NVDA - question for GauchoChris

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1

Greetings, Gaucho!

As somebody who always enjoys your thought-provoking posts, I was left bumfuzzled by your latest post on NVDA’s market segment trends (http://discussion.fool.com/nvda-earnings-next-week-33057764.aspx…). I wasn’t able to figure out what your numbers represent. My own quarter over quarter percentage calculations are considerably lower. Could you please clarify what numbers you used to compute percentages and what your numbers represent? What am I missing?

Here are my numbers, based on Nvidia’s own Quarterly Revenue Trend, their numbers rounded off to a full million, found here: http://investor.nvidia.com/financial-info/financial-reports/…. I would not be surprised if Q1’19 shows again negative growth for Gaming, Pro Visualization and OEM/IP, as it has for the past three years.

NVDA’s Revenue Growth by Market Segment, Quarter over Quarter


	     **Gaming	      Pro V	   Data C	   Auto          OEM/IP	         Total**	
	  $mln	  QoQ%	  $mln   QoQ%	 $mln   QoQ%	$mln   QoQ%   $mln    QoQ%     $mln	QoQ%
Q4FY15	   646	    -%	  190	   -%	  88      -%	 56	 -%    271      -%     1,251      -%
**Q1FY16	   587	 –9.1%	  181   –4.7%	  88    0.0%	 77   37.5%    218  –19.6%     1,151   –8.0%**
Q2FY16	   660   12.4%	  176   –2.8%	  72  –18.2%	 71   –7.8%    174  –20.2%     1,153	0.2%
Q3FY16	   761   15.3%	  190    8.0%	  82   13.9%	 79   11.3%    193   10.9%     1,305   13.2%
Q4FY16	   810	  6.4%	  203	 6.8%	  97   18.3%	 93   17.7%    198    2.6%     1,401    7.4%
**Q1FY17     687  –15.2%    189   –6.9%	 143   47.4%	113   21.5%    173  –12.6%     1,305   –6.9%**
Q2FY17     781   13.7%	  214   13.2%	 151    5.6%	119    5.3%    163   –5.8%     1,428    9.4%
Q3FY17   1,244	 59.3%	  207   –3.3%	 240   58.9%    127    6.7%    186   14.1%     2,004   40.3%
Q4FY17 	 1,348    8.4%	  225	 8.7%	 296   23.3%	128    0.8%    176   –5.4%     2,173	8.4%
**Q1FY18   1,027  –23.8%	  205   –8.9%	 409   38.2%    140    9.4%    156  –11.4%     1,937  –10.9%**
Q2FY18	 1,186   15.5%	  235   14.6%	 416    1.7%	142    1.4%    251   60.9%     2,230   15.1%
Q3FY18   1,561	 31.6%	  239	 1.7%	 501   20.4%	144    1.4%    191  –23.9%     2,636   18.2%
Q4FY18	 1,739	 11.4%    254	 6.3%    606   21.0%    132   –8.3%    180   –5.8%     2,911   10.4%

NVDA’s Revenue Growth by Market Segment, Year over Year


	                         **2018-01-28	      2017-01-29	  2016-01-31**
	                       $mln	%yoy	    $mln     %yoy	    $mln					
Gaming	                      5,513	35.8%	   4,060     44.1%	    2,818
Professional Visualization	934	11.9%	     835     11.3%	      750
Datacenter	               1932    132.8%	     830    144.8%	      339
Automotive	                558	14.6%	     487     52.2%	      320
OEM & IP	                777	11.3%	     698    –10.9%	      783

2017-2018 Year over year growth for Market Segments was highest for Data Centers at 132.8%, followed by Gaming 35.8%, Automotive 14.6%. Compared to 2016-2017, yoy growth has slowed for all segments except OEM & IP. It slowed significantly for Automotive, from a high 52.2% growth rate to 14.6%.

Any thoughts?
im

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I wasn’t able to figure out what your numbers represent. My own quarter over quarter percentage calculations are considerably lower.

I’m not Chris, but I think I can answer that. He’s giving you year-over-year results, not sequential results. Comparing the same quarter each year is comparing apples to apples. Sequential comparisons compare apples to bananas or grapes because of seasonality. Thus he compares Q418 with Q417, not with Q318.

Saul

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imyoung,

The numbers that I posted were y/y, not q/q.

Chris

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Saul, Chris,

Thanks. I am embarrassed. It should teach me not to post past my bedtime. I did briefly check yoy but got totally different percentages, most likely comparing the wrong yearly quarters, i.e. Q317 with Q216.

Sequential comparisons compare apples to bananas or grapes because of seasonality.

Saul,

It sounds like sequential comparisons are a waste of time but I find them useful. The reason I started looking at seasonality was LGIH. I used it as a proxy for the real estate market. And here I owe you, Saul, a big THANK YOU.

When I relocated to the US after a decade abroad, I needed a home. The LGIH’s sequential quarterly numbers clearly showed that January is the worst for real estate sales. This past January I was able to buy a nice home not the least because I followed you and Chris and many of the other knowledgeable posters.

I studied your Knowledge Base, made adjustment to my holdings and did so well, I was able to pay cash for my house.

The most useful thing to me are your monthly postings and the reasoning for making changes. So I hope you will continue to post them, including the numbers.

Gratefully yours,
I. M.

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