NVIDIA Earnings Report Q4 2019: Crypto Pain But Full Year Gain

Friday, February 15th, 2019 - GPUs, Teknologi

NVIDIA Earnings Report Q4 2019: Crypto Pain But Full Year Gain

This afternoon, NVIDIA announced their earnings for the fourth quarter of their 2019 fiscal year, which ended January 27. As expected, revenues were sharply hit by the crash of the cryptocurrency markets, and the Santa Clara company faced a year-over-year revenue drop of $706 million, or 24%, with fourth-quarter revenues of $2.2 billion. Gross margin fell to 54.7%, down 7.2% from Q4 2018. Operating income was down a dramatic 73% to $294 million, although net income was only down 49%, coming in at $567 million. This resulted in diluted earnings-per-share of $0.92, down 48% from a year ago.

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NVIDIA Q4 2019 Financial Results (GAAP)
 Q4'2019Q3'2019Q4'2018Q/QY/Y
Revenue$2205M$3181M$2911M-31%-24%
Gross Margin54.7%60.4%61.9%-5.7%-7.2%
Operating Income$294M$1058M$1073M-72%-73%
Net Income$567M$1230M$1118M-54%-49%
EPS$0.92$1.97$1.78-53%-48%

For the full fiscal year though, earnings were still very solid, with revenue up 21% to $11.7 billion, and an overall gross margin of 61.2%, up 1.3% from 2018. Operating income was $3.8 billion, up 19%, and net income was $4.1 billion, up 36%. Earnings-per-share for all of 2019 came in at $6.63, 38% higher than 2018.

NVIDIA’s growth thanks to Cryptocurrency was mostly found in their gaming GPU lineup sales, so unsurprisingly the GPU business saw the biggest revenue drop of any segment. Year-over-year, NVIDIA’s GPU business fell 20%, and compared to the previous quarter, it’s down 29%. Still, the GPU side of the house still brought in $1.98 billion in revenue.

Tegra is the other business unit, and it had revenues of only $225 million, down 50% from a year ago. Tegra includes automotive, SoCs for consoles, and embedded devices, and NVIDIA states that most of this decline is due to declines in gaming platforms.

Breaking the units down into markets, Gaming continues to be the biggest segment of NVIDIA, although not by the wide margin we are accustomed to. Gaming brought in $954 million in revenue, down 45% from a year ago where Gaming was $1.7 billion in revenue.

Professional Visualization was up 15% from Q4 2018, with revenues of $293 million, and Automotive was up 23% to $163 million. OEM and IP was down 36% though, thanks to the drop in SoC sales for consoles.

Datacenter continues to be a growth market for NVIDIA, with revenue up 12% to $679 million, encroaching on Gaming as the highest revenue segment for the company. Clearly they’ve done well to diversify and create product segments for the datacenter, and it pays extra dividends when your core business has a weak quarter like this one.

NVIDIA Quarterly Revenue Comparison (GAAP)
($ in millions)
In millionsQ4'2019Q3'2019Q4'2018Q/QY/Y
Gaming$954$1764$1739-46%-45%
Professional Visualization$293$305$254-4%+15%
Datacenter$679$792$606-14%+50%
Automotive$163$172$132-5%+23%
OEM & IP$116$148$180-31%-24%

For Q1 2020, NVIDIA is expecting revenues to be $2.2 billion, plus or minus 2%, with gross margins between 58.3% and 59.3%.

It will likely take a couple more quarters to get a feel for how everything has shaken out with the decline in Crypto GPU purchases clearly hitting the company hard. NVIDIA has made some pretty major gains that have certainly taken a beating, but they do have some new products on the market currently which might help alleviate the situation.

Source: NVIDIA Investor Relations

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