01—Abstract
Summary
Summary of the 10-Q filed August 28, 2023. Cited figures are marked; the original filing is the authoritative source.
NVIDIA Corporation (NVDA) reported exceptionally strong financial results for the second quarter of fiscal year 2024, with revenue surging 101% year-over-year to $13.51 billiona.
This growth was primarily driven by a remarkable 171% increase in Data Center revenue, reaching $10.32 billionb, fueled by massive demand for its AI computing platforms, particularly from cloud service providers (CSPs) and large internet companies. The company's gross margin also significantly improved to 70.1% from 43.5% in the prior year's quarter, reflecting the favorable shift in revenue mix towards higher-margin Data Center products and a reduction in inventory provisions. Net income experienced an explosive growth of 843% year-over-year, reaching $6.19 billion, translating to diluted earnings per share of $2.48, up from $0.26 in the same period last year.
NVIDIA's strong performance highlights its leading position in the AI infrastructure market, with continued robust demand visibility extending into the next fiscal year. The company also announced a substantial increase to its share repurchase program, underscoring its confidence in future performance and commitment to returning capital to shareholders.
02—Key points
Key Highlights
- Revenue for Q2 FY2024 reached $13.51 billion, a 101% increase year-over-year, significantly exceeding market expectations.
- Data Center revenue grew by 171% year-over-year to $10.32 billion, driven by high demand for AI and generative AI solutions from CSPs and large internet companies.
- Gross margin expanded significantly to 70.1% from 43.5% in the prior year's quarter, indicating strong pricing power and improved product mix.
- Net income soared to $6.19 billion, a 843% increase year-over-year, with diluted EPS of $2.48.
- The company announced an additional $25 billion increase to its share repurchase program, signaling strong confidence in its future financial health.
- Operating expenses increased by 10% year-over-year, primarily due to investments in compensation and stock-based compensation to support growth.
- Gaming revenue showed resilience, increasing 22% year-over-year, benefiting from the normalization of channel inventory for its GeForce RTX 40 Series GPUs.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in Q2 FY2024, NVIDIA Corp kept $0.46.
- Revenue$13.51B100.0%
- Cost of revenue−$4.04B29.9%
- Gross profit$9.46B70.1%
- Operating costs−$2.66B19.7%
- Operating income$6.80B50.3%
- Interest, other & tax−$612.0M4.5%
- Net income$6.19B45.8%
04—Financials
Financial Highlights
Figures from 10-QQ2 FY2024filed August 28, 2023Financial Statements
Q2 FY2024 against Q2 FY2023
| Line item | Q2 FY2024Q2 FY2023 | Change |
|---|---|---|
| Revenue | $13.51B$6.70B | +101.5% |
| Cost of Revenue | $4.04B$3.79B | +6.8% |
| Gross Profit | $9.46B$2.92B | +224.6% |
| R&D Expenses | $2.04B$1.82B | +11.8% |
| SG&A Expenses | $622.00M$592.00M | +5.1% |
| Operating Expenses | $2.66B$2.42B | +10.2% |
| Operating Income | $6.80B$499.00M | +1262.7% |
| Interest Expense | $65.00M$65.00M | 0.0% |
| Net Income | $6.19B$656.00M | +843.3% |
| EPS (Basic) | $0.25$0.03 | +861.5% |
| EPS (Diluted) | $0.25$0.03 | +861.5% |
| Shares Outstanding (Basic) | 24.73B24.95B | −0.9% |
| Shares Outstanding (Diluted) | 24.99B25.16B | −0.7% |
05—Questions
Frequently Asked Questions
What is driving NVIDIA's exceptional revenue growth in the latest quarter?
NVIDIA's extraordinary revenue growth is primarily fueled by the booming demand for its Data Center solutions, which saw a 171% year-over-year increase. This surge is directly attributed to the company's leading position in providing accelerated computing infrastructure for Artificial Intelligence (AI) and generative AI workloads, with significant contributions from Cloud Service Providers (CSPs) and large consumer internet companies.
How has NVIDIA's profitability improved?
Profitability has seen a dramatic improvement due to a combination of factors. The gross margin expanded significantly to 70.1% from 43.5% in the prior year. This is largely due to the shift in revenue mix towards higher-margin Data Center products and a substantial reduction in inventory provisions compared to the previous year. Consequently, net income grew by 843% year-over-year.
What is the outlook for NVIDIA's Data Center business?
The outlook for NVIDIA's Data Center business remains exceptionally strong. The company reports that demand for its data center systems and products has surged over the last two quarters, with demand visibility extending into the next fiscal year. This strong demand is driven by the ongoing development of large language models and generative AI.
What is NVIDIA doing with its capital?
NVIDIA is actively returning capital to shareholders through its share repurchase program. The company announced a significant increase of $25 billion to its share repurchase authorization, underscoring its confidence in its financial position and future prospects. While NVIDIA also pays dividends, the primary focus of capital return in this period has been share buybacks.
06—Continue