10-QPeriod: Q2 FY2025

NVIDIA CORP Quarterly Report for Q2 Ended Jul 28, 2024

Filed August 28, 2024For Securities:NVDA

Summary

NVIDIA Corporation's (NVDA) Form 10-Q filing for the period ending July 27, 2024, reveals exceptionally strong financial performance, driven primarily by its Data Center segment. Revenue surged by 122% year-over-year to $30.04 billion for the second quarter, with net income rising by an even more impressive 168% to $16.60 billion. This performance is fueled by sustained high demand for AI and accelerated computing solutions, particularly its Hopper GPU architecture. The company demonstrated robust sequential growth as well, with revenue up 15% and net income up 12%. While gross margins saw a slight sequential dip due to inventory provisions for new Blackwell material, they remained strong at 75.1%, up from 70.1% in the prior year. NVIDIA also provided a positive outlook, anticipating several billion dollars in Blackwell revenue in the fourth quarter of fiscal year 2025 and continued strength in its Data Center segment. NVIDIA continues to invest heavily in research and development and expanding its supply chain to meet demand. The company also announced a significant increase in its share repurchase authorization, highlighting its commitment to returning capital to shareholders. Despite ongoing global trade complexities and regulatory scrutiny, NVIDIA's core business remains exceptionally strong.

Financial Highlights

54 data points
Beta

Revenue

$30.04B

75.1% Gross Margin

Net Income

$16.60B

55.3% Net Margin

EPS (Diluted)

$0.67

Total Assets

$85.23B

Cash & Equivalents

$8.57B

Free Cash Flow

$14.49B

Financial Statements
Beta
Revenue$30.04B
Cost of Revenue$7.47B
Gross Profit$22.57B
R&D Expenses$3.09B
SG&A Expenses$842.00M
Operating Expenses$3.93B
Operating Income$18.64B
Net Income$16.60B
EPS (Basic)$0.68
EPS (Diluted)$0.67
Shares Outstanding (Basic)24.58B
Shares Outstanding (Diluted)24.85B

Key Highlights

  • 1Revenue for the second quarter of fiscal year 2025 reached $30.04 billion, a 122% increase year-over-year.
  • 2Net income for the quarter was $16.599 billion, a 168% increase compared to the same period last year.
  • 3Data Center revenue was $26.45 billion, up 154% year-over-year, driven by strong demand for AI and accelerated computing solutions.
  • 4Gross margin remained robust at 75.1% for the quarter, improving from 70.1% in the prior year.
  • 5The company shipped customer samples of its Blackwell architecture and expects to begin production ramp in the fourth quarter of fiscal year 2025, anticipating several billion dollars in Blackwell revenue.
  • 6NVIDIA announced an additional $50.0 billion share repurchase authorization, underscoring its capital return strategy.
  • 7Operating expenses increased 48% year-over-year, primarily due to investments in R&D and headcount growth.

Frequently Asked Questions

The primary driver of NVIDIA's exceptional revenue growth is its Data Center segment, which is experiencing unprecedented demand for AI and accelerated computing solutions. This is largely due to the widespread adoption of their Hopper GPU architecture for training and inferencing large language models and other AI applications.

NVIDIA is actively managing its supply chain by increasing capacity purchases with existing and new suppliers, including entering into prepaid manufacturing and capacity agreements. For the Blackwell architecture, they have shipped customer samples and are executing a change to the GPU mask to improve production yield. Production ramp is scheduled for Q4 FY2025, with significant revenue expected in that quarter. The company acknowledges that product transitions and managing new, complex product introductions can create volatility and may impact gross margins, as seen with initial inventory provisions for low-yielding Blackwell material.

NVIDIA expects continued strong demand in the Data Center segment. They anticipate shipping several billion dollars in Blackwell revenue in the fourth quarter of fiscal year 2025. Demand for the Hopper architecture is also expected to increase in the second half of fiscal year 2025. The company forecasts gross margins to be in the mid-70% range for fiscal year 2025 and expects operating expenses to grow in the mid to upper 40% range due to product development investments.

NVIDIA is navigating U.S. export controls by developing and shipping products designed for the China market that do not require export licenses, which has led to sequential revenue growth in China. However, revenue from China remains below pre-export control levels. The company has not received licenses to ship restricted products to China and actively seeks licenses for customers when applicable, though the process is uncertain and time-consuming. NVIDIA acknowledges that further changes in export controls could negatively impact its business and has implemented measures to enhance supply chain resiliency.