Shares of Nvidia (NVDA 1.75%) jumped 6.1% in after-hours trading on Wednesday following the artificial intelligence (AI) tech leader's release of a super-strong report for the first quarter of fiscal 2025 (ended April 28).
The main catalysts for the stock's rise include the quarter's revenue and earnings easily beating Wall Street's expectations, second-quarter guidance for the top and bottom lines doing the same, and the company announcing a 10-for-1 stock split.
The first quarter marked Nvidia's fourth consecutive quarter of triple-digit percentage growth for both revenue and adjusted earnings per share (EPS).
Nvidia's key numbers
| Metric | Fiscal Q1 2024 | Fiscal Q1 2025 | Change YOY |
|---|---|---|---|
| Revenue | $7.19 billion | $26.0 billion | 262% |
| GAAP operating income | $2.14 billion | $16.91 billion | 690% |
| GAAP net income | $2.04 billion | $14.88 billion | 628% |
| Adjusted net income | $2.71 billion | $15.24 billion | 462% |
| GAAP earnings per share (EPS) | $0.82 | $5.98 | 629% |
| Adjusted EPS | $1.09 | $6.12 | 461% |
Data source: Nvidia. YOY = year over year. GAAP = generally accepted accounting principles. Fiscal Q1 2025 ended April 28, 2024.
Investors should focus on the adjusted numbers, which exclude one-time items.
Wall Street was looking for adjusted EPS of $5.59 on revenue of $24.65 billion, so Nvidia sped by these expectations. It also beat its own guidance for revenue and adjusted EPS of $24 billion and $5.41, respectively.
Platform performance
| Platform | Fiscal Q1 2025 Revenue | Change YOY | Change QOQ |
|---|---|---|---|
| Data center | $22.6 billion | 427% | 23% |
| Gaming | $2.6 billion | 18% | (8%) |
| Professional visualization | $427 million | 45% | (8%) |
| Automotive and robotics | $329 million | 11% | 17% |
| OEM and other | $78 million | 1% | (13%) |
| Total | $26.0 billion | 262% | 18% |
Data source: Nvidia. OEM = original equipment manufacturer; OEM and other is not a target-market platform. YOY = year over year. QOQ = quarter over quarter.
The data center segment's revenue accounted for about 87% of Nvidia's total revenue, up from 83% in the prior quarter. This segment's growth is being driven by the incredible demand for Nvidia's products that enable AI capabilities.
In her CFO commentary, Colette Kress said the data center's powerful growth reflects "higher shipments of the NVIDIA Hopper GPU [graphics processing unit] computing platform used for [AI] training and [AI] inferencing with large language models, recommendation engines, and generative AI applications," along with strong demand for the company's networking products.
Generative AI is the tech behind OpenAI's immensely popular ChatGPT chatbot, released in late 2022. It significantly expands the potential use cases for AI.
Stock split and dividend increase
Nvidia's earnings release also included an announcement of a stock split. Last month, I explored why an Nvidia stock split was likely upcoming and the potential benefits for investors of stock splits.
The stock split is a 10-for-1 split. After the market close on Friday, June 7, investors will receive nine additional shares of Nvidia stock for each one they own as of the market close on Thursday, June 6. The company expects the stock to begin trading on a split-adjusted basis on Monday, June 10.
Nvidia also announced it's raising its quarterly cash dividend by 150% from $0.04 per share to $0.10 per share. The increased dividend will be $0.01 per share on a post-split basis. The dividend will be paid on Friday, June 28, to shareholders of record on Tuesday, June 11.
Nvidia's dividend is modest, but any increase is certainly positive. As of Wednesday's market close, the current dividend yielded 0.017%.
Guidance for the second quarter
For the second quarter of fiscal 2025 (which ends in late July), management expects revenue of $28 billion, which equates to growth of 107% year over year. It also guided (albeit indirectly by providing a bunch of inputs) for adjusted EPS of $6.22, or 130% growth.
Going into the report, Wall Street had been modeling for Q2 2025 adjusted EPS of $5.95 on revenue of $26.66 billion, so the company's outlook is higher than these expectations.
In short, Nvidia's report was superb. The company's data center products based on its next-generation GPU architecture, Blackwell, are in full production, and CEO Jensen Huang said in the earnings release that the company expects these products to help drive its "next wave of growth."
