NVIDIA's Record-Breaking Q1 FY2024: A Financial Deep Dive into Surging Revenues and AI Acceleration

Infotrading.io - NVIDIA has announced its fiscal first quarter 2024 results and has once again made a "splash." Revenue surged to $26 billion, marking a 262% increase over the previous year ($7.19 billion) and an 18% increase from Q4 FY24 ($22.1 billion), setting a new record. Additionally, impressive figures were also noted for net income, which reached $14.88 billion (+628% from last year and +21% from Q4 FY24), and the gross margin, which rose to 78.4%.

The results were primarily driven by the Data Center division, with a record quarterly revenue of $22.6 billion, a 427% increase from the previous year and 23% from the previous quarter. This revenue is divided between "Compute" (accelerators) and "Networking," with the former reaching $19.4 billion and network solutions achieving sales of $3.2 billion.

These increases reflect the growth in shipments of the NVIDIA Hopper GPU Computing platform used for training and inference with large-scale language models, recommendation engines, and generative AI applications," explained CFO Colette Kress.

"The networking revenue was $3.2 billion, up 242% from a year ago due to strong growth in end-to-end InfiniBand solutions, and a 5% sequential decrease due to supply timing," Kress added.

The strong sequential growth in Data Centers was driven by all customer types, led by Enterprise businesses and Consumer Internet sectors. Major cloud providers continued to see strong growth due to the deployment and operation of NVIDIA AI infrastructures at scale, representing half of the 40% of our Data Center revenue," the CFO noted.

Cloud providers are seeing a "strong and immediate return" on investments, Kress added. She stated that if a cloud provider spends one dollar on NVIDIA hardware, it can rent it out for five dollars over the next four years. Furthermore, Kress noted that the HGX H200, which combines eight GPUs, yields an even greater return on investment. "This means that for every dollar spent on NVIDIA HGX H200 servers at current prices, an API provider serving Llama 3 tokens can generate seven dollars in revenue over four years," the executive declared.

Speaking to analysts, CEO Huang assured that initial shipments of Blackwell solutions will begin in the current fiscal quarter, with production expected to increase quarter-over-quarter in anticipation of its formal debut in Q4. Colette Kress mentioned that the demand for Blackwell chips might exceed supply "until next year," driven by demand from Amazon, Google, Meta, Microsoft, OpenAI, Oracle, Tesla, and xAI.

Huang also reiterated what NVIDIA had stated months ago, namely that the development of new AI accelerators has shifted from a biennial to an annual pace. "I can announce that after Blackwell, there will be another chip. We are on an annual rhythm," the CEO declared.

To date, NVIDIA has introduced a new architecture approximately every two years, unveiling Ampere in 2020, Hopper in 2022, and Blackwell in 2024. According to rumors, the next architecture to be unveiled in 2025 will be named Rubin.

Returning to the quarterly performance, NVIDIA's Gaming division reported revenue of $2.6 billion, up 18% from last year but down 8% from the previous quarter. "The year-over-year increase mainly reflects higher demand. The sequential decline, however, reflects the seasonal decrease in sales of GPUs for laptops," explained NVIDIA. The Professional Visualization division increased its revenues by 45% from the past year to $427 million, though the figure was down 8% from Q4 FY24. The year-over-year increase primarily reflects higher sales to partners following the normalization of channel inventory levels. The sequential decline is largely due to desktop workstation GPUs.

Revenues related to the Automotive and Robotics sectors rose 11% from a year ago to $329 million and 17% on a sequential basis. The year-over-year increase was mainly driven by autonomous driving platforms, while the sequential increase was due to AI Cockpit solutions and autonomous driving platforms.

"The next industrial revolution has begun: companies and countries are collaborating with NVIDIA to shift traditional trillion-dollar data centers to accelerated computing and build a new type of data center—the AI factories—to produce a new commodity: artificial intelligence," stated NVIDIA's founder and CEO. "Artificial intelligence will bring significant productivity increases across almost all sectors and help companies be more cost-effective and energy-efficient, while also expanding revenue opportunities."

Projections for fiscal second quarter 2025 exceed analyst expectations, which were set around $26.6 billion: NVIDIA instead expects revenues of $28 billion, with a margin of error of plus or minus 2%.

NVIDIA also announced a ten-for-one stock split of its issued common shares to make share ownership more accessible to employees and investors. Finally, the company has increased its quarterly cash dividend by 150% from $0.04 per share to $0.10 per share.