01—Abstract
Summary
Summary of the 10-Q filed May 27, 2022. Cited figures are marked; the original filing is the authoritative source.
NVIDIA Corporation's 10-Q filing for the period ending April 30, 2022, reveals a strong revenue increase of 46% year-over-year, reaching $8.29 billiona.
This growth was primarily driven by significant expansion in the Data Center segment, which saw a 66% surge in revenue, and a 34% increase in the Graphics segment. Despite robust top-line performance, net income and diluted EPS saw a decline of 15% and 16% respectively, year-over-year, largely due to a substantial $1.35 billionb acquisition termination cost related to the failed Arm acquisition, which significantly impacted operating expenses. The company also continued its capital return program, repurchasing $2.00 billion in stock and paying $100 million in dividends during the quarter, underscoring a commitment to shareholder value.
While the company's financial health remains strong with substantial cash reserves of $20.34 billionc, investors should note the ongoing supply chain constraints, particularly in networking products, and the continued volatility in the cryptocurrency market which impacts demand forecasting. Management is actively addressing these challenges by securing future supply and adapting product strategies, such as the Lite Hash Rate (LHR) GPUs, to balance gaming and mining demand. The company's strategic focus on AI and high-performance computing, evidenced by new product architectures like Hopper and Grace, positions it for continued growth in key markets.
02—Key points
Key Highlights
- Total revenue for the quarter increased by 46% year-over-year to $8.29 billion.
- The Data Center segment experienced substantial growth, with revenue up 66% year-over-year.
- The Graphics segment also showed strong performance, with revenue increasing by 34% year-over-year.
- A significant $1.35 billion acquisition termination cost related to the Arm deal was recorded, impacting operating expenses and net income.
- Net income and diluted EPS decreased year-over-year by 15% and 16% respectively.
- NVIDIA returned $2.10 billion to shareholders through $2.00 billion in share repurchases and $100 million in cash dividends during the quarter.
- The company reported $20.34 billion in cash, cash equivalents, and marketable securities, indicating strong liquidity.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in Q2 FY2023, NVIDIA Corp kept $0.10.
- Revenue$6.70B100.0%
- Cost of revenue−$3.79B56.5%
- Gross profit$2.92B43.5%
- Operating costs−$2.42B36.0%
- Operating income$499.0M7.4%
- Interest, other & tax$157.0M2.3%
- Net income$656.0M9.8%
04—Financials
Financial Highlights
Figures from 10-QQ2 FY2023filed May 27, 2022Financial Statements
Q2 FY2023 against Q2 FY2022
| Line item | Q2 FY2023Q2 FY2022 | Change |
|---|---|---|
| Revenue | $6.70B$5.66B | +18.4% |
| Cost of Revenue | $3.79B$2.03B | +86.5% |
| Gross Profit | $2.92B$3.63B | −19.7% |
| R&D Expenses | $1.82B$1.15B | +58.2% |
| SG&A Expenses | $592.00M$520.00M | +13.8% |
| Operating Expenses | $2.42B$1.67B | +44.4% |
| Operating Income | $499.00M$1.96B | −74.5% |
| Interest Expense | $65.00M$53.00M | +22.6% |
| Net Income | $656.00M$1.91B | −65.7% |
| EPS (Basic) | $0.03$0.08 | −66.2% |
| EPS (Diluted) | $0.03$0.08 | −65.8% |
| Shares Outstanding (Basic) | 24.95B24.84B | +0.4% |
| Shares Outstanding (Diluted) | 25.16B25.28B | −0.5% |
05—Questions
Frequently Asked Questions
What was the primary driver of NVIDIA's revenue growth in this quarter?
NVIDIA's revenue growth was primarily driven by strong performance in its Data Center segment, which increased by 66% year-over-year, and its Graphics segment, which grew by 34% year-over-year. This indicates robust demand for its high-performance computing solutions and graphics processing units across various applications.
How did the termination of the Arm acquisition impact NVIDIA's financial results?
The termination of the Arm acquisition resulted in a significant $1.35 billion acquisition termination cost, which was recorded in the first quarter of fiscal year 2023. This charge substantially increased operating expenses and led to a year-over-year decrease in net income and diluted earnings per share.
What is NVIDIA's strategy regarding cryptocurrency mining demand and its gaming GPUs?
NVIDIA has implemented Lite Hash Rate (LHR) technology on its GeForce GPUs to limit their attractiveness for Ethereum mining, aiming to prioritize supply for gamers. While this strategy is in place, the company acknowledges that aftermarket attempts to bypass LHR have been successful, and the overall demand from cryptocurrency mining remains volatile and difficult to precisely forecast.
What is the current status of NVIDIA's supply chain and inventory?
NVIDIA is experiencing supply chain constraints, particularly for networking products, and anticipates these may continue. To mitigate this, the company is placing orders well in advance of historical lead times and paying premiums to secure future supply. However, this also carries the risk of excess inventory if demand forecasts are inaccurate.
06—Continue