Closing out the most recent earnings season for the PC industry is, as always, NVIDIA. The company’s unusual, nearly year-ahead fiscal calendar means that they get the benefit of being casually late in reporting their results. And in this case, they’ve ended up being the proverbial case of saving the best for last.
For the first quarter of their 2024 fiscal year, NVIDIA booked $7.2 billion in revenue, which is a 13% drop over the year-ago quarter. Like the rest of the chip industry, NVIDIA has been weathering a significant slump in demand for computing products over the past few quarters, which in turn has dented NVIDIA’s revenue and profitability. However, while NVIDIA’s consumer-focused gaming division has continued to take matters on the chin, the strong performance of NVIDIA’s data center group has kept the company as a whole fairly profitable, with the most recent quarter setting a segment record and helping NVIDIA to avoid the tough financial situations faced by rivals AMD and Intel.
| NVIDIA Q1 FY2024 Financial Results (GAAP) | |||||
| Q1 FY2024 | Q4 FY2023 | Q1 FY2023 | Q/Q | Y/Y | |
| Revenue | $7.2B | $6.1B | $8.3B | +19% | -13% |
| Gross Margin | 64.6% | 63.3% | 65.5% | +1.3ppt | -0.9ppt |
| Operating Income | $2.1B | $1.3B | $1.9B | +70% | +15% |
| Net Income | $2.0B | $1.4B | $1.6B | +44% | +26% |
| EPS | $0.82 | $0.57 | $0.64 | +44% | +28% |
To that end, while Q1’FY24 was not by any means a record quarter for NVIDIA, it was still a relatively strong one for the company. NVIDIA’s net income of $2 billion makes for one of their better quarters in that regard, and it’s actually up 26% year-over-year despite the revenue drop. That said, reading between the lines will find that NVIDIA paid their Arm acquisition breakup fee last year (Q1’FY23), so NVIDIA’s GAAP net income looks a bit better than it otherwise would; while non-GAAP net income would be down 21%. Meanwhile, NVIDIA’s gross margins have held strong in the most recent quarter, with NVIDIA posting a GAAP gross margin of 64.6%.
But even a solid quarter during an industry slump is arguably not the biggest news to come out of NVIDIA’s most recent earnings report. Rather, it’s the company’s projections for Q2’FY24. In short, NVIDIA is expecting revenue to explode in Q2, with the company forecasting $11 billion in sales. Should it come to fruition, such a quarter would blow well past NVIDIA’s previous revenue records – and shattering Wall Street expectations. As a result, NVIDIA’s stock has already taken off in overnight trading, and by the time the market opens a bit later this morning, NVIDIA is expected to be a $930B+ company, knocking on the door of crossing a market capitalization of a trillion dollars.
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