01—Abstract
Summary
Summary of the 10-Q filed May 22, 2018. Cited figures are marked; the original filing is the authoritative source.
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 billiona 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%b 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 millionc 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.
02—Key points
Key Highlights
- Exceptional revenue growth of 66% year-over-year to $3.21 billion, demonstrating strong market demand.
- Net income surged by 145% year-over-year to $1.24 billion, reflecting improved profitability.
- GPU business revenue increased by an impressive 77% year-over-year, fueled by gaming and datacenter growth.
- Gross margin improved significantly to 64.5%, up from 59.4% in the prior year's quarter, indicating enhanced pricing power and product mix.
- Operating income more than doubled, rising 134% year-over-year, showcasing strong operational leverage.
- Company returned $655 million to shareholders through share repurchases and $91 million in dividends, signaling confidence and commitment to shareholder value.
- Healthy liquidity with $7.30 billion in cash, cash equivalents, and marketable securities, providing financial flexibility.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in Q1 FY2019, NVIDIA Corp kept $0.39.
- Revenue$3.21B100.0%
- Cost of revenue−$1.14B35.5%
- Gross profit$2.07B64.5%
- Operating costs−$773.0M24.1%
- Operating income$1.29B40.4%
- Interest, other & tax−$51.0M1.6%
- Net income$1.24B38.8%
04—Financials
Financial Highlights
Figures from 10-QQ1 FY2019filed May 22, 2018Financial Statements
Q1 FY2019 against Q1 FY2018
| Line item | Q1 FY2019Q1 FY2018 | Change |
|---|---|---|
| Revenue | $3.21B$1.94B | +65.6% |
| Cost of Revenue | $1.14B$787.00M | +44.7% |
| Gross Profit | $2.07B$1.15B | +79.8% |
| R&D Expenses | $542.00M$411.00M | +31.9% |
| SG&A Expenses | $231.00M$185.00M | +24.9% |
| Operating Expenses | $773.00M$596.00M | +29.7% |
| Operating Income | $1.29B$554.00M | +133.8% |
| Interest Expense | $15.00M$16.00M | −6.2% |
| Net Income | $1.24B$507.00M | +145.4% |
| EPS (Basic) | $0.05$0.02 | +138.4% |
| EPS (Diluted) | $0.05$0.02 | +150.6% |
| Shares Outstanding (Basic) | 24.24B23.68B | +2.4% |
| Shares Outstanding (Diluted) | 25.08B25.64B | −2.2% |
05—Questions
Frequently Asked Questions
What drove NVIDIA's substantial revenue growth in this quarter?
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.
How did NVIDIA's profitability change, and what contributed to it?
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.
What is NVIDIA's approach to returning capital to shareholders?
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.
What is the company's financial health and liquidity position?
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.
06—Continue