NVIDIA Reports Q1 FY2021 Earnings: Let The Good Times Roll
by Ryan Smith on May 22, 2020 12:00 PM EST- Posted in
- GPUs
- NVIDIA
- Financial Results
This week NVIDIA announced their earnings for the first quarter of their 2021 fiscal year. The current fiscal year is an especially important one for NVIDIA on both a business level and a product level, as the company is enjoying closing the Mellanox deal, all the while opening up shipments of their new datacenter-class A100 accelerators. Especially coming off of last year’s crypto-hangover, NVIDIA has started their new fiscal year with the good times rolling on.
| NVIDIA Q1 FY2021 Financial Results (GAAP) | |||||
| Q1'FY2021 | Q4'FY2020 | Q1'FY2020 | Q/Q | Y/Y | |
| Revenue | $3080M | $3105M | $2220M | -1% | +39% |
| Gross Margin | 65.1% | 64.9% | 58.4% | +0.2% | +6.8% |
| Operating Income | $1028M | $990M | $358M | -1% | +116% |
| Net Income | $917M | $950M | $394M | -4% | +106% |
| EPS | $1.47 | $1.53 | $0.64 | -5% | +105% |
For Q1’FY21, NVIDIA booked $3.08B in revenue. Compared to the year-ago quarter, this is a jump in revenue of 39%, making for a very strong first quarter that was only a hair under Q4, which is commonly a very strong quarter for NVIDIA. Those sizable revenues, in turn, are reflected in NVIDIA’s profits: the company booked $917M in net income for the quarter, more than double Q1’FY20. In fact it’s the second-best Q1 ever for the company; only Q1’FY19 was better, which was in the middle of the crypto boom.
What was a record, however, was NVIDIA’s gross margin. For the quarter NVIDIA booked a GAAP gross margin of 65.1%, edging out the previous quarter and beating even Q1’FY19. As NVIDIA’s revenues have shifted increasingly towards higher-margin products like accelerators, it’s helped the already profitable NVIDIA to extend that profitability even further.
| NVIDIA Quarterly Revenue Comparison (GAAP) ($ in millions) |
|||||
| In millions | Q1'FY2021 | Q4'FY2020 | Q1'FY2020 | Q/Q | Y/Y |
| Gaming | $1339 | $1491 | $1055 | -10% | +27% |
| Professional Visualization | $307 | $331 | $266 | -7% | +15% |
| Datacenter | $1141 | $968 | $634 | +18% | +80% |
| Automotive | $155 | $163 | $166 | -5% | -7% |
| OEM & IP | $138 | $152 | $99 | -9% | +39% |
Breaking down NVIDIA’s revenue by platform, while there are no great surprises per-se, the company has reached some milestones that are strong indicators of where things are going. Starting with NVIDIA’s datacenter revenue, that platform of their business has set a record for revenue for a second consecutive quarter, with $1.141B in revenue. This marks the first time NVIDIA’s datacenter business has booked more than $1B in revenue in a single quarter, and NVIDIA doesn’t expect it to be the last.
While the picture will get muddled a bit next quarter as Mellonox revenue is folded into this mix, the big picture is that datacenter accelerator sales are strong, and set to grow. NVIDIA’s Ampere-based A100 accelerators began shipping for revenue in Q1, helping to boost the numbers there, while Q2 will be the first full quarter of sales. According to NVIDIA, they’re already seeing broad demand for datacenter products, with the major hyperscalers quickly picking up A100s. Overall, NVIDIA’s Volta-generation accelerators were extremely successful for the company, almost but not quite growing the datacenter business to one billion dollars per quarter, and the company is eager to repeat and extend that success with Ampere.
Meanwhile, NVIDIA’s largest business, gaming, was also strong for the quarter, with the company booking $1.339B in revenue. While down seasonally as usual, NVIDIA is reporting that they have weathered the current pandemic similar to other chipmakers, with soft sales in some areas being counterbalanced by greater demand for chips for home computers as workers shift to working from home.
Interestingly, there’s a very real chance that this could be one of the last quarters where gaming is NVIDIA’s biggest revenue generator. Along with folding Mellanox into the company – and into the datacenter segment – NVIDIA’s datacenter business as a whole has been growing at a much greater clip than gaming. NVIDIA has made it very clear that they’re pushing for a more diversified revenue stream than their traditional gaming roots, and if the datacenter business grows too much more they may just get there this year. Though it will be interesting to see what the eventual launch of Ampere-based gaming products does for gaming revenue, as NVIDIA’s revenue also reflects the fact that they’re nearing the end of the Turing generation of products.
Bringing up third place was NVIDIA’s professional visualization platform, which saw $307M in revenue. As with gaming sales, the company is seeing a boost in sales due to work from home equipment purchases. This comes on top of the day-to-day demand for workstation laptops, which NVIDIA has been increasingly invested in.
Meanwhile NVIDIA’s automotive business ended up being something of a laggard for Q1’FY21. The segment booked $155M in revenue, which is down 7% from the year-ago quarter. NVIDIA’s automotive business moves at a much different pace than its GPU businesses – in part because it’s not set to really take off until self-driving cars become a retail reality – so the business tends to ebb and flow.
Finally, NVIDIA booked $138M in OEM & IP revenue for Q1’FY21. While this platform is small potatoes compared to gaming and datacenter, on a percentage basis it’s actually another big jump for NVIDIA; the segment grew 39% over the year-ago quarter. According to NVIDIA, the main driving factor here was increased entry-level GPU sales for OEM systems.
Wrapping things up, looking ahead to Q2 of FY2021, NVIDIA’s current predictions call for another strong quarter. Having closed the Mellanox deal, Mellanox’s earnings will be folded into NVIDIA’s numbers starting in Q2, helping to push the company to what should be record revenue. Meanwhile on the product side of matters, Q2 will be the first full quarter of A100 accelerator shipments, which should help NVIDIA further grow their datacenter business.
Source: NVIDIA
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webdoctors - Friday, May 22, 2020 - link
The automotive results is so dissapointing, it tells me all these automakers are morons and don't understand why they're going to go bankrupt. Tesla and other makers will swoop in with cheap golfcarts that are autonomous driving and really shake the marketplace.These next generation of SoCs will really reduce the number of parts in a car, especially when they're electric and so the parts are already significantly reduced. Right now the barrier to entry to compete in the car market is high with so many individual parts. When you have millions of drones doing autonomous deliveries for trucks, last mile amazon, we'll see a huge transformation where automotive segment will dwarf everything except maybe datacenter.
I'm annoyed, Volvo said the XC90 was gonna be selfdriving in 2020, and now they pushed it to 2022, and their press releases keep changing with no explanation. My biggest fear right now is getting killed on the road, and we need selfdriving cars ASAP.
yeeeeman - Friday, May 22, 2020 - link
Don't hurry because currently self driving cars might just kill you instead of a human driver.close - Friday, May 22, 2020 - link
@webdoctors: "swoop in with cheap golfcarts that are autonomous driving"They'll be free mate, and they won't only self drive, they'll self-doeverything. One day they'll self write AT comments for you.
But seriously, the reason most manufacturers aren't investing in the kind of tech aimed at "self-driving" instead of "driver assist" because the only place self driving exists is in PR and marketing materials aimed at speculators and *very* simple folk who get educated from leaflets. For driver assists you don;t necessarily need a super high tech silicon brain. You may think people go crazy about buying self driving but that only drives some sales at the higher end and relatively irrelevant in the grand scheme of car sales. Most people will *not* leave their life in the hands of tech as unreliable as "self driving" until it proves it's at least as good as a human. In all conditions.
With or without a sack of Nvidia tech in your trunk won't change the fact that all it will do any time soon is try to stay between 2 lines and break before hitting the car in front. And it still fails too often. I'm reasonably confident that the only morons are the ones using "self-driving" as if it's actually self-driving.
webdoctors - Friday, May 22, 2020 - link
I live in TX. I could write pages and pages on the crazy stuff I see on a daily basis. Ppl weaving across 3 lanes of traffic, driving the wrong way, running red lights, 100% no turn signals for some drivers, switching lanes in the middle of the intersection, breaking to 0 so you can cut across 2 lanes to get on or off a highway on ramp. Ignoring even the 3pm drunk drivers murdering families.You can use lasers today to blind human drivers. I'll take computers over humans, but thats my personal bias.
Beaver M. - Tuesday, May 26, 2020 - link
I still wonder why autonomous cars will do if their sensors get blocked. A big fat bumble bee splattering all over the camera for example.Beaver M. - Tuesday, May 26, 2020 - link
Or someone who doesnt like you putting a color filter over the camera.Kjella - Saturday, May 23, 2020 - link
When Google made their first alpha test with non-project employees back in 2013 they had people fumbling through backpacks, applying make-up and even asleep at the wheel. This was despite being made explicitly clear that this project was highly experimental and they should be ready to intercept it at any time.I think convenience will quickly win over any safety concerns, like even if the car's driving was flawless there's still the risk of being rammed, rear-ended or side-swiped by a moron. If you can't get to zero risk anyway you might as well accept a tiny bit of risk for turning your commute into leisure time. A self-driving car will sell as quickly as they're able to make them.
ingwe - Sunday, May 24, 2020 - link
Agreed. To me the biggest obstacle is figuring out who is at fault for crashes. Self-driving cars are going to be safer than human controlled vehicles, but with a human at the wheel it is easy to find who is to blame for an accident. With AI, does the company who designed it face the consequences? Will it still be the driver?TheinsanegamerN - Tuesday, May 26, 2020 - link
Yes. Tesla, the same company that can barely stay profitable, is going to just DOMINATE the automotive market along with a bunch on new unamed companies. Because, you know, manufacturing and supporting vast product lines is just SO easy, right?Self-driving level 5 cars are still a pipe dream on par with powering the whole world with solar panels and fuzzy feelings. The presence of a more powerful SoC isnt going to magically make the complication of cars simple like a golf cart. Much like electric cars, big companies are not going to dump billions into automation when these other companies are willing to go bankrupt trying to prove said tech, and the patents can be scooped up cheap after they collapse.
We've seen driver aides be unpredictable, lane keep assist systems causing cars to veer violently, automatic emergency brakes stop cars at total random, and blind spot monitors report false postitives/negatives, and to this day none of these companeis have an answer for dirty sensors, or snow, or rain, thats why they all test in arizona or texas.
These systems are barely any more advanced then what DARPA funded in 2007. They're much smaller, no longer taking up the whole interior of a vehicle, but not much more capable.
Spunjji - Wednesday, May 27, 2020 - link
You're drawing the conclusion that "automakers are morons" missing the boat on self-driving because *one* hardware vendor's automotive sales aren't so hot. The thing is, Nvidia aren't even selling a self-driving system - they're selling the computational hardware on which you could *potentially* run a self-driving system, if you've developed one that works within their specifications.As far as I'm aware nobody has a production-ready self-driving system yet - they're all in development. Investing in more than just the kit you need for a few prototypes at this point in time would be the moronic thing to do, especially as Nvidia regularly revise their kit.
P.S. - the reason there are delays with no explanation for the XC90 is because self-driving is *hard* and coming out saying "we haven't figured it out yet" would impact their sales, even though it would be true and accurate and totally fair. Consumers aren't rational beings...