10-QPeriod: Q2 FY2024

NVIDIA CORP Quarterly Report for Q2 Ended Jul 30, 2023

Filed August 28, 2023For Securities:NVDA

Summary

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 billion. This growth was primarily driven by a remarkable 171% increase in Data Center revenue, reaching $10.32 billion, 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.

Financial Highlights

55 data points
Beta

Revenue

$13.51B

70.1% Gross Margin

Net Income

$6.19B

45.8% Net Margin

EPS (Diluted)

$0.25

Total Assets

$49.55B

Cash & Equivalents

$5.88B

Free Cash Flow

$6.35B

Financial Statements
Beta
Revenue$13.51B
Cost of Revenue$4.04B
Gross Profit$9.46B
R&D Expenses$2.04B
SG&A Expenses$622.00M
Operating Expenses$2.66B
Operating Income$6.80B
Interest Expense$65.00M
Net Income$6.19B
EPS (Basic)$0.25
EPS (Diluted)$0.25
Shares Outstanding (Basic)24.73B
Shares Outstanding (Diluted)24.99B

Key Highlights

  • 1Revenue for Q2 FY2024 reached $13.51 billion, a 101% increase year-over-year, significantly exceeding market expectations.
  • 2Data 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.
  • 3Gross margin expanded significantly to 70.1% from 43.5% in the prior year's quarter, indicating strong pricing power and improved product mix.
  • 4Net income soared to $6.19 billion, a 843% increase year-over-year, with diluted EPS of $2.48.
  • 5The company announced an additional $25 billion increase to its share repurchase program, signaling strong confidence in its future financial health.
  • 6Operating expenses increased by 10% year-over-year, primarily due to investments in compensation and stock-based compensation to support growth.
  • 7Gaming revenue showed resilience, increasing 22% year-over-year, benefiting from the normalization of channel inventory for its GeForce RTX 40 Series GPUs.

Frequently Asked Questions

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.

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.

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.

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.