NVIDIA Announces Financial Results for Second Quarter Fiscal 2018

[Raevenlord]

NVIDIA today reported record revenue for the second quarter ended July 30, 2017, of $2.23 billion, up 56 percent from $1.43 billion a year earlier, and up 15 percent from $1.94 billion in the previous quarter.

• Record revenue of $2.23 billion, up 56 percent from a year ago
• GAAP EPS of $0.92, up 124 percent from a year ago
• Non-GAAP EPS of $1.01, up 91 percent from a year ago
• Broad growth across all platforms
• GAAP earnings per diluted share for the quarter were $0.92, up 124 percent from $0.41 a year ago and up 16 percent from $0.79 in the previous quarter. Non-GAAP earnings per diluted share were $1.01, up 91 percent from $0.53 a year earlier and up 19 percent from $0.85 in the previous quarter.

"Adoption of NVIDIA GPU computing is accelerating, driving growth across our businesses," said Jensen Huang, founder and chief executive officer of NVIDIA. "Datacenter revenue increased more than two and a half times. A growing number of car and robot-taxi companies are choosing our DRIVE PX self-driving computing platform. And in Gaming, increasingly the world's most popular form of entertainment, we power the fastest growing platforms - GeForce and Nintendo Switch.

"Nearly every industry and company is awakening to the power of AI. Our new Volta GPU, the most complex processor ever built, delivers a 100-fold speedup for deep learning beyond our best GPU of four years ago. This quarter, we shipped Volta in volume to leading AI customers. This is the era of AI, and the NVIDIA GPU has become its brain. We have incredible opportunities ahead of us," he said.

Capital Return
During the first half of fiscal 2018, NVIDIA paid $758 million in share repurchases and $166 million in cash dividends. For fiscal 2018, NVIDIA intends to return $1.25 billion to shareholders through ongoing quarterly cash dividends and share repurchases.NVIDIA will pay its next quarterly cash dividend of $0.14 per share on September 18, 2017, to all shareholders of record on August 24, 2017.

NVIDIA's outlook for the third quarter of fiscal 2018 is as follows:

• Revenue is expected to be $2.35 billion, plus or minus two percent.
• GAAP and non-GAAP gross margins are expected to be 58.6 percent and 58.8 percent, respectively, plus or minus 50 basis points.
• GAAP operating expenses are expected to be approximately $672 million. Non-GAAP operating expenses are expected to be approximately $570 million.
• GAAP other income and expense is expected to be an expense of approximately $2 million, inclusive of additional charges from early conversions of convertible notes. Non-GAAP other income and expense is expected to be nominal.
• GAAP and non-GAAP tax rates are both expected to be 17 percent, plus or minus one percent, excluding any discrete items. GAAP discrete items include excess tax benefits or deficiencies related to stock-based compensation, which we expect to generate variability on a quarter by quarter basis.
• Capital expenditures are expected to be approximately $65 million to $75 million.

Second Quarter Fiscal 2018 Highlights

Datacenter:

• Announced and began shipping NVIDIA Tesla V100 GPU accelerators, the first GPU based on the new Volta architecture.
• Unveiled new lineup of NVIDIA DGX AI supercomputers, with a large installation at Facebook.
• Announced the NVIDIA GPU Cloud Platform, giving developers a comprehensive software suite for AI development.
• Disclosed that the world's 13 most energy-efficient supercomputers on the Green 500 list run on NVIDIA Tesla accelerators.
• Announced partnerships with VW and Baidu to bring AI deeper into their organizations.

Gaming:

• Introduced Max-Q, a design approach to make gaming laptops thinner, quieter and faster.
• Collaborated with Activision and Bungie to bring Destiny 2 to the PC for the first time.
• Expanded GeForce Experience to China, at the ChinaJoy gaming conference.

Professional Visualization:

• Introduced Project Holodeck, a photorealistic, collaborative VR environment.
• Announced steps to bring AI to ray tracing to advance the iterative design process, including the launch of NVIDIA OptiX 5.0 SDK.
• Launched NVIDIA TITAN X and NVIDIA Quadro external GPU support for the 25 million creative professionals using thin and light notebooks.
• Released the NVIDIA VRWorks 360 Video SDK, which enables high-quality, 360-degree live stereo streaming.

Automotive:

• Toyota selected NVIDIA DRIVE PX for its next-generation autonomous cars.
• Volvo and Autoliv selected DRIVE PX for self-driving cars targeted to hit the market by 2021.
• ZF and HELLA, two leading automotive suppliers, announced a system based on DRIVE PX to deliver the highest NCAP safety ratings for cars.
• Baidu announced that its Project Apollo open-source self-driving platform for the China market will use DRIVE PX.

Edge Computing:

• Introduced the NVIDIA Isaac robot simulator for training intelligent machines in simulated real-world conditions before deployment.
• Announced the NVIDIA Metropolis platform, used by more than 50 partners to make cities safer and smarter by applying deep learning to video streams.

View at TechPowerUp Main Site

 

[cryohellinc]

Nvidia is doing really well, and unlike Intel even thou its products are expensive Nvidia delivers innovation and performance.

 

[miki]

Nvidia is doing really well, and unlike Intel even thou its products are expensive Nvidia delivers innovation and performance.

Its because Nvidia has strong competition from AMD, intel had virtualy none for almost 5-6 years.

 

[Vya Domus]

Actually no , Nvidia is big in data centers more so than AMD right now and they are actually competing with Intel there. And they are killing them , they have pretty much monopolized on emerging fields such as AI and automotive automation.

The more times passes by the more I realize Intel has no idea what they are doing , they clearly let Nvidia snatch away a good chunk of what could have been part of their business.

 

[brian111]

A Gross Margin of 58% sure makes turning a profit easier.

 

[CronXPX]

Actually no , Nvidia is big in data centers more so than AMD right now and they are actually competing with Intel there. And they are killing them , they have pretty much monopolized on emerging fields such as AI and automotive automation.

Maybe in the near future yes, but for now...

Intel Data Center revenue Q2 2017: $4.4 billion or 9% increase vs Q2 2016.
Nvidia Data Center revenue Q2 2017: $151 million

 

[Vya Domus]

I was talking about those respective fields where Intel has nothing on Nvidia and those could return billions in the future.

 

[TheDeeGee]

Thank the Miners, NVIDIA...

I wish it died already... miners are selfish bastards.

 

[Fluffmeister]

As said it's not just miners, Nvidia have done a great job of diversifying themselves.

But then it also helps they released products well over a year ago that still don't have any competition.

 

[JalleR]

Actually no , Nvidia is big in data centers more so than AMD right now and they are actually competing with Intel there. And they are killing them , they have pretty much monopolized on emerging fields such as AI and automotive automation.

The more times passes by the more I realize Intel has no idea what they are doing , they clearly let Nvidia snatch away a good chunk of what could have been part of their business.

Intel has signed a deal with Audi regarding Automotive automation so i think they are ok...


Nvidia needs to send a basket with wine and flowers to AMD or Raja (the cigar slinging AMD guy) with a big Thank you note.....

 

[john_]

I have to give credit and congrats to Nvidia for continually finding new ways to make money from it's GPUs. While AMD's difficulties are giving Nvidia the chance to make more and more money in the gaming market, it's amazing how many markets they are addressing with a product that was considered secondary compared to the main CPU a few years ago. They are trying really hard to put the GPU in as many "driver's seats" as they can.

 

[Tsukiyomi91]

as expected from the Green Camp. Kudos to them for opening more opportunities for new people to join the bandwagon.

 

[PowerPC]

Nvidia is doing really well, and unlike Intel even thou its products are expensive Nvidia delivers innovation and performance.

This is Intel, and I still hear people often praise them for their great innovation in SSDs... SSDs, seriously? Can't a multi-billion dollar company come up with something more... profitable? And no matter how much they innovate there, people still buy SSDs from Samsung or literally anybody else but Intel. Intel definitely seems like the most risk averse of the multinational tech companies. Maybe it's finally time to move on to something else? Even if it completely fails, like Google Glass, you could at least say you tried.

 

[jabbadap]

Intel has signed a deal with Audi regarding Automotive automation so i think they are ok...


Nvidia needs to send a basket with wine and flowers to AMD or Raja (the cigar slinging AMD guy) with a big Thank you note.....

Heh that is actually funny one: nvidia and intel are both in bed with audi on that one. Though I would say intel is there because of acquirement of techfirm(mobileye) and nvidia because of it's own homebrew tech.

 

[Manu_PT]

Has nothing to do with miners. GTX1060 was already the most used GPU on steam stats way before the mining craze.

Also Nvidia is involved on Nintendo Switch wich is having massive success.

Nvidia Shield 2.0 is selling like hot cakes on amazon (that´s normal with such power for 180€ with a nvidia controller + nvidia remote + 60hz 4k HDMI2.0 output).

The next step for nvidia is entering the non-portable consoles market. ARM is evolving fast and has already plenty power to run the lastest game engines (Unreal Engine, Frostbite, etc) at 60fps. Expect a custom ARM Cpu+Gpu Nvidia chip soon to compete on that market.

 

[jabbadap]

Has nothing to do with miners. GTX1060 was already the most used GPU on steam stats way before the mining craze.

Also Nvidia is involved on Nintendo Switch wich is having massive success.

Nvidia Shield 2.0 is selling like hot cakes on amazon (that´s normal with such power for 180€ with a nvidia controller + nvidia remote + 60hz 4k HDMI2.0 output).

The next step for nvidia is entering the non-portable consoles market. ARM is evolving fast and has already plenty power to run the lastest game engines (Unreal Engine, Frostbite, etc) at 60fps. Expect a custom ARM Cpu+Gpu Nvidia chip soon to compete on that market.

Not sure why would they do that though. Xavier has so many features for automotive, which just consumes power and are useless for console market. And profit to gain on automotive is order of magnitude higher that console side. Maybe if they do another volta tegra gpu, tailored for console gaming market but I have my doubts about it. Gaming gpus is still the market where they got most of the revenue, but overall revenue is rinsing on all segments(see *).

Spoiler: Revenue tables by segments and market platforms

One interesting note is that Intel payments are over, though it has little effect on actual revenue numbers now anyway.

*Q2FY18 CFO Commentary final

 

[TheinsanegamerN]

Not sure why would they do that though. Xavier has so many features for automotive, which just consumes power and are useless for console market. And profit to gain on automotive is order of magnitude higher that console side. Maybe if they do another volta tegra gpu, tailored for console gaming market but I have my doubts about it. Gaming gpus is still the market where they got most of the revenue, but overall revenue is rinsing on all segments(see *).

Spoiler: Revenue tables by segments and market platforms

View attachment 90962

One interesting note is that Intel payments are over, though it has little effect on actual revenue numbers now anyway.

*Q2FY18 CFO Commentary final

But that is jsut the benefit of their tech, it is really easy to change it for a completely different purpose (and with ARM, really cheap too).

If nvidia wanted to, they could make a bonkers ARM console chip. The margins, though, are too low for nvidia to bother with.

 

[FrustratedGarrett]

$2.23 billions in revenue is no small feat. Well done Nvidia! They have qualified people at the top running things and making smart decisions.

 

[cdawall]

Has nothing to do with miners. GTX1060 was already the most used GPU on steam stats way before the mining craze.

6.37% of steam users who completed the hardware survey have a gtx 1060. Miners are buying them in lots of thousands. I would say that does make a difference.

As has been said it isn't just that making nvidia hold this position however. I would love to see number of gpus sold.

 

[bug]

This is Intel, and I still hear people often praise them for their great innovation in SSDs... SSDs, seriously? Can't a multi-billion dollar company come up with something more... profitable? And no matter how much they innovate there, people still buy SSDs from Samsung or literally anybody else but Intel. Intel definitely seems like the most risk averse of the multinational tech companies. Maybe it's finally time to move on to something else? Even if it completely fails, like Google Glass, you could at least say you tried.

Intel's innovation was the X25 line. They showed everyone how it's done and then they moved on to more lucrative business. They don't need to build drives as long as there's enough demand for their chips.
And if feel like they're playing safe and not innovating, maybe you should look up X-Point?

 

[jabbadap]

Our PC OEM revenue includes GPUs designed for mainstream desktops, notebooks, and cryptocurrency mining. The recent rise in crypto coin prices resulted in increased demand in OEM GPU sales. Tegra Processor business revenue, which included gaming development platforms and services, was $333 million, up 101 percent from a year ago and flat sequentially. Tegra business revenue includes SOC modules for the Nintendo Switch gaming console and development services. Also included was record automotive revenue of $142 million, which was up 19 percent from a year earlier and up 1 percent sequentially, incorporating infotainment modules, production DRIVE PX platforms, and development agreements for self-driving cars.

Heh so they are all ready sold some gpus to cryptominers. At least they said which segment the Switch revenue goes.

But that is jsut the benefit of their tech, it is really easy to change it for a completely different purpose (and with ARM, really cheap too).

If nvidia wanted to, they could make a bonkers ARM console chip. The margins, though, are too low for nvidia to bother with.

Well I would not call it cheap to design and verify new chips, but yeah if they are confident that they will get good money from it then why not.

 

[PowerPC]

Intel's innovation was the X25 line. They showed everyone how it's done and then they moved on to more lucrative business. They don't need to build drives as long as there's enough demand for their chips.
And if feel like they're playing safe and not innovating, maybe you should look up X-Point?

And again, all about SSD's ...

Safe is what gets you killed and Intel is being killed right now just because of their monolithic product line.

 

[Manu_PT]

6.37% of steam users who completed the hardware survey have a gtx 1060. Miners are buying them in lots of thousands. I would say that does make a difference.

As has been said it isn't just that making nvidia hold this position however. I would love to see number of gpus sold.

Steam Stats charts are dominated by Nvidia GPUs. They are established everywhere, from desktops to laptops. Their work on laptop chips was amazing on 10 series (no more GTX1060m etc). Exactly same chip as desktop counterparts, with lower clocks (on gtx1070 and gtx1080).

Not sure why would they do that though. Xavier has so many features for automotive, which just consumes power and are useless for console market. And profit to gain on automotive is order of magnitude higher that console side. Maybe if they do another volta tegra gpu, tailored for console gaming market but I have my doubts about it. Gaming gpus is still the market where they got most of the revenue, but overall revenue is rinsing on all segments(see *).

Spoiler: Revenue tables by segments and market platforms

View attachment 90962

One interesting note is that Intel payments are over, though it has little effect on actual revenue numbers now anyway.

*Q2FY18 CFO Commentary final

I am 100% sure Nvidia is interested in being involved on the next generation consoles. The margin might not be the same as on GPUs, but that´s the same for nintendo switch, low margin, but it is there. Imagine if Sony decided PS5 would use a nvidia chip with arm cpu+volta (or even pascal) gpu. Look what nvidia done with their laptop chips, exactly the same as desktop ones (lower clocks on the high-end models). They work, they don´t overheat and have the peformance. MaxQ aswell!! That´s a console dream.

The problem in 2012 (when this console gen started to be planed) the high-end ARM chip couldn´t even compete with a laptop haswell low power Pentium 3550M. In 2017 you look at Snapdragon 835 wich competes against a Sandy Bridge i5 performance, plenty for 60fps on any game engine (PS4/Xbox Jaguar cpu is weaker than Snapdragon 835 btw).

10nm, low power consumption, good performance, plently space to put a gpu inside the apu. And very important! Licensing costs! x86 is hella expensive. Makes all sense for nvidia to get in the game. They were always involved with consoles (xbox nvidia gpu, ps3 nvidia gpu, for example).

 

[FYFI13]

Its because Nvidia has strong competition from AMD, intel had virtualy none for almost 5-6 years.

AMD barely can beat GTX 970 with it's current offerings, what competition you're talking about? :-D And just before you say, Vega isn't out yet.

 

[Manu_PT]

AMD barely can beat GTX 970 with it's current offerings, what competition you're talking about? :-D And just before you say, Vega isn't out yet.

Funny thing about what you just said, is that it is very rude but when we analyze it you are saying the truth. That´s how bad it is lol

And we always tend to overlook the laptops market. Where are the AMD cards for those devices? They are very important on the market