01—Abstract
Summary
Summary of the 10-Q filed November 21, 2017. Cited figures are marked; the original filing is the authoritative source.
NVIDIA Corporation (NVDA) reported strong financial results for the third quarter and first nine months of fiscal year 2018, ended October 29, 2017.
The company demonstrated significant year-over-year revenue growth, driven by robust performance in its GPU business, particularly within the datacenter and gaming segments. The Tegra Processor business also showed substantial growth, bolstered by contributions from gaming development platforms and automotive applications. Profitability metrics also improved, with net income and diluted earnings per share showing substantial increases.
NVIDIA's balance sheet remains strong, with a healthy increase in cash and cash equivalents driven by robust operating activities. The company continued its commitment to returning capital to shareholders through share repurchases and an increased quarterly dividend, signaling confidence in its ongoing financial health and future prospects.
02—Key points
Key Highlights
- Revenue for the third quarter of fiscal year 2018 increased by 32% year-over-year to $2.64 billion, driven by strong GPU and Tegra processor sales.
- Net income for the third quarter rose 55% year-over-year to $838 million, with diluted earnings per share increasing by 60% to $1.33.
- The GPU business saw a 31% revenue increase, with Datacenter revenue surging 109% year-over-year due to high demand for AI and deep learning applications.
- Tegra Processor business revenue grew by 74% year-over-year, supported by gaming development platforms and automotive sector contributions.
- Gross margin improved to 59.5% from 59.0% in the prior year's third quarter, primarily due to the strong performance of Datacenter and gaming GPUs.
- Operating expenses increased by 24% year-over-year, reflecting investments in growth initiatives like gaming, AI, and autonomous driving.
- The company generated $2.14 billion in net cash from operating activities for the first nine months of fiscal year 2018, demonstrating strong cash flow generation.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in Q3 FY2018, NVIDIA Corp kept $0.32.
- Revenue$2.64B100.0%
- Cost of revenue−$1.07B40.5%
- Gross profit$1.57B59.5%
- Operating costs−$674.0M25.6%
- Operating income$895.0M34.0%
- Interest, other & tax−$57.0M2.2%
- Net income$838.0M31.8%
04—Financials
Financial Highlights
Figures from 10-QQ3 FY2018filed November 21, 2017Financial Statements
Q3 FY2018 against Q3 FY2017
| Line item | Q3 FY2018Q3 FY2017 | Change |
|---|---|---|
| Revenue | $2.64B$2.00B | +31.5% |
| Cost of Revenue | $1.07B$821.00M | +30.0% |
| Gross Profit | $1.57B$1.18B | +32.6% |
| R&D Expenses | $462.00M$373.00M | +23.9% |
| SG&A Expenses | $212.00M$171.00M | +24.0% |
| Operating Expenses | $674.00M$544.00M | +23.9% |
| Operating Income | $895.00M$639.00M | +40.1% |
| Interest Expense | $15.00M$16.00M | −6.2% |
| Net Income | $838.00M$542.00M | +54.6% |
| EPS (Basic) | $0.03$0.03 | +37.6% |
| EPS (Diluted) | $0.03$0.02 | +60.2% |
| Shares Outstanding (Basic) | 24.12B21.52B | +12.1% |
| Shares Outstanding (Diluted) | 25.12B26.12B | −3.8% |
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 its GPU business, with significant contributions from the datacenter segment (up 109% year-over-year) due to strong demand for AI and deep learning, and the gaming segment. The Tegra Processor business also showed strong growth (up 74% year-over-year), benefiting from gaming development platforms and the automotive sector.
How did NVIDIA's profitability fare in this quarter?
Profitability improved significantly. Net income increased by 55% year-over-year to $838 million, and diluted earnings per share grew by 60% to $1.33. This was supported by revenue growth and an improvement in gross margin to 59.5%.
What is NVIDIA's current financial position in terms of liquidity?
NVIDIA maintains a strong liquidity position. As of October 29, 2017, the company had $6.32 billion in cash, cash equivalents, and marketable securities. Net cash provided by operating activities for the first nine months of the fiscal year was $2.14 billion, indicating robust cash generation.
What is NVIDIA doing to return value to shareholders?
NVIDIA is actively returning value to shareholders. For the first nine months of fiscal year 2018, the company repurchased $909 million in shares and paid $250 million in cash dividends. The company intends to return $1.25 billion to shareholders in fiscal year 2018 and also in fiscal year 2019 through a combination of dividends and share repurchases. They also recently declared an increase in their quarterly cash dividend.
06—Continue