Nvidia FQ1 net income up 132 percent from last year

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Nvidia’s fiscal first-quarter financial results revealed the chipmaker topped its FQ1 2019 net income by 132 percent and its revenue by 38 percent. The corporation’s remarkable growth was driven by its booming data center sales, which hit a record high.

Even more impressive: the firm’s fiscal second-quarter forecast indicates its sales growth will continue apace through the June period.

Nvidia’s Impressive FQ1 Performance

In the three months ending April 26, Nvidia made $3.08 billion, an increase of $86 million from its FQ1 2020 sales. The company also recorded profits of $917 million, or adjusted earnings per share (EPS) of $1.80. By comparison, the firm reported $394 million in net income and adjusted EPS of $.88 in the same period last year.

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In addition to blowing away its yearly earnings, Nvidia also topped Wall Street’s estimates for its quarterly financial performance. Market data analytics firm Refinitiv pegged the component company’s sales at $3 billion against adjusted EPS of $1.69.

The firm’s gaming chip business contributed $1.34 billion to its fiscal fourth-quarter growth, up 27 percent year-over-year. However, the unit’s revenue fell by 10 percent from FQ4 2020, a decline the company attributed to COVID-19 related disruption. In a statement, CFO Collette Kress noted pandemic prompted closures of Chinese iCafes hurt demand for its gaming products.

Even though it suffered from quarterly contraction of its core business, the corporation enjoyed explosive growth in another key unit.

Nvidia saw an 80 percent year-over-year spike in quarterly data center revenue, which totaled a record $1.14 billion. CEO Jensen Huang mentioned the coronavirus outbreak had driven greater usage of its high-performance computing (HPC) components in an internal email last month. Web service providers ramped up their purchases of the corporation’s hardware to manage surges in bandwidth consumption in the March quarter.

Continued Growth in FQ2

For the fiscal second quarter, Nvidia Projects revenue of $3.6 billion, which would represent a 40 percent improvement from FQ2 2020. In addition, the company’s sales forecast also tops Bloomberg’s consensus analyst estimate of $3.28 billion.

The component maker also stated sales from its recently acquired subsidiary Mellanox would figure into this quarter’s revenue results. The corporation anticipates the supercomputer chip producer would make a “low-teens” contribution to its June period gross income as part of its data center unit.

As such, Nvidia’s FQ2 outlook suggests the firm will experience continued substantial growth because of its robust HPC component sales. With brands like Facebook and Twitter embracing the notion of maintaining a remote workforce post-COVID-19, the global digital infrastructure build-out will continue indefinitely.

With its recent unveiling of a new data center-specific GPU, Nvidia has positioned itself to take advantage of 2020’s biggest tech trends. Accordingly, the corporation’s explosive near-term growth should translate to major long-term gains.

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