Please ensure Javascript is enabled for purposes of website accessibility

Here's How NVIDIA Corp. Smashed Its Own Targets -- Again

By Anders Bylund - Updated Nov 16, 2018 at 1:46PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The company rode artificial intelligence and cryptocurrency workloads to record-breaking profit margins and torrential top-line sales.

NVIDIA (NVDA -2.46%) posted a fresh earnings report after the closing bell on Thursday, covering the fourth quarter of fiscal year 2018. The maker of graphics processors and other high-performance number crunchers exceeded its own expectations by a country mile.

Nvidia's fourth-quarter results: The raw numbers

Metric

Q4 2018

Q4 2017

Year-Over-Year Change

Revenue

$2.91 billion

$2.17 billion

34%

Net income

$1.12 billion

$655 million

71%

GAAP earnings per share (diluted)

$1.78

$0.99

80%

Data source: Nvidia.

What happened with Nvidia this quarter?

  • Data-center sales more than doubled year over year, landing at $606 million. The Volta processor family found lots of new business in the high-performance computing space, serving workloads like artificial intelligence, data analytics, and cloud-computing back-ends.
  • The flagship market of gaming chips saw revenues rising 29%, to 1.74 billion. Here, the growth drivers included holiday-season demand, the rising e-sports trend, and of course, a legion of cryptocurrency mining enthusiasts.
  • The automotive-computing market saw more subdued growth of 3%, adding up to $132 million.
  • Nvidia reported record-level GAAP gross margins in the fourth quarter, rising 1.9 percentage points over the year-ago period, to stop at 61.9%. The company achieved this milestone thanks to a more profitable sales mix and high interest in the lucrative GeForce series of gaming chips.
  • For the record, Nvidia's guidance for the fourth quarter pointed to GAAP earnings in the neighborhood of $1.08 per share on sales near $2.65 billion. The actual results left these projections firmly in the rearview mirror.
A stylized version of Nvidia's corporate logo, rendered as a bump-mapped green surface.

Image source: Nvidia.

What management had to say

"Virtually every internet and cloud service provider has embraced our Volta GPUs," said Nvidia CEO Jensen Huang in a prepared statement. "Hundreds of transportation companies are using our NVIDIA DRIVE platform. From manufacturing and healthcare to smart cities, innovators are using our platform to invent the future."

Looking ahead

For the first quarter of fiscal-year 2019, Nvidia's management presented the following guidance targets:

  • Revenues should land near $2.9 billion, which would represent a 50% year-over-year increase.
  • The GAAP gross margin should continue to rise, even from its current record-level reading. Right now, 62.7% looks like a reachable first-quarter goal.
  • GAAP net income is expected to land near $920 million, up from $507 million in the year-ago period. That would lead to unadjusted earnings near $1.47 per share, up from $0.79 per share in the first quarter of 2018.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

NVIDIA Corporation Stock Quote
NVIDIA Corporation
NVDA
$151.59 (-2.46%) $-3.83

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
317%
 
S&P 500 Returns
112%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 07/01/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.