NVIDIA Earnings Results
Metric Beat/Miss/Match Reported Value Analysts' Prediction
Adjusted EPS Beat $1.04 (post-split) $4.08 (pre-split)
Revenue (billions) Beat $6.5 $6.3
Gross Margin Beat 66.7% 66.4%

Source: Predictions based on analysts' consensus from Visible Alpha

Key Takeaways

  • Gross margin climbed by 70 basis points year over year to beat analyst predictions.
  • Adjusted EPS and revenue also surpassed predictions.
  • The company completed a 4:1 stock split in July.

NVIDIA (NVDA) Financial Results: Analysis

NVIDIA Corporation (NVDA) offered strong Q2 FY 2022 earnings results across the board, beating analyst predictions on several fronts. The company reported adjusted earnings per share (EPS) of $1.04. Taking into consideration that NVIDIA completed a 4:1 stock split in July, this figure surpasses pre-split estimates of $4.08. Record quarterly revenue of $6.5 billion also exceeded analyst expectations, climbing by about 68% year over year. Revenue growth was driven by record quarterly revenue in the company's Gaming and Data Center businesses.

NVDA Gross Margin

NVIDIA also beat analyst predictions on gross margin, with a reported 66.7% gross margin for the quarter. Gross margin is a key metric that is calculated as total revenue minus cost of goods sold (COGS). It is usually then divided by total revenue to express it as a percent, allowing for easy comparison between different time periods or companies. Semiconductors are a commodity good, meaning that they are, to a large extent, fungible and their prices highly cyclical. Sellers of such goods have limited pricing power, which means it is essential to keep costs low to maximize profits when times are good.

NVDA Outlook and Stock Performance

NVIDIA expects continued sequential growth in both revenue and gross margin for Q3 FY 2022. The company anticipates record quarterly revenue of $6.8 billion, give or take 2%. Gross margin is expected to climb to 67.0%.

NVIDIA shares have climbed by about 1.6% in after-hours trading following the earnings release. Thanks to a rally that began in May, the company's stock has solidly outperformed the broader market in the past year. NVIDIA shares have provided a one-year trailing total return of 55.5% as compared with 29.8% for the S&P 500.

Next Earnings Report

NVIDIA's next earnings report (for Q3 FY 2022) is estimated to be released on Nov. 11, 2021.