Nvidia Corporation (NASDAQ: NVDA) Reports A Strong Second Quarter for FY17 - Beats Analysts' Expectation by 16 Cents with EPS of $0.53 and $1.43 Billion in Record Revenue

Nvidia Corporation (NASDAQ: NVDA) Reports A Strong 2nd Quarter for FY17 – Beats Analysts' Expectation by xvi Cents with EPS of $0.53 and $ane.43 Billion in Record Revenue

Stock image of Nvidia's GTX 1060 Graphics Card which will compete with AMD's RX 480.

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Nvidia Corporation (NASDAQ: NVDA) has reported a non-GAAP EPS of 53 cents, easily chirapsia out analysts' expectation of 37 cents per share. With a beat of 16 cents, the chip manufacturer has reported an impressive quarter and is continuing its streak. Analysts expected Nvidia to report revenues of ane.35 Billion, which the visitor was able to beat out by a handy $80 One thousand thousand for a total reported second quarter revenue of $1.428 Billion.

During the starting time half of fiscal 2022, Nvidia spent $509 million in share repurchases and $124 million in cash dividends. Nvidia will pay its next quarterly cash dividend of $0.115 per share on September 16, 2022, to all shareholders of record on Baronial 25, 2022.

In the wake of such a strong quarter and the fact that Nvidia holds 81% of the GPU market share (co-ordinate to Jon Peddie research) the visitor's share price rose to a record loftier of $62 and is currently trading Later on-hours (at the time of writing) at around $61.seven. Proceed in mind however, that the by few months have shown an incredible period of growth in Nvidia'southward stock and a correction to back up levels could potentially come across the price dropping due to herding behavior.

Things to think virtually Nvidia'due south (NASDAQ: NVDA) current quarter

This quarter marks a new era for the chip manufacturers AMD and Nvidia – where the transition from the 28nm node to a sub-20nm node is made (which in the case of Nvidia is 16nm FinFET+). The company has recently introduced the first generation of FinFET GPUs with GeForce branding. This is an upgrade a long time in the making since we have been stuck on 28nm for quite a few years (since 2022). The performance of these GPUs exceeded expectations and have been met with unprecedented demand in the high end segment. Nevertheless:

The visitor has nevertheless to match competition below the $250 price bespeak.
It has been trying to make headway into the autonomous vehicle industry which is currently dominated past Mobileye. This is something that stands to change following the recent divorce of Tesla and Mobileye.
While the company's fe grip on the mainstream GPU industry is impressive, information technology needs to maintain its bullish momentum in other sectors to ensure proper diversification of risk.
Deep Learning is something Nvidia (NASDAQ: NVDA) GPUs are being widely implemented in and this lead is beingness maintained cheers to introduction of Pascal architecture with CuDNN five
The downside take chances of this visitor is express in nature, all the same, it is even so vulnerable to disruptions that originate from TSMC (including merely not limited to Apple being given priority for orders on the 16nm node or bad yields both of which are likely).

Specifically regarding the sub-$250 price indicate, the question was put to CEO Jen-Hsun Huang on the investors conference call request whether, given his before statement that all Pascal chips had taped out and ramped, was Nvidia ceding the sub-$250 market to contest. The answer to that was that although all Pascal chips had taped out and ramped, they had not notwithstanding all been introduced. This of course is something readers of our site volition already likely be familiar with in our previous reporting on a potential cut down 1060 3GB (which may also be introduced every bit the 1050).

Nvidia is major supplier of fries to auto manufacturers, but the vast majority of these go into the infotainment systems. The self-driving sector is something that Nvidia has not yet been very successful in breaking into. To properly diversify away from the hazard of a possibly shrinking PC market (as declared past Intel), Nvidia is attempting to establish itself as a provider of autonomous driving engineering - where it is currently trying to dislodge the well established Mobileye.

Nvidia (NASDAQ: NVDA)'due south GPGPU implementation is much more flexbile than Mobileye and their GPUs have a much higher MAC/southward rate (the relevant metric for self driving chips) yet, due to the lack of an established ecosystem, they accept not been particularly successful thus far. Proceed in mind all the same that the B2B market for product runs of things like cars are likely multi-year negotiating efforts with huge terms on both sides to exist agreed earlier deals of this nature become signed and announced.

Deep Learning and AI is something the world has just started to foray into, and ane of Nvidia's biggest intrinsic strengths is that its GPUs are the become-to standard for deep learning clusters. Of course, how much of their revenue comes from these clusters and after taking into account upgrade cycles the impact of this particular upside diminishes somewhat.

Nvidia Quarterly Revenue Trend Q2 FY17 GPU Business revenue was $1.20 billion, upwards 25 percentage from a year before and up 11 pct sequentially, reflecting strength in datacenter and GeForce® gaming GPU acquirement. Tegra Processor Business acquirement of $166 million was up 30 percent year on year and up 4 percent sequentially, reflecting growth in Tegra automotive. Gaming platform acquirement was $781 million, up 18 percent from a yr agone, driven by Pascal™ gaming GPU sales beyond all regions.

"Strong need for our new Pascal-generation GPUs and surging interest in deep learning drove tape results," said Jen-Hsun Huang, co-founder and chief executive officer, Nvidia. "Our strategy to focus on creating the future where graphics, computer vision and artificial intelligence converge is fueling growth across our specialized platforms -- Gaming, Pro Visualization, Datacenter and Automotive....We are more than excited than e'er about the impact of deep learning and AI, which will touch every industry and marketplace. Nosotros have made significant investments over the by five years to evolve our entire GPU calculating stack for deep learning. Now, we are well positioned to partner with researchers and developers all over the earth to democratize this powerful applied science and invent its futurity,"

During the earnings call, CEO Jen-Hsun Huang fielded a question most the penetration of Pascal thus far into the gaming segment. In answering the question, he stated that of the ~80 one thousand thousand GeForce cards currently in use, only about a tertiary of those had even upgraded to Maxwell and as such Nvidia sees a huge upgrade potential still in the market to Pascal given that initial penetration is extremely small-scale into their overall footprint, the implication of course being that just nether two thirds of users are still on Kepler or older cards.

Professional visualization acquirement from Quadro® was a record $214 million, upwards 22 pct year over year and up thirteen per centum sequentially. Datacenter acquirement, including Tesla® and Nvidia GRID™, was a record $151 million, up 110 per centum from a year before and up 6 per centum sequentially, amid strong demand for GPU acceleration related to deep learning. Automotive revenue from infotainment modules and product evolution contracts was a record $119 million, up 68 percent from a year earlier and upwardly 5 percent sequentially.

Nvidia (NASDAQ: NVDA) GAAP and Non-GAAP Q3 FY17 Quarterly Results

GAAP
*( $ in millions except earnings per share)*	Q2 FY17	Q1 FY17	Q2 FY16	Q/Q	Y/Y
Revenue	$ane,428	$1,305	$1,153	Upwards ix%	Up 24%
Gross margin	57.9%	57.5%	55.0%	Up 40 bps	Upward 290 bps
Operating expenses	$509	$506	$558	Up 1%	Downward 9%
Operating income	$317	$245	$76	Upwards 29%	Up 317%
Net income	$253	$196	$26	Up 29%	Upwardly 873%
Diluted earnings per share	$0.xl	$0.33	$0.05	Up 21%	Up 700%

Not-GAAP
*( $ in millions except earnings per share)*	Q2 FY17	Q1 FY17	Q2 FY16	Q/Q	Y/Y
Revenue	$1,428	$ane,305	$1,153	Up nine%	Upward 24%
Gross margin	58.ane%	58.six%	56.six%	Downwards l bps	Up 150 bps
Operating expenses	$448	$443	$421	Upwardly 1%	Upwardly 6%
Operating income	$382	$322	$231	Upwards 19%	Up 65%
Net income	$313	$263	$190	Up nineteen%	Up 65%
Diluted earnings per share	$0.53	$0.46	$0.34	Up 15%	Up 56%

Second Quarter Fiscal 2022 Highlights

During the 2nd quarter, Nvidia (NASDAQ: NVDA) accomplished progress in each of its 4 major platforms:

Introduced the first four members of its Pascal™ family of gaming GPUs: Nvidia® GeForce® GTX 1080 and 1070, which take set records for speed and ability efficiency; GTX 1060, which delivers immersive VR at strong value; and TITAN 10, the virtually powerful consumer GPU always built.
Unveiled Quadro® P6000 to power the most advanced workstations, enabling designers to manipulate circuitous designs up to twice equally fast as before.
Introduced (in partnership with SMI) an innovative rendering technique that uses centre tracking to enable developers to create more immersive VR environments.
Refreshed Nvidia DesignWorks™ and Nvidia VRWorks™ with new SDKs and updates that bring developers enhanced capabilities for interactive ray tracing, 360 degree video stitching and streaming and physically based materials.
Opened the path to virtualizing all enterprise applications with Tesla® M10, providing the industry'due south highest user density.
Introduced Tesla P100 GPU accelerator for PCI Express-based servers, delivering substantial operation and value compared with CPU-based systems.
Initiated collaborative enquiry in avant-garde self-driving technology with New York University's pioneering deep learning squad.

Nvidia Outlook for Q3 Fiscal Year 2022

Acquirement is expected to be $1.68 billion, plus or minus two per centum.
GAAP and not-GAAP gross margins are expected to be 57.8 percentage and 58.0 percent, respectively, plus or minus 50 basis points.
GAAP operating expenses are expected to be approximately $530 million. Non-GAAP operating expenses are expected to be approximately $465 one thousand thousand.
GAAP and non-GAAP tax rates for the third quarter of fiscal 2022 are both expected to be 21 pct, plus or minus one percent.
Capital expenditures are expected to exist approximately $35 1000000 to $45 million.