Total sales fell 12.5% year over year, to $1.05 billion, as graphics processor sales came in flat, and the Tegra mobile processor line plunged 54%. This was a tough comparison period for NVIDIA's mobile division because the new Tegra 4 launched during the quarter, but Tegra 3 sales were in full mass-production swing a year ago.
Non-GAAP earnings fell 33% year over year, to $0.26 per share. Analysts were looking for EPS of $0.25 on $1.05 billion in sales, so the flagging numbers still satisfied Wall Street.
NVIDIA enjoyed strong sales in its highest-margin product lines, including Quadro professional graphics chips, and Tesla supercomputing platforms. That's why gross margins climbed 250 basis points year over year, or 2.5 percentage points, despite soft overall sales trends.
The company saw $124 million of positive free cash flow, and NVIDIA's board increased the quarterly dividend by 13%. The company also added $1 billion to its existing share buyback program.