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NVIDIA (NVDA) Gains 5% on Q3 Earnings Beat and Record Sales
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Shares of NVIDIA Corporation (NVDA - Free Report) gained 5.2% in Wednesday’s extended trading session after the graphics chip maker reported better-than-expected third-quarter fiscal 2022 results with another quarter of record revenues.
NVIDIA delivered third-quarter non-GAAP earnings of $1.17 per share, beating the Zacks Consensus Estimate of $1.11. The reported figure also jumped a whopping 60% year over year and 13% sequentially.
The company reported record quarterly revenues of $7.1 billion that beat the consensus mark of $6.83 billion and surged 50% year over year. The top line climbed 9% on a quarter-over-quarter basis.
NVIDIA posted year-over-year revenue growth across its entire end markets. NVDA’s Gaming, Data Center and Professional Visualization markets registered record revenues during the quarter.
NVIDIA Corporation Price, Consensus and EPS Surprise
In first-quarter fiscal 2021, NVIDIA started reporting revenues under two segments — Graphics and Compute & Networking.
Graphics includes GeForce GPUs (Graphic Processing Units) for gaming and personal computers, the GeForce NOW game streaming service and related infrastructure, and solutions for gaming platforms; Quadro GPUs for enterprise design, GRID software for cloud-based visual and virtual computing, and automotive platforms for infotainment systems.
Graphics accounted for 58% of the fiscal third-quarter revenues. The segment’s top-line figure surged 47% year over year and 5% sequentially to $4.09 billion.
Compute & Networking represented 42% of the fiscal third-quarter revenues. The segment comprises Data-Center platforms and systems for AI, high-performance computing, and accelerated computing; DRIVE development platform for autonomous vehicles, and Jetson for robotics and other embedded platforms.
Compute & Networking revenues climbed 55% year over year and 16% sequentially to $3.01 billion.
Market Platform Top-Line Details
Based on the market platform, Gaming revenues (45% of revenues) shot up 42% year over year and 5% sequentially to $3.22 billion on higher sales across the company’s notebook and desktop gaming GPUs, and game console system-on-chips.
Revenues from Data Center (41% of revenues) jumped 55% year over year and 24% from the previous quarter to $2.94 billion. This year-over-year upswing was driven by the ramp-up of its Ampere architecture products into the vertical industries and hyperscale customers, and solid chip demand from hyperscale and large consumer Internet customers.
Professional Visualization revenues (8% of revenues) increased a whopping 144% year over year and 11% sequentially to $577 million. This growth mainly resulted from increased sales of notebook workstation GPUs and the ramp-up of Ampere architecture GPUs.
Auto revenues (2% of revenues) in the reported quarter totaled $135 million, up 8% on a year-over-year basis. This rise was primarily aided by the continued recovery in the global automotive production volumes and the ramp-up of self-driving programs. However, the division’s sales fell 11% sequentially due to the auto makers’ supply constraints.
OEM and Other revenues (4% of revenues) climbed 21% year on year to $409 million. This uptick reflects the inclusion of Cryptocurrency Mining Processors revenues under the market platform, which generated sales of $105 million. However, the division’s sales declined 43% on a quarter-on-quarter basis.
Operating Details
NVIDIA’s non-GAAP gross margin expanded 1500 basis points (bps) year over year and 30 bps sequentially to 67%, mainly on a higher-end mix within the desktop and notebook GeForce GPUs.
Non-GAAP operating expenses flared up 25% year over year and 6% sequentially to $1.38 billion on higher compensation-related expenses associated with the employee growth and increased infrastructure costs.
Non-GAAP operating income jumped 70% year over year and 20% quarter on quarter to $3.39 billion.
Balance Sheet and Cash Flow
As of Oct 31, 2021, NVIDIA’s cash, cash equivalents and marketable securities were $19.30 billion, slightly down from $19.65 billion as of Aug 1, 2021. The decline displays debt maturity worth $1 billion, prepayments for long-term supply and business acquisitions.
As of Oct 31, 2021, total long-term debt (including current maturities) was $10.94 billion, down from the $11.94 billion seen in the previous quarter ended Aug 1, 2021. This decrease reflects debt maturity worth $1 billion.
NVIDIA generated $1.52 billion in operating cash flows, up from the year-ago quarter’s $1.28 billion while down from the previous quarter’s $2.68 billion. Free cash flow was $1.28 billion, up from the prior-year period’s $806 million but down from last quarter’s $2.48 billion.
In the first three quarters of fiscal 2022, the company generated operating and free cash flows of $6.08 billion and $5.32 billion, respectively.
NVIDIA paid dividends of $100 million in the third quarter and $298 million in the first nine months of fiscal 2022.
Guidance
For the fourth quarter of fiscal 2022, NVIDIA anticipates revenues of $7.4 billion (+/-2%).
Non-GAAP gross margin is projected at 67% (+/-50 bps). Non-GAAP operating expenses are estimated to be $1.43 billion.
Zacks Rank #2 (Buy) NVDA projects capital expenditures to be approximately $250-$275 million in the fourth quarter.
Strong chip demand amid the ongoing work-and-learn-from-home and accelerated digitalization trends has led to a great earnings season for the semiconductor companies. Let’s take a quick look at the latest quarterly performance of the major semiconductor players — Qualcomm (QCOM - Free Report) , Advanced Micro Devices (AMD - Free Report) and Intel (INTC - Free Report) .
Qualcomm’s fourth-quarter fiscal 2021 earnings of $2.55 per share beat the Zacks Consensus Estimate by 29 cents. Also, Qualcomm’s revenues of $9.32 billion beat the consensus mark of $8.88 billion.
For first-quarter fiscal 2022, QCOM expects GAAP revenues between $10 billion and $10.8 billion and the non-GAAP earnings per share is forecast at $2.90-$3.10.
Advanced Micro Devices’ adjusted earnings increased 78% year over year to 73 cents per share in third-quarter 2021 and surpassed the Zacks Consensus Estimate by 10.6%. Revenues surged 54% to $4.31 billion, exceeding the consensus mark by 4.7%.
Advanced Micro Devices expects fourth-quarter revenues of $4.5 billion (+/-$100 million), indicating year-over-year growth of 39%. For 2021, AMD raised its revenue growth projection to 65% from 60% anticipated previously.
Intel’s third-quarter 2021 earnings jumped 58.3% year over year to $1.71 per share and beat the Zacks Consensus Estimate of $1.11. Revenues were up 5% year over year to $18.1 billion but were slightly below the estimated $18.2 billion.
For the fourth quarter of 2021, Intel expects revenues of about $18.3 billion and earnings per share of 90 cents. For the full year, INTC projects revenues of approximately $73.5 billion and earnings per share of $5.28.
Currently, Qualcomm and Advanced Micro Devices carry a Zacks Rank #2, while Intel has a Zacks Rank #3 (Hold).
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NVIDIA (NVDA) Gains 5% on Q3 Earnings Beat and Record Sales
Shares of NVIDIA Corporation (NVDA - Free Report) gained 5.2% in Wednesday’s extended trading session after the graphics chip maker reported better-than-expected third-quarter fiscal 2022 results with another quarter of record revenues.
NVIDIA delivered third-quarter non-GAAP earnings of $1.17 per share, beating the Zacks Consensus Estimate of $1.11. The reported figure also jumped a whopping 60% year over year and 13% sequentially.
The company reported record quarterly revenues of $7.1 billion that beat the consensus mark of $6.83 billion and surged 50% year over year. The top line climbed 9% on a quarter-over-quarter basis.
NVIDIA posted year-over-year revenue growth across its entire end markets. NVDA’s Gaming, Data Center and Professional Visualization markets registered record revenues during the quarter.
NVIDIA Corporation Price, Consensus and EPS Surprise
NVIDIA Corporation price-consensus-eps-surprise-chart | NVIDIA Corporation Quote
Segment Details
In first-quarter fiscal 2021, NVIDIA started reporting revenues under two segments — Graphics and Compute & Networking.
Graphics includes GeForce GPUs (Graphic Processing Units) for gaming and personal computers, the GeForce NOW game streaming service and related infrastructure, and solutions for gaming platforms; Quadro GPUs for enterprise design, GRID software for cloud-based visual and virtual computing, and automotive platforms for infotainment systems.
Graphics accounted for 58% of the fiscal third-quarter revenues. The segment’s top-line figure surged 47% year over year and 5% sequentially to $4.09 billion.
Compute & Networking represented 42% of the fiscal third-quarter revenues. The segment comprises Data-Center platforms and systems for AI, high-performance computing, and accelerated computing; DRIVE development platform for autonomous vehicles, and Jetson for robotics and other embedded platforms.
Compute & Networking revenues climbed 55% year over year and 16% sequentially to $3.01 billion.
Market Platform Top-Line Details
Based on the market platform, Gaming revenues (45% of revenues) shot up 42% year over year and 5% sequentially to $3.22 billion on higher sales across the company’s notebook and desktop gaming GPUs, and game console system-on-chips.
Revenues from Data Center (41% of revenues) jumped 55% year over year and 24% from the previous quarter to $2.94 billion. This year-over-year upswing was driven by the ramp-up of its Ampere architecture products into the vertical industries and hyperscale customers, and solid chip demand from hyperscale and large consumer Internet customers.
Professional Visualization revenues (8% of revenues) increased a whopping 144% year over year and 11% sequentially to $577 million. This growth mainly resulted from increased sales of notebook workstation GPUs and the ramp-up of Ampere architecture GPUs.
Auto revenues (2% of revenues) in the reported quarter totaled $135 million, up 8% on a year-over-year basis. This rise was primarily aided by the continued recovery in the global automotive production volumes and the ramp-up of self-driving programs. However, the division’s sales fell 11% sequentially due to the auto makers’ supply constraints.
OEM and Other revenues (4% of revenues) climbed 21% year on year to $409 million. This uptick reflects the inclusion of Cryptocurrency Mining Processors revenues under the market platform, which generated sales of $105 million. However, the division’s sales declined 43% on a quarter-on-quarter basis.
Operating Details
NVIDIA’s non-GAAP gross margin expanded 1500 basis points (bps) year over year and 30 bps sequentially to 67%, mainly on a higher-end mix within the desktop and notebook GeForce GPUs.
Non-GAAP operating expenses flared up 25% year over year and 6% sequentially to $1.38 billion on higher compensation-related expenses associated with the employee growth and increased infrastructure costs.
Non-GAAP operating income jumped 70% year over year and 20% quarter on quarter to $3.39 billion.
Balance Sheet and Cash Flow
As of Oct 31, 2021, NVIDIA’s cash, cash equivalents and marketable securities were $19.30 billion, slightly down from $19.65 billion as of Aug 1, 2021. The decline displays debt maturity worth $1 billion, prepayments for long-term supply and business acquisitions.
As of Oct 31, 2021, total long-term debt (including current maturities) was $10.94 billion, down from the $11.94 billion seen in the previous quarter ended Aug 1, 2021. This decrease reflects debt maturity worth $1 billion.
NVIDIA generated $1.52 billion in operating cash flows, up from the year-ago quarter’s $1.28 billion while down from the previous quarter’s $2.68 billion. Free cash flow was $1.28 billion, up from the prior-year period’s $806 million but down from last quarter’s $2.48 billion.
In the first three quarters of fiscal 2022, the company generated operating and free cash flows of $6.08 billion and $5.32 billion, respectively.
NVIDIA paid dividends of $100 million in the third quarter and $298 million in the first nine months of fiscal 2022.
Guidance
For the fourth quarter of fiscal 2022, NVIDIA anticipates revenues of $7.4 billion (+/-2%).
Non-GAAP gross margin is projected at 67% (+/-50 bps). Non-GAAP operating expenses are estimated to be $1.43 billion.
Zacks Rank #2 (Buy) NVDA projects capital expenditures to be approximately $250-$275 million in the fourth quarter.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Semiconductors Shine This Earnings Season
Strong chip demand amid the ongoing work-and-learn-from-home and accelerated digitalization trends has led to a great earnings season for the semiconductor companies. Let’s take a quick look at the latest quarterly performance of the major semiconductor players — Qualcomm (QCOM - Free Report) , Advanced Micro Devices (AMD - Free Report) and Intel (INTC - Free Report) .
Qualcomm’s fourth-quarter fiscal 2021 earnings of $2.55 per share beat the Zacks Consensus Estimate by 29 cents. Also, Qualcomm’s revenues of $9.32 billion beat the consensus mark of $8.88 billion.
For first-quarter fiscal 2022, QCOM expects GAAP revenues between $10 billion and $10.8 billion and the non-GAAP earnings per share is forecast at $2.90-$3.10.
Advanced Micro Devices’ adjusted earnings increased 78% year over year to 73 cents per share in third-quarter 2021 and surpassed the Zacks Consensus Estimate by 10.6%. Revenues surged 54% to $4.31 billion, exceeding the consensus mark by 4.7%.
Advanced Micro Devices expects fourth-quarter revenues of $4.5 billion (+/-$100 million), indicating year-over-year growth of 39%. For 2021, AMD raised its revenue growth projection to 65% from 60% anticipated previously.
Intel’s third-quarter 2021 earnings jumped 58.3% year over year to $1.71 per share and beat the Zacks Consensus Estimate of $1.11. Revenues were up 5% year over year to $18.1 billion but were slightly below the estimated $18.2 billion.
For the fourth quarter of 2021, Intel expects revenues of about $18.3 billion and earnings per share of 90 cents. For the full year, INTC projects revenues of approximately $73.5 billion and earnings per share of $5.28.
Currently, Qualcomm and Advanced Micro Devices carry a Zacks Rank #2, while Intel has a Zacks Rank #3 (Hold).