NVIDIA Q1 FY2015 Financial Results
by Brett Howse on May 8, 2014 10:00 PM EST
This afternoon NVIDIA announced their quarterly earnings for Q1 2015. Overall GAAP revenue came in at $1.1B, up 16% year over year and down 4% sequentially. Gross margin was up slightly to 54.8%, up from 54.3% from Q1 2014, and up 0.7% from the previous quarter.
Most impressive of the numbers was the rise in net income, up 75% from Q1 2014 and coming in at $137M. Operating expenses were relatively flat sequentially, but up 4% from a year ago. This lead to an Earnings Per Share (EPS) of $0.24, an 85% increase from Q1 2014, although down $0.01 from last quarter. Non-GAAP EPS came in at $0.29, handily beating the analysts’ estimates of $0.17.
| NVIDIA Q1 2015 Financial Results (GAAP) | |||||
| In millions except EPS | Q1'2015 | Q4'2014 | Q1'2014 | Q/Q | Y/Y |
| Revenue | $1103 | $1144 | $955 | -4% | +16% |
| Gross Margin | 54.8% | 54.1% | 54.3% | +0.7% | +0.5% |
| Operating Expenses | $453 | $452 | $436 | flat | +4% |
| Net Income | $137 | $147 | $78 | -7% | +75% |
| EPS | $0.24 | $0.25 | $0.13 | -4% | +85% |
| NVIDIA Q1 2015 Financial Results (Non-GAAP) | |||||
| In millions except EPS | Q1'2015 | Q4'2014 | Q1'2014 | Q/Q | Y/Y |
| Revenue | $1103 | $1144 | $955 | -4% | +16% |
| Gross Margin | 55.1% | 53.8% | 54.6% | +1.3% | +0.5% |
| Operating Expenses | $411 | $408 | $396 | +1% | +4% |
| Net Income | $166 | $187 | $114 | -11% | +46% |
| EPS | $0.29 | $0.32 | $0.18 | -9% | +61% |
The GPU business is still the dominant division of NVIDIA, coming in at over 81% of the company’s entire revenue with $898M. GPU sales were strong for Q1, with revenue up 14% year over year, but down from Q4 2014. Most impressively, GeForce GTX GPUs for both desktops and notebooks grew 57% with strong demand for the newly released GTX 750 which is the first GPU based on Maxwell. NVIDIA stated that demand was strong in all markets for Desktop GPUs, and high-end notebook GPU volume also grew, but overall notebook GPU revenue was down. NVIDIA stated the seasonal decline in the desktop market more than offset the GTX GPU sales, contributing to the quarter over quarter decline.
Also on the GPU side, Quadro revenue increased with demand from all major OEM desktop and mobile workstation vendors. GRID sales were strong, and Tesla was also up. Tesla and GRID revenue increases was attributed to GPU acceleration opportunities, VDI deployments supporting Citrix, and streaming gaming providers.
Tegra Processor sales, which account for 12.6% of revenue, were up 35% year over year, and unlike GPU sales they were also up quarter over quarter 6%. The strong quarter for Tegra was attributed to a volume increase for smartphone and auto infotainment systems, but Android tablet SoCs were down partially offsetting the revenue gains. Automotive systems was up a healthy 60% year over year. Game consoles and embedded devices were down from Q1 2014, but the sequential growth of the Tegra division was attributed to the strong auto infotainment and embedded devices, so while embedded is down year over year, it’s recovered somewhat from the previous quarter.
NVIDIA has one other source of revenue which it reports on, which is $66M from patent license agreements with Intel.
| NVIDIA Quarterly Revenue Comparison (GAAP) | |||||
| In millions | Q1'2015 | Q4'2014 | Q1'2014 | Q/Q | Y/Y |
| GPU | $898 | $947 | $786 | -5% | +14% |
| Tegra Processor | $139 | $131 | $103 | +6% | +35% |
| Other | $66 | $66 | $66 | flat | flat |
NVIDIA is projecting their Q2 revenue will be flat at $1.1B plus or minus 2%.
Overall it was a good quarter for NVIDIA. The strong demand for their new Maxwell GPUs. NVIDIA’s share of notebook computers is the highest since 2010. Although uptake of the Tegra 4 has been slow in tablets, NVIDIA has seen growth in Smartphone adoption as well as a strong automotive presence which is becoming more important with the growth in automotive infotainment systems in every single automotive brand. I’m sure they are hoping for some design wins with the Tegra K1, which looks like a nice upgrade over the Tegra 4, however there was no mention of it in the earnings release. We still have a few months for them to hit their target for the first half of 2014.
Source: NVIDIA
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jjj - Thursday, May 8, 2014 - link
in the call they said"It's about to be Tegra k1 season, i'm pretty excited about Tegra K1 , and... we don't have anything to announce today , but hopefully as we go into the second half we'll see some pretty exciting products coming out from TK1."
so i wouldn't expect much from TK1 in Q2.
They really need to get a lot more aggressive with Tegra. Too low volume is just rendering them irrelevant and can't really support all the costs of a custom core, baseband and so on.If they can get to 300 million per quarter and keep growing ,it would most likely be okish, but without that it seems futile to keep going without tuning the strategy.
grahaman27 - Thursday, May 8, 2014 - link
Where did you see that?jjj - Thursday, May 8, 2014 - link
http://investor.nvidia.com/events.cfmtestbug00 - Friday, May 9, 2014 - link
Tegra is being killed off except perhaps in cars. They managed to drive away all large mobile OEMs without resorting to selling their chips at low margins (one chinese OEM)Hard to be profitable when you have no way to sell high volume, and, the pricing on mobile chips is so low.
Morawka - Friday, May 9, 2014 - link
Last time i heard, Nvidia is going to start selling the Graphics IP. Like PowerVR, ARM etc... There would be a licensing cost sure, but it would be up to device makers on how to implement into their products. We'll have to see if Nvidia is price competitive on their licensing agreements with other ARM/x86 GPU MakerstuxRoller - Friday, May 9, 2014 - link
Who would buy it? Vivante? I'm not sure how much of their ip is applicable to these very post constrained environments. What I'd expect to happen is that new ip is going to be generated by img, qual, ARM, Nvidia, and possibly apple(if they do decide to go that route). What is trying to be done with mobile gpus hasn't been attempted before and if expect different approaches to reign.Morawka - Friday, May 9, 2014 - link
their architecture is leading the market in Performance per watt. Especially when you look at Maxwell's numbers which is said to also be available for License. So yeah, Apple, Qualcomm, or even Samsung would have reason to buy it.testbug00 - Friday, May 9, 2014 - link
oh, really? How many licensees has Nvidia announced? Zero.There are many reasons for that... One likely reason is that Nvidia probably does not hold the pref/watt crown. Tegra K1 not maxed out on CPU/GPU clock already consumers uses "<11 W" which means over 10W. source: https://pbs.twimg.com/media/Bl8_-GCCcAABW8r.jpg
Another one, is that, the terms of the license probably requires NVidia to have taped a SoC with the GPU before others can start integrating the GPU the moment NVidia had a chip with it... Meaning, if NVidia's chip first taped out in 2013 early-middle, your own SoC with that GPU would be coming late 2014-mid 2015. By that time, if Nvidia had a perf/watt lead with said GPU, it would have lost it.
It also would require any company licensing it to share their roadmap and chip plans with Nvidia... Which is a big competitive no-no.
There is a reason few companies that make hardware manage to license non-essential things to competitors. It is a bad deal for the competitor in most cases.
Oh, and, Maxwell comes late 2014 tape out on an ARM chip (at best) which means any launch for it in anyone's products but Nvidia's would be in 2016...
testbug00 - Friday, May 9, 2014 - link
I would also like to point out that Apple has a GPU design team. They are likely to try (and likely accomplish) to design a custom GPU at some point soon. So, they have no reason to license from NVidia.Neither does Samsung (same reason) or Qualcomm (who has WAY better low power tech than NVidia, btw.) Given the terms of license are cheap, and NVidia is willing to optimize SMX for area, Rockchip or some low-end cheapo (Rockchip sells 28nm quad cores for under $5 a pop) manufacturer will license NVidia mobile graphics IP.
ams23 - Friday, May 9, 2014 - link
Actually Apple has every reason to license NVIDIA's GPU technology if they desire to expand the reach of their in-house GPU's. NVIDIA probably has more fundamental graphics patents than any other company in the world. And with Kepler (including the Tegra K1 GPU, which is ~ 1.5x more power efficient than the best ultra mobile GPU's available today) and especially Maxwell, NVIDIA arguably makes the most power efficient and highest performance GPU's in the world too.