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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  • masouth - Tuesday, August 16, 2016 - link

    Monopolies (as you want to call these) are based on supply/ demand and aren't formed by socialism, they are formed by CAPITALISM. LOL, you think Gary Johnson is going to stop this? Don't be a dope, Gary Johnson is very much for capitalism and minimized government interference.

    And as far as nVidia being a monopoly goes...not unless you mean a near monopoly on top of the line performance or better management.
  • HideOut - Sunday, August 14, 2016 - link

    I hope you two realize that the gouging isnt Nvidia, but board partners. Nvidia sells by lots of chips, say 1000 at a time, much like intel. The parners set the prices (except with the FE editions of course).
  • Chaser - Friday, August 12, 2016 - link

    I know right? Because Nvidia also controls when we open our wallets to gouge ourselves too. The 9 series was superb when it came out and at that time it blew away anything AMD had to offer. AMD's response with the Fury series was too little, too late and then all the RX480 fans told us to wait for how incredible that was going to be. 1060 pretty much put that fire out. Now they say Vega is where it will be next. Sheeze.
  • slickr - Sunday, August 14, 2016 - link

    The cheapest GTX 1060 you can find is $270, its even worse in Europe where the cheapest is 280 Euros, so essentially $300 when converted to US dollars. The chepest RX 480 8GB is $250 though and 260 euros, so essentially at least 30 euros cheaper and the 4GB model can be found for as little as 230 euros, which is 50 euros cheaper than the GTX 1060 which only wins in older DX11 titles specifically optimized for Nvidia.

    Since most games coming out in Q4 2016 and 2017 will be DX12 and Vulkan where AMD's offerings crush Nvidia, the AMD offerings make much more sense in every single way. Only braindead Nvidia worshipers would choose Nvidia's current overpriced offerings.
  • TheJian - Saturday, August 13, 2016 - link

    What all of you whiners don't seem to understand is it took NV 9 full years to get back to 2007 profits. And they are not beating those by much now (finally). So the idea they've been ripping you off is silly. AMD should be charging more as they make peanuts. Get a better job if you can't afford a $300-700 vid card every few years. Your cell phone probably costs more than most vid cards today and those people are pulling down BILLIONS. You whine about a company that might crack 1B in profits? LOL. Whatever. Go NV (and AMD if they'd ever price correctly when they have a great product), make more money and spend more on R&D.

    You guys would have them make nothing, and we'd all sit here wondering why there was no new gpus each year...ROFL. It's mind boggling you people would rather have NV act like AMD than the reverse and have AMD making more money. Market predicts pricing, and NV can clearly charge more as they have a tough time keeping 1080 in stock.

    Like I said, get a better job if you can't afford your hobby (whatever it is). 1070 is already cheap enough for what you get. Do you guys realize it costs 120mil just to create a 10nm soc? Never mind the costs to make a gpu that is ~3x it's size. You should not be confused about why AMD has quarter after quarter of losses (until this last Q) and lost 8B over the last 15yrs. It's comic anyone thinks AMD has great prices, while not realizing it is exactly THAT PRICING that is killing them as a business. I hope Zen is ~350+mm^2 and is priced like Intels current HEDT ($430-1720) so they can finally get back to 58% margins like NV/Intel (and what they had themselves in 2006 when cpus over $800 existed for AMD). Some people don't seem to read balance sheets or quarterly reports...LOL.

    Do you guys want AMD to make money or what?
  • StrangerGuy - Saturday, August 13, 2016 - link

    AMD is in a funny position. It's easy to garner sympathy for them not to have >40% marketshare despite years of better perf/price, but yet they also deserve to be dipping to <20% for screwing up Hawaii and Polaris badly, milking GCN 1.0 to death and also not saying no to cryptocurrency where the incredible volatility done to AMD GPU supply/demand has garnered a ton of ill will in the much larger gaming market.
  • darkfalz - Sunday, August 14, 2016 - link

    Perf/price means next to nothing for technology that is not scalable. This is a hardware enthusiasts site, not Dell or
  • D. Lister - Sunday, August 14, 2016 - link

    When AMD was competitive, they did charge more. Remember the $1K+ AMD CPUs? ...and that was when AMD was putting better numbers mainly in games and audio encode. That was when Intel was stuck in the P4 Netburst quicksand, while AMD continued to improve upon the short pipeline arch. based on the P3.

    To ask for a competitive price, you need at least a marginally competitive product, which AMD hasn't had in a good long while. Sure, if you selectively limit your criteria to benchmark numbers alone, you can happily live with the illusion of competition. The fact, as supported by the numbers (market share, earnings, profit/loss) is that there is much more to every product than raw performance. Unless the enthusiast community realize this, people would keep getting surprised at how AMD GPUs "appear" so competitive in the benches, and yet still fail to gain any market share.
  • slickr - Sunday, August 14, 2016 - link

    That is bullshit, Nvidia has paid the tech media really well to miinform their customers and easily recommend every Nvidia turd, use Nvidia's software to measure the card's performance, while always putting down AMD products even when they are 10x times better.

    So you have a bunch of uninformed and misinformed fools tricked into buying Nvidia, thanks to fraud and sellout by media.
  • StrangerGuy - Sunday, August 14, 2016 - link

    The ramblings of delusional AMD fanboys is always entertaining.

    But that's OK, matching a 970 at only 2 years late while relying on rabid fanboys to proclaim how DX11 performance doesn't matter was clearly a successful market winning strategy.

    BTW AMD CPU division should be thankful they got wrecked in 2006 instead of 2003 because not using the Pentium M on desktop was purely a political decision at Intel.

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