Nvidia’s first-quarter revenue increased 46% year-on-year

NVIDIA’s first-quarter revenue increased by 46% year-on-year.

NVIDIA’s first-quarter revenue increased by 46% year-on-year. NVIDIA achieved record revenue in the first quarter, reaching $8.29 billion, year-on-year. Growth of 46%, data center and gaming business revenue hit a new high. NVIDIA's first-quarter revenue increased 46% year-on-year. NVIDIA's revenue in the first quarter increased by 46% year-on-year1

After the U.S. stock market closed on May 25, NVIDIA announced its first quarter financial report for fiscal year 2023 as of May 1, 2022, showing NVIDIA's revenue for this fiscal quarter. 8.29 billion US dollars, an increase of 46% over the same period last year, setting a record in the company's history. Net profit was US$1.62 billion, a year-on-year decrease of 15% and a month-on-month decrease of 46%. Nvidia's revenue for the quarter was higher than Wall Street analysts expected, but its net profit fell short of expectations.

Nvidia’s two major revenue pillars, gaming and data center performance, remain strong. Nvidia CEO Jensen Huang said that although the gaming business revenue has reached a new high, the data center is already Nvidia’s largest platform and is optimistic about its performance in the second half of the year.

Looking at the two major businesses, the game business achieved revenue of US$3.62 billion in the first fiscal quarter, a year-on-year increase of 31%, mainly covering graphics required for desktop and laptop computers. Processors (GPUs), and GPUs supplied to the Nintendo Switch game console. NVIDIA said that the previous high prices of graphics cards used for games made it difficult for consumers to purchase them. Now the shortage situation has eased, but it expects that the sales revenue of the game business in the second quarter will decrease by more than ten percent compared with the first quarter.

Nvidia’s data center revenue in the first quarter was US$3.75 billion, exceeding that of its gaming business, a year-on-year increase of 83%, mainly due to strong market demand for the company’s artificial intelligence products. Huang Renxun predicts that data center performance will reach new highs.

In the first fiscal quarter, Nvidia’s sales revenue from hyperscale and cloud computing customers more than doubled year-on-year. Vertical industry demand remains strong, and network revenue growth accelerates.

The other two businesses had mixed results. The professional visualization business had revenue of US$622 million in the quarter, a year-on-year increase of 67%. This business mainly provides professional-grade rendering GPUs for workstations and 3D design purposes. Affected by some supply chain constraints in the automotive industry, automotive business revenue fell 10% year-on-year to US$138 million.

Nvidia’s OEM and other business revenue for the quarter was US$158 million, a 51% year-on-year decrease and an 18% month-on-month decrease. The month-on-month decrease was mainly due to the decline in CMP shipments of mining-specific processors. On May 6, the U.S. Securities and Exchange Commission (SEC) issued a statement on its official website stating that it had reached a settlement with Nvidia over insufficient disclosure.

The SEC previously accused the chip giant of insufficient disclosure regarding the impact of crypto mining on the company’s gaming business. Without admitting or denying the SEC's findings, Nvidia agreed to accept a cease-and-desist order and pay a $5.5 million fine.

Nvidia also disclosed that after giving up the acquisition of Arm, it paid SoftBank a termination fee of US$1.35 billion.

Affected by the geopolitical situation and supply chain chaos, Nvidia gave a pessimistic performance outlook for the second quarter: estimated revenue of US$8.1 billion, lower than market expectations. Nvidia CFO Kress said on the conference call that it expects the gaming business sales in China and Russia to lose about 400 million US dollars, and the data center business sales in Russia to also lose nearly 100 million US dollars, with a total loss of more than 500 million US dollars. .

Kress also said that in response to the challenging macroeconomic environment, Nvidia will slow down the pace of hiring and control expenses.

Affected by pessimistic performance expectations, Nvidia’s stock price fell by more than 9% after the market closed. Fluctuations in Nvidia's stock price also affect the stocks of semiconductor companies such as AMD, Micron, and Western Digital. NVIDIA's first-quarter revenue increased by 46% year-on-year2

According to news on May 26, NVIDIA disclosed its performance for the latest quarter.

The report shows that NVIDIA achieved record revenue in the first quarter, reaching US$8.29 billion, a year-on-year increase of 46% and a month-on-month increase of 8%. Data center and gaming business revenue hit a new high. However, Nvidia’s net profit was only US$1.618 billion, a year-on-year decrease of 15% and a month-on-month decrease of 46%.

Calculated in accordance with U.S. GAAP, Nvidia’s adjusted net profit was US$3.443 billion, a year-on-year increase of 49% and a month-on-month increase of 3%.

NVIDIA founder and CEO Jensen Huang said that in the context of a challenging macro environment, NVIDIA has achieved record performance in the data center and gaming fields. "Deep learning automation intelligence The effectiveness is driving companies in various industries to adopt NVIDIA products for artificial intelligence computing. Although the revenue achieved by the gaming business has reached a new quarterly high, the data center business has become NVIDIA’s main business.”

The report shows that during the reporting period, NVIDIA's data center business achieved revenue of US$3.75 billion, a year-on-year increase of 83%, accounting for approximately 45.23% of total revenue; NVIDIA's gaming business achieved revenue of US$3.62 billion, a year-on-year increase of 31%, approximately Accounting for 43.67% of total revenue. Nvidia's first-quarter revenue increased by 46% year-on-year3

In the early morning of May 26, Beijing time, Nvidia announced its financial report for Q1 of fiscal year 2023. The financial report shows that Nvidia’s Q1 revenue reached a record high of US$8.29 billion (approximately 56.6 billion yuan), a year-on-year increase of 46%, and a month-on-month increase of 8%. In terms of net income, Q1 net income was US$1.62 billion (approximately 10.9 billion yuan), a decrease of 46% month-on-month and a year-on-year decrease of 15%.

Overall, Nvidia’s performance in the last quarter was slightly higher than market expectations.

However, due to supply chain problems caused by the epidemics in Russia, Ukraine and China, Nvidia is relatively pessimistic about Q2 performance. The company's EVP and CFO Colette Kress pointed out that this may affect revenue of approximately US$500 million (approximately 3.4 billion yuan). The financial report shows that Nvidia expects Q2 revenue to be US$8.1 billion (approximately 54.3 billion yuan), lower than analysts’ expectations of US$8.54 billion (approximately 573 yuan).

Affected by this, Nvidia’s stock fell 6.5% to US$159.36 (approximately 1,069 yuan) after the market closed. The stock price of its main competitor AMD also fell by 2.6%. Intel’s Shares also fell slightly.

In terms of main business, as Nvidia’s traditional strong business, the gaming business represented by gaming graphics cards reached a record-breaking US$3.62 billion (approximately 24.3 billion yuan) in Q1, a year-on-year increase of 31%. A month-on-month increase of 6%.

NVIDIA stated that the growth of the gaming business is mainly driven by notebook graphics cards and game console chips. This year, Nvidia released the GeForce RTX 3090 Ti, the most powerful consumer graphics card to date.

At the same time, the shortage of graphics cards that has plagued players around the world in the past year has also been alleviated. Nvidia said graphics card inventory for gaming has "normalized." Regionally, gaming demand remains strong in North America, but Nvidia is seeing some weakness in parts of Europe and China. Nvidia expects that channel inventory will basically return to normal in the second quarter, but game revenue will also drop by about 10%.

Reflected in the price of graphics cards, the prices of graphics cards that skyrocketed last year have begun to fall. According to data from PC hardware website Toms Hardware, as of the end of April, the prices of graphics card-related products dropped by an average of 30% compared with January.

However, it should be noted that although the current shortage of graphics cards has been alleviated, the shortage of chips may continue. Intel CEO Patrick Gelsinger predicted as recently as April that the shortage would last until 2024.

In terms of data center business, although it only started in 2019, it has grown rapidly. The financial report shows that Q1 data center business revenue was US$3.75 billion (approximately 25.2 billion yuan), a year-on-year increase of 83% and a month-on-month increase of 15%, surpassing Nvidia’s core gaming business for the first time.

In the past few years, the widespread application of deep learning has brought strong demand for computing power. Take GPT-3, a general-purpose AI model with 175 billion parameters, as an example. The supercomputer designed specifically for it by Microsoft in 2020 is equipped with 10,000 graphics cards.

Nvidia CEO Jen-Hsun Huang told analysts on a conference call: “Whether it’s the industry’s recognition of the importance of artificial intelligence, or the transformative nature of these new artificial intelligence models, recommendation systems, large language models, artificial intelligence Intelligent conversations, thousands of companies around the world using NVIDIA AI in the cloud, all of these factors are driving our data center growth, so we expect data center demand to remain strong."

In terms of other businesses, the professional visualization business increased by 67% year-on-year to US$622 million (approximately 4.2 billion yuan). Kress said workstation-class GPU performance remains strong as the company continues to invest in supporting remote work. She also emphasized that its 3D collaboration/simulation platform Omniverse is making money for customers like Amazon, PepsiCo, and Kroger, and increasing GPU sales.

The only underperforming business is the automotive chip business, with Q1 revenue of US$138 million (approximately 930 million yuan), a year-on-year decrease of 10%. Nvidia attributed this to tight automotive supply and declining in-vehicle entertainment SoC revenue.

In addition, although the acquisition of ARM failed, Nvidia still needs to pay SoftBank up to US$1.25 billion (approximately 8.4 billion yuan), which is the deposit stipulated when the two companies signed the contract in 2020.