This afternoon, NVIDIA announced their quarterly earnings for the second quarter of their 2017 fiscal year, which ended July 31. NVIDIA had record revenues for the quarter, coming in at $1.43 billion, which is up 24% from a year ago. Gross margin for the quarter was 57.9%, up 2.9% from a year ago, while operating expenses fell 9% to $509 million. Operating income for the quarter was $317 million, up 317% from Q2 2016 where it was just $76 million due to a write-down of the Icera modem division. This also impacted net income, which was up 873% to $253 million, and earnings per share of $0.40 was up 700% compared to the Q2 2016 results.

NVIDIA Q2 2017 Financial Results (GAAP)
  Q2'2017 Q1'2017 Q2'2016 Q/Q Y/Y
Revenue (in millions USD) $1428 $1305 $1153 +9% +24%
Gross Margin 57.9% 57.5% 55.0% +0.4% +2.9%
Operating Income (in millions USD) $317 $245 $76 +29% +317%
Net Income $253 $196 $26 +29% +873%
EPS $0.40 $0.33 $0.05 +21% +700%

NVIDIA also released Non-GAAP measures, which “exclude stock-based compensation, legal settlement costs, product warranty charge, acquisition-related costs, contributions, restructuring and other charges, gains from non-affiliated investments, interest expense related to amortization of debt discount, and the associated tax impact of these items, where applicable” and therefore don’t factor in the Icera write-down. In Non-GAAP measures, revenue was the same $1.428 billion, and gross margin was 58.1% which was up 1.5% from the Q2 2016 Non-GAAP results. Operating income was up 65% to $328 million, and net income was up the same 65% to $313 million. Earnings per share were up 56% to $0.53 compared to last year’s Non-GAAP results.

NVIDIA Q2 2017 Financial Results (Non-GAAP)
  Q2'2017 Q1'2017 Q2'2016 Q/Q Y/Y
Revenue (in millions USD) $1428 $1305 $1153 +9% +24%
Gross Margin 58.1% 58.6% 56.6% -0.5% +1.5%
Operating Income (in millions USD) $382 $322 $231 +19% +65%
Net Income $313 $263 $190 +19% +65%
EPS $0.53 $0.46 $0.34 +15% +56%

At the heart of this is NVIDIA’s GPU business, which has diversified quite a bit over the last several years. For Q2 2017, NVIDIA’s GPU business brought in $1.196 billion in revenue, up 18% from last year and up 14% over last quarter. NVIDIA’s Tegra platform, which is primarily automotive now, but still powering a couple of consumer devices like the SHIELD Tablet K1 and the SHIELD Android TV, brought in revenues of $166 million, which is up 30% from a year ago. NVIDIA’s “other” category is the $66 million they report per quarter for the payment from Intel for licensing.

Broken down by market, gaming is still the largest market for NVIDIA, with revenues of $781 million attributed to gaming, which is up 18% year-over-year. This has been spurred by the recent releases of their latest Pascal GPUs for the desktop, which hold the current performance crown with the move to a new FinFET node. Professional Visualization brought in $214 million, up 22% from a year ago, and NVIDIA just announced Pascal based Quadro cards as well, so I would expect this growth to continue if Quadro matches GeForce. The Datacenter revenue had the biggest jump, up 110% year-over-year to $151 million, and NVIDIA has put a lot of effort and marketing into deep learning to achieve this kind of growth. Automotive accounted for $119 million in revenue, up 68% from a year ago, and NVIDIA’s OEM and IP market was the only one to see a small loss of 6% revenue compared to last year, down to $163 million.

NVIDIA Quarterly Revenue Comparison (GAAP)
In millions Q2'2017 Q1'2017 Q2'2016 Q/Q Y/Y
GPU $1196 $1079 $959 +11% +25%
Tegra Processor $166 $160 $128 +4% +30%
Other $66 $66 $66 flat flat

For next quarter, NVIDIA is expecting revenues of $1.68 billion, plus or minus 2%, with GAAP margins of 57.8% and non-GAAP margins of 58.0%, plus or minus 0.5%.

With record revenue, a more diversified platform, and the current GPU performance crown, NVIDIA has been easily outperforming the PC market with their strong focus on one of the few bright spots in the PC market – gaming. We’ve seen several companies transition to practically only selling gaming computers, and that is because of the higher margins and strong sales they’ve seen. NVIDIA has been riding this wave with successful launches of it’s Maxwell products, and now Pascal.

Source: NVIDIA Investor Relations

Comments Locked


View All Comments

  • michael2k - Friday, August 12, 2016 - link

    If AMD had the performance crown, they'd be charging the premium. That's kind of the point of having the crown.
  • emn13 - Friday, August 12, 2016 - link

    The performance crown doesn't usually allow charging major premiums because the competition isn't usually this far behind.

    But yes, almost complete lack of competition does allow borderline monopolistic pricing. That's kind of the point of aiming for a monopoly.

    Unfortunately, regulators apparently feel that monopolies in IT in general are perfectly fine, since we have both a long history and many modern monopolies, without a single impactful step to reduce the damage they do.

    I'm guessing the underlying reason for that is the rapid improvement in tech in general - that lets even egregious practices persist since despite consumers getting really shoddy deals relative to producers, they're still getting more for their money than last year.
  • Michael Bay - Friday, August 12, 2016 - link

    Oy vey, somebody`s geschaft is working, WE CAN`T HAVE THAT, bring out muh monopoly wailing!
  • Strunf - Friday, August 12, 2016 - link

    It's the fact that nVIDIA charges a premium that allows AMD to keep in business by competing on the price/performance or low budget share of the market.
    If nVIDIA didn't charge a premium and it's products were priced the same while being faster no one would buy AMD.
  • dsumanik - Friday, August 12, 2016 - link

    No dude, this comes down to one thing only. People associating their epeen with having the fastest computer possible at any cost.

    How does it feel to literally be a cow walking in,one to the slaughterhouse? Much like waiting in line at an Apple Store I presume
  • TormDK - Friday, August 12, 2016 - link

    Must be hard being broke, and have to flip burgers at McDonalds.

    Nvidia makes money because they know what customers want; Raw power. Who cares about "Best bang for the buck", we want "BANG!" and don't care about bucks.
  • slickr - Sunday, August 14, 2016 - link

    Nvidia knows its customers are idiots and like sheep to the slaughter go to the slaughter pit.
  • HollyDOL - Friday, August 12, 2016 - link

    The issue here is the fact nV currently left AMD in dust, their flagships performance is right now very significant. Hopefully AMD releases something soon that can trade equal blows with 1080 or ideally Pascal Titan X. Nobody wants to pay excessive premium if it is not necessary. Well, perhaps except few hardcore fanboys.

    Alas, those income gains we can see now are likely not result of Pascal or FE circus. The availability of new cards esp. at the first half of Q2'2017 (May-July) was pretty bad. Ihmo majority of increased profit comes from trimming costs of stocked Maxwell cards... and subsequently selling loads of them.
  • HollyDOL - Friday, August 12, 2016 - link

    Though I wonder if they'll be able to stay so positive and growing in Q3 when all those $30 fees for GTX970 start to add up...
  • niva - Friday, August 12, 2016 - link

    I really don't understand what people are complaining about in terms of AMD performance. For games they're good but nV has always been the better choice for gamers. AMD had a huge lead in compute performance for quite a few years, they're not so far behind even now and they seem to lag behind on manufacturing nodes and generations. Later this year the next gen stuff will come and they'll be trading blows again. The problem for AMD is that their graphics business is the only one which is competitive, but that's a topic for another time.

Log in

Don't have an account? Sign up now