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NVIDIA (NVDA) Q4 Earnings Beat Estimates, Revenues Surge Y/Y

·4 min read

NVIDIA NVDA reported fourth-quarter fiscal 2022 non-GAAP earnings of $1.32 per share, which beat the Zacks Consensus Estimate by 8.2%. The reported figure jumped 69.2% year over year and 12.8% sequentially.

Revenues of $7.64 billion beat the consensus mark by 2.9% and surged 52.8% year over year. The top line climbed 7.6% on a quarter-over-quarter basis.

The year-over-year top-line growth was driven by higher sales of GeForce Graphic Processing Units (GPUs). NVIDIA continues to benefit from strong demand for its Ampere architecture products.

Segment Details

NVIDIA reports revenues under two segments — Graphics and Compute & Networking.

Graphics includes GeForce GPUs for gaming and personal computers; the GeForce NOW game-streaming service and related infrastructure, besides solutions for gaming platforms; Quadro GPUs for enterprise design; GRID software for cloud-based visual and virtual computing; and automotive platforms for infotainment systems.

NVIDIA Corporation Price, Consensus and EPS Surprise

NVIDIA Corporation Price, Consensus and EPS Surprise
NVIDIA Corporation Price, Consensus and EPS Surprise

NVIDIA Corporation price-consensus-eps-surprise-chart | NVIDIA Corporation Quote

Graphics accounted for 57.8% of the fiscal fourth-quarter revenues. The segment’s top line surged 44.6% year over year and 8% sequentially to $4.42 billion.

Compute & Networking represented 42.2% of the fiscal fourth-quarter revenues. The segment comprises Data-Center platforms and systems for AI, high-performance computing, and accelerated computing; DRIVE development platform for autonomous vehicles; and Jetson for robotics and other embedded platforms.

Compute & Networking revenues soared 65.6% year over year and 7.1% sequentially to $3.23 billion.

Market Platform’s Top-Line Details

Based on the market platform, Gaming revenues (44.7% of revenues) shot up 37.1% year over year and 6.2% sequentially to $3.42 billion.

Revenues from Data Center (42.7% of revenues) jumped 71.5% year over year and 11.1% from the previous quarter to $3.26 billion. This year-over-year upswing was driven by strong demand for its Ampere architecture products from cloud computing and AI providers.

Professional Visualization revenues (8.4% of revenues) increased a whopping 109.4% year over year and 11.4% sequentially to $643 million. This growth mainly resulted from increased sales of notebook workstation GPUs and the ramp-up of Ampere architecture GPUs.

Auto revenues (1.6% of revenues) in the reported quarter totaled $125 million, down 13.8% on a year-over-year basis and 7.4% sequentially. The segment suffered from supply constraints.

OEM and Other revenues (2.5% of revenues) climbed 25.5% year over year to $192 million. Cryptocurrency Mining Processors’ revenues under the market platform were $24 million. However, the division’s sales declined 17.9% on a quarter-on-quarter basis.

Operating Details

NVIDIA’s non-GAAP gross margin expanded 160 basis points (bps) year over year to 67%, mainly on a higher-end mix within the desktop and notebook GeForce GPUs. On a sequential basis, gross margin was flat.

Non-GAAP operating expenses flared up 21.9% year over year and 5.2% sequentially to $1.45 billion on higher compensation-related expenses associated with the employee growth and increased infrastructure costs.

Non-GAAP operating income jumped 76% year over year and 8.6% quarter over quarter to $3.68 billion.

Balance Sheet and Cash Flow

As of Jan 30, 2022, NVIDIA’s cash, cash equivalents and marketable securities were $21.21 billion, up from $19.30 billion as of Oct 31, 2021.

As of Jan 30, 2022, total long-term debt (including current maturities) was $10.95 billion, slightly up from $10.94 billion seen in the previous quarter ended Oct 31, 2021.

NVIDIA generated $3.03 billion in operating cash flows, up from the previous quarter’s $1.52 billion. Free cash flow was $2.74 billion, up from last quarter’s $1.28 billion.

Guidance

For the fourth quarter of fiscal 2022, NVIDIA anticipates revenues of $8.10 billion (+/-2%).

Non-GAAP gross margin is projected at 67% (+/-50 bps). Non-GAAP operating expenses are estimated to be $1.60 billion.

Zacks Rank & Other Stocks to Consider

NVIDIA currently carries a Zacks Rank #2 (Buy).

NVDA’s shares are up 77.9% against the Zacks Computer and Technology sector’s growth of 1% in the past year.

Some better-ranked stocks in the same sector are Allied Motion Technologies AMOT, Agilent Technologies A and Box BOX. All three stocks carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Agilent Technologies’ shares have gained 5.8% in the past year.

Agilent is scheduled to report first-quarter 2022 results on Feb 22.

Allied Motion Technologies’ shares have surged 20.6% in the past year.

AMOT is scheduled to report fourth-quarter 2021 results on Mar 9.

Box shares have surged 45.1% in the past year.

BOX is scheduled to report fourth-quarter 2021 results on Mar 2.


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