Nvidia (NVDA) shares were rising more than 11% after hours Thursday to $242.94 as the chipmaker reported fourth-quarter earnings of $1.78 per share, easily beating analyst estimates of $1.17 per share. Revenue for the quarter came in at $2.91 billion, compared to estimates of $2.68 billion.
Here are some of the top takeaways from Nvidia's earnings report.
- By any standard, Nvidia knocked the cover off the ball when it came to top-line performance. In addition to trouncing January quarter estimates, April quarter revenue guidance of $2.9 billion (+/- 2%) is well above a $2.46 billion consensus. And given the company's recent history, there's a chance it's guiding conservatively.
- Also giving last quarter's earnings a boost was the fact that adjusted gross margin was 62.1%, up 190 basis points annually and above guidance of 59.5% to 60.5%. Nvidia is also guiding for gross margins to rise to a range of 62.5% to 63.5% in the April quarter.
- In spite of tough annual comps due to the 2016 launch of high-end Pascal-architecture GPUs, Nvidia's Gaming segment revenue rose 29% year-over-year to $1.74 billion, easily beating a $1.57 billion consensus. Strong Pascal sales to PC gamers and cryptocurrency miners helped, as did healthy demand for the Nvidia-powered Nintendo (NTDOY) Switch console.
- Datacenter segment sales continue to soar thanks to massive purchases of Nvidia's Tesla server GPUs for AI training workloads: The segment's revenue rose 105% to $606 million, trouncing a $551 million consensus. And revenue growth nearly matched the October quarter's 109%.
- Crypto mining demand also gave a lift to Nvidia's OEM and IP revenue, which rose 64% to $180 million after backing out $66 million in year-ago Intel (INTC) licensing payments. Automotive sales only grew 3% to $132 million, as Nvidia de-emphasizes infotainment processor work in the name of pursuing long-term autonomous driving opportunities.
- For fiscal 2019 (ends in Jan. 2019), Nvidia is promising to return $1.25 billion to shareholders via stock buybacks and dividends. That's on par with what it returned in fiscal 2018.
This article has been corrected to state Nvidia's Datacenter revenue consensus was $551 million, rather than $501 million.