Nvidia Q4 revenues grow 53% to $7.64B as it focuses on post-Arm strategy

Nvidia reported revenues of $7.64 billion for its fourth fiscal quarter ended January 30, up 53% from a year earlier.

Gaming, datacenter, and professional visualization market platforms each achieved record revenue for the quarter and year.

Nvidia reported non-GAAP earnings per share of $1.32 on revenues of $7.64 billion, up from EPS of $1.17 on revenue of $7.10 billion a year earlier. The earnings come after Nvidia canceled its $80 billion acquisition of chip architecture firm Arm due to antitrust concerns.

The Santa Clara, California-based company makes graphics processing units (GPUs) that can be used for games, AI, and datacenter computing. While many businesses have been hit hard by the pandemic, Nvidia has seen a boost in those areas. The company saw record revenue in its gaming, datacenter, and professional visualization platforms.

GAAP earnings per diluted share for the quarter were $1.18, up from 97 cents a year ago. In after-hours trading, Nvidia’s stock is trading at $259.69, down 2%.

Analysts expected Nvidia to report earnings for the January quarter of $1.22 a share on revenues of $7.42 billion.

“We are seeing exceptional demand for Nvidia computing platforms,” Nvidia CEO Jensen Huang in a statement. “Nvidia is propelling advances in AI, digital biology, climate sciences, gaming, creative design, autonomous vehicles and robotics – some of today’s most impactful fields.”

He added, “We are entering the new year with strong momentum across our businesses and excellent traction with our new software business models with Nvidia AI, Nvidia Omniverse, and Nvidia Drive. GTC is coming. We will announce many new products, applications, and partners for Nvidia computing.”

Nvidia has seen a boom in both gaming and datacenter revenues as users go online during the pandemic. Gamers have been snatching up graphics cards to play PC games, but a shortage of semiconductors has hurt companies like Nvidia.

In a conference call with analysts, Huang said the company could not get regulators to approve the Arm deal.

“We gave it our best shot,” he said.

Nvidia touted its next Nvidia GTC event this week, which will host 900 sessions with 1,400 speakers talking about AI, high-performance computing, and graphics — all in the context of Nvidia and Arm going their separate ways.

I moderated a fall GTC session on a vision for the metaverse, and I’ll do the same at the upcoming GTC event. Nvidia has been coming up with updates for its Omniverse, a metaverse for engineers and enterprises.

Chip shortages have been a tough part of the semiconductor business in the pandemic, and the availability of products in the market remains low, said Colette Kress, chief financial officer, in the earnings call with analysts. The cancellation of the Arm deal cost $1.36 billion in fees for Nvidia. Nvidia is trying to direct available supply to gamers, Kress said.

Datacenter

Datacenter revenues hit $3.26 billion, up 71% from a year earlier and up 11% from the previous quarter. Nvidia announced that Meta is building its AI Research SuperCluster with Nvidia DGX A100 systems. Kress said hyperscale and cloud demand was outstanding with revenue more than doubling from a year ago. The A100 GPU continues to drive strong growth for AI products, Kress said.

Gaming

As noted, gaming revenue was $3.42 billion, up 37% from a year earlier and up 6% from the previous quarter. Nvidia launched its GeForce RTX 3050 desktop graphics processing unit (GPU) in the quarter, and it also launched its GeForce RTX 3080 Ti and RTX 3070 Ti laptop GPUs for laptops for gamers and creators. Gaming has become the top entertainment category and continues to show momentum, said Kress.

Laptop gaming revenue hit a record. Nvidia announced 160 gaming computer design wins. Nvidia is integrating its GeForce Now cloud gaming service into Samsung TVs. Regarding ray tracing technology, Huang said RTX is an “unqualified home run.”

Professional visualization

Professional visualization generated revenues of $643 million, up 109% from a year earlier and up 11% from the previous quarter.

Growth was driven by a shift to higher-value products and Nvidia’s Ampere architecture adoption, Kress said.

Automotive

Fourth-quarter automotive revenue was $125 million, down 14% from a year earlier and down 7% from the previous quarter. Nvidia said today it formed a multi-year partnership with Jaguar Land Rover to jointly develop and deliver next-generation automated driving systems, plus AI-enabled services and experiences, Huang said.

The deal will allow the companies to create a shared software revenue stream over the life of the fleet, he said. The potential is for products in 10 million cars over a decade. Kress said the company is excited about its new software-driven revenue models. Huang noted that every single car will eventually be a robot someday.

“In the case of Nvidia Drive, we share the economics of the software we deliver,” Huang said.

Outlook

For the first quarter ending April 30, Nvidia expects gross profit margins of 65.2% (GAAP) and 67% (non-GAAP) on revenues of $8.1 billion, while analysts previously expected earnings to be $1.17 a share on revenue of $7.29 billion.