Published in Graphics

Geforce saved Nvidia's Q2 finance

by on07 August 2015

Automotive helped 

Nvidia just announced its financial Q2 2016 scores and they are better than anyone expected, thanks mostly to a sterling performance from Geforce. 

Nvidia booked a $1.153 billion revenue which is five per cent better than a year before. In it had $1.103 billion revenue and the gross margin of 56.1 per cent.

Its gross margin in second quarter was 55 percent which was 1.1 percent less than year ago. It is interesting to note that Nvidia did two million more sales than in the first quarter.

Operating expenses increased to $558 mainly due to the Icera modem write off. This is a 17 percent increase from the last quarter when Nvidia had $477 million expense and 22 percent more than a year ago $456 million.

Net income was $26 million or eighty percent year on year. Nvidia's earning per share dropped 77 percent down from $0.22 in Q2 2015 to $0.05 in current quarter.

The income and expenses were hurt as Nvidia failed to find a buyer for Icera modem business unit. The Shield tablet recall might account for $0.02 loss per diluted share. The Samsung and Qualcomm lawsuit cost Nvidia $24 million.

On the bright side, Jeff Fisher's GPU division did exceptionally well. Revenue from Geforce GPU grew 51 percent and the high end sales grew significantly.

GPU sales accounted for $959 million sales in Q2 or two percent more than $940 in Q1 . Year over year Nvidia had nine percent better sales, up from $878 million in Q2 last year. Nvidia claims that its gaming revenue rose 59 percent year on year to $661 million.

Nvidia's enterprise graphics and virtualisation revenues declined 14 per cent  year on year to $187 million. Quadro business declined 14 per cent year on year to $187. Nvidia blames a weak refresh cycle on  the workstation market.  

Tegra processor sales fell twelve percent from $145 in Q1 to $128 in Q2. It fell 19 percent year over year from $159, while the other sales accounted for flat $66 million year over year, last quarter and current quarter.

Nvidia had 15 percent decline year on year in HPC and Cloud, reflecting lumpiness from major deep learning projects.  

Automotive revenues rose 76 percent year on year to $71 million. Nvidia claims that 50 companies are interested in using Nvidia Drive PX in their autonomous driving efforts.

Colette M. Kress Chief Financial Officer & Executive Vice President said. 

In the face of challenges on both the macro and semiconductor fronts, NVIDIA is executing well. Helped by our sharp focus and strong market positions, our strategy for creating platforms for gaming, enterprise graphics and virtualization, HPC and cloud, and automotive continues to serve us well as visual computing becomes increasingly more important in these industries. In Q2, these four platforms contributed 85% of our revenue, up from 68 per cent  a year earlier.

Nvidia expects to have 1.18 billion revenue +/- 2 percent in financial Q3 with margins of 56.2% to 56.5%. Q4 might be good for Nvidia with some cool games coming. Nvidia did quite well considering that the PC industry is hurting and that everyone except Apple did  badly this this year.

Noone can say that Nvidia is a gaming company, it is becoming an automotive company too. 

Last modified on 07 August 2015
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