NVIDIA Financial Results Fourth Quarter and Fiscal 2020 - Positive Forecasts Despite Coronavirus

NVIDIA today reported revenue for the fourth quarter ended Jan. 26, 2020, of $3.11 billion, up 41 percent from $2.21 billion a year earlier, and up 3 percent from $3.01 billion in the previous quarter. Nvidia Corp on Thursday forecast first-quarter revenue above expectations spurred by increasing demand for data-center and gaming chips, despite a hit of $100 million from the coronavirus outbreak.

GAAP earnings per diluted share for the quarter were $1.53, up 66 percent from $0.92 a year ago, and up 6 percent from $1.45 in the previous quarter. Non-GAAP earnings per diluted share were $1.89, up 136 percent from $0.80 a year earlier, and up 6 percent from $1.78 in the previous quarter.

For fiscal 2020, revenue was $10.92 billion, down 7 percent from $11.72 billion a year earlier. GAAP earnings per diluted share were $4.52, down 32 percent from $6.63 a year earlier. Non-GAAP earnings per diluted share were $5.79, down 13 percent from $6.64 a year earlier.

“Adoption of NVIDIA accelerated computing drove excellent results, with record data center revenue,” said Jensen Huang, founder and CEO of NVIDIA. “Our initiatives are achieving great success.

“NVIDIA RTX ray tracing is reinventing computer graphics, driving powerful adoption across gaming, VR and design markets, while opening new opportunities in rendering and cloud gaming. NVIDIA AI is enabling breakthroughs in language understanding, conversational AI and recommendation engines ― the core algorithms that power the internet today. And new NVIDIA computing applications in 5G, genomics, robotics and autonomous vehicles enable us to continue important work that has great impact.

“We are well positioned for the greatest technology trends of our time,” he said.

NVIDIA will pay its next quarterly cash dividend of $0.16 per share on March 20, 2020, to all shareholders of record on Feb. 28, 2020.

Q4 Fiscal 2020 Summary

GAAP
($ in millions, except earnings per share)	Q4 FY20	Q3 FY20	Q4 FY19	Q/Q	Y/Y
Revenue	$3,105	$3,014	$2,205	Up 3%	Up 41%
Gross margin	64.9%	63.6%	54.7%	Up 130 bps	Up 1,020 bps
Operating expenses	$1,025	$989	$913	Up 4%	Up 12%
Operating income	$990	$927	$294	Up 7%	Up 237%
Net income	$950	$899	$567	Up 6%	Up 68%
Diluted earnings per share	$1.53	$1.45	$0.92	Up 6%	Up 66%

Non-GAAP
($ in millions, except earnings per share)	Q4 FY20	Q3 FY20	Q4 FY19	Q/Q	Y/Y
Revenue	$3,105	$3,014	$2,205	Up 3%	Up 41%
Gross margin	65.4%	64.1%	56.0%	Up 130 bps	Up 940 bps
Operating expenses	$810	$774	$755	Up 5%	Up 7%
Operating income	$1,220	$1,156	$479	Up 6%	Up 155%
Net income	$1,172	$1,103	$496	Up 6%	Up 136%
Diluted earnings per share	$1.89	$1.78	$0.80	Up 6%	Up 136%

Fiscal 2020 Summary

GAAP
($ in millions except earnings per share)	FY20	FY19	Y/Y
Revenue	$10,918	$11,716	Down 7%
Gross margin	62.0%	61.2%	Up 80 bps
Operating expenses	$3,922	$3,367	Up 16%
Operating income	$2,846	$3,804	Down 25%
Net income	$2,796	$4,141	Down 32%
Diluted earnings per share	$4.52	$6.63	Down 32%

Non-GAAP
($ in millions except earnings per share)	FY20	FY19	Y/Y
Revenue	$10,918	$11,716	Down 7%
Gross margin	62.5%	61.7%	Up 80 bps
Operating expenses	$3,086	$2,826	Up 9%
Operating income	$3,735	$4,407	Down 15%
Net income	$3,580	$4,143	Down 14%
Diluted earnings per share	$5.79	$6.64	Down 13%

NVIDIA’s outlook for the first quarter of fiscal 2021 does not include any contribution from the pending acquisition of Mellanox Technologies, Ltd. Discussions with China’s regulatory agency, the State Administration for Market Regulation, are progressing, and NVIDIA believes the acquisition will likely close in the early part of calendar 2020.

While the ultimate effect of the coronavirus is difficult to estimate, the company has reduced its revenue outlook for the first quarter of fiscal 2021 by $100 million to account for its potential impact.

Revenue is expected to be $3.00 billion, plus or minus 2 percent.
GAAP and non-GAAP gross margins are expected to be 65.0 percent and 65.4 percent, respectively, plus or minus 50 basis points.
GAAP and non-GAAP operating expenses are expected to be approximately $1.05 billion and $835 million, respectively.
GAAP and non-GAAP other income and expense are both expected to be income of approximately $25 million.
GAAP and non-GAAP tax rates are both expected to be 9 percent, plus or minus 1 percent, excluding any discrete items. GAAP discrete items include excess tax benefits or deficiencies related to stock-based compensation, which are expected to generate variability on a quarter by quarter basis.

Highlights

Since the end of the third quarter of fiscal 2020, NVIDIA has achieved progress in these areas:

Gaming

Grew momentum for ray tracing with the launch of such RTX-enabled games as Deliver Us The Moon, Wolfenstein: Youngblood and Bright Memory.
Brought its GeForce NOW™ cloud gaming service out of beta, opening up PC gaming to hundreds of millions of consumers who can now add a virtual GeForce® graphics card to their device and play games they own, as well as free-to-play games.
Brought its number of gaming laptops to a record 125 models, including the world’s first 14-inch GeForce RTX™ laptop, the ASUS ROG Zephyrus G14.
Continued to build G-SYNC® momentum at CES, with the launch of the ASUS ROG Swift 360, the world’s fastest monitor, with a 360Hz refresh rate; and with LG adopting G-SYNC in its new lineup of OLED TVs.

Data Center and Edge Computing

Unveiled the first scalable GPU-accelerated supercomputer in the cloud with Microsoft Azure, with access to up to 800 NVIDIA® V100 Tensor Core GPUs.
Announced that it is powering the world’s most powerful industrial supercomputer, HPC5, which has 7,280 NVIDIA V100 GPUs and is operated by Italian energy company Eni.
Announced that Alibaba’s and Baidu’s recommendation engines run on NVIDIA AI, boosting inference by orders of magnitude beyond CPUs.
Joined forces with AWS, using NVIDIA T4 Tensor Core GPUs to power AWS Outposts, bringing Amazon EC2 G4 instances to customers’ data centers.
Collaborated with Arm, Ampere Computing, Fujitsu and Marvell on a new reference design platform for GPU-accelerated Arm-based servers, and with Red Hat to bring GPU acceleration to Arm for HPC applications.
Introduced NVIDIA TensorRT™ 7, an inference software development kit, paving the way to smarter and faster conversational AI.
Unveiled NVIDIA Clara™ Federated Learning, a reference application that preserves patient privacy while improving global model accuracy, already in use by the American College of Radiology and UCLA Health.
Introduced Magnum IO, a software suite for data scientists and high performance computing researchers that is optimized to eliminate storage and input/output bottlenecks.
Released a new version of the NVIDIA Isaac™ software development kit, a unified robotic development platform to accelerate the development and testing of robots.

Professional Visualization

Brought RTX technology to new desktops and laptops from Acer and joined forces with Adobe to provide a complimentary three-month Adobe Creative Cloud membership with new RTX Studio purchases.
Introduced RTX capabilities to Autodesk’s Maya 2020, Dassault’s Catia 2020 and Siemens Ray-Trace Studio with the release of a new NVIDIA Quadro® Driver and NVIDIA Studio Driver.
Expanded the reach of RTX technology into Chaos Group’s V-Ray, Autodesk’s Arnold and Blender’s Cycles, enabling designers to create complex 3D visuals, accurate reflections and more.

Automotive

Announced DRIVE AGX Orin™, an advanced software-defined platform for autonomous vehicles capable of achieving 200 TOPS, nearly 7x that of the previous generation SoC.

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