Kepler and Tegra Bring Nvidia Record Revenue Despite of Weak Economy

Nvidia Earns Record $1.2 Billion in Q3 Thanks to Demand for Gaming GPUs, Tegra Mobile Chips

by Anton Shilov
11/09/2012 | 08:41 AM



As the majority of chip companies are reporting drops in revenues due to weak economy across the globe, Nvidia Corp. on Thursday reported $1.2 billion in revenue for the third quarter of fiscal 2013, an all-time-record for the company. Nvidia attributes its increase of sales to high demand for its gaming graphics processing units, compute accelerators and Tegra line of mobile system-on-chips.

"Kepler GPUs are winning across the special-purpose PC markets we serve, from gaming to design to supercomputing. Tegra is powering some of the most innovative tablets, phones and cars in the market. […] We have confidence in our businesses and our continued ability to grow. Given our strong financial position and ongoing ability to generate cash, we are well positioned to continue investing in our future," said Jen-Hsun Huang, president and chief executive officer of Nvidia.

Nvidia’s consumer GPU business (includes desktop, notebook, memory, license revenue from patent cross license agreement with Intel, and the ramp-down of chipset products) had revenue of $739.6 million, up 10.7% sequentially and up 14.7% year-over-year.

Demand for Nvidia’s desktop GeForce GTX products remained strong in the third quarter as the company continued the launch of its Kepler-based GPUs. Notebook GPU revenue was at a record level on the strength of its latest generation design wins. Inventory in the channel remained healthy.

License revenue from the patent license agreement with Intel was flat at $66.0 million, unchanged from the previous and year-earlier quarters. Chipset revenue declined to $3.3 million from $7.3 million the previous quarter and $22.4 million a year earlier.

Revenue for Nvidia’s professional solutions business (includes workstation graphics and computing) was $220.6 million, up 12.4% sequentially and down 4.2% year-over-year.

Nvidia Quadro business continued to be challenged in the current quarter by the macroeconomic environment, with weak economic conditions in Europe and softness in other geographies.

Conversely, Nvidia Tesla business was up both sequentially and year-over-year. The increase was largely due to the first shipments of our new Kepler-based Tesla products to Oak Ridge National Labs in connection with the build of their new Titan supercomputer.

Nvidia’s consumer products business (includes Tegra-based smartphone and tablet products, Icera baseband processors and RF transceivers, embedded products, and license, royalty, and other revenue associated with game consoles) earned $243.9 million in revenue, up 35.7% sequentially and 27.6% year-over-year.

The increase was largely attributable to record revenue for Tegra, as the Tegra 3 system-on-chips continued to ship in smartphone and tablet devices.

For the third quarter of fiscal 2013 (ended October 28, 2012) Nvidia earned record revenue of $1.20 billion, up 15.3% from the previous quarter and up 12.9% from a year earlier. The company’s GAAP net income was $209.1 million, whereas gross margins were record 52.9%. Another good news for Nvidia is that its GAAP operating expenses for the third quarter were $384.4 million, below its outlook of approximately $390.0 million, and down from the prior quarter’s $401.1 million.

For the fourth quarter of fiscal 2013 Nvidia expects revenue to be between $1.025 billion and $1.175 billion, GAAP gross margins to be flat relative to the prior quarter at around 52.9% and operating expenses to be approximately $400 million.