NVIDIA Earnings, reported after the bell, beat Wall Street expectations and provided stronger-than-expected guidance for the quarter.
Nvidia shares fell 8% in after-hours trading.
Here’s how the company performed compared to consensus estimates for LSEG:
- Earnings per share: Adjusted to 68 cents vs. 64 cents
- income: US$30.04 billion, expected to be US$28.7 billion
According to StreetAccount, Nvidia expects revenue of about $32.5 billion in the current quarter, compared with analysts’ expectations of $31.7 billion. That would be an 80% increase from a year ago.
The chipmaker’s revenue continues to soar, rising 122% year-over-year this quarter after three consecutive periods of more than 200% year-over-year growth.
Net profit for the quarter more than doubled to $16.6 billion, or 67 cents a share, from $6.18 billion, or 25 cents a share, a year earlier.
Nvidia is a major beneficiary of the current artificial intelligence boom. Nvidia shares are up more than 150% this year after soaring nearly 240% in 2023.
Nvidia’s data center business revenue, including artificial intelligence processors, increased 154% year-on-year to US$26.3 billion, accounting for 88% of total sales. It also beat StreetAccount’s forecast of $25.24 billion.
Not all of these sales are artificial intelligence chips. Nvidia said Wednesday that $3.7 billion in revenue came from the company’s networking products.
Much of its business is aimed at a handful of cloud service providers and consumer internet companies, including Microsoft, Alphabet, Meta and Tesla. Nvidia’s chips, such as the H100 and H200, are used in most generative AI applications, such as OpenAI’s ChatGPT.
Many customers are waiting for Nvidia’s next-generation AI chip, Blackwell. Nvidia said it shipped samples of Blackwell chips during the quarter and made changes to the product to improve manufacturing efficiency.
“In the fourth quarter, we expect Blackwell’s revenue to be in the billions of dollars,” Nvidia Chief Financial Officer Colette Kress said on a conference call with analysts.
“The replacement of the mask is complete. No functional changes are required,” Nvidia CEO Jensen Huang said on a conference call.
“When I say start production in the fourth quarter, I mean shipments. I don’t mean start shipments,” he continued.
However, Nvidia said it expects total shipments of current-generation Hopper chips to increase over the next two quarters, rather than gradually decreasing.
Nvidia CEO Jensen Huang said in a press release: “Demand for Hopper remains strong and Blackwell’s expectations are incredible.” Nvidia noted that Hopper supply is increasing, while Blackwell’s supply remains in short supply.
Nvidia said its gross profit margin fell to 75.1% this quarter from 78.4% in the previous quarter, but was still higher than 70.1% a year ago. The company said it expects full-year gross profit margin to be “around 70%.” Analysts expected full-year profit margins of 76.4%, according to StreetAccount.
Before data centers took off, Nvidia’s gaming business was the company’s main focus. Game revenue increased 16% from the same period last year to US$2.9 billion, exceeding StreetAccount’s forecast of US$2.7 billion. The company said this was partly due to increases in PC game card shipments and “game console SOCs.” Nvidia supplies chips for Nintendo’s game consoles.
Nvidia also makes chips for high-end graphic designers as well as cars and robots. The company’s professional visualization business grew 20% to $454 million in revenue. Nvidia reported automotive and robotics revenue of $346 million, compared with StreetAccount’s forecast of $344.7 million.
Nvidia also said it approved $50 billion in additional stock repurchases.
