NVIDIA is back, with revenue soaring 41% in the fourth quarter
Latest update time：2021-09-02 17:32
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Graphics chip maker Nvidia Corp. announced today that its revenue is recovering, thanks to strong gaming revenue and record sales of hardware used in big data centers for artificial intelligence computing.
The Santa Clara, California-based company said Thursday that fourth-quarter sales rose 41% to $3.11 billion. Adjusted earnings per share more than doubled to $1.89, ending four straight quarters of weak year-over-year results.
The results were better than Wall Street forecasts, with analysts on average expecting Nvidia to report sales of $2.96 billion and adjusted earnings per share of $1.67, according to a FactSet survey.
Nvidia's shares rose more than 6% in after-hours trading.
The chipmaker gave an upbeat outlook for the current quarter, which ends in April. Revenue is expected to reach $3 billion, above analysts' expectations.
The company said the coronavirus outbreak in China is difficult to estimate. But what can be seen is that it will reduce Nvidia's expected sales by $100 million this quarter. Data shows that in the last fiscal year, Nvidia's sales revenue in China accounted for about 24% of its revenue.
While the virus threatens to disrupt tech companies’ vital supply chains in China, chipmakers have so far emerged relatively unscathed because their customers, including computer makers and electronic parts suppliers, typically place orders months in advance. But industry experts say the impact could start to be felt this quarter. Analysts at Northland Securities on Tuesday forecast semiconductor demand would fall 10% to 20% from the previous quarter before recovering slowly through the rest of the year.
Nvidia has benefited recently from the growing market for artificial intelligence, another computing challenge for its stellar graphics processors. Big cloud computing companies such as Amazon.com Inc. and Alphabet Inc.’s Google unit use Nvidia chips to meet customer demands for more AI computing power.
Nvidia has also long been a leader in gaming, which remains its biggest revenue source. Nvidia chips are used in Nintendo Co.’s Switch game console. Nintendo said it sold 10.81 million Switch devices in the last three months of last year.
The company also made a splash with its ray tracing technology, which it says helps depict light and shadow more realistically in video games. Earlier this month, Nvidia also launched a cloud-based gaming service called GeForce Now that lets gamers play their favorite games (some with ray tracing enabled) without having to have a powerful computer at home.
Nvidia said gaming revenue rose 56% to $1.49 billion in the quarter. Data center revenue rose 43% to $968 million. Sales rose in all of the company's divisions except its automotive business, which sells technology used in autonomous driving. Revenue from the business was flat at $163 million.
The revenue growth in the quarter partly reflects Nvidia’s weak performance in the same period last year, when the company was struggling with a downturn in the cryptocurrency market. Nvidia’s graphics processors are well suited to solving the complex mathematical calculations that go into cryptocurrency mining, driving demand for chips while the market was still hot in 2018, but weakness since then has led to a stagnation.
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