This afternoon NVIDIA announced their earnings for the second quarter of their 2019 fiscal year. As has been the trend over the last couple of years, NVIDIA continues to churn out the money, with record revenue across all of their platforms this quarter. Revenue was $3.12 billion for the quarter, up 40% from the same quarter a year ago. Margins for the quarter were 63.3%, up 4.9% from Q2 2018. Operating income was up 68% year-over-year to $1.157 billion, and net income was up 89% to $1.101 billion. This meant earnings per share of $1.76, up 91% from a year ago. Although it may sound like Q2 2018 was a poor quarter for NVIDIA with these kinds of gains for 2019, revenue was up 56% year-over-year back in Q2 2018.

NVIDIA Q2 2019 Financial Results (GAAP)
  Q2'2019 Q1'2018 Q2'2018 Q/Q Y/Y
Revenue $3123M $3207M $2230M -3% +40%
Gross Margin 63.3% 64.5% 58.4% -1.2% +4.9%
Operating Income $1157M $1295M $688M -11% +68%
Net Income $1101M $1244M $583M -11% +89%
EPS $1.98 $1.98 $0.92 -11% +91%

Gaming continues to be the bread and butter for the company, even as they have diversified into other markets. For Q2 2019, gaming revenues were $1.805 billion, which is 52.2% growth over Q2 2018. That’s strong growth despite the drop in cryptocurrency demand for the consumer GeForce cards.

Professional Visualization was up 19.6% in revenue to $281 million. It’ll be interesting to watch this market now that NVIDIA has just announced their Quadro RTX lineup just a few days ago.

The Datacenter market continues to be a source of strong growth as well, with this segment up 83% year-over-year to $760 million in revenue. The company has been creating and expanding markets for their datacenter products, and have found a lot of homes in some very big infrastructures.

Automotive was also up, but at only 13% to $161 million. Growth in this segment isn’t quite as rapid as some of their other inroads, but it’s a strong market that they’ve notched into with Tegra several years ago. NVIDIA now offers several platforms such as DRIVE for vehicle infotainment and driverless cars.

The only real downside for the company is that it seems their OEM orders for cryptocurrency have dried up. They had forecast $100 million in revenue for the quarter for cryptocurrency chips, but delivered only $18 million, and project no meaningful contributions going forward. That’s good news for those of us who have been unable to buy a GPU over the last while, and unsurprising with the rapid decline in cryptocurrency prices.

Looking ahead to next quarter, NVIDIA is expecting revenue of $3.25 billion, plus or minus 2%, with margins of 62.6% plus or minus 0.5%.

NVIDIA Quarterly Revenue Comparison (GAAP)
($ in millions)
In millions Q2'2019 Q1'2018 Q2'2018 Q/Q Y/Y
Gaming $1805 $1723 $1027 +4.8% +75.7%
Professional Visualization $281 $251 $205 +11.9% +37.1%
Datacenter $760 $701 $409 +8.4% +85.8%
Automotive $161 $145 $140 +11.0% +15%
OEM & IP $116 $387 $156 -70.0% -25.6%

Source: NVIDIA Investor Relations

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  • DifferentFrom - Thursday, August 16, 2018 - link

    "Margins for the quarter were 63.3%" this is why we need competition! Reply
  • patrickjp93 - Thursday, August 16, 2018 - link

    Good thing Intel's jumping into the game. Reply
  • yannigr2 - Friday, August 17, 2018 - link

    LOL.... people are so pathetic.
    For years they laugh at AMD, for years they want AMD a second at best and now they want Intel, another company with 60% plus margins to enter the market because they want competition. Pathetic.
    Reply
  • Ravenshow - Sunday, August 19, 2018 - link

    WTF are you talking about???
    AMD couldn't produce the products as cheap to make as Nvidia at same performance level an or better than it at same price range to get a higher profit margin. Every company needs that higher profit margin to stay in the market. It's not nvidia's fault. It's AMD's. It's their inability. Don't show your fanboy face here. If one competitor couldn't compete. It's great to expect another company to pop in to challenge and that will help the prices to be in check. You can go to WCCFTECH to troll and show your devotion to your beloved brand.
    Reply
  • michael2k - Thursday, August 16, 2018 - link

    Competition doesn't erase margins, unless it triggers a price war.

    See Android vs iOS. Apple's iPhones have not dropped in price over the last decade, and in fact their ASP has gone up despite having introduced cheaper and more diverse models.
    Reply
  • tipoo - Friday, August 17, 2018 - link

    Smartphones are decidedly stickier products than GPUs. Any new GPU will run your old games, any new alternative smartphone OS will not. Reply
  • Yojimbo - Friday, August 17, 2018 - link

    If they didn't make money you wouldn't get RT cores, etc, because they wouldn't have the resources to devote to them. If they are operating on razor thin margin you'd get an unstable situation where they have to worry about prioritizing their resources. Look at AMD. Their problems have come from the fact that they lost their financial health much more than they have come from engineering/strategic incompetence.

    NVIDIA are chasing the opportunities that exist in the growing marketplace. Greater competition from AMD might bring down prices a small amount, but not substantially. Look at GPU prices historically, they really have not gone up. People have been moving up the ladder to higher and higher positioned parts, however. Over the past 25 years the GPU has become a more and more important part of the end experience of a gaming PC.

    If AMD also had decent margins then they too could expend resources on innovation and then we'd be getting innovation from two sources, instead of mainly just one with the other playing catch up. Then consumers would win. But if both NVIDIA and AMD operate at AMD's margins consumers would actually lose out.
    Reply
  • sowoah - Friday, August 17, 2018 - link

    You do know that this doesn't include opex right? You have to pay the thousands of engineers that design the thing, and all the rest of the staff. Gotta make the drivers and other software. Gotta pay the bills,. Gotta market the thing. etc. you can see the net incoke is closer to 35%. That's a more relevant number. Reply
  • PeachNCream - Friday, August 17, 2018 - link

    Crypto demand has no potential contribution to future income? Wow! What happened to it and why does the future look so bleak? (Mind you, I'm not complaining or anything - I'd like consumer graphics adapters to drop to below MSRP rather than what happened to them this past generation.) Reply
  • Drumsticks - Friday, August 17, 2018 - link

    Crypto demand was mostly driven by the rising prices that occurred due to a crypto bubble. That's why GPUs we're disappearing - prices were high making profit good.

    The massive collapse in price (bubbles pop, and people were pumping it artificially iirc), drove away anybody who would do GPU mining, because the mining costs more than it makes.
    Reply

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