NVIDIA this afternoon closed the book on another record fiscal year, announcing their FY 2021 and Q4 2021 earnings results for the company. For the last quarter of their fiscal year, NVIDIA booked just over $5B in revenue with a profit of $1457M, marking NVIDIA’s first five billion dollar quarter, and setting earning records across the board. Meanwhile for the full fiscal year, NVIDIA has recorded just under $16.7B in revenue, with a net income for the year of $4.3B.

NVIDIA Q4 2021 Financial Results (GAAP)
  Q4'2021 Q3'2021 Q4'2020 Q/Q Y/Y
Revenue $5003M $4726M $3105M +6% +61%
Gross Margin 63.1% 62.6% 64.9% +0.5% -1.8%
Operating Income $1507M $1398M $990M +8% +52%
Net Income $1457M $1336M $950M +9% +53%
EPS $2.31 $2.12 $1.53 +9% +51%

Setting revenue and profit records, NVIDIA once more closed their year on a high note. The $5B in revenue they booked made for their best quarter ever, and a 61% jump over the year-ago quarter. Meanwhile NVIDIA’s record $1457M in net income is a similarly significant jump, besting Q4’2020 by 53%.

NVIDIA’s gross margin for the quarter was similarly strong. NVIDIA recorded a gross margin of 63.1%, a slight decline from NVIDIA’s record-setting margin in Q4’2020, but still incredibly comfortable for a fabless semiconductor company.

NVIDIA Quarterly Revenue Comparison (GAAP)
($ in millions)
In millions Q4'2021 Q3'2021 Q4'2020 Q/Q Y/Y
Gaming $2495 $2271 $1491 +10% +67%
Professional Visualization $307 $236 $331 +30% -7%
Datacenter $1903 $1900 $968 Flat +97%
Automotive $145 $125 $163 +16% -11%
OEM & IP $153 $194 $152 -21% +1%

Breaking down their revenue by segment, the big winner, as you might expect, was NVIDIA’s gaming segment. Covering all things GeForce – video cards and services like GeForce Now – among the many records NVIDIA set for Q4 was in gaming revenue. For the quarter NVIDIA booked $2.495B in gaming revenue, just inches short of half of all revenue for the company.

Driving that gaming revenue has been a mix of gaming and mining demand, a thorny issue that NVIDIA is taking some rather extreme steps to deal with. Although the company is not outright hostile to industrial miners, the demand for hardware from Ethereum miners is screwing up NVIDIA’s gaming market, and the instability of that market makes it difficult to prepare for the resulting up and down-swings in the mining market. This has led to the company taking steps such as artificially limiting Ethereum performance on GeForce cards going forward, starting with the RTX 3060, and introducing a companion, mining-focused line of cards with the upcoming CMP parts.

The big, earnings-related question on everyone’s mind is how much Ethereum mining contributed to NVIDIA’s bottom-line for Q4; and the answer to that remains nebulous. NVIDIA believes that a significant number of video cards were purchased by industrial miners, but because the bulk of their sales are to AIB partners, they can’t accurately track or quantify what those cards are being used for. To that end, NVIDIA’s very uncertain ballpark estimate is that mining drove $100mil to $300mil in revenue for the quarter, a surprisingly small part of their overall gaming revenue. But, even if that range is right, it’s certainly been enough to tip the market scales towards empty shelves and unhappy gamers.

Looking towards Q1, NVIDIA expects to start CMP card shipments next month. The first month’s sales will be quite limited, with the company projecting just $15mil in revenue. But it’s a start; and the company will also be breaking out CMP sales in future quarters to help quantify the impact of mining on their bottom line.

Moving on, NVIDIA’s other big mover for Q4 was the data center market. Keeping in mind that NVIDIA has folded the bulk of Mellanox revenue into this segment – so year-over-year comparisons are tricky – at the end of the day NVIDIA is still setting revenue records for this segment. Interestingly enough, according to the company Mellanox sales are actually down on the quarter, so the compute side of the data center market has grown enough to absorb that drop and then some.

Otherwise, NVIDIA’s other segments have been a mixed bag. NVIDIA’s normally reliable professional visualization segment is still feeling the impact of COVID to an extent; now that the immediate rush of work-from-home purchasing is done, desktop workstation GPU sales haven’t fully recovered from the COVID drop, and mobile workstation sales aren’t enough to cover the difference. Meanwhile NVIDIA’s OEM and IP business has held steady on a year-over-year basis, and automotive is down as some legacy infotainment products have been retired.

NVIDIA FY2021 Full Year Financial Results (GAAP)
  FY2021 FY2020 FY2019
Revenue $16675M $10918M $11716M
Gross Margin 62.3% 62.0% 61.2%
Operating Income $4532M $2846M $3804M
Net Income $4332M $2796M $4141M
EPS $6.90 $4.52 $6.63

As for the complete, fiscal year 2021 picture, NVIDIA’s Q4 is the cherry on top of what initially looked like it would be a shaky year for the company. Initially the fear was that the tech industry would take a big hit from COVID – with NVIDIA’s fiscal year almost perfectly lining up with the start of the pandemic – however the tech industry has instead benefitted from the high demand for products. As a result, NVIDIA booked a record $16.7B in revenue for the year, up 53% from FY2020. And net income was similarly strong, with NVIDIA booking a record $4.3B in profit, up 55% from the previous year.

NVIDIA Yearly Revenue Comparison (GAAP)
($ in millions)
In millions FY2021 FY2020 FY2019
Gaming $7759 $5518 $6246
Professional Visualization $1053 $1212 $1130
Datacenter $6696 $2983 $2932
Automotive $536 $700 $641
OEM & IP $631 $505 $767

Looking at NVIDIA’s business segments for the full year, FY2021’s winners and losers are generally the same as Q4’s. Data center saw the largest growth by far for the full year, jumping 124% to just shy of $6.7B in revenue. As previously mentioned a big part of this is how NVIDIA has rolled Mellanox’s products into the segment. But even doing some basic work to separate Mellanox’s contributions – according to NVIDIA, Mellanox contributed about 10% to the company’s FY2021 revenues – and that still has the compute side of the data center business growing by almost 70%. The vast majority of which, in turn, has been driven by NVIDIA’s A100 accelerator, which was introduced in Q2. NVIDIA has continued to ramp up A100 throughout the fiscal year, which has been reflected in their ever-growing quarterly data center results.

Meanwhile gaming was up “just” 41%, to $7.8B for the year. As with the data center market, NVIDIA launched their next-generation Ampere parts to the gaming market over the past several months, which has driven the usual spike in demand as gamers upgrade and build new systems. Ethereum mining undoubtedly played a part in that as well, however NVIDIA isn’t able to meaningfully determine what the total contribution there has been. Going forward, the matter is potentially a significant risk for NVIDIA, as when the Ethereum bubble pops, a lot of that GeForce RTX gaming hardware will enter the second-hand market; so NVIDIA is keen to avoid another crypto-hangover like 2018.

Otherwise, NVIDIA’s OEM and IP business was up 25% over 2020, which NVIDIA is primarily attributing to improved sales of entry-level laptop GPUs. All the while professional visualization and automotive are down for the year as a whole, due to the previously mentioned troubles from COVID as well as the change in NVIDIA’s automotive product mix.

Finally, looking ahead to FY2021 and Q1, NVIDIA is entering the year on an optimistic note. The company expects to book $5.3B in revenue for the quarter, with a gross margin of 63.8%.

In fact, the biggest limitation to NVIDIA’s growth opportunities over the year is likely to be the ongoing, industry-wide chip shortage. While NVIDIA isn’t making any meaningful projections for the full year, at least for the rest of this quarter (Q1), the company is expecting more of the status quo; which is to say that chip supplies remain tight while demand remains high. For gamers in particular, NVIDIA is projecting that channel inventories for GeForce parts will remain low throughout the quarter (even with tomorrow’s RTX 3060 launch). So for the moment, there’s no sign that GeForce video cards will be any easier to get over the next couple of months.

Source: NVIDIA Investor Relations

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  • whatthe123 - Thursday, February 25, 2021 - link

    these days even growth doesn't matter. all that matters is buying in before the stock is price moves up on speculation 10 years in advance. if people feel they missed the boat the stock will end up losing value and attention even with record growth.
  • scineram - Friday, February 26, 2021 - link

    No, I hate both.
  • Supercell99 - Thursday, February 25, 2021 - link

    Thanks for the quarterly financials. Cleanly presented. Much easier to read than 99% of the financial sites. I like the stock!
  • smilingcrow - Thursday, February 25, 2021 - link

    Except for the lack of commas in the numbers in the charts.
  • dairyAT - Thursday, February 25, 2021 - link

    No mention of the potential ARM acquisition?
  • ChrisGX - Wednesday, March 3, 2021 - link

    Ryan Smith said: Finally, looking ahead to FY2021 and Q1...

    That should be FY2022.
  • Oxford Guy - Wednesday, March 3, 2021 - link

    Clearly showing how humanity is greatly enriched — by going beyond communism's long lines in the hopes of getting product to not having to bother with lines because there's no product to get.

    We don't need companies to produce products that meet demand. We need companies that produce what they want to in as much quantity as they feel like.
  • RSAUser - Friday, March 5, 2021 - link

    Those gross margins are actually sickening, so sad that there is pretty much no alternative (yes there's AMD who also cannot meet supply who are also upping their pricing).

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