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NVIDIA Q1 FY 2020 – Result Report: After resetting the encryption



This week, NVIDIA announced its profits for the first quarter of fiscal 2020. Although the crypto-currency crash was a boom for gamers who wanted to buy GPUs, the Company's Form 10 was not so welcome. Q. First quarter 2020 revenues decreased 31% to $ 2.22 billion and gross margin decreased 6.1% from 64.5% to 58.4%. The company's operating expenses increased by 21% despite the decline in revenue. NVIDIA spent $ 132 million more on research and development this quarter than in the same period last year. Operating income declined 72% to $ 358 million, despite a net income of $ 394 million due to interest income of $ 44 million and tax benefits of $ 5 million. Although net income was higher than operating income, it was 68% lower than in the first quarter of 201

9. This resulted in earnings per share of $ 0.64, down 68% from $ 1.98 in the prior year.

NVIDIA Q1 2020 Financial Results (GAAP))
Q1 & # 39; 2020 Q4 & 2019 Q1 & 399199 Q / Q Y / Y [19659008] Sales $ 2220M [19659010$] $ 3207 million + 1% -31%
Gross margin 58.4% 54.7% 64.5 % + 3.7% -6.1%
Operating Income $ 358 million $ 294 million $ 1295 million + 22% [19659009] -72%
Net Income 394 million USD 567 million USD [19659010USD19659010] -31% -68%
EPS 0.64 $ 0 , $ 92 $ 1.98 -30% -68%

Although such a decline is never good, some perspective is needed. The 2019 fiscal year of NVIDIA was an outstanding one. First quarter revenue in 2019 was $ 3.2 billion, with net income of $ 1.2 billion. However, if you look at the first quarter of 2018, revenue was $ 1.9 billion and net income was $ 507 million, much closer to the first quarter of 2020. Compared to the first quarter of 2018, sales increased by 14.6% in 2020 and net profit by 28.6%. However, the inflated results, thanks to a perfect storm for NVIDIA's financial data for 2019, have clearly come to an end and the company has been brought back to reality. Luckily, the reality for the company is that with a Q1 of $ 2.2 billion, it's the second best Q1 ever, and I think they're fine.

If you look at each segment of the business, there are basically two products that NVIDIA sells: GPU and Tegra. NVIDIA further subdivides them into subcategories, but NVIDIA is still a GPU company, and the results prove it. GPU sales, at $ 2.022 billion, represented 91% of the company's revenue and this segment posted operating income of $ 669 million. A year ago, when Crypto was king, the GPU achieved sales of $ 2.765 billion and operating income of $ 1.394 billion. Revenue from GPUs declined as gaming and data center revenues declined and revenues for Cryptocurrency Mining Processors (CMP) were $ 289 million.

By contrast, Tegra's revenue for the first quarter of 2020 was only $ 198 million, with an operating loss of $ 44 million. A year ago, Tegra's revenue was $ 442 million, and the segment was in the black with an operating profit of $ 97 million. The big decline at Tegra is a decline in SoC modules for games, which you can largely refer to as Nintendo Switch sales.

NVIDIA then translates these results into several other categories. Gaming is the largest company, with gaming revenue of $ 1.05 billion, down 39% from a year ago. NVIDIA attributes this decline to a decline in GPU shipments as well as a decline in SoC modules for game consoles.

Professional Visualization, with the Quadro brand, achieved sales of $ 266 million, an increase of 6% over the previous year. In NVIDIA, both desktop and laptop workstation products have grown compared to 2019.

The data center generated $ 634 million in revenue in the first quarter, down 10% from a year ago. NVIDIA experienced some slowdown in hyperscale and enterprise purchases of GPUs, but some inference growth that compensated somewhat for the decline.

Automotive achieved sales of $ 166 million, 14% more than a year ago, due to growth in the AI ​​cockpit modules.

Finally, at $ 99 million, OEM and other product sales were 74% down on the year-ago level, which is not surprising as NVIDIA's CMP sales were down here, meaning that this total decrease was directly attributable to the cryptocurrency is. [19659047NVIDIAQuarterlyRevenueComparison(GAAP)
(in millions of dollars) In millions of USD Q1 & # 39; 2020 Q4 & # 39; 2019 Q1 & 399199 Q / Q Y / Y [19659008] Gaming 1055 [1965901] $ 954 $ 1723 + 11% -39% Professional Visualization $ 266 $ 293 $ 251 [19659009] -9% + 6% data center $ 634 $ 679 $ 701 -7% + 10% Automotive $ 166 [19659009] $ 163 $ 145 + 14% OEM & IP $ 99 $ 116 $ 387 -15% -74%

After a stellar 2019 fiscal year, the company had to perform a reset bit. The first quarter is significantly worse than 2019, but fortunately for the company, not so far from last year. For the second quarter of 2020, NVIDIA expects sales of $ 2.55 billion (plus or minus 2%) and a gross margin (plus or minus 0.5%) of 59.2%.

Source: NVIDIA Investor Relations


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