01—Abstract
Summary
Summary of the 10-Q filed May 25, 2016. Cited figures are marked; the original filing is the authoritative source.
NVIDIA Corporation's fiscal first quarter 2017 results, ending April 30, 2016, demonstrated robust growth, with revenue increasing 13% year-over-year to $1.305 billiona and net income up 46% to $196 million.
This strong performance was driven by a 15%b increase in the GPU business, fueled by strong demand in gaming and datacenter segments, particularly for deep learning applications. The Tegra Processor business also saw a 10% increase, primarily from the automotive sector. Key financial highlights include a significant increase in operating income and diluted EPS, reflecting effective cost management and growing revenue streams.
The company also continues to prioritize shareholder returns, returning $562 millionc to shareholders through share repurchases and dividends in the quarter, and intends to return approximately $1 billion in fiscal year 2017. NVIDIA's strategic focus on key markets like gaming, professional visualization, datacenter, and automotive appears to be yielding positive financial results.
02—Key points
Key Highlights
- Revenue grew 13% to $1.305 billion compared to the prior year's quarter.
- Net income increased by 46% to $196 million.
- Diluted earnings per share rose by 38% to $0.33.
- The GPU business, a key segment, saw revenue grow 15%, with notable strength in gaming and datacenter (deep learning).
- Datacenter revenue, including Tesla and NVIDIA GRID, surged 63% year-over-year.
- The company returned $562 million to shareholders through share repurchases ($500M ASR) and dividends in the quarter.
- Gross margin improved to 57.5% from 56.7% in the prior year, driven by product mix and platform approach.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in Q2 FY2017, NVIDIA Corp kept $0.16.
- Revenue$1.30B100.0%
- Cost of revenue−$554.0M42.5%
- Gross profit$751.0M57.5%
- Operating costs−$434.0M33.3%
- Operating income$317.0M24.3%
- Interest, other & tax−$109.0M8.4%
- Net income$208.0M15.9%
04—Financials
Financial Highlights
Figures from 10-QQ2 FY2017filed May 25, 2016Financial Statements
Q2 FY2017 against Q2 FY2016
| Line item | Q2 FY2017Q2 FY2016 | Change |
|---|---|---|
| Revenue | $1.30B$1.15B | +13.2% |
| Cost of Revenue | $554.00M$519.00M | +6.7% |
| Gross Profit | $751.00M$634.00M | +18.5% |
| R&D Expenses | $350.00M$320.00M | +9.4% |
| SG&A Expenses | $157.00M$149.00M | +5.4% |
| Operating Expenses | $509.00M$558.00M | −8.8% |
| Operating Income | $317.00M$76.00M | +317.1% |
| Interest Expense | $12.00M$12.00M | 0.0% |
| Net Income | $208.00M$26.00M | +700.0% |
| EPS (Basic) | $0.01$0.00 | +680.0% |
| EPS (Diluted) | $0.01$0.00 | +600.0% |
| Shares Outstanding (Basic) | 21.36B21.64B | −1.3% |
| Shares Outstanding (Diluted) | 25.36B22.24B | +14.0% |
05—Questions
Frequently Asked Questions
What were the main drivers of NVIDIA's revenue growth in this quarter?
NVIDIA's revenue growth was primarily driven by a 15% increase in its GPU business, with strong performance in GeForce gaming GPUs and significant growth in the Datacenter segment, particularly for deep learning applications. The Tegra Processor business also contributed positively with a 10% increase, mainly due to growth in automotive applications.
How is NVIDIA returning capital to shareholders?
NVIDIA is actively returning capital through share repurchases and cash dividends. In this quarter, they returned $562 million, including a $500 million accelerated share repurchase (ASR) agreement and $62 million in dividends. The company intends to return approximately $1 billion to shareholders in fiscal year 2017.
What is the financial performance of NVIDIA's key business segments?
The GPU business revenue increased by 15%, led by gaming and datacenter demand. The Tegra Processor business revenue grew by 10%, primarily from automotive applications. The 'All Other' category, which includes patent licensing, remained stable.
Are there any significant legal matters impacting NVIDIA's financial results?
NVIDIA resolved its intellectual property disputes with Samsung and Qualcomm through a memorandum of understanding. They also settled litigation with Advanced Silicon Technologies LLC, involving a patent license agreement. These resolutions appear to have been managed without significant negative financial impact reported for this quarter, with a $16 million payment to Advanced Silicon Technologies being expensed or capitalized.
06—Continue