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NVIDIA Corporation NVDA delivered first-quarter fiscal 2022 non-GAAP earnings of $3.66 per share, beating the Zacks Consensus Estimate $3.28. The reported figure also jumped a whopping 103% year over year and 18% sequentially.
Revenues of $5.66 billion beat the consensus mark of $5.4 billion and surged 84% year over year as well. The top line also climbed 13%, quarter on quarter.
The company reported revenue growth across its entire end markets except for Auto which has been impacted by business disruptions caused by the COVID-19 pandemic. Moreover, the company’s Gaming, Data Center and Professional Visualizationmarkets registered record revenues during the quarter.
Beginning first-quarter fiscal 2021, NVIDIA started reporting revenues under two segments — Graphics and Compute & Networking.
Graphics include GeForce GPUs for gaming and PCs, the GeForce NOW game streaming service and related infrastructure, and solutions for gaming platforms; Quadro GPUs for enterprise design; GRID software for cloud-based visual and virtual computing; and automotive platforms for infotainment systems.
Graphics accounted for 61% of the fiscal first-quarter revenues. The segment’s top-line figure surged 81% year over year and 13% sequentially to $3.45 billion.
Compute & Networking represented 39% of the fiscal first-quarter revenues. The segment comprises Data-Center platforms and systems for AI, HPC, and accelerated computing; DRIVE for autonomous vehicles; and Jetson for robotics and other embedded platforms.
Compute & Networking revenues soared 88% year over year and 14% sequentially to $2.21 billion.
Market Platform Top Line Details
Based on the market platform, Gaming revenues (49% of revenues) shot up 106% year over year and 11% sequentially to $2.76 billion on higher sales across the company’s notebook and desktop gaming GPUs and game console SOCs.
Revenues from Data Center (36% of revenues) soared 79% year over year and 8% from the previous quarter to $2.05 billion. This year-on-year upswing was chiefly driven by revenue contribution from the Mellanox acquisition, and strong chip demand from hyperscale and large consumer Internet customers.
Professional Visualization revenues (7% of revenues) increased 21% year over year as well as sequentially to $372million. This increase mainly resulted from record sales of notebook workstation GPUs, while quarter-on-quarter growth reflects higher GPU sales for both desktop and notebook workstations.
Auto revenues (3% of revenues) in the reported quarter totaled $154 million, down 1% on a year-over-year basis. Nonetheless, the division’s sales increased 6%, sequentially. This quarter-on-quarter rise was primarily aided by continued recovery in the global automotive production volumes.
OEM and Other revenues (5% of revenues) skyrocketed 137% year on year and 114% sequentially to $327 million. This uptick reflects inclusion of Cryptocurrency Mining Processors (CMP) revenues under the market platform, which generated sales of $155 million.
NVIDIA’s non-GAAP gross margin expanded 40 basis points (bps) year over year and 70 bps sequentially to 66.2%.
Non-GAAP operating expenses flared up 45% year over year to $1.19 billion on higher compensation related expenses, including headcount increase, the Mellanox acquisition-related costs, and infrastructure costs. Sequentially, non-GAAP operating expenses were flat as higher compensation-related costs offset by the additional week in the fourth quarter of fiscal 2021.
Non-GAAP operating income jumped an an astounding 112% year over year and 22% quarter on quarter to $2.56 billion.
Balance Sheet and Cash Flow
As of May 2, 2021, NVIDIA’s cash, cash equivalents and marketable securities were $12.67 billion, up from $11.56 billion as of Jan 31, 2021.
As of May 2, 2021, total long-term debt (including current maturities) was $5.96 billion, flat with the previous quarter ended on Jan 31, 2021.
The company generated $1.87 billion in operating cash flows, up from the year-ago quarter’s $909 million but down from the previous quarter’s $2.07 billion. Free cash flow was $1.56 billion, up from the prior-year period’s $754 million but down from the last quarter’s $1.77 billion.
During the fiscal first quarter, NVIDIA paid dividends of $99 million.
For the second quarter of fiscal 2022, NVIDIA anticipates revenues of $6.3 billion (+/-2%).
Non-GAAP gross margin is projected at 66.5% (+/-50 bps). Non-GAAP operating expenses are estimated to be $1.26 billion.
Capital expenditures are expected to be approximately $300-$325 million.
Zacks Rank & Other Stocks to Consider
NVIDIA currently carries a Zacks Rank #2 (Buy).
Other top-ranked stocks in the broader technology sector include Lam Research Corporation LRCX, ASML Holding N.V. ASML and Facebook FB. While Lam Research and ASML Holding sport a Zacks Rank #1 (Strong Buy), NVIDIA carries a Zacks Rank #2, at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
The long-term earnings growth rate for Lam Research, ASML Holding, and Facebook is currently pegged at 32.8%, 29.8% and 20.1%, respectively.
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