NVIDIA Announces Q3 FY 2020 Earnings

Today NVIDIA announced their results for the third quarter of their 2020 fiscal year, and the company’s results took a hit compared to their Q3 2019 results with earnings of $3.014 billion this quarter, down 5% year-over-year. Gross margin was up though to a very healthy 63.6%, up 3.2% from a year ago. Operating income was down 12% to $927 million, with net income down 27% to $899 million. Earnings-per-share fell to $1.45, down 26% from $1.97 a year ago.

NVIDIA Q3 2020 Financial Results (GAAP)
  Q3’2020 Q2’2020 Q3’2019 Q/Q Y/Y
Revenue $3014M $2579M $3181M +17% -5%
Gross Margin 63.6% 59.8% 60.4% +3.8% +3.2%
Operating Income $927M $571M $1058M +62% -12%
Net Income $899M $552M $1230M +63% -27%
EPS $1.45 $0.90 $1.97 +61% -26%

NVIDIA breaks its business into two high-level categories, with GPU and Tegra. GPU revenue was down 8% to $2.565 million, while Tegra was up 10% to $449 million.

Breaking these down into markets, NVIDIA’s Gaming revenue was down 6% to $1.659 billion, with NVIDIA attributing this to a decline in desktop GPU sales. A year ago, NVIDIA launched their Turing platform, meaning they are now a year into their latest platform, with sales not quite as high as when it launched. However, the desktop GPU sales drop was partially offset by increased notebook GPUs as well as gaming platform SoCs.

Professional Visualization set a record for revenue, up 6% from a year ago and coming in at $324 million. NVIDIA has stated that they’ve had strong sales in mobile workstation products.

Data Center revenue was down 8% to $726 million. NVIDIA has seen lower enterprise revenue, and sales of products with lower margins than some of their top-tier datacenter products, but this drop was partially offset by increased hyperscale demand.

Automotive revenue was down 6% to $162 million, with lower sales of autonomous vehicle solutions and legacy infotainment modules being singled out, but growth in AI cockpit solutions helped stem the decline.

Finally, OEM and Other revenue was $143 million, down 3% from a year ago.

NVIDIA Quarterly Revenue Comparison (GAAP)
($ in millions)
In millions Q3’2020 Q2’2020 Q3’2019 Q/Q Y/Y
Gaming $1659 $1313 $1764 +26% -6%
Professional Visualization $324 $291 $305 +11% +6%
Datacenter $726 $655 $792 +11% -8%
Automotive $162 $209 $172 -22% -6%
OEM & IP $143 $111 $148 +29% -3%

NVIDIA has been riding a large wave of success over the last several years, and the company has diversified itself significantly, but the last couple of quarters have seen the company fall back to earth somewhat. But with strong margins, they are investing heavily in R&D, with $53 million more spent in this quarter than a year ago, and for first nine months of their 2020 fiscal year, they’ve spent and additional $163 million so far, bringing the total for 2020 to $400 million.

Looking ahead to Q4, NVIDIA is expecting revenue of $2.95 billion, plus or minus 2% with a gross margin of 64.1%, plus or minus 0.5%.

Source: NVIDIA Investor Relations