NVIDIA Q2 Earnings: Revenue and EPS Beat Estimates, Announces $50 Billion Stock Buyback

NVIDIA just released its earnings report:

– Q2 revenue came in at $30.04 billion, surpassing the estimate of $28.9 billion.
– Q2 adjusted EPS was $0.68, beating the expected $0.65.
– NVIDIA also announced a $50 billion stock buyback program.

Nvidia Q2’25 Earnings Highlights:

Nvidia reported strong financial results for the second quarter of FY25. The company achieved revenue of $30.0 billion, exceeding the estimated $28.9 billion and marking a 122% increase year-over-year. The GAAP earnings per share (EPS) was $0.67, slightly above the expected $0.65, representing a 168% year-over-year growth. The non-GAAP gross margin came in at 75.7%, just above the estimate of 75.5%. Nvidia also announced a substantial $50 billion stock buyback.

Q3’25 Guidance:

For the third quarter of FY25, Nvidia expects revenue to be around $32.5 billion, with a possible variation of 2%, exceeding the estimated $31.7 billion. The GAAP gross margin is expected to be 74.4%, plus or minus 50 basis points, while the non-GAAP gross margin is anticipated to be around 75.0%, in line with estimates. The company also provided guidance for GAAP and non-GAAP operating expenses, which are projected to be approximately $4.3 billion and $3.0 billion, respectively. The expected GAAP and non-GAAP tax rates are 17%, with a possible variation of 1%.

Q2 Revenue by Segment:

In Q2, Nvidia’s Data Center segment generated $26.3 billion in revenue, surpassing the estimate of $25.1 billion and reflecting a 154% year-over-year increase. The Gaming segment earned $2.9 billion, beating the estimated $2.6 billion and growing by 16% year-over-year. However, the Professional Visualization segment fell short of expectations, bringing in $454 million compared to the estimated $500 million, although it still grew by 20% year-over-year. The Automotive segment also missed expectations with $346 million in revenue versus the estimated $400 million, though it saw a 37% year-over-year increase. Revenue for the OEM & Other segment was not explicitly mentioned this quarter.

Key Metrics:

Nvidia’s operating income for the quarter was $18.64 billion, up 174% year-over-year. The company reported net income of $16.60 billion, reflecting a 168% year-over-year increase. GAAP operating expenses were $3.93 billion, up 48% year-over-year, while non-GAAP operating expenses were $2.79 billion, marking a 52% increase year-over-year.

Business Updates:

Nvidia completed a 10-for-1 forward stock split on June 7, 2024, making its stock more accessible to a broader range of investors. The company also announced an additional $50 billion in share repurchase authorization with no expiration date. Additionally, Nvidia declared a quarterly cash dividend of $0.01 per share, which will be paid on October 3, 2024.

Nvidia’s Blackwell Production Update:

– Production Ramp-Up: Set to start in the fourth quarter and extend into fiscal 2026.
– Revenue Forecast: Nvidia still expects several billion dollars in revenue from Blackwell in Q4.
– Production Adjustments: Necessary changes are being implemented to enhance Blackwell production.
– Anticipation: Nvidia highlights the immense anticipation for Blackwell, with samples already being shipped to partners and customers.

$NVDA CFO: We shipped customer samples of our Blackwell architecture in the second quarter. We executed a change to the Blackwell GPU mask to improve production yield.”

“The Blackwell production ramp is scheduled to begin in the fourth quarter and continue into fiscal 2026. In the fourth quarter, we expect to ship several billion dollars in Blackwell revenue.”

“Hopper demand is strong, and shipments are expected to increase in the second half of fiscal 2025”

Nvidia’s CFO mentioned that they modified the Blackwell GPU mask to improve production yield. The Blackwell ramp-up will start in Q4 and extend into fiscal 2026. A mask is the template for creating chip functions, and yield refers to the number of working chips produced. Low yield is costly, as it results in more discarded chips and reduced supply. Revising the mask takes time and money, which can lead to lost sales and slower growth for Nvidia.

Nvidia Smashes Records!

Nvidia ($NVDA) just reported an *unbelievable* Q2 revenue of $30.0 billion—a stunning achievement compared to the mere $1.1 billion they were making just 10 years ago. 📈

Year-over-Year Growth: 
Nvidia’s quarterly revenue has soared by an incredible 122% compared to last year!

And they’re not slowing down—Nvidia just unveiled a massive $50 billion stock buyback and forecasts a $32.5 billion revenue for the upcoming quarter. This puts them on track to surpass $100 billion in annual revenue! 💰

Operating Income: 
It’s up a jaw-dropping 160% over the past year, and their gross margin is hovering around a record 76%.

NVIDIA Q2 Earnings Summary

– Revenue: Increased by 130%, rising from $13.15 billion to $30.04 billion.
– Gross Margin: Improved by 450 basis points, up from 71.2% to 75.7%.
– Operating Income: Surged by 160%, from $7.7 billion to $19.94 billion.
– Free Cash Flow: Grew by 125%, from $6.05 billion to $13.48 billion.
– Share Buyback: Announced a new $50 billion share repurchase program.

NVIDIA Q3 Earnings Guidance

– Revenue Outlook: NVIDIA expects Q3 revenue to reach $32.5 billion, surpassing estimates of $31.9 billion.

NVIDIA Q2 Revenue Over the Last 10 Years

– 2014: $1.1 billion
– 2015: $1.15 billion
– 2016: $1.43 billion
– 2017: $2.23 billion
– 2018: $3.12 billion
– 2019: $2.58 billion
– 2020: $3.87 billion
– 2021: $6.51 billion
– 2022: $6.51 billion
– 2023: $13.51 billion
– 2024: $30.04 billion

Almost a 40% CAGR.

Update

Nvidia stock $NVDA dropped over 6% despite beating earnings estimates, with EPS of $0.68 (vs. $0.65 expected) and revenue of $30B (vs. $28.9B expected).

The company has lost approximately $230 billion in market cap since the results were announced.

Update

Nvidia’s data center revenue in China saw sequential growth and was a major contributor to the company’s overall revenue. However, it remains below the levels observed before the implementation of export controls, and the Chinese market is expected to stay highly competitive.

Nvidia’s CFO stated that demand for their Blackwell platforms far exceeds supply, a trend likely to persist into next year. Additionally, the CFO highlighted that sovereign AI, where countries are developing their own infrastructure, continues to grow and is expected to generate “low double-digit” billions in revenue.

This emphasis on sovereign AI is particularly important for Nvidia, as it must showcase increasing demand for its hardware outside of its core cloud customers. The concept of governments building independent computer networks to secure national data is a strategy strongly supported by CEO Jensen Huang.

Nvidia also emphasized that “every PC with RTX is an AI PC.”

NVIDIA Analyst Revisions & Ratings:

– Cantor Fitzgerald: Maintained at $175 – Overweight

– Melius: Maintained at $165 – Buy

– Stifel: Maintained at $165 – Buy
– BofA Securities: Raised to $165 from $150 – Buy
– Wells Fargo: Raised to $165 from $155 – Overweight

– Bernstein: Raised to $155 from $130 – Outperform

– JPMorgan: Raised to $155 from $115 – Overweight

– Baird: Raised to $150 from $120 – Outperform

– UBS: Maintained at $150 – Buy

– Jefferies: Maintained at $150 – Buy

– Citi: Maintained at $150 – Buy

– Morgan Stanley: Raised to $150 from $144 – Overweight

– Piper Sandler: Maintained at $140 – Overweight

– Raymond James: Raised to $140 from $120 – Strong Buy

– Mizuho: Raised to $140 from $132 – Outperform

– Truist Securities: Raised to $148 from $145 – Buy

– New Street Research: Raised to $143 from $120 – Buy

– Needham: Raised to $145 from $120 – Buy

– Barclays: Maintained at $145 – Overweight

The lowest price target is now $140, up from the previous $115. The median price target has increased to $150 from $144. The highest price target is now $175, up from the previous $165.

In total, there were 10 upward revisions and 7 maintained ratings.

Update

Nvidia stock $NVDA has dropped more than 12% since its earnings report on August 28th, wiping out $400 billion in market value in just three trading days. Despite significantly surpassing earnings expectations and announcing a $50 billion stock buyback, Nvidia is struggling to maintain its recent gains.

Update

Nvidia’s stock, $NVDA, has experienced a significant decline, erasing $360 billion from its market capitalization today, including the after-hours move.

With the after-hours drop, this marks the largest single-day loss of market capitalization for any stock in history.

In total, over $1 trillion in market cap was wiped out from various stocks today.

As antitrust concerns come into focus, large-cap tech companies are facing yet another challenge.

Nvidia Q2 Earnings Preview: Key Expectations and Investor Concerns Ahead of Report