NVIDIA announced its earnings this afternoon for the second quarter of their 2018 fiscal year (not a typo). As we’ve seen over the past several quarters, NVIDIA has been growing their business at a very brisk pace, and that growth was reflected in their earnings statement once again. For the second quarter, ending July 30, NVIDIA reported revenues of $2.23 billion, up 56% from a year ago. Gross margin was up half a percent as well to 58.4%. When revenue is up, and margins are up, it should perhaps not be a shock that operating income also jumped, in this case to $688 million, which is up 117% compared to Q2 2017. Net income was $583 million, up 123% year-over-year, and that resulted in earnings per share of $0.92, up 124% from the $0.41 a year ago. Sometimes these large jumps can be attributed to write-downs or other charges in the compared quarter, but in fact Q2 2017 was also a record for the company, after they took a write down charge for the Icera modem division two years ago.

NVIDIA Q2 2018 Financial Results (GAAP)
  Q2'2018 Q1'2018 Q2'2017 Q/Q Y/Y
Revenue (in millions USD) $2230 $1937 $1428 +15.1% +56.2%
Gross Margin 58.4% 59.4% 57.8% -1.7% +1.0%
Operating Income (in millions USD) $688 $554 $317 +24.2% +117.0%
Net Income $583 $507 $261 +15.0 +123.4%
EPS $0.92 $0.79 $0.41 +16.4% +124.4%

NVIDIA’s gaming segment continues to be their largest source of revenue, even as they have diversified the company, and despite the contraction of the PC market, PC gaming still appears to be a strong business, and NVIDIA has taken advantage of that. For the quarter, NVIDIA had gaming revenue of $1.186 billion, compared to $781 million a year ago. They’ve not launched anything that’s completely new this quarter, but are still seeing success with their Pascal based GPUs. This growth can also likely be attributed to mining, but to NVIDIA, a GeForce sale goes in the gaming column.

Professional visualization is likely still one of the higher margin divisions of NVIDIA, even as they’ve seen this group surpassed by several other divisions in the company. The Professional Visualization revenue grew 13.5%, which is actually pretty solid growth, but it can seem a bit diminutive compared to some of the other growth in the company.

Datacenter has quickly become one of NVIDIA’s biggest sources of revenue. A year ago, it accounted for just under 11% of the company’s revenue, but for Q2 2018, revenue is up 175% to $416 million. This once small segment of NVIDIA now accounts for almost 19% of their revenue, and with the acceleration of AI and compute tasks in the datacenter, the company appears to be in a prime position to continue to capitalize on that trend.

Automotive is the segment that emerged out of NVIDIA’s unsuccessful attempt to move into mobile. It continues to grow as well, with NVIDIA signing agreements with many of the largest automotive companies to include their technology in new vehicles. In May of this year, NVIDIA announced that Toyota will utilize their DRIVE PX platform, to join the party with other companies such as Volvo. Revenues for this segment grew 19.3% to $142 million this quarter, compared to Q2 2017.

Finally, NVIDIA’s OEM and IP segment had a big jump in revenue as well, from $163 million a year ago to $251 million today. That’s a 54% increase.

NVIDIA Quarterly Revenue Comparison (GAAP)
In millions Q2'2018 Q1'2018 Q2'2017 Q/Q Y/Y
Gaming $1186 $1027 $781 +15.5% +51.9%
Professional Visualization $235 $205 $214 +14.6% +9.8%
Datacenter $416 $409 $151 +1.7% +175.5%
Automotive $142 $140 $119 +1.4% +19.3%
OEM & IP $251 $156 $163 +60.9 +54.0%

Looking ahead to Q3 2018, NVIDIA sees their record year continuing, with expected revenues of $2.35 billion, plus or minus 2%, and margins between 58.1% and 59.1%.

Source: NVIDIA Investor Relations

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  • dgingeri - Thursday, August 10, 2017 - link

    Think of how much better they'd be if they hadn't crippled compute performance on the mainstream cards so badly.
  • Dr. Swag - Thursday, August 10, 2017 - link

    How did they cripple it?
  • 1mpetuous - Thursday, August 10, 2017 - link

    Mostly in artificially reducing FP16 and INT8 performance in the Geforce group, and not offering anything with remotely reasonable DP performance at all below Tesla.
  • 1mpetuous - Thursday, August 10, 2017 - link

    Sorry, I made an error. INT8 not restricted, just FP16
  • mapesdhs - Friday, August 11, 2017 - link

    I skipped the entire 600 series because of the borked CUDA performance. Nothing came along to consistently beat the 580 in the same price range until the 780 Ti. There's an AE thread on Creativecow full of people who "upgraded" to 600 series cards, and even some 700s, only to see no speedup at all or often a drop. They judged based on the number of cores, but the design was very different, lower clocks to help power delivery and other changes, especially the much lower ratio for FP64.
  • jwcalla - Thursday, August 10, 2017 - link

    I'm sure you know the business better than them. Maybe you should apply to be CEO?
  • StrangerGuy - Thursday, August 10, 2017 - link

    When a clearly luxury product is too expensive for the likes of dgingeri, regard said product as if it's his constitutional right.

    I find amazing the lengths people will go to hide their entitlement syndrome, just like how poor third worlders constantly whining about iPhone prices.
  • mapesdhs - Friday, August 11, 2017 - link

    Perhaps (I won't go into that, my MAGA hat is too much of a rant magnet...:D), but it is true that NV radically changed their support for compute on consumer cards in a way which did make it very difficut for prosumers on a budget to move up the scale in their capabilities. Presumably they did it because they thought that reasonable compute on consumer cards would hurt Quadro/Tesla sales, but that doesn't seem likely from the conversations I've had with relevant people; those who can afford Quadro/Tesla also tend to want the extra features they offer, such as ECC, better caching structures, full-speed PCIe return path, longer warranty, better MTBF, etc. Prosumers on a budget though had nowhere to go after the 580 for quite a while. NV also seemed to miss the potential for those users who, if they could, would use a GF to dev code at home while their employer would use pro cards for final deployment, eg. a guy using CUDA for financial transaction processing said final systems must have ECC, but it would have been nice to have something better than a 580 for home dev work.

  • WinterCharm - Sunday, August 13, 2017 - link

    Don't forget certified drivers! that's one of the main reasons to get Quadro and Tesla cards.
  • 1mpetuous - Thursday, August 10, 2017 - link

    Agreed. Most casual compute (students / academic research) customers just don't have the budget to step up to the Tesla cards at almost an order of magnitude greater cost.

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