More Insight on NVDA

NVDA 5/9/2017

Nvidia reported on Tuesday the 9th of May. Let’s go through the numbers and see if anyone can shoot holes in them.

Revenue Growth:

Q115      Q215       Q315       Q415      Q116      Q216      Q316      Q416      Q117      Q217      Q317      Q417      Q118
1.10B.    1.10B      1.20B      1.25B     1.15B     1.15B     1.30B     1.40B     1.30B     1.43B     2.00B     2.17B     1.94B   
                                             5%        5%        8%       12%       13%        24%      54%       55%       49%

In Q217 the Revenue started accelerating. Before it was growing in the 8-9% range and didn’t seem to really grow. I didn’t get into the stock until it reached 98 dollars a share and that was during Q417. Let’s look at Q217 and see what was happening then.

In Q217 they had their first full quarter of the Pascal GPU architecture. But what was amazing is that the Pascal wasn’t the biggest part of the Revenue for Graphic cards. The M6000 was meaning that the Pascal was going to still have a big growth rate. During the first quarter they also did an accelerated share purchase of 500 million. If you would have been on the conference call you would have realized that they were excited about the Pascal GPU architecture. Also their Data Center revenue doubled which showed strong growth in supercomputer, gridvitualization and Hyperscale data centers. Also automotive grew 68%. The most important, in my mind, statement on the call was that finally they were seeing growth in all 4 markets. Deep learning, self driving cars, gaming, and virtual reality. The GPU chip makes the most difference and was starting to pay off. In the Data Center for the Quarter. Half the Revenue was deep learning, 35% was high performance computing and the rest was virtualization and Jen-Hsun Huang expected deep learning to become much more.

Eps for Q2 was beaten by $.16 and came in at $.53. Beating earnings by 43% and Revenue was beat by 24% and beats by 80M.

In Q317 the Pascal GPU took off and their Datacenter’s kept growing. The GPU business was up 53% and the Tegra business was up 87% but off a smaller basis. For this quarter gaming increased 63%, Professional Visualization only grew 9%, DataCenter revenue Tripled, and automotive was up 61% on a small basis.

Eps for Q3 $.94 beats by $.37 Revenue of 2B(54%) beats by 310M.

In Q417 Datacenter Revenue Tripled again up 55%. Q4 GPU revenue grew 57% to $1.85B Tegra processor was up 64% at $257 million. Q4 gaming grew 66% with gamers continuing to upgrade to pascal. Also it doesn’t hurt to be a kid at Christmas, Professional Visualization grew by 11%, showing its slow growth, Datacenter Tripled again, and grew 23% sequentially. Growth was fueled by AI, cloud service providers deploying GPU instances, High Performance computing, Grid Graphics virtualization, and DGX AI supercomputing appliance. They stated that the first step of AI started with Google, FB, Microsoft, IE, deep learning and would move to enterprise in healthcare, retail, transportation, and finance. Finally revenue in Automotive was up 38%. In this conference call Audi claims they will have level 4 autonomous driving by 2020. Volvo announced fully autonomous cars on designated roads in Gothenburg Sweden.

Eps for Q4 of $1.13 beat by $.30 Revenue of $2.17B +55% beat by 60M

In Q1 2018, which is their weakest quarter usually. So how did this quarter go? Well they nearly Tripled DataCenter Revenue….again. GPU Revenue grew by 45% to $1.56B and Tegra revenue doubled to $332B and the rest of the 43M came from their INTEL agreement. Gaming revenue was up 49%, Professional visualization was up 8%, Datacenter nearly tripled at 409M up 38% sequential marking its seventh consecutive sequential improvement, AI has moved to the most powerful force in Technology and NVIDIA is in the middle of it. Automotive revenue grew by 24%.

EPS of $.85 beats by $.18 Revenue of 1.94B(+49.2%) beats by 30M

Now let’s look at the earnings for the previous quarters.

Earnings (EPS) Growth (QoQ)

Q115     Q215    Q315    Q415   Q116   Q216   Q316   Q416   Q117   Q217   Q317   Q417   Q118
$.29     $.30    $.39    $.43   $.33   $.34   $.46   $.52   $.46   $.53   $.94  $1.13   $.85
                                 14%    13%    18%    21%    39%    56%   104%   117%.   85%

Earning (EPS) Growth (YOY)

Q115   Q215   Q315  Q415   Q116   Q216   Q316   Q416   Q117   Q217   Q317   Q417   Q118
$.29   $.30   $.39  $.43   $.33   $.34   $.46   $.52   $.46   $.53   $.94   $1.13  $.85
                    $1.41  $1.45  $1.49  $1.56  $1.65  $1.78  $1.97  $2.45  $3.06  $3.45
                                                 17%   22.8%  32.2%  57.1%  85.5%  93.8%


Gross Margins(growth from year to year)

FY2013                FY2014             FY2015         FY2016        LTM
52.3%                  55.1%              55.8%          56.8%       58.4%

Operating Margins

FY2013                FY2014             FY2015         FY2016        LTM
19.6%                  16.1%              20.4%          22.5%       28.8%

So after looking at all these numbers you get a good idea where the company is headed. Many people will get anxious to hold this company but we are in the early innings. This company has 3 very good growth fields that give it many options. AI-Data centers/ Games/ Autonomous Cars. Analysts are guiding to Revenue’s of 1.95B. The company has beaten the Revenue and earnings since Q2 2017, and if you go back and look at the Revenue beat, the lowest they beat by was 30M and the highest they beat was 310M. After reading the transcript and seeing how excited management is I think they will easily beat next quarters Revenue and earnings.




Nice post! Would you mind if I link it over at the NPI (or you can post it there if you like)?

Just a few comments:

  1. Notice that their revenue growth rate YoY is declining 55% to 48% to 36%. The latter 2 numbers are from their earnings call with the last line being their guidance for 2nd quarter 2018. That could be seasonal slowdown in gaming of course although that didn’t happen in 2016 and 2017 (i.e. Lower YoY growth rate than Q1).

  2. We have discussed their future growth sector initiatives in detail on the NPI and estimates of TAM for each (Gaming, AI, Autonomous driving) but I thought it was interesting that as regards the revenue growth rate this past earnings call, that the revenue growth in these sub sectors were 49%, 38%, and 24% respectively.

These sector growth rates are crucial to the bull case theories that we have established on the NPI (with Tinker and Mauser) so IMO, they should routinely be part of your financial assessment…if they don’t grow the latter two at a much faster rate than this past quarter…that bull thesis will be called into question. Those latter two sub sectors did not grow at a rate greater than their overall revenue YoY growth.

You did a great job on that post for sure. But to me, for a stock that has been a 5 MULTIPLE in a SINGLE year…holders of this stock need to drill down to their next great drivers of revenue rather than just look at totals…the theory at the NPI is that the latter two are the the next great TAM drivers…so we should be paying particular attention to those sub sectors.

Please let me know what you think and appreciate your post!


Hi Duma,
Thanks for your kind words. You can use this post any way you would like. That is what this board is for, sharing and discussing of ideas. But thanks for asking.

I realize management gave guidance of 1.95B, but I am going to post one more post on Q118 specifically. I thought about putting it all together but I think it would have been to much at one time so I decided to split it into 3 posts. There is a lot to discuss with Q118.

But discussing the guidance, I think they are low balling it. The 30m to 310m they have beaten in the last year makes me believe they will also beat next quarter. I have no proof of this and no way to quantify it but the management on the CC.

Thanks for the discussion Duma and after my next post I think we should have a really good discussion.


What/where is the NPI?

Thanks in advance.

Here is a link to a thread on TTD from NPI board, or New Paradigm.