Nvidia has published its latest set of quarterly results, for the three month period ending 25th October, 2015. The green team's bean counters refer to this most recent quarter as Q3 FY16. Nvidia's results were good, topping revenue guidance and its shares have risen as much as nine per cent in afterhours trading.
Overall highlights of the financial results are bullet pointed below:
- Record revenue of $1.305 billion, up 7 percent from a year ago, up 13 percent sequentially
- GAAP operating income of $245 million, up 15 percent from a year ago
- Quarterly cash dividend raised 18 percent to $0.115 per share. Company to return $1 billion to shareholders in fiscal 2017
Behind the above headline figures, the beating heart of Nvidia - its graphics processors for PCs, was the star performer. Nvidia is trying to diversify and cut its reliance upon PC gaming graphics but revenue from this part of its business rose 44 per cent to deposit $761 million in the company coffers this quarter. Nvidia CEO Jen-Hsun Huang commented that "PC gaming is our biggest business. When it grows, it really grows." Demand for PC graphics was particularly strong in developing countries where eSports games are becoming more popular.
No business likes all its eggs in one basket and Nvidia has been trying for quite some time to diversify. It augments its PC gaming graphics business with; Pro Visualisation, Datacentre, Auto, and Tegra OEM/IP businesses. You can see in the chart below that Gaming is by far the most important sector to Nvidia and while the Tegra chip business is declining, and Pro Visualisation and Datacentre businesses are flat-lining, the Auto business is showing pleasing signs of growth.
Auto looks really promising, as the trend for smarter cars looks unstoppable. Nvidia has some good contracts in place in this field (such as Mercedes-Benz, Audi, Porsche, Bentley and Honda) and made an important new partnership with Tesla Motors.
Looking forward to Q4, Nvidia expects revenue of $1.30 billion, plus or minus two percent. However no forward look statements were made about individual parts of Nvidia's business, and there were no hints about any upcoming product launches.
