NVIDIA Announces Financial Results for Second Quarter Fiscal 2025

2024-08-29 05:20:02

Record quarterly revenue of $30.0 billion, up 15% from Q1 and up 122% from a year ago

Record quarterly Data Center revenue of $26.3 billion, up 16% from Q1 and up 154% from a year ago

NVIDIA (NASDAQ: NVDA) today reported revenue for the second quarter ended July 28, 2024, of $30.0 billion, up 15% from the previous quarter and up 122% from a year ago.

For the quarter, GAAP earnings per diluted share was $0.67, up 12% from the previous quarter and up 168% from a year ago. Non-GAAP earnings per diluted share was $0.68, up 11% from the previous quarter and up 152% from a year ago.

“Hopper demand remains strong, and the anticipation for Blackwell is incredible,” said Jensen Huang, founder and CEO of NVIDIA. “NVIDIA achieved record revenues as global data centers are in full throttle to modernize the entire computing stack with accelerated computing and generative AI.”

“Blackwell samples are shipping to our partners and customers. Spectrum-X Ethernet for AI and NVIDIA AI Enterprise software are two new product categories achieving significant scale, demonstrating that NVIDIA is a full-stack and data center-scale platform. Across the entire stack and ecosystem, we are helping frontier model makers to consumer internet services, and now enterprises. Generative AI will revolutionize every industry.”

During the first half of fiscal 2025, NVIDIA returned $15.4 billion to shareholders in the form of shares repurchased and cash dividends. As of the end of the second quarter, the company had $7.5 billion remaining under its share repurchase authorization. On August 26, 2024, the Board of Directors approved an additional $50.0 billion in share repurchase authorization, without expiration.

NVIDIA will pay its next quarterly cash dividend of $0.01 per share on October 3, 2024, to all shareholders of record on September 12, 2024.

On June 7, 2024, NVIDIA completed a ten-for-one forward stock split. All share and per-share amounts presented have been retroactively adjusted to reflect the stock split.

Q2 Fiscal 2025 Summary

GAAP
($ in millions, except earnings per share)	Q2 FY25		Q1 FY25		Q2 FY24		Q/Q	Y/Y
Revenue	$30,040		$26,044		$13,507		Up 15%	Up 122%
Gross margin		75.1%		78.4%		70.1%	Down 3.3 pts	Up 5.0 pts
Operating expenses	$3,932		$3,497		$2,662		Up 12%	Up 48%
Operating income	$18,642		$16,909		$6,800		Up 10%	Up 174%
Net income	$16,599		$14,881		$6,188		Up 12%	Up 168%
Diluted earnings per share	$0.67		$0.60		$0.25		Up 12%	Up 168%

Non-GAAP
($ in millions, except earnings per share)	Q2 FY25		Q1 FY25		Q2 FY24		Q/Q	Y/Y
Revenue	$30,040		$26,044		$13,507		Up 15%	Up 122%
Gross margin		75.7%		78.9%		71.2%	Down 3.2 pts	Up 4.5 pts
Operating expenses	$2,792		$2,501		$1,838		Up 12%	Up 52%
Operating income	$19,937		$18,059		$7,776		Up 10%	Up 156%
Net income	$16,952		$15,238		$6,740		Up 11%	Up 152%
Diluted earnings per share	$0.68		$0.61		$0.27		Up 11%	Up 152%

Outlook

NVIDIA’s outlook for the third quarter of fiscal 2025 is as follows:

Revenue is expected to be $32.5 billion, plus or minus 2%.

GAAP and non-GAAP gross margins are expected to be 74.4% and 75.0%, respectively, plus or minus 50 basis points. For the full year, gross margins are expected to be in the mid-70% range.

GAAP and non-GAAP operating expenses are expected to be approximately $4.3 billion and $3.0 billion, respectively. Full-year operating expenses are expected to grow in the mid- to upper-40% range.

GAAP and non-GAAP other income and expense are expected to be an income of approximately $350 million, excluding gains and losses from non-affiliated investments and publicly-held equity securities.

GAAP and non-GAAP tax rates are expected to be 17%, plus or minus 1%, excluding any discrete items.

Highlights

NVIDIA achieved progress since its previous earnings announcement in these areas:

Data Center

Second-quarter revenue was a record $26.3 billion, up 16% from the previous quarter and up 154% from a year ago.

Announced that the combination of NVIDIA H200 Tensor Core and NVIDIA Blackwell architecture B200 Tensor Core processors swept the latest industry-standard MLPerf benchmark results for inference.

Revealed that H200 GPU-powered systems are now available on CoreWeave, the first cloud service provider to announce general availability.

Unveiled an array of Blackwell systems featuring NVIDIA Grace™ CPUs, networking and infrastructure from top manufacturers such as GIGABYTE, QCT and Wiwynn.

Reported broad adoption of the NVIDIA Spectrum-X™ Ethernet networking platform by cloud service providers, GPU cloud providers and enterprises, as well as partners incorporating it into their offerings.

Released NVIDIA NIM™ for broad availability to developers globally and announced more than 150 companies are integrating microservices into their platforms to speed generative AI application development.

Unveiled an inference service with Hugging Face powered by NIM microservices on NVIDIA DGX™ Cloud to enable developers to deploy popular large language models.

Introduced an NVIDIA AI Foundry service and NIM inference microservices to accelerate generative AI for the world’s enterprises with the Llama 3.1 collection of models.

Announced Japan advanced its sovereign AI capabilities with its ABCI 3.0 supercomputer, integrating H200 GPUs and NVIDIA Quantum-2 InfiniBand networking.

Accelerated quantum computing efforts at national supercomputing centers around the world with the open-source NVIDIA CUDA-Q™ platform.

Gaming and AI PC

Second-quarter Gaming revenue was $2.9 billion, up 9% from the previous quarter and up 16% from a year ago.

Announced NVIDIA ACE, a suite of generative AI technologies that bring digital humans to life, now includes NVIDIA Nemotron-4 4B, a small language model for on-device inference, and is available in early access for RTX AI PCs.

Introduced Project G-Assist, a technology preview demonstrating the power of AI agents to assist gamers and creators in real time.

Announced new NVIDIA GeForce RTX and DLSS titles, including Indiana Jones and the Great Circle, Dune: Awakening and Dragon Age: The Veilguard, bringing the total number of RTX games and apps to over 600.

Surpassed 2,000 games on GeForce NOW, expanded the service into Japan and announced launches of Black Myth: Wukong and Star Wars Outlaws.

Professional Visualization

Second-quarter revenue was $454 million, up 6% from the previous quarter and up 20% from a year ago.

Introduced generative AI models and NIM microservices for OpenUSD to accelerate workflows and the development of industrial digital twins and robotics.

Announced major Taiwanese electronics makers are creating more autonomous factories with a new reference workflow that combines NVIDIA Metropolis vision AI, NVIDIA Omniverse™ simulation and NVIDIA Isaac™ AI robot development.

Automotive and Robotics

Second-quarter Automotive revenue was $346 million, up 5% from the previous quarter and up 37% from a year ago.

Unveiled the world’s leaders in robot development, including BYD Electronics, Siemens and Teradyne Robotics, are adopting the Isaac robotics platform for R&D and production.

Announced Omniverse Cloud Sensor RTX™ microservices to enable physically accurate sensor simulation to speed development of autonomous machines.

Won the Autonomous Grand Challenge at the Computer Vision and Pattern Recognition conference in the category of End-to-End Driving at Scale for advances in building physical, generative AI applications for autonomous vehicle development.

CFO Commentary

Commentary on the quarter by Colette Kress, NVIDIA’s executive vice president and chief financial officer, is available at https://investor.nvidia.com.

Conference Call and Webcast Information

NVIDIA will conduct a conference call with analysts and investors to discuss its second quarter fiscal 2025 financial results and current financial prospects today at 2 p.m. Pacific time (5 p.m. Eastern time). A live webcast (listen-only mode) of the conference call will be accessible at NVIDIA’s investor relations website, https://investor.nvidia.com. The webcast will be recorded and available for replay until NVIDIA’s conference call to discuss its financial results for its third quarter of fiscal 2025.

Non-GAAP Measures

To supplement NVIDIA’s condensed consolidated financial statements presented in accordance with GAAP, the company uses non-GAAP measures of certain components of financial performance. These non-GAAP measures include non-GAAP gross profit, non-GAAP gross margin, non-GAAP operating expenses, non-GAAP income from operations, non-GAAP other income (expense), net, non-GAAP net income, non-GAAP net income, or earnings, per diluted share, and free cash flow. For NVIDIA’s investors to be better able to compare its current results with those of previous periods, the company has shown a reconciliation of GAAP to non-GAAP financial measures. These reconciliations adjust the related GAAP financial measures to exclude stock-based compensation expense, acquisition-related and other costs, other, gains from non-affiliated investments and publicly-held equity securities, net, interest expense related to amortization of debt discount, and the associated tax impact of these items where applicable. Free cash flow is calculated as GAAP net cash provided by operating activities less both purchases related to property and equipment and intangible assets and principal payments on property and equipment and intangible assets. NVIDIA believes the presentation of its non-GAAP financial measures enhances the user’s overall understanding of the company’s historical financial performance. The presentation of the company’s non-GAAP financial measures is not meant to be considered in isolation or as a substitute for the company’s financial results prepared in accordance with GAAP, and the company’s non-GAAP measures may be different from non-GAAP measures used by other companies.

NVIDIA CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In millions, except per share data)
(Unaudited)


			Three Months Ended						Six Months Ended
			July 28,			July 30,			July 28,			July 30,
				2024			2023			2024			2023

Revenue			$	30,040		$	13,507		$	56,084		$	20,699
Cost of revenue				7,466			4,045			13,105			6,589
Gross profit				22,574			9,462			42,979			14,110

Operating expenses
	Research and development			3,090			2,040			5,810			3,916
	Sales, general and administrative			842			622			1,618			1,253
		Total operating expenses		3,932			2,662			7,428			5,169

Operating Income				18,642			6,800			35,551			8,941
	Interest income			444			187			803			338
	Interest expense			(61	)		(65	)		(125	)		(131	)
	Other, net			189			59			264			42
		Other income (expense), net		572			181			942			249

Income before income tax				19,214			6,981			36,493			9,190
Income tax expense				2,615			793			5,013			958
Net income			$	16,599		$	6,188		$	31,480		$	8,232

Net income per share:
	Basic		$	0.68		$	0.25		$	1.28		$	0.33
	Diluted		$	0.67		$	0.25		$	1.27		$	0.33

Weighted average shares used in per share computation:
	Basic			24,578			24,729			24,599			24,716
	Diluted			24,848			24,994			24,869			24,948

NVIDIA CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(In millions)
(Unaudited)


			July 28,		January 28,
			2024		2024
ASSETS

Current assets:
	Cash, cash equivalents and marketable securities		$	34,800	$	25,984
	Accounts receivable, net			14,132		9,999
	Inventories			6,675		5,282
	Prepaid expenses and other current assets			4,026		3,080
		Total current assets		59,633		44,345

Property and equipment, net				4,885		3,914
Operating lease assets				1,556		1,346
Goodwill				4,622		4,430
Intangible assets, net				952		1,112
Deferred income tax assets				9,578		6,081
Other assets				4,001		4,500
		Total assets	$	85,227	$	65,728

LIABILITIES AND SHAREHOLDERS’ EQUITY

Current liabilities:
	Accounts payable		$	3,680	$	2,699
	Accrued and other current liabilities			10,289		6,682
	Short-term debt			–		1,250
		Total current liabilities		13,969		10,631

Long-term debt				8,461		8,459
Long-term operating lease liabilities				1,304		1,119
Other long-term liabilities				3,336		2,541
		Total liabilities		27,070		22,750

Shareholders’ equity				58,157		42,978
		Total liabilities and shareholders’ equity	$	85,227	$	65,728

NVIDIA CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In millions)
(Unaudited)


		Three Months Ended						Six Months Ended
		July 28,			July 30,			July 28,			July 30,
			2024			2023			2024			2023

Cash flows from operating activities:
Net income		$	16,599		$	6,188		$	31,480		$	8,232
Adjustments to reconcile net income to net cash provided by operating activities:
	Stock-based compensation expense		1,154			842			2,164			1,576
	Depreciation and amortization		433			365			843			749
	Gains on investments in non-affiliated entities and publicly-held equity securities, net		(193	)		(60	)		(264	)		(45	)
	Deferred income taxes		(1,699	)		(746	)		(3,276	)		(1,881	)
	Other		(144	)		(69	)		(288	)		(102	)
Changes in operating assets and liabilities, net of acquisitions:
	Accounts receivable		(1,767	)		(2,986	)		(4,133	)		(3,239	)
	Inventories		(803	)		296			(1,380	)		861
	Prepaid expenses and other assets		714			(376	)		(12	)		(592	)
	Accounts payable		823			777			801			789
	Accrued liabilities and other current liabilities		(888	)		1,986			3,314			2,675
	Other long-term liabilities		260			131			584			236
Net cash provided by operating activities			14,489			6,348			29,833			9,259
Cash flows from investing activities:
	Proceeds from maturities of marketable securities		4,094			2,598			8,098			5,111
	Proceeds from sales of marketable securities		15			–			164			–
	Purchases of marketable securities		(5,744	)		(2,542	)		(15,047	)		(5,343	)
	Purchase related to property and equipment and intangible assets		(977	)		(289	)		(1,346	)		(537	)
	Acquisitions, net of cash acquired		(279	)		–			(317	)		(83	)
	Purchases of investments in non-affiliated entities		(344	)		(235	)		(534	)		(456	)
	Proceeds from sales of investments in non-affiliated entities		50			–			105			–
	Other		–			21			–			21
Net cash used in investing activities			(3,185	)		(447	)		(8,877	)		(1,287	)
Cash flows from financing activities:
	Proceeds related to employee stock plans		–			1			285			247
	Payments related to repurchases of common stock		(7,158	)		(3,067	)		(14,898	)		(3,067	)
	Repayment of debt		(1,250	)		(1,250	)		(1,250	)		(1,250	)
	Payments related to tax on restricted stock units		(1,637	)		(672	)		(3,389	)		(1,179	)
	Dividends paid		(246	)		(99	)		(344	)		(199	)
	Principal payments on property and equipment and intangible assets		(29	)		(11	)		(69	)		(31	)
Net cash used in financing activities			(10,320	)		(5,098	)		(19,665	)		(5,479	)
Change in cash, cash equivalents, and restricted cash			984			803			1,291			2,493
Cash, cash equivalents, and restricted cash at beginning of period			7,587			5,079			7,280			3,389
Cash, cash equivalents, and restricted cash at end of period		$	8,571		$	5,882		$	8,571		$	5,882

Reconciliation of cash, cash equivalents, and restricted cash to the Condensed Consolidated Balance Sheet:
	Cash and cash equivalents	$	8,563		$	5,783		$	8,563		$	5,783
	Restricted cash, included in Prepaid expenses and other current assets		8			99			8			99
Total cash, cash equivalents, and restricted cash		$	8,571		$	5,882		$	8,571		$	5,882

Supplemental disclosures of cash flow information:
Cash paid for income taxes, net		$	7,208		$	227		$	7,449		$	328

NVIDIA CORPORATION
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES
(In millions, except per share data)
(Unaudited)

		Three Months Ended									Six Months Ended
		July 28,			April 28,			July 30,			July 28,			July 30,
			2024			2024			2023			2024			2023

GAAP gross profit		$	22,574		$	20,406		$	9,462		$	42,979		$	14,110
GAAP gross margin			75.1	%		78.4	%		70.1	%		76.6	%		68.2	%
	Acquisition-related and other costs (A)		118			119			119			238			239
	Stock-based compensation expense (B)		40			36			31			75			58
	Other (C)		(3	)		(1	)		2			(4	)		10
Non-GAAP gross profit		$	22,729		$	20,560		$	9,614		$	43,288		$	14,417
Non-GAAP gross margin			75.7	%		78.9	%		71.2	%		77.2	%		69.7	%

GAAP operating expenses		$	3,932		$	3,497		$	2,662		$	7,428		$	5,169
	Stock-based compensation expense (B)		(1,114	)		(975	)		(811	)		(2,089	)		(1,518	)
	Acquisition-related and other costs (A)		(26	)		(21	)		(18	)		(48	)		(72	)
	Other (C)		–			–			5			–			10
Non-GAAP operating expenses		$	2,792		$	2,501		$	1,838		$	5,291		$	3,589

GAAP operating income		$	18,642		$	16,909		$	6,800		$	35,551		$	8,941
	Total impact of non-GAAP adjustments to operating income		1,295			1,150			976			2,446			1,887
Non-GAAP operating income		$	19,937		$	18,059		$	7,776		$	37,997		$	10,828

GAAP other income (expense), net		$	572		$	370		$	181		$	942		$	249
	Gains from non-affiliated investments and publicly-held equity securities, net		(193	)		(69	)		(62	)		(264	)		(46	)
	Interest expense related to amortization of debt discount		1			1			1			2			2
Non-GAAP other income (expense), net		$	380		$	302		$	120		$	680		$	205

GAAP net income		$	16,599		$	14,881		$	6,188		$	31,480		$	8,232
	Total pre-tax impact of non-GAAP adjustments		1,103			1,082			915			2,184			1,843
	Income tax impact of non-GAAP adjustments (D)		(750	)		(725	)		(363	)		(1,475	)		(622	)
Non-GAAP net income		$	16,952		$	15,238		$	6,740		$	32,189		$	9,453

Diluted net income per share
	GAAP	$	0.67		$	0.60		$	0.25		$	1.27		$	0.33
	Non-GAAP	$	0.68		$	0.61		$	0.27		$	1.29		$	0.38

Weighted average shares used in diluted net income per share computation			24,848			24,890			24,994			24,869			24,948

GAAP net cash provided by operating activities		$	14,489		$	15,345		$	6,348		$	29,833		$	9,259
	Purchases related to property and equipment and intangible assets		(977	)		(369	)		(289	)		(1,346	)		(537	)
	Principal payments on property and equipment and intangible assets		(29	)		(40	)		(11	)		(69	)		(31	)
Free cash flow		$	13,483		$	14,936		$	6,048		$	28,418		$	8,691



(A) Acquisition-related and other costs are comprised of amortization of intangible assets, transaction costs, and certain compensation charges and are included in the following line items:
		Three Months Ended									Six Months Ended
		July 28,			April 28,			July 30,			July 28,			July 30,
			2024			2024			2023			2024			2023
	Cost of revenue	$	118		$	119		$	119		$	238		$	239
	Research and development	$	17		$	12		$	12		$	30		$	24
	Sales, general and administrative	$	9		$	8		$	6		$	18		$	48

(B) Stock-based compensation consists of the following:
		Three Months Ended									Six Months Ended
		July 28,			April 28,			July 30,			July 28,			July 30,
			2024			2024			2023			2024			2023
	Cost of revenue	$	40		$	36		$	31		$	75		$	58
	Research and development	$	832		$	727		$	600		$	1,559		$	1,124
	Sales, general and administrative	$	282		$	248		$	211		$	530		$	394

(C) Other consists of IP-related costs and assets held for sale related adjustments.
(D) Income tax impact of non-GAAP adjustments, including the recognition of excess tax benefits or deficiencies related to stock-based compensation under GAAP accounting standard (ASU 2016-09).

NVIDIA CORPORATION
RECONCILIATION OF GAAP TO NON-GAAP OUTLOOK


		Q3 FY2025 Outlook
		($ in millions)

GAAP gross margin			74.4	%
	Impact of stock-based compensation expense, acquisition-related costs, and other costs		0.6	%
Non-GAAP gross margin			75.0	%

GAAP operating expenses		$	4,250
	Stock-based compensation expense, acquisition-related costs, and other costs		(1,250	)
Non-GAAP operating expenses		$	3,000