NVIDIA’s fiscal year for 2017 ended on January 29, 2017, and for the fourth quarter and full year, NVIDIA reports they had record revenues. For Q4 2017, NVIDIA is reporting revenue of $2.173 billio.n, up 55% from a year ago. Gross margin came in at 60.0%, which is up 3.5% from Q4 2016. Operating income for the quarter was $733 million, up 191%, and net income was up 216% to $655 million. The very high growth in operating income and net income are even more impressive, since Q4 2016 was also a record for them at the time. NVIDIA reported $0.99 per share earnings for this quarter, up 183%.
| NVIDIA Q4 2017 Financial Results (GAAP) | |||||
| Q4’2017 | Q3’2017 | Q4’2016 | Q/Q | Y/Y | |
| Revenue (in millions USD) | $2173 | $2004 | $1401 | +8% | +55% |
| Gross Margin | 60.0% | 59.0% | 56.5% | +1.0% | +3.5% |
| Operating Income (in millions USD) | $733 | $639 | $252 | +15% | +191% |
| Net Income | $655 | $542 | $207 | +21% | +183% |
| EPS | $0.99 | $0.83 | $0.35 | +19% | +183% |
Even though 2016 was a record year for NVIDIA, 2017 was even better. NVIDIA reported record revenue of $6.91 billion for the full fiscal year 2017, which is up 38% from a year ago, and had a net income of $1.666 billion. Earnings per share for the year were $2.57. They also repurchased $739 million in shares over the last year, and paid $261 million in dividends.
The majority of NVIDIA’s revenue came from their Gaming segment, which includes their GeForce GPUs. The launch of Pascal has clearly been very successful, and for the quarter NVIDIA’s Gaming segment had revenues of $1.348 billion, up from $810 million a year ago. This is a gain of 66.4% year-over-year, on a market they were already at the top of. This quarter, they also launched the GeForce GTX 1050 and 1050 Ti mobile GPUs, and a new SHIELD TV, along with unveiling the GeForce NOW game streaming service.
Professional Visualization had much more modest growth, being up “only” 10.8% from last year, with revenues of $225 million for the quarter. They just launched the GP100 Quadro though, so it may have even more growth to come.
Datacenter has been a big focus from NVIDIA in diversifying their portfolio, and this quarter they had some announcements here as well, with a collaboration with Microsoft on the Microsoft Cognitive Toolkit, powered by Microsoft Azure cloud running on NVIDIA DGX-1 deep learning system. They unveiled the DGX SATURNV AI supercomputer, and partnered with the National Cancer Institute and US Department of Energy to build CANDLE to “advance cancer research”. The growth of NVIDIA’s Datacenter segment has been almost exponential, and it is now the second largest source of revenue for the company. For Q4 2017, NVIDIA reported $296 million in revenue from this segment, up from $97 million a year ago, or an increase of 205.1%.
NVIDIA has also diversified into Automotive with their Tegra lineup, after originally releasing it as a mobile SoC. This has also been a boon for the company, and they are now powering self-driving cars, and the infotainment systems of major manufacturers like Audi, and Mercedes-Benz, and they’ve partnered with Bosch on self-driving systems as well. This segment saw revenues of $128 million for the quarter, up from $93 million a year ago, or 37.6%.
Finally, the OEM and IP segment had revenues of $176 million, down from $198 million a year ago. Unfortunately NVIDIA has not gone into much detail about just why this is dropping, and how revenue from this category breaks down.
| NVIDIA Quarterly Revenue Comparison (GAAP) | |||||
| In millions | Q4’2017 | Q3’2017 | Q4’2016 | Q/Q | Y/Y |
| Gaming | $1348 | $1244 | $810 | +8.4% | +66.4% |
| Professional Visualization | $225 | $207 | $203 | +8.7% | +10.8% |
| Datacenter | $296 | $240 | $97 | +23.3% | +205.1% |
| Automotive | $128 | $127 | $93 | +0.8% | +37.6% |
| OEM & IP | $176 | $186 | $198 | -5.4 | -11.1% |
For next quarter, NVIDIA is expecting revenues of $1.9 billion, plus or minus 2%, and gross margins between 59.5 and 59.7%.
The diversification of NVIDIA from a purely GPU company has clearly paid dividends, especially when their core market is doing as well as it is. The datacenter growth is clearly very high margin as well, considering the jump in net income for the quarter.
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