Nvidia(US:NVDA)2024-11-20 21:31Revenue Growth - Revenue for Q3 FY2025 was $35.1 billion, up 94% YoY and 17% sequentially[151] - Data Center revenue grew 112% YoY and 17% sequentially, driven by demand for Hopper computing platform and generative AI applications[152] - Gaming revenue increased 15% YoY and 14% sequentially, driven by GeForce RTX 40 Series GPUs and game console SoCs[153] - Automotive revenue surged 72% YoY and 30% sequentially, driven by self-driving platforms[154] - Revenue from the Compute & Networking segment increased by 112% to $31.036 billion in Q3 FY2025 compared to $14.645 billion in Q3 FY2024, driven by strong demand for Data Center computing and AI solutions[161] - Graphics segment revenue grew by 16% to $4.046 billion in Q3 FY2025, primarily due to higher sales of GeForce RTX 40 Series GPUs[161] Gross Margin and Profitability - Gross margin was 74.6%, down 0.5 percentage points sequentially due to a mix shift to higher-cost Data Center systems[154] - Gross margin improved to 74.6% in Q3 FY2025 from 74.0% in Q3 FY2024, driven by a higher mix of Data Center revenue[172] - The company's net income margin improved to 54.9% in Q3 FY2025, up from 51.0% in Q3 FY2024[160] - Operating income for the Compute & Networking segment increased significantly, driven by growth in Data Center revenue, while Graphics segment operating income also rose due to revenue growth[165] Operating Expenses and R&D - Operating expenses increased 44% YoY and 9% sequentially, primarily due to higher compensation and benefits expenses[156] - Research and development expenses increased by 48% to $3.390 billion in Q3 FY2025, reflecting employee growth, compensation increases, and higher engineering development costs for new products[176] Supply Constraints and Production - Blackwell production shipments are scheduled to begin in Q4 FY2025, with demand expected to exceed supply for several quarters in FY2026[135] - The company faces supply constraints for both Hopper and Blackwell systems, with demand for Blackwell expected to outpace supply[135] Export Controls and Regional Impact - Data Center revenue in China grew sequentially in Q3 FY2025 but remains below pre-export control levels[144] - Export controls on A100, H100, and other products to China and certain regions continue to impact the company's competitive position[143][145] Financial Position and Cash Flow - Cash, cash equivalents, and marketable securities totaled $38.5 billion as of October 27, 2024, up from $25.984 billion as of January 28, 2024[186][190] - Net cash provided by operating activities for the first nine months of fiscal year 2025 was $47.460 billion, compared to $16.591 billion in the same period of fiscal year 2024[186] - The company repurchased 254 million shares for $26.2 billion in the first nine months of fiscal year 2025, with an additional $50 billion share repurchase authorization approved on August 26, 2024[195] - Cash dividends paid to shareholders totaled $589 million in the first nine months of fiscal year 2025[194] Tax and Debt - Income tax expense for the third quarter of fiscal year 2025 was $3.0 billion, representing 13.5% of income before income tax[182] - Unrecognized tax benefits were $1.9 billion as of October 27, 2024, including $215 million in related interest and penalties[200] - The company's aggregate debt maturities as of October 27, 2024 include $2.250 billion due in one to five years, $2.750 billion due in five to ten years, and $3.500 billion due in greater than ten years[198] - Approximately $1.4 billion of cash, cash equivalents, and marketable securities held outside the U.S. have not accrued related foreign or state taxes if repatriated to the U.S.[192] - The effective tax rate increased due to a lower percentage of tax benefits from the foreign-derived intangible income deduction and a discrete benefit in fiscal year 2024 from an IRS audit resolution[183] Investment and Inventory - Provisions for inventory and excess inventory purchase obligations totaled $865 million in Q3 FY2025, with a net unfavorable impact of 2.2% on gross margin[173] - The company's investment policy requires the purchase of high-rated fixed income securities, diversification of investment types and credit exposures, and certain maturity limits on the portfolio[186] Interest Income and Customer Concentration - Interest income increased by 102% to $472 million in Q3 FY2025, driven by growth in cash, cash equivalents, and publicly-held debt security balances[179] - Sales to direct customers representing 10% or more of total revenue were primarily attributable to the Compute & Networking segment, with Customer A, B, and C each contributing 12% in Q3 FY2025[168] Revenue Distribution - Revenue from customers outside the United States accounted for 58% of total revenue in Q3 FY2025, compared to 65% in Q3 FY2024[166]