Nvidia’s AI-Driven Revenues, Revenues and Guidance Easily Exceed Expectations…Once Again
stock nvidia (NVDA -2.85%) The graphics chip specialist rose 9.1% in after-hours trading on Wednesday after releasing a strong report for the fourth quarter of fiscal 2024 (ending Jan. 28).
The stock’s gains were largely due to quarterly earnings and revenue that significantly beat Wall Street expectations, with first-quarter fiscal 2025 guidance for both the top and bottom lines jumping according to analyst consensus estimates.
Nvidia’s key quarterly numbers
| metric system | Fourth quarter of fiscal year 2023 | Fourth quarter of fiscal year 2024 | YOY change |
|---|---|---|---|
| revenue | 6.05 billion dollars | $22.1 billion | 265% |
| GAAP operating profit | $1.26 billion | $13.62 billion | 983% |
| GAAP net income | $1.41 billion | $12.29 billion | 769% |
| adjusted net income | $2.17 billion | $12.84 billion | 491% |
| GAAP earnings per share | $0.57 | $4.93 | 765% |
| adjusted earnings per share | $0.88 | $5.16 | 486% |
Data source: NVIDIA. YOY = compared to the previous year. GAAP = Generally Accepted Accounting Principles. The fourth quarter of fiscal 2024 ended on January 28, 2024.
Investors should pay attention to the adjusted numbers because one-time items are excluded.
Wall Street expected revenue of $20.62 billion and adjusted earnings per share (EPS) of $4.63, so Nvidia met both expectations. It also beat its own guidance for $20 billion in revenue and $4.46 adjusted EPS.
platform performance
| platform | Fiscal 2024 Fourth Quarter Earnings | YOY change | QOQ changes |
|---|---|---|---|
| data center | $18.4 billion | 409% | 27% |
| gambling | $2.9 billion | 56% | flat |
| professional visualization | $463 million | 105% | 11% |
| automobile | $281 million | (4%) | 8% |
| OEM and others | 90 million dollars | 7% | 23% |
| gun | $22.1 billion | 265% | 22% |
Data source: NVIDIA. OEM = original equipment manufacturer; OEMs and others are not our target market platforms. YOY = compared to the previous year. QOQ = quarterly quarterly.
Breaking another quarterly record, data center segment revenue continued to increase as a percentage of the company’s total revenue. Therefore, these artificial intelligence (AI)-based businesses are increasingly driving overall results. In the fiscal fourth quarter, this segment accounted for 83% of total revenue.
The segment’s performance is even more impressive considering that, as Colette Kress said in a CFO commentary, “sales to China declined significantly in the fourth quarter due to U.S. government licensing requirements.” China historically accounts for about 20% to 25% of Nvidia’s data center revenue, as I reported when the government’s chip export restrictions were expanded in October 2023.
Kress attributed the robust data center growth to “increased shipments of the NVIDIA Hopper GPU computing platform, which is used with InfiniBand for (AI) training and (AI) inference for large-scale language models, recommendation engines, and generative AI applications. “Final (networking) solution.”
Generative AI is OpenAI’s ChatGPT chatbot-based technology that has gained explosive popularity since its official launch to the public in late 2022.
What the CEO wanted to say
Here’s what CEO Jensen Huang had to say on the earnings call:
Accelerated computing and generative AI have reached a tipping point. Demand is surging across businesses, industries, and countries around the world. Our data center platform is used by large cloud service providers and GPU (graphics processing unit) specialists, as well as enterprise software and consumer Internet companies. Vertical industries led by automotive, financial services, and healthcare are now multibillion-dollar businesses.
guide
Management expects revenue of $24 billion in the first quarter of fiscal 2025 (ending the end of April), which would represent 234% year-over-year growth. It also drove adjusted EPS of $5.41, or 396% growth (albeit indirectly, by providing various inputs).
Going into the report, Wall Street was modeling first quarter 2025 adjusted EPS of $4.99 and revenue of $22.1 billion, so the company’s outlook easily exceeded both estimates.
Another amazing quarter
In short, Nvidia has filed another strong quarterly report, and the guidance shows that management is incredibly optimistic that the company will continue to see huge demand for its products and services thanks to strong adoption of AI.
