NVIDIA Quarterly Report: Q1 FY2024

Key insights

7 takeaways

01
NVIDIA reported total revenue of $26.04 billion for the first quarter of fiscal year 2025, a significant increase from $7.19 billion in the same period of the previous year.
02
The Compute & Networking segment drove the majority of growth, contributing $22.56 billion in revenue, while Gaming revenue reached $2.65 billion.
03
The company announced a ten-for-one forward stock split effective for record holders as of June 6, 2024, with additional shares distributed after market close on June 7, 2024.
04
Two direct customers accounted for 24% of total revenue (13% and 11% respectively), and two indirect customers each represented 10% or more of total revenue.
05
Blackwell architecture is currently in production with customer shipments expected to ramp in the second half of the fiscal year, though supply constraints for these offerings are projected to persist into next year.
06
Export controls continue to impact operations, with Data Center revenue in China down significantly following October 2023 restrictions and the company unable to obtain licenses for restricted products.
07
Income tax expense rose to $2.4 billion for the quarter, up from $166 million in the prior year's first quarter, resulting in an effective tax rate of 13.9%.

Summary

NVIDIA's first-quarter fiscal 2025 results, for the quarter ended April 28, 2024, show a company whose financial profile has been transformed by AI-driven demand for data center computing. Although the source is titled Q1 FY2024, the data and filing date of May 29, 2024 correspond to fiscal 2025. Revenue reached $26.0 billion, up 262% from $7.2 billion a year earlier and 18% sequentially, while gross margin expanded to 78.4% from 64.6%. Net income climbed to $14.9 billion and diluted EPS to $5.98 from $0.82. Data Center revenue of $22.6 billion, up 427%, drove the result on strong Hopper GPU demand, whereas Gaming ($2.6 billion), Professional Visualization ($427 million), and Automotive ($329 million) grew more modestly year over year.

Cash generation and capital returns were substantial. Operating cash flow reached $15.3 billion, and cash and marketable securities rose to roughly $31 billion. NVIDIA repurchased $8.0 billion of stock, with $14.5 billion of authorization remaining, paid $98 million in dividends, and announced a 10-for-1 stock split and a 150% dividend increase. Debt stands at $9.7 billion, purchase commitments total $29.4 billion, and the effective tax rate rose to 13.9%, with cash taxes expected to climb in the second quarter. Management guided to mid-70% gross margins and low-40% operating expense growth for the full year.

Risks center on supply, concentration, and geopolitics. Blackwell is in production with shipments ramping in the second half of the fiscal year, but demand exceeds supply and constraints are expected to persist into next year. Two direct customers represented 13% and 11% of revenue, and international sales fell to 48% from 67% as U.S. export controls tightened in October 2023 sharply reduced China Data Center revenue. NVIDIA has not received licenses to ship restricted products to China and warns of competitive disadvantage, possible extension of controls to other products, and growing AI regulatory scrutiny. Dependence on Taiwan-based supply, Middle East tensions affecting roughly 4,000 employees in Israel, and a pending crypto-related securities class action add further exposure.