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NVIDIA Q1 FY 2020 Income Report: Post-Crypto Reset



This week, NVIDIA announced its first-quarter revenue of its 2020 fiscal year, and although crypto-currency crashes have been a boom for players looking to buy GPUs, it's not been so welcome to the company's Form 10- Q Revenue for the first quarter of 2020 fell 31% to $ 2.22 billion, with a gross margin of 6.1% from 64.5% to 58.4%. Operating expenses in the company increased by 21% despite a decline in revenue, while NVIDIA spent $ 132 million more in the quarter on R&D than in the same period a year ago. Revenue was down 72% to $ 358 million, but due to $ 44 million in interest income and $ 5 million in income tax, the net result reached $ 394 million. Although net was higher than operating, net continued to decline by 68% compared to Q1

2019. This resulted in earnings per share of $ 0.64, down 68% from $ 1.98 a year ago.

Q1 2020 Financial Results (GAAP)
Q1 & 2020 Q / Q Q / Q
Y / Y
Turnover [2265M] [22065] [22065] [32065] [32065] [1] -31% [gross] 58.4% 54.7% 64 , 5% + 3.7% -6.1%
Operating revenues $ 358M $ 294M $ 1295M + 22% -72%
$ 394M $ 567M $ 1244M [19659010] -31% -68% -68% -68% $ 0.64 -68% $ 0.64 [19659009] $ 0.92 $ 1.98 -30% -68%

Although seeing such a drop, it is never good, some perspective is needed. NVIDIA's financial year for 2019 was a standout. Revenue in Q1 2019 was $ 3.2 billion, with a net income of $ 1.2 billion. However, if you go back to Q1 2018, your revenue was $ 1.9 billion, and your net income was $ 507 million, much closer to the 1st quarter of 2020. Comparison of Q1 2018 to Q1 2020 has increased by 14.6% by 2020 and net income down 28.6%. It is clear that the inflated performance, thanks to a perfect storm for NVIDIA's 2019 economy, has ended and the company has been withdrawn to reality. Fortunately, the reality for the company is that a $ 2.2 billion Q1 makes it their second best Q1 ever, so I think they'll be OK.

Hopping in some segments of the company, there are basically two products NVIDIA sells: GPU and Tegra. NVIDIA breaks them into subcategories, but NVIDIA in its heart is still a GPU, and the results show it. The GPU revenues accounted for 91% of the company's revenue of $ 2,022 billion, and this segment had revenues of $ 669 million. A year ago when the crypto was king, the GPU was $ 2,765 billion in revenue with an operating revenue of $ 1,394 billion. Revenue for the GPU was down due to a decline in game and data center revenue, as well as having $ 289 million in revenue for cryptocurrency mining processors (CMP).

By contrast, Tegra was only $ 198 million in revenue for the first quarter of 2020, with a $ 44 million operating loss. A year ago, Tegra was $ 442 million in revenue, and the segment was in black, with revenues of $ 97 million. The big drop for Tegra is a decline in SoC games for games, which you can read as Nintendo Switch sales for the most part.

NVIDIA then mixes all these results into several other categories. Gaming is their biggest, and Gaming had $ 1.05 billion in revenue, down from 39% from the previous year. NVIDIA allows this case due to a decline in GPU shipments as well as a decrease in SoC games for game consoles.

Professional visualization, which has the Quadro brand, had sales of $ 266 million, an increase of 6% from the previous year. NVIDIA has experienced growth in both desktop and laptop workstation products compared to 2019.

Data center sales for the first quarter were $ 634 million, down 10% from the previous year. NVIDIA has seen a certain decline in hyperscale and business purchases of GPUs, but some growth in incidents that have compensated the decline somewhat.

The automotive industry had a turnover of $ 166 million, an increase of 14% from the previous year, attributed to the growth of the AI ​​cockpit modules.

Finally, OEM and Other Revenues were $ 99 million, down 74% year-on-year, which is not surprising since NVIDIA sold it CMP sales, which means that this entire drop can be attributed directly to cryptocurrency. [19659047] NVIDIA Quarterly Revenue Composition (GAAP)
($ in Millions) In Millions Q1 & 2020 Q4 Q199 Q1 Q [Q] Q [Q] Q / Q Y / Y Gaming $ 1055 $ 1055 ] $ 954 $ 1723 + 11% -39% Professional Visualization $ 266 $ 293 [19659009] $ 251 -9% + 6% data center $ 634 $ 679 $ 701 -7% + 10% Automotive $ 166 $ 163 $ 145 + 2% + 14% OEM & IP $ 99 $ 116 $ 387 ] -15% -74%

After a star FY 2019, the company has had to reset a bit. Q1 is well down compared to 2019, but fortunately for the company, not so far from the year before. Looking forward to Q2 2020, NVIDIA expects revenue of $ 2.55 billion, plus or minus 2%, and gross margin of 59.2% plus or minus 0.5%.

Source: NVIDIA Investor Relations


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