Nvidia reports record-breaking revenue in fiscal Q2 2018

Nvidia put its earnings report for the second fiscal quarter of 2018 on the table yesterday. As one might expect given the company's dominance of the profitable high-end gaming sector and the money-printing GPU compute market, the company's financials were up across the board compared to last year. Reported revenue was a company-record $2.23 billion, up 56% from $1.43 billion in Q2 2017. Operating income saw even larger boosts, displaying a Q2 2018 figure of $688 million, 117% higher than the same period a year ago. The company reported GAAP gross margins of 58.4% and GAAP margins of 58.6%, both representing a 0.5% increase year-over-year, but also a quarterly drop. Nvidia's CFO commentary says this drop is the result of the end of a licensing deal with Intel.

As one might expect, the GPU segment was responsible for the lion's share of revenue, raking in $1.90 billion dollars during the quarter. This represents a 59% jump from the $1.20 billion in the same period in the 2017 fiscal year. The company's Tegra business saw almost no movement in revenue compared to last quarter, but the $332 million figure is still just over double what the unit saw in Q2 2017.

($ in millions) Q2 2018 Q1 2018 Q2 2017 Q/Q Y/Y
GPU business $1897 $1562 $1196 +21% +59%
Tegra processor business $333 $332 $166 +0% +101%
Other - $43 $66 -100% -100%
Total $2230 $1937 $1428 +15% +56%

Breaking the figures down by business platform, gaming is still the company's revenue cash cow, raking in $1.19 billion of the $2.23 billion total. The datacenter division is responsible for the most year-over-year growth, though. The OEM and IP business showed the most noticeable quarterly revenue increase.

($ in millions) Q2 2018 Q1 2018 Q2 2017 Q/Q Y/Y
Gaming $1186 $1027 $781 +15% +52%
Professional visualization $235 $205 $214 +15% +10%
Datacenter $416 $409 $151 +2% +175%
Automotive $142 $140 $119 +1% +19%
OEM and IP $251 $156 $163 +61% +54%
Total $2230 $1937 $1428 +15% +56%

Nvidia had a number of high-profile product announcements during the past quarter. The company introduced its Tesla V100 GPU accelerator and a group of related products for the datacenter and announced partnerships with Volkswagen and Baidu. The big news for the quarter in the gaming sector was the announcement and availability of its Max-Q initiative for thin gaming laptops. The company also touted new technologies in professional visualization, automotive, and edge computing in its earnings press release.

All of this wasn't enough to impress Wall Street, as the company's stock value dropped in the wake of the earnings report. Uncertainty about the future of cryptocurrency and its role in Nvidia's earnings were reported to having played a role in the decrease in share price. Additional information is available in Nvidia's press release and CFO commentary.

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