2% | +0.8% |
| Operating Income | $2846M | $3804M | -25% |
| Net Income | $2796M | $4141M | -32% |
| EPS | $4.52 | $6.63 | -32% |
As for the complete, fiscal year 2020 picture, NVIDIA’s Q4 has helped to prop up what has been a profitable but overall weaker year for the company. The $10.9B in revenue that NVIDIA booked for the year is down 7% from the previous year. And net income fell even more sharply, dropping by 32% to $2.976B on the year.
The year-over-year drop has been influenced by several factors, but arguably the biggest is the crypto hangover, which really only ended a bit earlier this year. So the first half or so of the year for NVIDIA is marked by distributors still trying to get rid of excess inventory, as well as the fact that compared to the unbounded spending on crypto gear in NVIDIA’s FY 2019, anything more normal pales in comparison. Coupled with that has been the previously mentioned softness in the data center market, which while not nearly as dramatic as the crypto hangover, saw much of FY2020 data center spending underperforming FY2019 at similar points.
| NVIDIA Yearly Revenue Comparison (GAAP) ($ in millions) |
|||
| In millions | FY2020 | FY2019 | Y/Y |
| Gaming | $5518 | $6246 | -12% |
| Professional Visualization | $1212 | $1130 | +7% |
| Datacenter | $2983 | $2932 | +2% |
| Automotive | $700 | $641 | +9% |
| OEM & IP | $505 | $767 | -34% |
There had been some concern that the datacenter market had reached saturation – at least for the current generation of products – but following Q4 at least, it looks like that’s not the case. Overall NVIDIA closes out the year up 2% on data center revenue, with the strong Q4 pulling data center revenues up. Gaming doesn’t fare quite so well, as more exposed to the hangover, NVIDIA still end the fiscal year down 12% in gaming revenue versus FY2019.
The big winner here on a pure percentage basis is actually automotive, which was up 9% year-over-year, followed by NVIDIA’s trusty professional visualization group, which was up 7%. The upshot here, at least, is that NVIDIA has long desired to further diversify its business so that it isn’t quite so reliant on gaming revenue, and that’s certainly where FY2020 has taken them.
Finally, looking ahead to FY2020 and Q1, NVIDIA is seemingly projecting with a bit of caution. The company expects to book $3B in revenue, with a gross margin of 65.0%.
The wildcard factor here is the ongoing COVID-19 (coronavirus) outbreak, which along with getting trade shows like Mobile World Congress canceled, could also hurt overall tech spending in China. Officially, NVIDIA has knocked $100M off of their Q1 projections, though this is ultimately a rough estimate as no one is quite sure what to expect. According to the company, China accounts for around 30% of their gaming sales – which is still NVIDIA’s largest segment – so if the COVID-19 outbreak hurts Chinese spending, NVIDIA is likely to feel it in their gaming revenues.
Source: NVIDIA Investor Relations
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CiccioB - Monday, February 17, 2020 - link
I do not like anyone.I look at the best products on the market.
Up to now AMD has the best CPUs while Nvidia the best GPUs.
My ranting is more on you fanboys that find any occasion to try to defend a global company even when its products are bad. And they have been bad since 2012 and going worse every generation. But are cheap. Bigger, more power hungry, featureless and you think this is good. ANd it is good in general for the market advancement.
AMD GPUs, despite being built on a more advance PP are cheap to the buyer (but not in production).
Guess why they are sold at lower margins and despite that their market share do not improve (a double fail).
And yes, you are a kid as if you ever understand something about technology and market in genera l you wouldn't have come here speaking about "good reviews" try to find something positive in products that are 3 years late.
AMD is late, even more late than in 2012. Navi may be your best buy for its price but is a bad product seen the technology involved. If their next RDNA2 does not prove to be on par (better is a hopeless thought seen what it has done so far with a PP of advantage) with Ampere, they'll just have to hope all the future games are optimized exclusively for their architecture to not be completely powned. Or they will sell just consoles APUs and nothing else in the PC market, unless they resort to even cheaper price (hiding more deeply their losses on the graphics division).
Korguz - Tuesday, February 18, 2020 - link
and intel fanboys like you do the same for intel, whats your point ? i dont recall you ranting on the other " fanboys " amd or intel, like you have on me, so either shut up, or start attacking them too. intel can boys STILL claim they are the best, not so much any more. the use quite a but more power then Ryzen, and they NEED the clock speeds they have, to keep any performance they do have.the reviews for navi have been good, while not the competition for nvidia we need.. but still good, and you STILL seem to imply they have completely failed.so i dont know what reviews you have been reading.. but obviously, bias ones.. like most of your posts..
" Guess why they are sold at lower margins " and look at all those people crying about threadripper being priced the way they are.. complaining amd is overcharging for them, yet.. where were these people to complain about intel and its pricing ?? seems if amd does it.. its wrong, but if intel does it is ok.. what a crock
the fact you resort to insults and name calling in your posts to try to prove your point, says you are the child and kid, not me, as only children resort to name calling, and insults. i guess it does make you feel better about your self to be insulting and resort to name calling... have your self a good day.
CiccioB - Tuesday, February 18, 2020 - link
Kid, start studying what's technology, what is marketing and what is fanboy hopes so in a discussion you can use the proper arguments to try to have a point.You continue to talk about "other ones" review to prove Navi is good. That simply means you can't make your own opinion. And that's simply because you do not know anything about technology and how to evaluate it.
Otherwise you would not define an architecture that has the same transistor number than the competitor but lacks all the new advanced features (that use a tons of transistors, you'll see when AMD will get there somewhere in the future.. let's say 3 years?) and is saved buy the use of a more advanced PP in terms of absolute dimension and power consumption.
Again, if you measure the absolute performances AMD is there, to the level of a 1080Ti 3 years old. But they sell their product at a so low margin to give it an appeal. Were it on the market with the margins such an advanced product deserves, they all would remain in AMD stores (but the few cards that AMD fanboys like you would buy whatever the cost and performance because they need to have an AMD product and be convinced that is is absolutely good to sleep in the night, Bulldozer docet).
But you cant separate the marketing part from technology, you have not understood what has been said here for years: there's not a bad products, just a wrong price. ANd guess, AMD prices are lower for a reason.
Up to now AMD makes the better CPUs based on technology used and performance reached. Where on the Earth can you label me as an Intel fanboy only your childish desire to attack me can tell, my dear AMD fanboy that
And I attack you because you are the one the constantly comment my post with so childish and full of AMD fanboysm that you deserve what you need: to grow up and be able to make a discussion like an adult.
Let's try next time. This time you have completely failed.
BTW: you can continue enjoying AMD GPUs and contribute to make a competition to over priced but still better Nvidia products. Thanks for that. I can spare some bucks with fanboys like you araound, but what I really hope is that AMD will ever create something that does not need to be price cut to the lower tier to be considered good. Just my personal hope, before I'll die.
Qasar - Thursday, February 27, 2020 - link
" And that's simply because you do not know anything about technology and how to evaluate it. " ahh so those who do not know about technology shouldn't believe reviews ? that so arrogant, it isn't even funny. thats why those that don't know, read reviews, as it gives those of us some idea on what to buy, and what not to buy. " You continue to talk about "other ones" review to prove Navi is good. That simply means you can't make your own opinion " on the contrary, reading those reviews, allows one to come to an opinion as to which to by, man, can you be any more arrogant ??? as korguz said, you are the one that is childish here, and i would add arrogant. not every one knows about technology, what marketing is, or how to separate them, as you said, hence why people read reviews. you keep accusing him of being an amd fan boy, i have also seen some of your other posts, and most of them seem to be anti amd, and full of intel fanboyism. by resorting to attacks to attempt to prove a point, makes you the child here, but your flat out arrogance, causes you to be blind. as korguz mentioned, amds current are not the utter failures you are making them out to be, the reviews also show it, they are a little more competitive then the previous ones were, not as much as we, consumers, need them to be, but at least there is some options. if you would look passed your arrogance, you would see that.BTW: you can continue to enjoying the over priced nvidia gpus,. and keep lining their pockets, im sure Jensen Huang appreciates it.
michael2k - Tuesday, February 18, 2020 - link
I think your opinion is wrong.I don't think for a minute believe RDNA 'surprised' NVIDIA. I also don't think NVIDIA was 'forced' to release the Super series.
What I believe is that NVIDIA had the Super series waiting in the wings as a backup plan whenever AMD was able to field a competitive part; after several months, yield was bound to go up, which means for no extra cost there would be more parts with more usable cores, clock higher, and perform better.
They didn't change the architecture, they didn't change the chip, they just re-binned the parts and sold them at the same or even higher price; the 2060 super cost $50 more than the 2060 at launch, after all. The 5700XT can't compete with the 2070 Super, 2080, 2080 Super, or 2080 Ti.
Long story short, AMD still doesn't have a part to compete at the high end, so NVIDIA can still continue to charge what the market will bear, and the introductions of the Super series is forcing AMD to sell ever cheaper, as documented in prices 6 months apart:
https://www.anandtech.com/show/14586/geforce-rtx-2...
https://www.anandtech.com/show/15422/the-amd-radeo...
RX 5700 $379 prior to the RTX Super, $329 after, with the 2060 RTX Super above and the vanilla 2060 below, and of course the 2070 RTX Super, 2080 RTX Super, and 2080 Ti all slotting above them.
Maybe the RDNA2 will be able to compete better, but NVIDIA has two more aces up it's sleeve: 7nm, to boost clock, reduce temperatures, power and cost, and a new architecture to increase cores and performance.
BenSkywalker - Friday, February 14, 2020 - link
I thought this was self evident, but apparently not. Those monstrous margins are heavily influenced by their professional and datacenter sales. If their datacenter revenue had been halved their margins would-be been markedly reduced.Also, a products name doesn't change it's margins. The 2060 and above are all *significantly* larger than any other consumer part offered at their price point.
CiccioB - Sunday, February 16, 2020 - link
Yes they are. And they have a cost. Which seen the reports on 7nm costs is not that different. And for sure on a so old and optimized PP they have better yields.
That's probably why AMD has not baked a big Navi GPU on 7nm but it has been waiting for 7nm+ which should decrease the cost and improve yields. And probably why Nvidia has not jumped on 7nm wagon yet.