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NVIDIA (NVDA) Earnings Report Q1 2024

NVIDIA Announces Financial Results For First Quarter Fiscal 2024

May 24, 2023

  • Quarterly revenue of $7.19 billion, up 19% from previous quarter
  • Record Data Center revenue of $4.28 billion
  • Second quarter fiscal 2024 revenue outlook of $11.00 billion

SANTA CLARA, Calif., May 24, 2023 (GLOBE NEWSWIRE) — NVIDIA (NASDAQ: NVDA) today reported revenue for the first quarter ended April 30, 2023, of $7.19 billion, down 13% from a year ago and up 19% from the previous quarter.

GAAP earnings per diluted share for the quarter were $0.82, up 28% from a year ago and up 44% from the previous quarter. Non-GAAP earnings per diluted share were $1.09, down 20% from a year ago and up 24% from the previous quarter.

“The computer industry is going through two simultaneous transitions — accelerated computing and generative AI,” said Jensen Huang, founder and CEO of NVIDIA.

“A trillion dollars of installed global data center infrastructure will transition from general purpose to accelerated computing as companies race to apply generative AI into every product, service and business process.

“Our entire data center family of products — H100, Grace CPU, Grace Hopper Superchip, NVLink, Quantum 400 InfiniBand and BlueField-3 DPU — is in production. We are significantly increasing our supply to meet surging demand for them,” he said.

During the first quarter of fiscal 2024, NVIDIA returned to shareholders $99 million in cash dividends.

NVIDIA will pay its next quarterly cash dividend of $0.04 per share on June 30, 2023, to all shareholders of record on June 8, 2023.

Q1 Fiscal 2024 Summary

GAAP
($ in millions, except earnings per share)Q1 FY24Q4 FY23Q1 FY23Q/QY/Y
Revenue$7,192 $6,051 $8,288 Up 19%Down 13%
Gross margin 64.6% 63.3% 65.5%Up 1.3 ptsDown 0.9 pts
Operating expenses$2,508 $2,576 $3,563 Down 3%Down 30%
Operating income$2,140 $1,257 $1,868 Up 70%Up 15%
Net income$2,043 $1,414 $1,618 Up 44%Up 26%
Diluted earnings per share$0.82 $0.57 $0.64 Up 44%Up 28%
Non-GAAP
($ in millions, except earnings per share)Q1 FY24Q4 FY23Q1 FY23Q/QY/Y
Revenue$7,192 $6,051 $8,288 Up 19%Down 13%
Gross margin 66.8% 66.1% 67.1%Up 0.7 ptsDown 0.3 pts
Operating expenses$1,750 $1,775 $1,608 Down 1%Up 9%
Operating income$3,052 $2,224 $3,955               Up 37%Down 23%
Net income$2,713 $2,174 $3,443 Up 25%Down 21%
Diluted earnings per share$1.09 $0.88 $1.36 Up 24%Down 20%

Outlook
NVIDIA’s outlook for the second quarter of fiscal 2024 is as follows:

  • Revenue is expected to be $11.00 billion, plus or minus 2%.
  • GAAP and non-GAAP gross margins are expected to be 68.6% and 70.0%, respectively, plus or minus 50 basis points.
  • GAAP and non-GAAP operating expenses are expected to be approximately $2.71 billion and $1.90 billion, respectively.
  • GAAP and non-GAAP other income and expense are expected to be an income of approximately $90 million, excluding gains and losses from non-affiliated investments.
  • GAAP and non-GAAP tax rates are expected to be 14.0%, plus or minus 1%, excluding any discrete items.

Highlights

NVIDIA achieved progress since its previous earnings announcement in these areas: 

Data Center

Gaming

  • First-quarter revenue was $2.24 billion, down 38% from a year ago and up 22% from the previous quarter.
  • Announced the GeForce RTX™ 4060 family of GPUs, bringing the advancements of NVIDIA Ada Lovelace architecture and DLSS, starting at $299.
  • Launched the GeForce RTX 4070 GPU based on the Ada architecture, which enables DLSS 3, real-time ray-tracing and the ability to run most modern games at over 100 frames per second at 1440p resolution.
  • Added 36 DLSS gaming titles, bringing the total number of games and apps to 300.
  • Made path tracing available for the first time on a major gaming title through collaboration with CD PROJEKT RED on an update to Cyberpunk 2077. 
  • Expanded GeForce NOW’s game titles to more than 1,600, including the first Microsoft Xbox game, Gears 5. 

Professional Visualization

  • First-quarter revenue was $295 million, down 53% from a year ago and up 31% from the previous quarter.
  • Announced NVIDIA Omniverse™ Cloud, a fully managed service running in Microsoft Azure, for the development and deployment of industrial metaverse applications.
  • Expanded its collaboration with Microsoft to connect Microsoft 365 applications with Omniverse. 
  • Announced six new NVIDIA RTX™ GPUs for mobile and desktop workstations based on the Ada architecture.

Automotive

CFO Commentary
Commentary on the quarter by Colette Kress, NVIDIA’s executive vice president and chief financial officer, is available at https://investor.nvidia.com/.

Conference Call and Webcast Information
NVIDIA will conduct a conference call with analysts and investors to discuss its first quarter fiscal 2024 financial results and current financial prospects today at 2 p.m. Pacific time (5 p.m. Eastern time). A live webcast (listen-only mode) of the conference call will be accessible at NVIDIA’s investor relations website, https://investor.nvidia.com. The webcast will be recorded and available for replay until NVIDIA’s conference call to discuss its financial results for its second quarter of fiscal 2024.

Non-GAAP Measures
To supplement NVIDIA’s condensed consolidated financial statements presented in accordance with GAAP, the company uses non-GAAP measures of certain components of financial performance. These non-GAAP measures include non-GAAP gross profit, non-GAAP gross margin, non-GAAP operating expenses, non-GAAP income from operations, non-GAAP other income (expense), net, non-GAAP net income, non-GAAP net income, or earnings, per diluted share, and free cash flow. For NVIDIA’s investors to be better able to compare its current results with those of previous periods, the company has shown a reconciliation of GAAP to non-GAAP financial measures. These reconciliations adjust the related GAAP financial measures to exclude acquisition termination costs, stock-based compensation expense, acquisition-related and other costs, IP-related costs, legal settlement costs, other, losses from non-affiliated investments, interest expense related to amortization of debt discount, and the associated tax impact of these items where applicable. Free cash flow is calculated as GAAP net cash provided by operating activities less both purchases of property and equipment and intangible assets and principal payments on property and equipment and intangible assets. NVIDIA believes the presentation of its non-GAAP financial measures enhances the user’s overall understanding of the company’s historical financial performance. The presentation of the company’s non-GAAP financial measures is not meant to be considered in isolation or as a substitute for the company’s financial results prepared in accordance with GAAP, and the company’s non-GAAP measures may be different from non-GAAP measures used by other companies.

About NVIDIA
Since its founding in 1993, NVIDIA (NASDAQ: NVDA) has been a pioneer in accelerated computing. The company’s invention of the GPU in 1999 sparked the growth of the PC gaming market, redefined computer graphics, ignited the era of modern AI and is fueling the creation of the industrial metaverse. NVIDIA is now a full-stack computing company with data-center-scale offerings that are reshaping industry. More information at https://nvidianews.nvidia.com/.

For further information, contact:

Simona Jankowski Robert Sherbin
Investor Relations Corporate Communications
NVIDIA Corporation NVIDIA Corporation
[email protected] [email protected]

Certain statements in this press release including, but not limited to, statements as to: the computer industry going through two simultaneous transitions – accelerated computing and generative AI; installed global data center infrastructure transitioning from general purpose to accelerated computing as companies race to apply generative AI into every product, service and business process; NVIDIA’s entire data center family of products being in production; NVIDIA significantly increasing supply to meet surging demand; NVIDIA’s next quarterly cash dividend; NVIDIA’s financial outlook and expected tax rates for the second quarter of fiscal 2024; the benefits, impact, performance, features and availability of our products and technologies, including NVIDIA Ada, NVIDIA Hopper, NVIDIA Grace Hopper CPU, NVIDIA L4 Tensor Core GPU, NVIDIA AI Foundations, NVIDIA cuLitho software library, NVIDIA H100 Tensor Core GPU, NVIDIA AI Enterprise, GeForce RTX GPUs, DLSS 3, GeForce NOW, NVIDIA Omniverse Cloud, Omniverse, NVIDIA RTX GPUs, and NVIDIA DRIVE Orin; and the benefits and impact of our collaborations, including with Google Cloud, Amazon Web Services, Microsoft Azure, Oracle Cloud Infrastructure, ServiceNow, Medtronic, Dell Technologies, CD PROJEKT RED, Microsoft, and BYD are forward-looking statements that are subject to risks and uncertainties that could cause results to be materially different than expectations. Important factors that could cause actual results to differ materially include: global economic conditions; our reliance on third parties to manufacture, assemble, package and test our products; the impact of technological development and competition; development of new products and technologies or enhancements to our existing product and technologies; market acceptance of our products or our partners’ products; design, manufacturing or software defects; changes in consumer preferences or demands; changes in industry standards and interfaces; unexpected loss of performance of our products or technologies when integrated into systems; as well as other factors detailed from time to time in the most recent reports NVIDIA files with the Securities and Exchange Commission, or SEC, including, but not limited to, its annual report on Form 10-K and quarterly reports on Form 10-Q. Copies of reports filed with the SEC are posted on the company’s website and are available from NVIDIA without charge. These forward-looking statements are not guarantees of future performance and speak only as of the date hereof, and, except as required by law, NVIDIA disclaims any obligation to update these forward-looking statements to reflect future events or circumstances.

© 2023 NVIDIA Corporation. All rights reserved. NVIDIA, the NVIDIA logo, GeForce, GeForce NOW, GeForce RTX, NVIDIA DRIVE Orin, NVIDIA Grace Hopper, NVIDIA Hopper, NVIDIA Omniverse, and NVIDIA RTX are trademarks and/or registered trademarks of NVIDIA Corporation in the U.S. and/or other countries. Other company and product names may be trademarks of the respective companies with which they are associated. Features, pricing, availability, and specifications are subject to change without notice.

NVIDIA CORPORATION
 CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In millions, except per share data)
(Unaudited)
      
      
   Three Months Ended
   April 30, May 1,
    2023   2022 
      
Revenue$7,192  $8,288 
Cost of revenue 2,544   2,857 
Gross profit 4,648   5,431 
Operating expenses   
 Research and development 1,875   1,618 
 Sales, general and administrative 633   592 
 Acquisition termination cost –   1,353 
  Total operating expenses 2,508   3,563 
Income from operations 2,140   1,868 
 Interest income 150   18 
 Interest expense (66)  (68)
 Other, net (15)  (13)
  Other income (expense), net 69   (63)
Income before income tax 2,209   1,805 
Income tax expense 166   187 
Net income$2,043  $1,618 
      
Net income per share:   
 Basic$0.83  $0.65 
 Diluted$0.82  $0.64 
      
Weighted average shares used in per share computation:  
 Basic 2,470   2,506 
 Diluted 2,490   2,537 
    
NVIDIA CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(In millions)
(Unaudited)
      
      
   April 30, January 29,
    2023  2023
ASSETS   
      
Current assets:   
 Cash, cash equivalents and marketable securities$15,320 $13,296
 Accounts receivable, net 4,080  3,827
 Inventories 4,611  5,159
 Prepaid expenses and other current assets 872  791
  Total current assets 24,883  23,073
      
Property and equipment, net 3,740  3,807
Operating lease assets 1,094  1,038
Goodwill 4,430  4,372
Intangible assets, net 1,541  1,676
Deferred income tax assets 4,568  3,396
Other assets 4,204  3,820
  Total assets$44,460 $41,182
      
LIABILITIES AND SHAREHOLDERS’ EQUITY
      
Current liabilities:   
 Accounts payable$1,141 $1,193
 Accrued and other current liabilities 4,869  4,120
 Short-term debt 1,250  1,250
  Total current liabilities 7,260  6,563
      
Long-term debt 9,704  9,703
Long-term operating lease liabilities 939  902
Other long-term liabilities 2,037  1,913
  Total liabilities 19,940  19,081
      
Shareholders’ equity 24,520  22,101
  Total liabilities and shareholders’ equity$44,460 $41,182
      
NVIDIA CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In millions)
(Unaudited)
     
     
  Three Months Ended
  April 30, May 1,
   2023   2022 
     
Cash flows from operating activities:   
Net income$2,043  $1,618 
Adjustments to reconcile net income to net cash   
provided by operating activities:   
 Stock based compensation expense 735   578 
 Depreciation and amortization 384   334 
 Losses on investments in non affiliates, net 14   17 
 Deferred income taxes (1,135)  (542)
 Acquisition termination cost –   1,353 
 Other (34)  23 
Changes in operating assets and liabilities, net of acquisitions:   
 Accounts receivable (252)  (788)
 Inventories 566   (560)
 Prepaid expenses and other assets (215)  (1,261)
 Accounts payable 11   255 
 Accrued liabilities and other current liabilities 689   634 
 Other long-term liabilities 105   70 
Net cash provided by operating activities 2,911   1,731 
Cash flows from investing activities:   
 Proceeds from maturities of marketable securities 2,512   5,947 
 Proceeds from sales of marketable securities –   1,029 
 Purchases of marketable securities (2,801)  (3,932)
 Purchase related to property and equipment and intangible assets (248)  (361)
 Acquisitions, net of cash acquired (83)  (36)
 Investments and other, net (221)  (35)
Net cash provided by (used in) investing activities (841)  2,612 
Cash flows from financing activities:   
 Proceeds related to employee stock plans 246   204 
 Payments related to tax on restricted stock units (507)  (532)
 Dividends paid (99)  (100)
 Principal payments on property and equipment and intangible assets (20)  (22)
 Payments related to repurchases of common stock –   (1,996)
Net cash provided by (used in) financing activities (380)  (2,446)
Change in cash and cash equivalents 1,690   1,897 
Cash and cash equivalents at beginning of period 3,389   1,990 
Cash and cash equivalents at end of period$5,079  $3,887 
     
NVIDIA CORPORATION
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES
(In millions, except per share data)
(Unaudited)
       
  Three Months Ended
  April 30, January 29, May 1,
   2023   2023   2022 
       
GAAP gross profit$4,648  $3,833  $5,431 
  GAAP gross margin 64.6%  63.3%  65.5%
 Acquisition-related and other costs (A) 119   120   94 
 Stock-based compensation expense (B) 27   30   38 
 IP-related costs 8   16   – 
Non-GAAP gross profit$4,802  $3,999  $5,563 
  Non-GAAP gross margin 66.8%  66.1%  67.1%
       
GAAP operating expenses$2,508  $2,576  $3,563 
 Stock-based compensation expense (B) (708)  (709)  (540)
 Acquisition-related and other costs (A) (54)  (54)  (55)
 Acquisition termination cost –   –   (1,353)
 Legal settlement costs –   –   (7)
 Other (C) 4   (38)  – 
Non-GAAP operating expenses$1,750  $1,775  $1,608 
       
GAAP income from operations$2,140  $1,257  $1,868 
 Total impact of non-GAAP adjustments to income from operations 912   967   2,087 
Non-GAAP income from operations$3,052  $2,224  $3,955 
       
GAAP other income (expense), net$69  $32  $(63)
 Losses from non-affiliated investments 14   10   17 
 Interest expense related to amortization of debt discount 1   1   1 
Non-GAAP other income (expense), net$84  $43  $(45)
       
GAAP net income$2,043  $1,414  $1,618 
 Total pre-tax impact of non-GAAP adjustments 927   978   2,105 
 Income tax impact of non-GAAP adjustments (D) (257)  (218)  (280)
Non-GAAP net income$2,713  $2,174  $3,443 
       
Diluted net income per share     
 GAAP$0.82  $0.57  $0.64 
 Non-GAAP$1.09  $0.88  $1.36 
       
Weighted average shares used in diluted net income per share computation 2,490   2,477   2,537 
       
GAAP net cash provided by operating activities$2,911  $2,249  $1,731 
 Purchases related to property and equipment and intangible assets (248)  (509)  (361)
 Principal payments on property and equipment and intangible assets (20)  (4)  (22)
Free cash flow$2,643  $1,736  $1,348 
       
 
       
(A) Acquisition-related and other costs are comprised of amortization of intangible assets, transaction costs, and certain compensation charges and are included in the following line items:
  Three Months Ended
  April 30, January 29, May 1,
   2023   2023   2022 
 Cost of revenue$119  $120  $94 
 Research and development$12  $10  $9 
 Sales, general and administrative$42  $44  $46 
       
(B) Stock-based compensation consists of the following: 
  Three Months Ended
  April 30, January 29, May 1,
   2023   2023   2022 
 Cost of revenue$27  $30  $38 
 Research and development$524  $527  $384 
 Sales, general and administrative$184  $182  $156 
       
(C) Other consists of assets held for sale related adjustments.     
       
(D) Income tax impact of non-GAAP adjustments, including the recognition of excess tax benefits or deficiencies related to stock-based compensation under GAAP accounting standard (ASU 2016-09).  
       
NVIDIA CORPORATION
RECONCILIATION OF GAAP TO NON-GAAP OUTLOOK
   
 
  Q2 FY2024 Outlook
  ($ in millions)
   
GAAP gross margin 68.6%
 Impact of stock-based compensation expense, acquisition-related costs, and other costs 1.4%
Non-GAAP gross margin 70.0%
   
GAAP operating expenses$2,710 
 Stock-based compensation expense, acquisition-related costs, and other costs (810)
Non-GAAP operating expenses$1,900