NVIDIA Corporation (NASDAQ:NVDA) TD Cowen 45th Annual Health Care Conference March 3, 2025 11:10 AM ET Company Participants Kimberly Powell – Vice President, Healthcare, NVIDIA Conference Call Participants Josh Buchalter – TD Cowen Brendan Smith – TD Cowen Josh Buchalter All right. Good morning everybody. Thank you for joining us at our Healthcare Conference. I'm Josh Buchalter, Semiconductor Analyst at TD Cowen. Really pleased to be joined by my colleague Brendan Smith, who covers life science tools and di ...

Core Viewpoint - NVIDIA Corporation reported better-than-expected results for the fourth quarter of fiscal 2025, with shares trading 1% higher in pre-market [1] Financial Performance - Non-GAAP earnings were 89 cents per share, exceeding the Zacks Consensus Estimate by 5.95%, reflecting a 71% year-over-year increase and a 10% sequential increase [1] - Fiscal fourth-quarter revenues reached $39.33 billion, a 78% year-over-year increase and a 12% sequential increase, surpassing the consensus estimate of $37.72 billion [3] Segment Performance - The Graphics segment accounted for 8% of revenues, with a decline of 22% year over year and 19% sequentially to $3.3 billion, below the estimate of $4.82 billion [5] - Compute & Networking represented 92% of revenues, with a 101% year-over-year increase and a 16% sequential increase to $36.04 billion, exceeding the estimate of $32.68 billion [7] - Data Center revenues, making up 90.5% of total revenues, increased 93% year over year and 16% sequentially to $35.58 billion, driven by higher shipments of advanced GPU platforms [8][9] Operating Metrics - Non-GAAP gross margin was 73.5%, down 320 basis points year over year and 150 basis points sequentially, attributed to a shift to more complex systems [13] - Non-GAAP operating expenses rose 53% year over year and 11% sequentially to $3.38 billion, but as a percentage of total revenues, they decreased to 8.6% from 10% a year ago [14] - Non-GAAP operating income increased 73% year over year and 10% sequentially to $25.52 billion, with a non-GAAP operating margin of 64.9% [15] Cash Flow and Shareholder Returns - NVIDIA generated $16.6 billion in operating cash flow for the fourth quarter, up from $11.5 billion year over year but down from $17.6 billion sequentially [17] - The company returned $245 million to shareholders through dividends and repurchased $8.1 billion in stocks during the fourth quarter [18] Future Guidance - For Q1 2026, NVIDIA anticipates revenues of $43 billion (+/-2%), higher than the Zacks Consensus Estimate of $41.06 billion, with a projected non-GAAP gross margin of 71% (+/-50 bps) [20]

Core Insights - Nvidia's CEO Jensen Huang announced record sales of the company's advanced chip architecture, indicating strong future demand as the AI era is just beginning [1] - The Blackwell GPU architecture generated $11 billion in revenue in the fourth quarter, with data center revenues more than doubling due to demand for the H200 chip series [1] Financial Performance - For the fourth quarter, Nvidia reported net income of $22.1 billion, or 89 cents per share, with revenue of $39.3 billion, surpassing Wall Street's expectations [9] - Year-over-year, quarterly net income increased by 80% and revenue rose by 78% [9] - For the fiscal year 2025, Nvidia's net income was $72.9 billion, up 145% from the previous year, with revenue of $130.5 billion, up 114% [10] - The company expects first-quarter fiscal 2026 revenue to be around $43 billion, exceeding analyst expectations of $42.05 billion [10] Market Dynamics - Concerns arose regarding competition from Chinese AI startup DeepSeek, which offers low-cost AI models that could impact Nvidia's chip demand [2] - However, Huang noted that DeepSeek's open-sourcing of its high-performing model expands the market for AI workloads, thereby increasing the demand for GPUs [3] - Despite the competition, demand for AI GPUs continues to exceed supply, indicating ongoing strong demand from tech firms [4] AI Trends - Huang emphasized that the current wave of AI advancements is just two years in, transitioning from generative AI for consumers to AI agents for business applications [4] - The next phase is expected to involve physical AI, such as robotics [4] - AI is becoming mainstream and is anticipated to be embedded across all industries, transforming software development to rely on machine learning rather than traditional CPUs [5] Data Center Developments - Data centers are projected to evolve into "AI factories," processing AI workloads essential for various industries [5] - Huang highlighted the significant capital investment in data centers, indicating a shift towards accelerated computing and generative AI architectures [6] Regulatory Environment - Nvidia's sales to China have halved due to U.S. export controls, but the revenue percentage has remained stable [6] - The impact of potential tariffs on chips under the Trump administration remains uncertain [7] Market Capitalization - Nvidia's market capitalization reached $3.22 trillion, making it the second most valuable company in the world, following Apple [11]