NVIDIA today reported revenue for the fourth quarter ended Jan. 27, 2019, of $2.21 billion, down 24 percent from $2.91 billion a year earlier, and even worse, down 31 percent from $3.18 billion in the previous quarter. The company’s full-year revenue was up 21 percent.
GAAP earnings per diluted share for the quarter were $0.92, down 48 percent from $1.78 a year ago and down 53 percent from $1.97 in the previous quarter. Non-GAAP earnings per diluted share were $0.80, down 53 percent from $1.72 a year earlier and down 57 percent from $1.84 in the previous quarter.
For fiscal 2019, revenue was $11.72 billion, up 21 percent from $9.71 billion a year earlier. GAAP earnings per diluted share were $6.63, up 38 percent from $4.82 a year earlier. Non-GAAP earnings per diluted share were $6.64, up 35 percent from $4.92 a year earlier.
“This was a turbulent close to what had been a great year,” said Jensen Huang, founder and CEO of NVIDIA. “The combination of post-crypto excess channel inventory and recent deteriorating end-market conditions drove a disappointing quarter.
“Despite this setback, NVIDIA’s fundamental position and the markets we serve are strong. The accelerated computing platform we pioneered is central to some of world’s most important and fastest growing industries – from artificial intelligence to autonomous vehicles to robotics. We fully expect to return to sustained growth,” he said.
Capital Return
In fiscal 2019, NVIDIA returned $1.95 billion to shareholders through a combination of $1.58 billion in share repurchases and $371 million in quarterly cash dividends.
Of the $3.00 billion NVIDIA intends to return to shareholders by the end of fiscal 2020, $700 million in share repurchases were completed in the fourth quarter of fiscal 2019. The company intends to return the remaining $2.30 billion by the end of fiscal 2020, through a combination of share repurchases and cash dividends.
NVIDIA will pay its next quarterly cash dividend of $0.16 per share on March 22, 2019, to all shareholders of record on March 1, 2019.
Q4 Fiscal 2019 Summary
| GAAP | |||||||||||
| ($ in millions except earnings per share) | Q4 FY19 | Q3 FY19 | Q4 FY18 | Q/Q | Y/Y | ||||||
| Revenue | $2,205 | $3,181 | $2,911 | Down 31% | Down 24% | ||||||
| Gross margin | 54.7% | 60.4% | 61.9% | Down 570 bps | Down 720 bps | ||||||
| Operating expenses | $913 | $863 | $728 | Up 6% | Up 25% | ||||||
| Operating income | $294 | $1,058 | $1,073 | Down 72% | Down 73% | ||||||
| Net income | $567 | $1,230 | $1,118 | Down 54% | Down 49% | ||||||
| Diluted earnings per share | $0.92 | $1.97 | $1.78 | Down 53% | Down 48% | ||||||
| Non-GAAP | |||||||||||
| ($ in millions except earnings per share) | Q4 FY19 | Q3 FY19 | Q4 FY18 | Q/Q | Y/Y | ||||||
| Revenue | $2,205 | $3,181 | $2,911 | Down 31% | Down 24% | ||||||
| Gross margin | 56.0% | 61.0% | 62.1% | Down 500 bps | Down 610 bps | ||||||
| Operating expenses | $755 | $730 | $607 | Up 3% | Up 24% | ||||||
| Operating income | $479 | $1,210 | $1,202 | Down 60% | Down 60% | ||||||
| Net income | $496 | $1,151 | $1,081 | Down 57% | Down 54% | ||||||
| Diluted earnings per share | $0.80 | $1.84 | $1.72 | Down 57% | Down 53% | ||||||
Fiscal 2019 Summary
| GAAP | |||||||
| ($ in millions except earnings per share) | FY19 | FY18 | Y/Y | ||||
| Revenue | $11,716 | $9,714 | Up 21% | ||||
| Gross margin | 61.2% | 59.9% | Up 130 bps | ||||
| Operating expenses | $3,367 | $2,612 | Up 29% | ||||
| Operating income | $3,804 | $3,210 | Up 19% | ||||
| Net income | $4,141 | $3,047 | Up 36% | ||||
| Diluted earnings per share | $6.63 | $4.82 | Up 38% | ||||
| Non-GAAP | |||||||
| ($ in millions except earnings per share) | FY19 | FY18 | Y/Y | ||||
| Revenue | $11,716 | $9,714 | Up 21% | ||||
| Gross margin | 61.7% | 60.2% | Up 150 bps | ||||
| Operating expenses | $2,826 | $2,227 | Up 27% | ||||
| Operating income | $4,407 | $3,617 | Up 22% | ||||
| Net income | $4,143 | $3,085 | Up 34% | ||||
| Diluted earnings per share | $6.64 | $4.92 | Up 35% | ||||
NVIDIA’s outlook for the first quarter of fiscal 2020 is as follows:
- Revenue is expected to be $2.20 billion, plus or minus 2 percent.
- GAAP and non-GAAP gross margins are expected to be 58.8 percent and 59.0 percent, respectively, plus or minus 50 basis points.
- GAAP and non-GAAP operating expenses are expected to be approximately $930 million and $755 million, respectively.
- GAAP and non-GAAP other income and expense are both expected to be income of approximately $20 million.
- GAAP and non-GAAP tax rates are both expected to be 10 percent, plus or minus 1 percent, excluding any discrete items. GAAP discrete items include excess tax benefits or deficiencies related to stock-based compensation, which are expected to generate variability on a quarter by quarter basis.
For fiscal 2020, revenue is expected to be flat to down slightly.
Latest Highlights
Since the end of the third quarter, NVIDIA has achieved progress in these areas:
Datacenter
- Announced that the NVIDIA® T4 GPU launched in public beta on Google Cloud Platform, with availability in the U.S., Europe, Brazil, India, Japan, and Singapore.
- Set six records in AI performance with the release of MLPerf, the industry’s first objective set of AI benchmarks.
- Announced with Google the integration of NVIDIA’s RAPIDS™ GPU-accelerated data science libraries with Kubeflow Pipelines, a Kubernetes-based platform for deploying and managing machine learning workloads in hyperscale datacenters.
Gaming
- Launched the GeForce RTX™ 2060 GPU, putting exceptional performance and graphics enhanced by ray tracing and AI within reach of tens of millions of gamers.
- Unveiled a record 40+ new gaming laptops in over 100 configurations powered by NVIDIA GeForce RTX GPUs.
- Expanded its G-SYNC™ ecosystem with G-SYNC-compatible monitors, tested and driver-optimized by NVIDIA.
- Announced that Battlefield V, the first real-time ray tracing game, will add DLSS AI super-sampling technology; that the highly anticipated game Anthem will integrate DLSS; and that Justice, one of China’s most popular MMO games, will add ray tracing and DLSS.
Professional Visualization
- Introduced Quadro RTX™ 4000, bringing real-time ray tracing to millions of midrange workstation users.
- Announced the NVIDIA CUDA®-accelerated REDCODE RAW decode SDK, in collaboration with RED Digital Cinema, enabling developers and studios to edit 8K video in real time without the need for additional video processors.
Automotive
- Introduced NVIDIA DRIVE™ AutoPilot, the world’s first commercially available Level 2+ automated driving system, with Tier 1 suppliers Continental and ZF announcing the availability of Level 2+ solutions based on NVIDIA DRIVE in 2020.
- Announced with Mercedes-Benz that it will create a centralized computing architecture for the automaker’s next-generation vehicles, enabling them to be software-defined AI cars.
Edge Computing
- Launched the NVIDIA Jetson AGX Xavier™, a palm-sized module delivering 32 TOPS to help build the next generation of autonomous machines.
- Opened its AI and Robotics Research Lab in Seattle.
