Nvidia(US:NVDA)2025-05-28 22:00Financial Data and Key Metrics Changes - NVIDIA reported revenue of $44 billion, a 69% increase year-over-year, exceeding expectations despite a challenging operating environment [5] - Data center revenue reached $39 billion, growing 73% year-on-year [5] - GAAP gross margins were 60.561%, while non-GAAP gross margins would have been 71.3% excluding a $4.5 billion charge related to inventory write-downs [30][32] Business Line Data and Key Metrics Changes - Data center revenue was significantly impacted by new export controls, with $4.6 billion recognized prior to the controls and a $4.5 billion charge for inventory write-downs [6][30] - Gaming revenue reached a record $3.8 billion, increasing 48% sequentially and 42% year-on-year, driven by strong adoption of Blackwell architecture [21] - Networking revenue grew 64% quarter-over-quarter to $5 billion, with strong demand for NVLink and Spectrum X solutions [17][20] Market Data and Key Metrics Changes - China data center revenue was below expectations due to export licensing controls, with a meaningful decrease anticipated in Q2 [20] - Singapore accounted for nearly 20% of Q1 build revenue, primarily for US-based customers [20] - The AI market in China is estimated to be around $50 billion, which NVIDIA is currently unable to access due to export restrictions [6][60] Company Strategy and Development Direction - NVIDIA is focusing on AI factory deployments, with nearly 100 AI factories in progress, doubling year-over-year [12][13] - The company is committed to a robust product roadmap extending through 2028, with a focus on enhancing AI capabilities and infrastructure [10][32] - NVIDIA is exploring ways to comply with new export control rules while maintaining competitiveness in the AI market [7][36] Management's Comments on Operating Environment and Future Outlook - Management expressed concerns about losing access to the China AI accelerator market, which could materially impact business [7][36] - The company anticipates continued growth in AI demand, particularly in reasoning AI, which is driving significant increases in inference workloads [11][82] - Management expects total revenue for Q2 to be around $45 billion, with modest sequential growth across all platforms [31][32] Other Important Information - NVIDIA returned a record $14.3 billion to shareholders through share repurchases and dividends [30] - The company is investing heavily in onshore manufacturing and partnerships to strengthen its supply chain [44][45] Q&A Session Summary Question: How much of the inference demand is NVIDIA able to serve? - Management indicated they are on track to serve most of the inference demand, with Blackwell NVLink 72 being the ideal solution for reasoning AI [52][54] Question: What is the impact of the China export controls on future revenue? - Management confirmed a significant decline in China data center revenue is expected, with a total of $8 billion in H20 revenue lost for Q2 [58][60] Question: Are there more large GPU cluster investments expected? - Management noted that there are many AI factories being planned globally, indicating a strong demand for AI infrastructure [70][72] Question: What is the outlook for the networking business? - Management highlighted strong adoption of Ethernet solutions and improvements in utilization rates, particularly with Spectrum X [95][100]