NVIDIA Announces FY 2016 Q1 Financial Results
by Brett Howse on May 7, 2015 11:10 PM EST- Posted in
- GPUs
- NVIDIA
- Financial Results
Today NVIDIA released their earnings for quarter one of their 2016 fiscal year (and no, that’s not a typo, NVIDIA is almost a full calendar year ahead with their fiscal year) and revenue was up for the quarter 4% over the same period last year, coming in at $1.151 billion. NVIDIA had a record quarter for gross margin, with 56.7% this quarter. However net income was down 2% to $134 million. Compared to Q4 2015, revenue was down 8% and net income was down 31% due to the seasonal nature of the GPU market. Earnings per share came in at $0.24, which is flat year-over-year.
| NVIDIA Q1 2016 Financial Results (GAAP) | |||||
| Q1'2016 | Q4'2015 | Q1'2015 | Q/Q | Y/Y | |
| Revenue (in millions USD) | $1151 | $1251 | $1103 | -8% | +4% |
| Gross Margin | 56.7% | 55.9% | 54.8% | +0.8% | +1.9% |
| Operating Expenses (in millions USD) | $477 | $468 | $453 | +2% | +5% |
| Net Income | $134 | $193 | $137 | -31% | -2% |
| EPS | $0.24 | $0.35 | $0.24 | -31% | flat |
One of the things that will be impacting their financials for fiscal year 2016 is the winding down of the Icera modem operations. The company is open to sales, but regardless it is expecting restructuring charges of $100 to $125 million. It will re-invest the money it had been using for modems and put it into deep learning, self-driving cars, and gaming, which are all areas where NVIDIA has seen some success at (I’ve heard they are known for gaming even).
NVIDIA has also announced Non-GAAP results which exclude stock-based compensation, acquisition costs, interest, and taxes on these items. On a Non-GAAP basis, gross margin was 56.9%, and net income was $187 million, which is up 13% year-over-year. Non-GAAP earnings per share came in at $0.33.
| NVIDIA Q1 2016 Financial Results (Non-GAAP) | |||||
| Q1'2016 | Q4'2015 | Q1'2015 | Q/Q | Y/Y | |
| Revenue (in millions USD) | $1151 | $1251 | $1103 | -8% | +4% |
| Gross Margin | 56.9% | 56.2% | 55.1% | +0.7% | +1.8% |
| Operating Expenses (in millions USD) | $425 | $420 | $411 | +1% | +3% |
| Net Income | $187 | $241 | $166 | -22% | +13% |
| EPS | $0.33 | $0.43 | $0.29 | -23% | +14% |
Breaking the results down into the individual segments, the GPU unit accounts for the bulk of the revenue for the company. GPU revenues were up 5% year-over-year, coming in at $940 million for Q1. They attribute this to revenue from GeForce gaming desktops and notebooks growing 14% with strength in their Maxwell GPUs being one of the keys. Notebooks have also been a source of strength, and although they did not release numbers, notebook GPU sales were “well above year-ago levels”. Tesla GPUs also increase due to project wins with cloud service providers, but the Quadro line of professional graphics declined.
| NVIDIA Quarterly Revenue Comparison (GAAP) | |||||
| In millions | Q1'2016 | Q4'2015 | Q1'2015 | Q/Q | Y/Y |
| GPU | $940 | $1073 | $898 | -12% | +5% |
| Tegra Processor | $145 | $112 | $139 | +29% | +4% |
| Other | $66 | $66 | $66 | flat | flat |
Tegra, once the tablet and possible smartphone SoC, has found its niche is the automotive infotainment field, but it is also the SoC inside SHIELD devices sold by NVIDIA. Revenue for Tegra was up 4% year-over-year, and up 29% as compared to Q4 2015, which was attributed to automotive systems and development services.
The final piece of NVIDIA’s pie is their licensing agreement with Intel, which is the standard $66 million per quarter.
For Q2, projections are revenue of $1.01 billion, plus or minus two percent, and gross margins of 55.7% plus or minus 0.5%.
It was another good quarter for NVIDIA, and during the quarter they launched the TITAN X GPU, as well as the NVIDIA SHIELD set top box. Yesterday, AMD announced that they will have a new GPU coming out this quarter, so it will be awesome to see how that plays out in the never ending GPU battle.
Source: NVIDIA Investor Relations
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Dark Man - Friday, May 8, 2015 - link
I don't mean NVIDIA products not good. They are really good. But that does not mean the quarterly reports would be always green too (look at at HTC, Motorola or other companies else)I mean if we subtract the income from Intel payment, how much would they get (or what would the EPS number look like) ?
Samus - Saturday, May 9, 2015 - link
nVidia is frighteningly ahead of AMD in GPU architecture. AMD hasn't released a new architecture since Maxwell 1.0 was introduced early LAST year, and odds are nVidia is going to release Pascal/Volta either in line with AMD's successor to GCN 1.2 (which hasn't even been announced yet, they're just riding GCN 1.0/1.1/1.2 parts into the sunset for the rest of the year)tuxRoller - Sunday, May 10, 2015 - link
Are they? Intel, yeah, they're frighteningly ahead of amd.AMD is still competitive, and, for gaming, their dx12 support has really closed many gaps.
Their gcn was quite innovative. They don't necessarily have to come out with brand new archs each time. Intel has been riding sb since, what, 2011?
Samus - Monday, May 11, 2015 - link
There is so much wrong with your statement, all the way down to Intel riding sandy bridge, that this is already too much of a dignified response.medi03 - Monday, May 11, 2015 - link
That's quite a clueless comment on for a tech site. Gap between Intel and AMD exists and is huge.Gap between nVidia and AMD is marginal.
chizow - Friday, May 8, 2015 - link
It's just revenue, Nvidia could very well be treating it as $66 million worth of R&D to pay 500 engineers for whatever they feel like dabbling in. So yes, in quarters where their net profit is closer to even, that $66 million might look like its a big difference in their net profit, but in reality, if they didn't have that guaranteed revenue stream, they might simply cut expenses accordingly as any responsible business would.Dark Man - Friday, May 8, 2015 - link
NVIDIA could only use 66 mi as operating expense if Intel pay them first. But if NVIDIA uses 66 mi of Q4 2014 to pay their employees in Q1 2015, so that 66 mi of Q4 2014 is the budget for Q1 2015, but not the revenue of Q1 2015. 66 mi of Q1 2015 is the budget for Q2 2015, but not the revenue of Q2 2015chizow - Friday, May 8, 2015 - link
That's not quite how it works. If you have enough cash on hand, you can incur the expense before you receive payment, you just set up a receivable (asset) which gets wiped out and becomes revenue when Intel actually pays up within the quarter. I am sure Nvidia knows Intel is good for it (given the tens of billions cash they are sitting on), so it is trivial for them to shell out for payroll before actually receiving the payments.Ultimately it just comes down to budgeting and fiscal management, if the $66M went away, Nvidia would have to adjust but they would still be profitable.
melgross - Monday, May 11, 2015 - link
That revenue is almost all profit for Nvidia, after accounting expenses, so the loss of it would cut net by almost half. So yes, it would have quite an impact.chizow - Thursday, May 14, 2015 - link
Except they know exactly when that revenue will cease, so they can obviously make arrangements for it well in advance by cutting expenses similarly, so no, it shouldn't have any impact if Nvidia is managing their finances prudently as any business should/would.