Nvidia suffers revenue, profit shrinkage

The numbers are in for Nvidia’s latest fiscal quarter, and… well, the green team could be doing better. Although Nvidia’s gross margin was up a couple of points compared to last year, revenue and profits were both down a ways.

Here are the numbers. They pertain to the third quarter of Nvidia’s 2014 fiscal year, which ended on October 27:

  Q3 FY’13 Q2 FY’14 Q3 FY’14
Revenue $1.204 billion $977.2 million $1.054 billion
Net income $209.1 million $96.4 million $118.7 million
Gross margin 52.9% 55.8% 55.4%

As Reuters reports, sales of Nvidia’s Tegra mobile chips sank by 54%, and sales of its PC graphics processor decreased by 2%. Nevertheless, Nvidia CEO Jen-Hsun Huang touts "the proliferation of Tegra into new verticals like automotive and set-top boxes." He also boasts about "all-time high Quadro and Tesla revenues" and a "record number of customer trials for our GRID datacenter initiative."

Reuters says Nvidia’s forecast for the ongoing quarter came in below Wall Street estimates, as well. Analysts were forecasting $1.083 billion on average, but Nvidia says it expects revenue of $1.05 billion, give or take a couple of percent, with a gross margin of "approximately" 54.2%. For reference, in the same quarter last year, Nvidia posted $1.107 billion revenue and a 52.9% gross margin.

In related news, Nvidia plans to give back $1 billion to shareholders through "stock repurchases and quarterly dividend payments" during its 2015 fiscal year. For those not intimately familiar with Nvidia’s accounting practices, it looks like the company’s fiscal years usually begin on the last Monday of January.

Comments closed
    • TwoEars
    • 6 years ago

    What?

    Don’t be silly. Those are extremely nice numbers, any company of that size would be happy to have those numbers on their balance sheet.

    Gross margin of over 50%? Cry me a river.

    Nvidia is doing well.

    • Buzzard44
    • 6 years ago

    A fairly calm and stable earnings report is nothing that I get too excited about, but boy there sure have been some funny comments on here!

    • brucethemoose
    • 6 years ago

    This proves my point: stock ARM cores just aren’t competitive with custom SOC designs anymore.

    • Eggrenade
    • 6 years ago

    Well, they’ve got the fastest GPU on the planet, so they probably aren’t suffering any [i<]other[/i<] kind of shrinkage.

      • dpaus
      • 6 years ago

      Beat me to it, although I suspect the financial results are still a splash of at least cool water….

    • echo_seven
    • 6 years ago

    Is there a typo in the chart? The chart says $1.204 billion for 3QFY’13 while the text itself (and the link) seem to say $1.10 billion.

    edit: okay, my bad, never mind. I can’t read.

    • NeoForever
    • 6 years ago

    After what happened to AMD’s stocks, I’m gonna be watching how investors treat Nvidia stocks after this report.

      • SCR250
      • 6 years ago

      Up $1.01 or 7%.

        • Pwnstar
        • 6 years ago

        The smart investors know where to put their money.

          • NeoForever
          • 6 years ago

          I think valuation of a stock has as much to do with psychology of the investors as anything else.

            • SCR250
            • 6 years ago

            [quote<]I think valuation of a stock has as much to do with psychology of the investors as anything else.[/quote<] For a company like AMD that is very true and the reason for it's massive swings in share prices. For Nvidia it is more about sustainable revenue growth. Nvidia has a floor under it's price with it's cash hoard, dividend and share buy back program.

            • MadManOriginal
            • 6 years ago

            Over the short-term, yes, but over the long-term (meaning at least a year if not longer) the fundamental quality of a company is what matters.

    • Modivated1
    • 6 years ago

    Everybody is reading into the Fiscal sales drop and saying that AMD’s recent GPU release has caused Nvidia to falter. Did no one pay attention to the report that the Tegra mobile chip business ” has sank by 54% ” That is where the majority of their shortage is at.

    AMD may catch some marketshare yet, but lets call it like it is, even though the graphic’s market is bigger I don’t think that 2% GPU loss is more costly then the 54% loss in the mobile market.

      • NeelyCam
      • 6 years ago

      Bay Trail killed WinRT.
      AMD killed NVidia’s console business.

        • chuckula
        • 6 years ago

        Video Killed the Radio Star.

          • JustAnEngineer
          • 6 years ago

          Try this [i<]a capella[/i<] version. [url<]http://www.youtube.com/watch?v=8JC3db0rEus[/url<]

        • tipoo
        • 6 years ago

        Windows RT didn’t need to die for Tegra 4 to do poorly. It is a power hungry chip for the performance it has. Qualcomm handily killed it on their own.

      • SCR250
      • 6 years ago

      TR seems to like to always focus on the negative so they only posted the Y-Y decline of 54%. They failed to mention the 111.4% rise in Tegra revenue from the previous quarter.

      Source: [url<]http://phx.corporate-ir.net/External.File?item=UGFyZW50SUQ9MjEwMDA0fENoaWxkSUQ9LTF8VHlwZT0z&t=1[/url<] And the market seems to like what they saw and heard in the CC as the stock climbed 7% today.

        • Buzzard44
        • 6 years ago

        While the stock pop is noteworthy, the only thing I’m reading from your talk on Tegra revenue is that 3 months ago, Tegra revenue somehow declined 78% over the previous 9 months…how exactly do you lose that much revenue from a product that fast? 78% over 9 months…jeez. Sounds like the graphics cards are doing fine, but NVidia’s mobile sector is getting slaughtered.

          • Pwnstar
          • 6 years ago

          If nobody wants your chips, they don’t get sold.

            • SCR250
            • 6 years ago

            Nobodies bought $111.2 million dollars of Tegra’s in 2014Q3.

            Last quarter nobodies bought $52.6 million dollars of Tegra’s.

            So more nobodies or the same nobodies bought an additional $58.6 million dollars of Tegra’s or 111.4% more.

            Looks like the nobodies came, liked and bought.

            [url<]http://phx.corporate-ir.net/External.File?item=UGFyZW50SUQ9MjEwMDAzfENoaWxkSUQ9LTF8VHlwZT0z&t=1[/url<]

    • ronch
    • 6 years ago

    Ok, I’m no accountant. Will somebody tell me how Nvidia’s [b<]2014[/b<] fiscal year has already ended? It's only 2013, right?

      • dmjifn
      • 6 years ago

      It didn’t. Q3 2014 just ended. FY 2014 started in late 2013 and ends in late January 2014. It’s still pretty weird but companies have a lot of flexibility in how they set this up.

      • chuckula
      • 6 years ago

      Six Words: Time And Relative Dimensions In Space!

        • SCR250
        • 6 years ago

        Funny.

        As a side note are you going to see the 50th in a theater or on the TV?

        I was lucky in that a theater in the Dallas area is showing it and I got my ticket just before it was sold out.

          • chuckula
          • 6 years ago

          All the shows around here are sold out 🙁
          I do have BBC America in my TV package so I can watch it live on the 23rd.

      • moose17145
      • 6 years ago

      We go over this every single time NVidia posts their quarterly earnings…

      Basically companies are allowed to set when their fiscal year starts and ends. Since NVidias fiscal year ends in the early part of 2014, all earnings for that fiscal year will be marked at fiscal year 14 earnings.

      It is common practice in businesses to offset their fiscal year from the calender year. I would imagine the federal government also even encourages companies to do this as well. The reason being, comes each new year comes a deluge of people and other companies trying to get their taxes done. If a company offsets their fiscal year from the calender year, then they often do not get caught up in “tax season rush hour”, instead it gives them an extra month or so to get their paperwork and taxes in order, and can then submit them during off season when it is much slower.

      There are numerous other reasons to have a shifted fiscal year, that is just one reason / example of many.

        • JustAnEngineer
        • 6 years ago

        NVidia’s excuse has always been that they’re too [s<]drunk[/s<] busy around the Christmas holiday to stop and add up how many widgets they've sold and how much money they've spent. Therefore, they don't get around to closing up the fiscal year until several weeks later.

      • dpaus
      • 6 years ago

      Accounting Games: The Way They’re Meant To Be Played!

      • WaltC
      • 6 years ago

      These are reports from the future. nVidia prefers to release reports on how it did in the quarter ended six months from now instead in the most recent quarter ended.

      • Meadows
      • 6 years ago

      FY’14 has not ended yet. This is Q3.

      • SCR250
      • 6 years ago

      Nvidia fiscal year always ends in January. Since that is in 2014 Nvidia’s current Q3 which just ended at the end of October is 2014FY-Q3.

      [quote<]A fiscal year (or financial year, or sometimes budget year) is a period used for calculating annual ("yearly") financial statements in businesses and other organizations. In many jurisdictions, regulatory laws regarding accounting and taxation require such reports once per twelve months, but do not require that the period reported on constitutes a calendar year (that is, 1 January to 31 December). Fiscal years vary between businesses and countries. [url<]http://en.wikipedia.org/wiki/Fiscal_year[/url<][/quote<]

        • JustAnEngineer
        • 6 years ago

        It usually ends in January, but it sometimes ends in February if they’re especially busy at that time of year.

          • SCR250
          • 6 years ago

          When has it ever ended in February?

          Nvidia reports in February for the Quarter/FY that ends in January.

            • JustAnEngineer
            • 6 years ago

            I haven’t owned NVidia stock in over a decade, so it was probably that long ago.

            • SCR250
            • 6 years ago

            How about never.

    • bittermann
    • 6 years ago

    I guess charging $650 for a video card isn’t working anymore. AMD gets it but clearly Nvidia doesn’t…

      • superjawes
      • 6 years ago

      Because the 780 Ti is the only card Nvidia offers….

        • NeoForever
        • 6 years ago

        I don’t think he is being literal or technical about it. His point is that Nvidia’s strategy involves setting very high margins.

        No need to be narrow-minded here.

          • Srsly_Bro
          • 6 years ago

          No need, but they certainly will. Providing a juvenile response is more common than properly understanding and responding in an intellectual way.

        • bittermann
        • 6 years ago

        Nvidia over chargers for video card performance vs. AMD in almost every category. Truth hurts, I know…wish it wasn’t so because both companies have great cards.

          • Klimax
          • 6 years ago

          There is no truth in your posts in this thread.

        • Srsly_Bro
        • 6 years ago

        lol. That has nothing to do with his comment. Both companies sell cards for under $650. He said AMD doesn’t charge $650, but Nvidia does. You, sir, fail at all things comprehension. I’m sure he’s well aware AMD and Nvidia both offers cards under $650.

        Oh, let me help with a car analogy.

        I guess charging $60,000 for a truck isn’t working anymore. Chevy gets it but clearly Ford doesn’t

        Your deluded response:

        Well Ford sells a focus!

        What does that have to do with the original response about high prices? You and those other +4 people need some help, and my analogies are just the help you all need!

          • superjawes
          • 6 years ago

          The article is about Nvidia’s financial results, which include much more than a single $650 card, so any comment putting all the blame on such a card lacks the perspective my retort provides.

          Additionally, the article specifically mentions a drop in sales for a specific component, the Tegra. So bittermann is essentially attributing a revenue decline to a single product even though there is a simpler answer staring him in the face!

          To apply your own analogy, it would be like blaming Ford’s financial troubles on a $60,000 truck when they report a 54% decline in bus sales…

            • Srsly_Bro
            • 6 years ago

            I don’t read articles. I go straight to comments. If that’s the basis for his comment, he’s pretty silly.

      • travbrad
      • 6 years ago

      AMD may “get it” but their CPU business is dragging them down. Even if you were to put a negative sign in front of Nvidia’s Q3 net income, it would still be better than AMD’s Q3.

    • odizzido
    • 6 years ago

    Perhaps this is the wrong website to ask on, but I don’t understand why Nvidia would ever give back 1 billion to stockholders.

    I mean, the stockholders gave nvidia a bunch of money for what is effectively nothing, and try as I might I really can’t see the CEO(s) saying….aww sorry for scamming you guys. Here, have some of the money back.

    Do the CEO(s) want to increase the unit price because they have a bunch of shares or something?

      • superjawes
      • 6 years ago

      There are lots of reasons why a company would pay out to shareholders. A CEOs job isn’t just to incrase share price. That’s really more of a safeguard against his own job since you traded partial ownership (stocks) for capital.

      • nanoflower
      • 6 years ago

      Probably most of the money will go into stock purchases which will help drive the price up for all stock holders. The dividends are given out for a variety of reasons. Some people (and institutions) will only buy stocks that have a dividend. Think about someone that is retired. They may not want to be involved in trading stocks but just want to hold on to good stocks that have a nice dividend. (I’m not sure that Nvidia fits in that category but it seems that most mid-cap and larger stocks do return a dividend.)

    • superjawes
    • 6 years ago

    “Nvidia suffers revenue, profit shrinkage”

    “Honestly, it’s just cold in here!”

      • MadManOriginal
      • 6 years ago

      “I was in the pool!”

    • yammerpickle2
    • 6 years ago

    I don’t really see a killer app that will force me to upgrade, and while the 780 TI is nice I’ll wait on a Maxwell based card.

      • sschaem
      • 6 years ago

      killer app… I think ‘we’ have all been waiting for the killer monitor.

      ~30″ is the sweet spot for desktop gaming.

      So I can totally see 32″ 4K monitor taking the gaming world by storm.
      Quality 120hz 4k panels are about ~$450.. slap gsync on this on AMD could make a killing at <$800

      We just need people in the PC industry to understand that the same old same old doesn’t cut it if they want to regain momentum.

        • Pwnstar
        • 6 years ago

        Somebody Kickstart this!!!

    • BoBzeBuilder
    • 6 years ago

    Dayum. The R9 290 is putting a hurt on Nvidia.

      • Joerdgs
      • 6 years ago

      Reserve that comment for the next fiscal quarter report.

        • Srsly_Bro
        • 6 years ago

        lol. Do you really think someone as literate as bob is silly enough to assume a product released days ago would affect revenue posted from a previous quarter. Troll comment yes, even sillier response? Oh, yes.

        • dmjifn
        • 6 years ago

        Why? It won’t be any more true then than now.

          • Zeratul
          • 6 years ago

          “They pertain to the third quarter of Nvidia’s 2014 fiscal year, which ended on October 27”

            • dmjifn
            • 6 years ago

            Who pertains to the third quarter? Joerdgs? What does he have to do with Nvidia’s fiscals?

      • derFunkenstein
      • 6 years ago

      [quote<] They pertain to the third quarter of Nvidia's 2014 fiscal year, which ended on October 27[/quote<]

      • HisDivineOrder
      • 6 years ago

      It’s incredible how the R9 290 traveled back through time using its incredibly loud cooler combined with a tiny fusion reactor, a hover conversion it picked up in 2055, and then popped back into 1985.

      Once there, it pierced the ear drums of a young Jen and that later made his hearing weak at a crucial moment when his engineers told him that they had to stop making Shield devices or they’d start losing money. Unfortunately, Jen couldn’t hear them because of that near run-in with a really loud GPU. To save face, he just shrugged and waved them off while signing a paper to double production of Shield devices.

      Content in a job well done, the R9 290 revved up its turboprop fan and returned to the present where it found to its dismay the present and future had been altered, but in ways it had not anticipated. Unfortunately, suddenly there was a 780 Ti waiting for it when it arrived.

      “Dagnabbit!” it squealed at 55%.

        • Srsly_Bro
        • 6 years ago

        -2/10

        • dmjifn
        • 6 years ago

        I for one hope you entered the TR Dear Diary contest!

          • chuckula
          • 6 years ago

          350 word limit?

            • dmjifn
            • 6 years ago

            For some the challenge is not finding the ideas, it’s expressing them! 🙂

            • derFunkenstein
            • 6 years ago

            There are sooooo many entries with 500-700 words. I’ve been reading them and most of them have been different words to express the same thought. Some have been really good.

        • Klimax
        • 6 years ago

        Damn it, that was funny…

      • maxxcool
      • 6 years ago

      wow. did you ever learn to read ?

    • Krogoth
    • 6 years ago

    The reason for the drop is simple. Shield is a flop and demand for gaming cards is dwindling. PC gamers are still holding onto their older GPUs and there’s no killer app that renders them completely obsolete. The same story is also affecting AMD’s graphical division.

      • yogibbear
      • 6 years ago

      Battlefield 4 will put a stop to this… perhaps?

      Oh no, maybe not. Cross your fingers for Titanfall then.

      • ClickClick5
      • 6 years ago

      Long live the 6970! :p

      The new consoles should push developers to use DX11, and push for a higher poly count that has been severely absent for the past few years.

      Behold PC gaming brethren, a new generation is soon upon us!

        • mcnabney
        • 6 years ago

        You sure about that? Many of the games coming out in Q4 are already being rendered at sub-1080p on the consoles that haven’t even launched yet. You think they the industry will make games even more detailed so that the consoles have to run at 480p?

          • Pwnstar
          • 6 years ago

          That’s because the GPU on the consoles suck. We don’t have that problem on PC.

      • Star Brood
      • 6 years ago

      To me my single 7850 2GB works out great, the only time it suffers is in Far Cry 3 Blood Dragon with all eye candy turned on (poor game optimization) and with TressFX Hair in Tomb Raider (which is turned off even during gaming benchmarks).

        • Concupiscence
        • 6 years ago

        Yeah, I’m still pleased as punch with my GTX 660 myself. At 1080p I just don’t run into problems it can’t solve, and it looks like that might stay true for the next couple of years at minimum.

      • HisDivineOrder
      • 6 years ago

      Shield wasn’t meant to be more than a demo of new Tegra parts. Shield sells Tegra processors to users, device builders look on and maybe buy one for themselves, and then are supposed to squeal like a bleary-eyed teenie-boppin’-schoolgirl at a Twilight-themed Bieber concert.

      I don’t think even that happened. Hence, why they’re trying to use Shield as a bonus for high spenders in the GPU market. I guess it makes sense to clean out inventory. I still hold hope that nVidia gives up the ghost on Shield hardware and makes the gimmick something that can be done from nVidia GPU to nVidia GPU, no matter if that GPU is in a tablet, laptop, HTPC, or desktop.

      As for the rest, I mostly agree. Like the current gen consoles (for one more week at least anyway), they’re pushing this generation out too far, stretching it out across too many years like jelly scraped over too much bread. Everyone who was going to upgrade will have certainly done so. Now they’re just trying to double or triple dip into the same user base.

      We need a new technology to come along and redefine the price points to performance ratios. I suspect the combination of games coming as ports to/from the (so-called) “next gen consoles” with their x64-built games and memory levels of 6+ GB, higher resolution textures, etc are going to help rejuvenate the market for a bit just in time for Maxwell to show up with an octacore Haswell-E solution from Intel. Elsewhere, AMD will be screaming, “MANTLE! CONSOLES! MANTLE!” with a Kaveri cheapo chip in one hand and a Hawaii chip in the other.

      No matter how you slice it, new tech comes next year. Given how long a user who bought a SB(-E?) at launch and a 7970 at launch got out of their cards, buying an E-line CPU from Intel suddenly makes a lot of sense if it has a lot of cores because the performance narrative is actually shrinking year to year, so if the rate continues you could get 4-5 years out of it at near the high end. And if this gen repeats and if nVidia bothers to show up with their true high end next year with Maxwell instead of postponing it on account of rain (no competition), it could hold up for 2+ years, too.

    • Diplomacy42
    • 6 years ago

    Going foreword, I think 54.2% gross margin might be a little optimistic, which is good.

    • Grigory
    • 6 years ago

    With all the Teslas catching fire Nvidia is in trouble. 😉

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