Nvidia reported fourth-quarter earnings and sales on Wednesday that beat analyst expectations and provided a strong outlook for the current quarter. The stock fell about 2% in extended trading.
During the call, CEO Jensen Huang discussed the canceled ARM acquisition. “Our proposed acquisition spurred questions,” Huang said. “We worked hard for over a year.” In the end, the company just couldn’t overcome industry and regulatory opposition to the deal.
Earning overview
Nvidia reported $7.64 billion in revenue, up 53% from the year-ago quarter. Above the October quarter, adjusted earnings were up 69% to $1.32 a share. Wall Street analysts had expected revenue of $7.42 billion and adjusted profits of $1.23 a share. Under generally accepted accounting principles, the company earned $1.18 a share.
Nvidia has gotten a boost as cloud providers and enterprises turn to its graphics processors that are used for artificial intelligence applications like speech recognition and recommendations. Nvidia reported $3.26 billion in sales from its data center business, up 71% annually.
Gaming is still Nvidia’s largest market, as its latest GeForce graphics processors are ideal for playing advanced computer games. The gaming business rose 37% year-over-year to $3.42 billion driven by GeForce sales, the company said.
Nvidia’s chips are also used by businesses for applications like computer-assisted design and rendering. It reports those sales in its Professional Visualization business, which rose 109% annually to $643 million. The company said the growth was driven by workstation chip sales and hybrid working.
However, Nvidia’s automotive business was down 14% to $125 million. It’s not a primary focus for the company but represents a growth market for its chips. Nvidia said that car makers’ supply constraints were one reason that its automotive sales fell.
Nvidia said nearly all of its GPUs now ship with software that prevents them from being used to mine cryptocurrency and that miners can buy specialized mining processors instead. It said it sold $550 million in crypto-specific cards in fiscal 2022 and only $24 million in the fourth quarter.
Future Outlook
For the April quarter, Nvidia is projecting revenue of $8.1 billion, give or take 2%, with gross margins of 65.2% on a GAAP basis and 67% on a non-GAAP basis. That’s well above the Wall Street consensus revenue forecast of $7.3 billion. Analysts see adjusted profits of $1.19 a share in the quarter. The company noted that it will recognize a $1.36 billion charge in the quarter to reflect costs related to its terminated agreement to buy Arm from SoftBank.
Huang said the vast majority of the strong growth in the April quarter will be driven by the company’s data center business, including hyperscale cloud providers, internet services, and others.
Earlier Wednesday, Nvidia announced a deal with Jaguar Land Rover to supply the company’s automotive platform to all new Jaguar and Land Rover cars starting in 2025. While the automotive segment is a relatively small part of the business now. Huang says that the inflection point for that business will be in the second quarter – and he says that eventually, automotive software should be one of the company’s largest businesses.
Despite the strong January quarter numbers, Nvidia shares were off 2.4% in late trading. The stock has risen 73% over the last 12 months.
