Nvidia Q4 FY 2024 Earnings
Posted:The Company's Revenue Surges 265% Fueled by Proliferating AI Business
Nvidia reported Q4 FY202 earnings on 21st February. Nvidia for the fourth-quarter revenue jumped to $22.1 billion a remarkable surge of 265% in total revenue compared to the previous year. The surge in revenue was driven by robust sales of AI chips for servers, particularly the company's "Hopper" chips like the H100. Moreover, robust demand was fueled by enterprise software and consumer internet applications, as well as various industry sectors such as automotive, financial services, and healthcare.
Segmental Revenue for the Fourth Quarter
Nvidia's data center revenue jumped to $18.4 billion a whooping 409% increase on a YoY basis. Importantly, more than half of Nvidia's data center sales were attributed to large cloud providers.
Nvidia acknowledged that its data center revenue suffered due to recent U.S. restrictions on exporting advanced AI semiconductors to China. CEO Huang stated that they addressed these restrictions by reconfiguring their products to ensure they were not susceptible to software hacks, although this process took time, resulting in a reset of their product offerings to China. Currently, they are in the process of sampling customers in China.
Moreover, Nvidia's Chief Financial Officer Colette Kress noted that while the company has improved the supply of its AI GPUs, shortages are still anticipated, especially for the upcoming next-generation chip, the B100, set to ship later this year. Kress emphasized that despite supply improvements for the Hopper architecture products, demand for Hopper remains high, and they anticipate supply constraints for their next-generation products due to overwhelming demand.
Nvidia's CEO Huang added that the ramp-up from zero to mass production for new products takes time and cannot be accomplished overnight.
Furthermore, The company's gaming business, encompassing graphics cards for laptops and PCs, saw a more modest increase of 56% year over year, reaching $2.87 billion. Graphics cards for gaming were historically Nvidia's mainstay business before the emergence of its AI chips. It's worth noting that some of Nvidia's graphics cards are also utilized for AI purposes.
Nvidia's professional visualization segment which includes making graphics hardware for professional applications reported revenue of $463 million up by 105% YoY. Additionally, the company's automotive business declined 4% YoY to $281 million in sales in the fourth quarter. Nvidia's OEM and other businesses, which include crypto chips, rose 7% YoY to $90 million.
Other Financial Information
For the fourth quarter, Nvidia reported Earnings Per Share (EPS) of $4.93 per share up from 57 cents a year earlier.
The company's net income for Q4 increased to $12.29 billion from $1.41 billion same period the previous year, surging 769% from a year ago.
Nvidia's gross margin for the fourth quarter stood at 76%, marking an increase from 63.3% in the year-ago period. According to Nvidia's chief financial officer, Colette Kress, this improvement can be attributed to the expansion of the data center business, primarily propelled by Nvidia's Hopper GPU computing platform.
Nvidia CEO Jensen Huang reassured investors on a call with analysts regarding concerns about the company's ability to sustain its growth or sales levels throughout the year. He expressed confidence in the company's continued growth prospects, stating, "Fundamentally, the conditions are excellent for continued growth" in 2025 and beyond. Huang emphasized that demand for the company's GPUs will remain strong, driven by generative AI and an industry-wide transition from central processors to the accelerators produced by Nvidia.
Outlook
Looking ahead, Nvidia anticipated to be around $24.0 billion, with a margin of error of plus or minus 2%.
Gross margins are anticipated to be around 76.3% with a potential variation of plus or minus 50 basis points.
Operating expenses are forecasted to be approximately $3.5 billion.
Other income and expenses are anticipated to generate income of approximately $250 million, excluding gains and losses from non-affiliated investments.
Nvidia shares, which experienced declines for four consecutive days leading up to the earnings release, surged approximately 10% in extended trading after the announcement.
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