Nvidia has a better-than-expected quarterly profit and forecast second-quarter revenue above estimates on strong demand for its gaming chips and higher sales to data centers. The company forecast revenue of $2.55 billion, plus or minus 2%, for the quarter.
In the first quarter of 2019, Nvidia's net income fell to $394 million, or 64 cents per share, from $1.24 billion, or $1.98 per share, a year earlier. Year over year though, things do not look great. Excluding items, Nvidia earned 88 cents per share. Total revenue fell to $2.22 billion compared with $3.21 billion a year earlier and $2.21 billion in the previous quarter.
“NVIDIA is back on an upward trajectory,” said Jensen Huang, founder and CEO of NVIDIA. “We’ve returned to growth in gaming, with nearly 100 new GeForce Max-Q laptops shipping. And NVIDIA RTX has gained broad industry support, making ray tracing the standard for next-generation gaming.
“Despite the near-term pause in demand from hyperscale customers, the application of AI continues to accelerate. AI adoption is accelerating in the world’s largest industries, moving beyond the cloud to the edge where AI processing has to be instantaneous. We’re excited about our pending acquisition of Mellanox, which will help us drive data center architecture for high performance computing and AI from the cloud to the edge,” he said.
Q1 highlights
Q1 Fiscal 2020 Summary
GAAP | |||||||||||
($ in millions, except earnings per share) | Q1 FY20 | Q4 FY19 | Q1 FY19 | Q/Q | Y/Y | ||||||
Revenue | $2,220 | $2,205 | $3,207 | Up 1% | Down 31% | ||||||
Gross margin | 58.4% | 54.7% | 64.5% | Up 370 bps | Down 610 bps | ||||||
Operating expenses | $938 | $913 | $773 | Up 3% | Up 21% | ||||||
Operating income | $358 | $294 | $1,295 | Up 22% | Down 72% | ||||||
Net income | $394 | $567 | $1,244 | Down 31% | Down 68% | ||||||
Diluted earnings per share | $0.64 | $0.92 | $1.98 | Down 30% | Down 68% |
Non-GAAP | ||||||||
($ in millions, except earnings per share) | Q1 FY20 | Q4 FY19 | Q1 FY19 | Q/Q | Y/Y | |||
Revenue | $2,220 | $2,205 | $3,207 | Up 1% | Down 31% | |||
Gross margin | 59.0% | 56.0% | 64.7% | Up 300 bps | Down 570 bps | |||
Operating expenses | $753 | $755 | $648 | -- | Up 16% | |||
Operating income | $557 | $479 | $1,428 | Up 16% | Down 61% | |||
Net income | $543 | $496 | $1,285 | Up 9% | Down 58% | |||
Diluted earnings per share | $0.88 | $0.80 | $2.05 | Up 10% | Down 57% |