Summary
NVIDIA Corporation reported its first quarter fiscal year 2020 results, ending April 28, 2019, with a significant year-over-year decline in revenue and net income. Total revenue fell 31% to $2.22 billion, driven by a substantial decrease in the GPU business, which was down 27% year-over-year, impacted by lower gaming and data center sales, and the absence of cryptocurrency mining processor revenue. The Tegra Processor business also saw a steep 55% decline. Despite the revenue drop, sequential revenue showed a slight increase of 1%, indicating a potential stabilization. The company also announced a major development with its agreement to acquire Mellanox Technologies for approximately $6.9 billion, a strategic move aimed at bolstering its data center and AI capabilities. Profitability was significantly impacted, with net income dropping 68% to $394 million, resulting in diluted earnings per share of $0.64, down from $1.98 in the prior year. This decline is attributed to lower revenues, reduced gross margins (down to 58.4% from 64.5% year-over-year), and increased operating expenses, which rose 21% year-over-year due to increased R&D and SG&A costs, including those related to the Mellanox acquisition. NVIDIA continues to focus on returning capital to shareholders, planning to return $3.00 billion by the end of fiscal year 2020 through dividends and share repurchases.
Financial Highlights
55 data points| Revenue | $2.22B |
| Cost of Revenue | $924.00M |
| Gross Profit | $1.30B |
| R&D Expenses | $674.00M |
| SG&A Expenses | $264.00M |
| Operating Expenses | $938.00M |
| Operating Income | $358.00M |
| Interest Expense | $13.00M |
| Net Income | $394.00M |
| EPS (Basic) | $0.02 |
| EPS (Diluted) | $0.02 |
| Shares Outstanding (Basic) | 24.28B |
| Shares Outstanding (Diluted) | 24.64B |
Key Highlights
- 1Total revenue for Q1 FY2020 decreased 31% year-over-year to $2.22 billion, impacted by declines in the GPU and Tegra Processor businesses.
- 2The company announced an agreement to acquire Mellanox Technologies for approximately $6.9 billion, a significant strategic move in the data center and AI space.
- 3Net income declined 68% year-over-year to $394 million, with diluted EPS falling to $0.64 from $1.98.
- 4Gross margin decreased to 58.4% from 64.5% year-over-year, mainly due to lower gaming margins and portfolio mix shifts.
- 5Operating expenses increased by 21% year-over-year, driven by higher R&D and SG&A costs, including expenses related to the Mellanox acquisition.
- 6NVIDIA plans to return $3.00 billion to shareholders by the end of FY2020 through dividends and share repurchases.
- 7Cash, cash equivalents, and marketable securities totaled $7.80 billion, providing a strong liquidity position.