10-QPeriod: Q3 FY2024

NVIDIA CORP Quarterly Report for Q3 Ended Oct 29, 2023

Filed November 21, 2023For Securities:NVDA

Summary

NVIDIA Corporation's (NVDA) third quarter of fiscal year 2024 (ending October 29, 2023) demonstrated exceptional financial performance, driven primarily by the robust demand in its Data Center segment, fueled by the burgeoning AI market. Revenue surged by 206% year-over-year to $18.12 billion, with the Data Center segment alone growing an impressive 279% to $14.51 billion. This growth underscores NVIDIA's dominant position in providing the accelerated computing infrastructure essential for AI model training and inference. The company also saw strong performance in its Gaming segment, which grew 81% year-over-year, indicating a healthy recovery in channel inventory and strong consumer demand for its latest GeForce GPUs. Despite increased operating expenses, largely due to investments in R&D and compensation, NVIDIA's operating income expanded dramatically by 1,633% to $10.42 billion, reflecting significant operating leverage and improved gross margins from a more favorable product mix. The company also updated its share repurchase authorization, signaling continued commitment to returning capital to shareholders.

Financial Highlights

55 data points
Beta

Revenue

$18.12B

74.0% Gross Margin

Net Income

$9.24B

51.0% Net Margin

EPS (Diluted)

$0.37

Total Assets

$54.15B

Cash & Equivalents

$5.52B

Free Cash Flow

$7.33B

Financial Statements
Beta
Revenue$18.12B
Cost of Revenue$4.72B
Gross Profit$13.40B
R&D Expenses$2.29B
SG&A Expenses$689.00M
Operating Expenses$2.98B
Operating Income$10.42B
Interest Expense$63.00M
Net Income$9.24B
EPS (Basic)$0.37
EPS (Diluted)$0.37
Shares Outstanding (Basic)24.68B
Shares Outstanding (Diluted)24.94B

Key Highlights

  • 1Revenue for Q3 FY24 surged 206% year-over-year to $18.12 billion, significantly exceeding market expectations.
  • 2Data Center revenue demonstrated explosive growth, up 279% year-over-year to $14.51 billion, driven by high demand for AI infrastructure.
  • 3Gaming revenue increased by 81% year-over-year to $2.86 billion, reflecting channel inventory normalization and strong consumer demand.
  • 4Gross margin improved significantly to 74.0% from 53.6% in the prior year, driven by a favorable product mix and lower inventory provisions.
  • 5Operating income soared by 1,633% year-over-year to $10.42 billion, showcasing strong operational leverage.
  • 6The company announced an additional $25 billion increase to its share repurchase program, signaling confidence and a commitment to shareholder returns.
  • 7NVIDIA continues to navigate evolving US export control regulations impacting sales to China and other regions, with expectations of a significant decline in Q4 FY24 revenue from these areas, though offset by growth elsewhere.

Frequently Asked Questions

The primary driver behind NVIDIA's exceptional revenue growth is the surging demand for its Data Center products, largely propelled by the explosive growth in Artificial Intelligence (AI). The company's GPUs and accelerated computing platforms are critical for training and running large language models and other AI applications, leading to a 279% year-over-year increase in Data Center revenue.

NVIDIA is actively working to comply with evolving U.S. export control regulations, which restrict the sale of certain high-performance chips to China and other regions. While these regulations are expected to significantly reduce revenue from these specific markets in the fourth quarter of fiscal year 2024, NVIDIA anticipates this decline will be more than offset by strong growth in other geographic regions. The company is also developing new, regulation-compliant solutions.

NVIDIA's gross margin has shown significant improvement, reaching 74.0% in the third quarter of fiscal year 2024, up from 53.6% in the prior year. This improvement is attributed to a more favorable product mix, with a higher contribution from the high-margin Data Center segment, and a reduction in net inventory provisions and related charges compared to the previous year.

NVIDIA continues to return value to shareholders through a robust share repurchase program and dividend payments. The company announced an increase to its share repurchase authorization by an additional $25 billion, indicating a strong commitment to buying back stock. While dividends are subject to Board determination, the company has consistently paid them.