NVIDIA Q1 2025 Earnings
Posted:
NVIDIA's shares surge by 7% On Account of Strong Earnings Performance and Forecast
NVIDIA for the first quarter of 2025 reported revenue of $26.0 billion, surged by 262% from a year ago, driven by a massive surge in the AI demand.
On a segmental basis, Nvidia's data center business generated $22.6 billion in revenue last quarter, marking a staggering 427% YoY increase, accounting for 86% of the company's total revenue. This figure is significantly 20 times higher than the $1.1 billion revenue generated by the segment in 2020. According to Nvidia's finance chief, Colette Kress, this surge was driven by shipments of the company's Hopper graphics processors, which include the H100 GPU.
"Our data center growth was propelled by robust and increasing demand for generative AI training and inference on the Hopper platform," stated Nvidia CEO Jensen Huang. "In addition to cloud service providers, generative AI has extended its reach to encompass consumer internet companies, enterprises, sovereign AI initiatives, automotive, and healthcare customers, thereby establishing multiple multibillion-dollar vertical markets."
Nvidia's Gaming segment, previously its most important business, reported a revenue increase of $2.65 billion, up 18% YoY driven by strong demand.
Nvidia's Professional Visualization segment reported first-quarter revenue of $427 million, a 45% increase from the previous year.
Moreover, the company's automotive and robotics segment reported first-quarter revenue of $329 million, an 11% increase from the previous year.
Nvidia's net income during the quarter skyrocketed by 628% YoY and stood at $14,881 billion. This quarter marked Nvidia's most profitable and highest sales period ever, surpassing the previous record set in the quarter ending this January, with a net income of $12.3 billion and revenue of $22.1 billion.
During the quarter, Nvidia unveiled the Blackwell platform to drive a new era of AI computing at a trillion-parameter scale, along with the Blackwell-powered DGX SuperPOD™ for generative AI supercomputing. Despite the company's business tripling or more, CEO Huang indicated that the next-generation AI GPU, named Blackwell, would drive further growth. "We will see a lot of Blackwell revenue this year," he stated during a call with analysts, adding that the new chip would be in data centers by the fourth quarter.
"A major highlight this quarter was Meta's announcement of Lama 3, their latest large language model, which utilized 24,000 H100 GPUs," Kress stated during a call with analysts. She also mentioned that large cloud providers account for approximately "mid-40%" of Nvidia's data center revenue.
Apart from this, Kress highlighted a significant decline in revenue from China during the quarter due to the company's necessity to suspend shipments of its most powerful chips to the country. Additionally, she anticipates ongoing intense competition in the region's market moving forward.
Outlook
Nvidia anticipates revenue for Q2 2025 to be $28.0 billion, plus or minus 2%. Furthermore, the company expects the gross margins to be in the range of 74.8% and 75.5%, respectively, plus or minus 50 basis points. For the full year, gross margins are expected to be in the mid-70% range.
Nvidia also revealed plans for a 10-for-1 stock split on June 7. This move would reduce its share price from approximately $950 to $95 while keeping the company's total valuation unchanged. This decision aims to make whole shares more accessible for investors and employees.
Nvidia disclosed that it repurchased $7.7 billion worth of its shares and distributed $98 million in dividends during the quarter. Additionally, the company announced an increase in its quarterly cash dividend from 4 cents per share to 10 cents on a pre-split basis. Following the split, the dividend will amount to one cent per share.
Nvidia shares surged approximately 7% in late trading on 22nd May evening, surpassing $1,000 for the first time. This remarkable increase followed the company's outstanding quarterly earnings report and the announcement of a 10-for-1 stock split.
Sources:
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