10-QPeriod: Q1 FY2019

NVIDIA CORP Quarterly Report for Q1 Ended Apr 29, 2018

Filed May 22, 2018For Securities:NVDA

Summary

NVIDIA Corporation's (NVDA) fiscal first quarter 2019 report (ending April 28, 2018) showcases exceptional financial performance, marked by a significant 66% year-over-year revenue increase to $3.21 billion and a substantial 145% surge in net income to $1.24 billion. This growth was propelled by robust demand across all market platforms, particularly in the GPU business, which saw a 77% rise in revenue, driven by strong sales in gaming and datacenter segments. The company's strategic focus on AI and advanced computing continues to yield impressive results. Key financial highlights include a notable improvement in gross margin to 64.5% and a substantial increase in operating income by 134%. NVIDIA also demonstrated a strong commitment to shareholder returns, repurchasing $655 million in stock and paying $91 million in dividends during the quarter. The company maintains a healthy liquidity position with $7.3 billion in cash, cash equivalents, and marketable securities, positioning it well for future growth and continued innovation in its core markets.

Financial Highlights

53 data points
Beta

Revenue

$3.21B

64.5% Gross Margin

Net Income

$1.24B

38.8% Net Margin

EPS (Diluted)

$0.05

Total Assets

$11.46B

Cash & Equivalents

$765.00M

Free Cash Flow

$1.33B

Financial Statements
Beta
Revenue$3.21B
Cost of Revenue$1.14B
Gross Profit$2.07B
R&D Expenses$542.00M
SG&A Expenses$231.00M
Operating Expenses$773.00M
Operating Income$1.29B
Interest Expense$15.00M
Net Income$1.24B
EPS (Basic)$0.05
EPS (Diluted)$0.05
Shares Outstanding (Basic)24.24B
Shares Outstanding (Diluted)25.08B

Key Highlights

  • 1Exceptional revenue growth of 66% year-over-year to $3.21 billion, demonstrating strong market demand.
  • 2Net income surged by 145% year-over-year to $1.24 billion, reflecting improved profitability.
  • 3GPU business revenue increased by an impressive 77% year-over-year, fueled by gaming and datacenter growth.
  • 4Gross margin improved significantly to 64.5%, up from 59.4% in the prior year's quarter, indicating enhanced pricing power and product mix.
  • 5Operating income more than doubled, rising 134% year-over-year, showcasing strong operational leverage.
  • 6Company returned $655 million to shareholders through share repurchases and $91 million in dividends, signaling confidence and commitment to shareholder value.
  • 7Healthy liquidity with $7.30 billion in cash, cash equivalents, and marketable securities, providing financial flexibility.

Frequently Asked Questions

NVIDIA's revenue growth was primarily driven by strong demand across all its market platforms. The GPU business experienced a 77% increase, particularly in gaming and datacenter segments, with notable contributions from demand for eSports, battle royale games, and strong sales of Volta architecture GPUs for AI and HPC. The Tegra Processor business also saw a 33% increase, driven by gaming platforms and automotive.

Profitability significantly improved, with net income rising 145% year-over-year. This was largely due to the robust revenue growth across key segments and an expansion in gross margin to 64.5%. The favorable mix shift within the GPU segment, especially in high-end gaming products and datacenter solutions, played a crucial role in improving overall profitability.

NVIDIA is actively returning capital to shareholders through its share repurchase program and quarterly cash dividends. In this quarter, the company repurchased $655 million of its stock and paid $91 million in dividends. NVIDIA has authorized significant additional repurchases through December 2020 and intends to return approximately $1.25 billion to shareholders in fiscal year 2019 through a combination of dividends and buybacks.

NVIDIA maintains a strong financial position, with $7.30 billion in cash, cash equivalents, and marketable securities as of April 29, 2018. This robust liquidity, coupled with strong operating cash flow generation, provides the company with significant financial flexibility to fund its growth initiatives, research and development, and capital return programs.