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

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  • TheJian - Saturday, August 13, 2016 - link

    But compute perf meant nothing then (and still doesn't mean much today). That is the problem, AMD isn't trying to be good at what we actually DO for the most part (well not good enough that is, to achieve higher ASP). They were busy crowing about compute when NV was crowing about GAMES perf and hence priced accordingly. NV wisely chopped off compute (not needed for home usage where GAMING is king) and left that for Titan or above variety cards (tesla etc) while concentrating on features and fps in games. It was comic to watch sites like anandtech crow about F@H perf etc when only 177K people actually ever used it (the download site gives total d/ls for life), and all it does is run up your electric bills...ROFL. Who cares. Most people reading these sites GAME. Synthetic crap is just that. Crap.

    AMD's problem is MANAGEMENT (not the workers) and the direction they've taken the company over the last decade. They fired the only guy who had the right idea (Dirk Meyer). Make a KING product then spend time on other stuff as profits allow. I hope ZEN is a return to KING status, not "good enough" crap that gets relegated to bargain bin pricing they have now. I won't buy ZEN unless it BEATS Intel's 8 core HEDT. Pricing means nothing to me as long as they are ~around Intel (up or down), I just want the WINNER. Period. I'm hoping they put out a 6 core (defective 8 core?) and that is what I'd be after based on Intel pricing probably. I'll be looking at $400+ this time with 6+ cores for the stuff I'm doing now. But I really hope AMD's die size is huge and prices just like Intel HEDT:
    They need the profits. Use failed chips for the rest of people that can't afford an 8 core at $1000+. If their 8core beats Intel's 8 (which it should if it's 100mm^2 larger than Intel, basically make it xbox1 sized which is made for $100 BTW) it should price ABOVE Intel, not below. No point in a price war if you are WINNING the perf war!

    Their junk apus can go to the poor people. Nobody I know that games has any need for integrated, so enthusiast chips should always be sans gpu. Concentrate on high end first AMD! ALWAYS. That is the difference between an NV record quarter and AMD's "well at least we didn't lose money this Q". If Vega would have come FIRST, I think AMD would have made much more. If Zen had come years ago instead of consoles (and new version of consoles again coming shortly), they wouldn't have had to drop out of the cpu race. Again, this is management and I feel for the AMD employees who have to watch their talents be wasted on bad decisions. One more point: there are 30-40% less of them than a few years ago now too! That sucks. Hopefully Zen/Vega profits will pull in enough to be able to hire back more QUALITY people for future products.
  • TheJian - Saturday, August 13, 2016 - link

    Incorrect, multiple retailers have said 1080 was the fastest selling top end gpu in history. 18/23 1080's are out of stock at newegg as of a day or two ago when I checked long after launch and they are selling as fast as they make them pretty much still today which is why pricing is where it is still and AIB's see no reason to price at NV MSRP (and I wouldn't either until they're stuck on shelves).

    OCuk sold 2000 AMD 480's on the first day. They sold 1000 1080's also on the first day. I'd say they have a pretty good supply, and all of the launch stuff and long after were in the quarter fully. Profit doesn't come from cutting prices to sell old inventory (that actually lessens margins). Profit here clearly came from $400+ cards.
  • HollyDOL - Saturday, August 13, 2016 - link

    Can you reference those claims?
  • krazyfrog - Friday, August 12, 2016 - link

    If you don't like it, don't buy it. Graphics cards aren't exactly basic commodities.
  • HollyDOL - Friday, August 12, 2016 - link

    Heretic! :-D
  • Michael Bay - Friday, August 12, 2016 - link

    How dare you. GFX are THE BASIC HUMAN RIGHT, you BIGOT!
  • BurntMyBacon - Monday, August 15, 2016 - link

    @krazyfrog: "Graphics cards aren't exactly basic commodities."

    Get out!
  • TheJian - Saturday, August 13, 2016 - link

    IIRC AMD had a $1500 card not long ago (and NV tried 3000, which didn't work out). Price what the market will bear...period. That is a company's job. If I want more spending cash, I'll get a better job (always trying to do that...ROFL).

    There is no monopoly here. 1/2 the PC gpus are NOT NV (integrated) and AMD owns ~23% of the market for discrete while NV owns 77. NV is dwarfed by the rest in overall gpus with under 20% IIRC. No court would take a case on this...ROFL. In fact NV is doing no harm even with Titanx which is a bargain for people who can't afford the $5000 Quadro that BIG companies easily can afford for pro app stuff which Titanx is aimed at (home users trying to do the same stuff, indie devs, contractors etc). $650 doesn't seem like much for a top end gpu (GTX 1080).

    And yes, as the OP said, if NV charged less than the market would bear AMD wouldn't even be able to exist. We'd have 1080's at $300 and AMD would be dead...LOL. Capitalism works fine.
  • Yojimbo - Saturday, August 13, 2016 - link

    I don't know if NVIDIA ended up eventually charging AIB partners more for the GPUs, but NVIDIA didn't do anything shameless either way. They produced as many chips as they could and sold as many as they could. The market just had a bigger demand than they could supply, so either the prices go up or the availability goes down. They (NVIDIA and their AIB partners) tried to keep the prices down and that's why there was such a low availability for such a long time.
  • Hrel - Saturday, August 13, 2016 - link

    Unfortunately AMD doesn't have Billions of dollars to invest in the R&D to equal a card like Nvidia's 10 series.

    We now have a monopoly in CPU's and GPU's. A monopoly in Operating Systems and ever increasing soldered shit machines that can never be upgraded.

    Yup, we're pretty much fucked unless we elect Gary Johnson as President, only way to stop this socialist trend.

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