Nvidia Q3 FY2022 Earnings Report Recap

NVDA beat on earnings and revenue

Key Takeaways

  • Nvidia's data center revenue beat analysts' expectations, with growth accelerating from the previous quarter's pace.
  • Demand for services offered by data centers has grown rapidly during the pandemic, boosting demand for Nvidia's chips.
  • Nvidia posted record revenue in its gaming, data center, and professional visualization businesses.
Nvidia Key Stats
Metric Beat/Miss/Match Reported Value Analysts' Prediction
Adjusted EPS Beat $1.17 $1.11
Revenue Beat $7.1B $6.8B
Data Center Revenue Beat $2.9B  $2.7B

Source: Predictions based on analysts' consensus from Visible Alpha

NVIDIA (NVDA) Financial Results: Analysis

Nvidia Corporation (NVDA) reported Q3 FY 2022 earnings on Nov. 17, 2021 that beat analysts' expectations. Adjusted earnings per share (EPS) came in above analyst forecasts, rising 60.3% year over year (YOY). Nvidia's revenue also came in above consensus estimates, up 50.3% compared to the year-ago quarter to a new quarterly record of $7.1 billion. Data center revenue surpassed analysts' expectations.

The company's shares were up nearly 4% in after-hours trading. Over the past year, Nvidia's shares have provided a total return of 118.1%, well above the S&P 500's total return of 29.9%.

NVDA Data Center Revenue

Nvidia's data center revenue grew 54.5% YOY, accelerating from the previous quarter's pace. Nvidia Chief Financial Officer Colette Kress said that data center revenue, which also hit a quarterly record, was primarily driven by sales of the company's Ampere architecture products used for cloud computing and various workloads like natural language processing.

Nvidia has traditionally specialized in making chips for the gaming and graphics industry, being a pioneer in the development of graphics processing units (GPUs). It turns out that the robust computational capabilities employed by GPUs to power video games and graphics software are also well-suited for technologies like artificial intelligence (AI) and machine learning. Both of those technologies are increasingly important for the rapidly growing data center market. Demand for remote computing power increased substantially during the pandemic as more and more people began working from home and businesses were forced to shift certain operations online. That development has helped to boost demand for Nvidia's chips used by data centers.

The surge in demand for semiconductors has put strain on chipmakers to generate the much-needed supply—dynamics that have led to a global semiconductor shortage. Nvidia Chief Executive Officer Jensen Huang said last week that he thinks demand for semiconductors will continue to outpace supply through the next year.

NVDA Omniverse

Nvidia also highlighted its new Omniverse Enterprise platform, which is built to provide virtual collaboration and real-time physically accurate simulation. Huang also suggested last week that Nvidia could be one of the major suppliers for technology companies involved in constructing the "metaverse"—an expansive virtual world that could become an increasingly important commercial space.

NVDA Outlook

Nvidia expects its revenue for the fourth quarter of FY 2022 to be $7.4 billion, representing a growth rate of 47.9% YOY.

Nvidia Earnings Call Recap

In an earnings call after results were announced, Chief Executive Officer (CEO) Jensen Huang said that the company has taken several steps to adjust to the global chip shortage. “We feel very good about our supply situation, particularly starting in the second half of next year and going forward,” he said. Nvidia said it has made moves to assure long-term supply agreements, including making $1.64 billion in advance payments in the third quarter.

Nvidia's next earnings report (for Q4 FY 2022) is estimated to be released on Feb. 22, 2022.

Article Sources

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