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NVIDIA Corporation (NVDA - Free Report) reported third-quarter fiscal 2025 earnings of 81 cents per share, which beat the Zacks Consensus Estimate by 8%. The reported figure soared 103% year over year and 19% sequentially, driven by higher revenues.
NVDA’s earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 12.7%.
Find the latest EPS estimates and surprises on Zacks Earnings Calendar.
NVDA’s fiscal third-quarter revenues beat the consensus mark by 5.6%. The top line climbed 94% year over year and 17% sequentially to $35.08 billion. The robust growth in the top line was mainly driven by record sales in the Data Center end market and higher sales across the Gaming, Professional Visualization and Automotive end markets.
Buoyed by an overwhelming fiscal third-quarter performance, NVIDIA provided strong guidance for the fiscal fourth quarter and raised the outlook for the full fiscal. Strong quarterly results, along with upbeat guidance, may further drive its share price higher. NVIDIA, a heavyweight in the semiconductor industry, has seen its stock surge 192.6% year to date, outperforming the Zacks Semiconductor – General industry’s return of 140.1%.
Segment Details of NVIDIA
NVIDIA reports revenues under two segments — Graphics and Compute & Networking.
The Graphics segment includes GeForce graphics processing units (GPUs) for gaming and personal computers, the GeForce NOW game-streaming service and related infrastructure. The segment also offers solutions for gaming platforms, Quadro GPUs for enterprise design, GRID software for cloud-based visual and virtual computing as well as automotive platforms for infotainment systems.
Graphics accounted for 11.5% of fiscal third-quarter revenues. The segment’s top line increased 16% year over year and 13% sequentially to $4.05 billion. Our estimate for the segment’s fiscal third-quarter revenues was pegged at $4.16 billion.
Compute & Networking represented 88.5% of fiscal third-quarter revenues. The segment comprises the Data Center platforms and systems for artificial intelligence, high-performance computing and accelerated computing, the DRIVE development platform for autonomous vehicles and Jetson for robotics as well as other embedded platforms.
Compute & Networking revenues surged 112% year over year and 17% sequentially to $31.04 billion. Our estimate for the segment’s fiscal third-quarter revenues was pegged at $28.4 billion.
NVIDIA Corporation Price, Consensus and EPS Surprise
Based on the market platform, revenues from Data Center (87.7% of revenues) jumped 112% year over year and 17% from the previous quarter to $30.77 billion. This robust rise was mainly driven by higher shipments of the Hopper GPU computing platform that is used for the training and inference of large language models, recommendation engines and generative AI applications. Our estimate for this end-market’s fiscal third-quarter revenues was pegged at $28.5 billion.
NVIDIA witnessed strong demand for its chips used in the Data Center by all customers in both compute and networking markets. During the fiscal third quarter, large cloud providers represented half of Data Center revenues while the remaining stemmed from consumer Internet and enterprise companies.
Gaming revenues increased 15% year over year and 14% sequentially to $3.28 billion, accounting for 9.3% of the total revenues. The year-over-year rise reflected increased sales of its GeForce RTX 40 series family of GPUs and game console system-on-chips. Our estimate for the Gaming end-market’s third-quarter revenues was pegged at $3.11 billion.
Professional Visualization revenues (1.4% of revenues) increased 17% year over year and 6% sequentially to $454 million. The increase was primarily driven by the ramp of RTX GPU workstations based on the Ada architecture. Our estimate for the Professional Visualization end-market’s fiscal third-quarter revenues was pegged at $475.7 million.
Automotive sales (1.2% of revenues) in the reported quarter totaled $346 million, up 37% on a year-over-year basis and 7% sequentially. The increase was mainly driven by a rise in self-driving technology using NVIDIA Orin and robust demand for new autonomous vehicles (NAVs). Moreover, NVDA also experienced a surge in demand from Volvo, which is launching its fully electric SUV using NVIDIA Orin and DriveOS. OEM and Other revenues (0.3% of revenues) were up 33% year over year and 10% sequentially to $97 million. Our estimates for the Automotive and OEM end markets’ fiscal third-quarter revenues were pegged at $340.3 million and $86.8 million, respectively.
NVDA’s Operating Details
NVIDIA’s non-GAAP gross margin remained flat year over year at 75%. However, the non-GAAP gross margin contracted 70 basis points (bps) sequentially. The sequential decline was mainly due to a shift in the product mix toward more expensive H100 systems in the Data Center.
Non-GAAP operating expenses increased 50% year over year and 9% sequentially to $3.05 billion. The increase was due to higher development costs for new products introduced across compute, infrastructure and engineering development. However, as a percentage of total revenues, non-GAAP operating expenses declined to 8.7% from 11.2% in the year-ago quarter and 9.3% in the previous quarter.
The non-GAAP operating income jumped 101% year over year and 17% sequentially to $23.27 billion, driven by higher revenues. Non-GAAP operating margin improved 250 bps to 66.3% from the year-ago quarter’s 63.8% due to higher gross margin and lower operating expenses as a percentage of revenues. Sequentially, non-GAAP operating margin contracted 10 bps due to a reduction in gross margin.
NVIDIA’s non-GAAP net income margin of 57% for the fiscal third quarter improved 170 bps year over year and 60 bps sequentially.
Balance Sheet and Cash Flow
As of Oct. 27, 2024, NVDA’s cash, cash equivalents and marketable securities were $38.4 billion, up from $34.8 billion as of July 28. As of Sept. 27, the total long-term debt was $8.46 billion, which remained unchanged sequentially.
NVIDIA generated $17.63 billion in operating cash flow, up from the year-ago quarter’s $7.3 billion and the previous quarter’s $14.5 billion. In the first three quarters of fiscal 2025, it generated an operating cash flow of $47.5 billion. NVIDIA generated a free cash flow of $16.78 billion in the fiscal third quarter and $45.2 billion in the first three quarters of fiscal 2025.
In the fiscal third quarter, the company returned $245 million to shareholders through dividend payouts and repurchased stocks worth $11 billion. In the first three quarters of fiscal 2025, the company paid out $589 million in dividends and bought back stocks worth $25.9 billion.
On Aug. 26, 2024, NVIDIA’s board of directors approved a new $50 billion share repurchase authorization, bringing the total authorization to $57.5 billion, which has no expiration time. As of Oct. 27, 2024, the company has the remaining authorization of approximately $46.5 billion.
NVDA’s Q4 Guidance
For the fourth quarter of fiscal 2025, NVIDIA anticipates revenues to be $37.5 billion (+/-2%). The Zacks Consensus Estimate for the same is pinned at $36.84 billion.
The non-GAAP gross margin is projected to be 73.5% (+/-50 bps). Non-GAAP operating expenses are estimated to be $3.4 billion.
Zacks Rank & Other Stocks to Consider
Currently, NVDA sports a Zacks Rank #1 (Strong Buy).
Blackberry (BB - Free Report) , Amphenol (APH - Free Report) and Celestica (CLS - Free Report) are some other top-ranked stocks that investors can consider in the broader Zacks Computer & Technology sector.
The consensus mark for Blackberry’s 2025 earnings has been revised upward by 3 cents to a loss of 2 cents per share over the past 60 days, indicating a 140% year-over-year decline. BB shares have plunged 34.8% year to date.
The consensus mark for Amphenol’s 2024 earnings has been revised upward by 2 cents to $1.17 per share over the past seven days, indicating a 58% year-over-year increase. The long-term expected earnings growth rate for the stock stands at 42.60%. APH shares have jumped 43% year to date.
The consensus mark for Celestica’s 2024 earnings has been revised upward by 20 cents to $3.85 per share over the past 30 days, indicating a 58.4% year-over-year increase. CLS shares have jumped 197.1% year to date.
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NVIDIA's Q3 Earnings Beat: Can Strong Q4 Guidance Lift Shares Up?
NVIDIA Corporation (NVDA - Free Report) reported third-quarter fiscal 2025 earnings of 81 cents per share, which beat the Zacks Consensus Estimate by 8%. The reported figure soared 103% year over year and 19% sequentially, driven by higher revenues.
NVDA’s earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 12.7%.
Find the latest EPS estimates and surprises on Zacks Earnings Calendar.
NVDA’s fiscal third-quarter revenues beat the consensus mark by 5.6%. The top line climbed 94% year over year and 17% sequentially to $35.08 billion. The robust growth in the top line was mainly driven by record sales in the Data Center end market and higher sales across the Gaming, Professional Visualization and Automotive end markets.
Buoyed by an overwhelming fiscal third-quarter performance, NVIDIA provided strong guidance for the fiscal fourth quarter and raised the outlook for the full fiscal. Strong quarterly results, along with upbeat guidance, may further drive its share price higher. NVIDIA, a heavyweight in the semiconductor industry, has seen its stock surge 192.6% year to date, outperforming the Zacks Semiconductor – General industry’s return of 140.1%.
Segment Details of NVIDIA
NVIDIA reports revenues under two segments — Graphics and Compute & Networking.
The Graphics segment includes GeForce graphics processing units (GPUs) for gaming and personal computers, the GeForce NOW game-streaming service and related infrastructure. The segment also offers solutions for gaming platforms, Quadro GPUs for enterprise design, GRID software for cloud-based visual and virtual computing as well as automotive platforms for infotainment systems.
Graphics accounted for 11.5% of fiscal third-quarter revenues. The segment’s top line increased 16% year over year and 13% sequentially to $4.05 billion. Our estimate for the segment’s fiscal third-quarter revenues was pegged at $4.16 billion.
Compute & Networking represented 88.5% of fiscal third-quarter revenues. The segment comprises the Data Center platforms and systems for artificial intelligence, high-performance computing and accelerated computing, the DRIVE development platform for autonomous vehicles and Jetson for robotics as well as other embedded platforms.
Compute & Networking revenues surged 112% year over year and 17% sequentially to $31.04 billion. Our estimate for the segment’s fiscal third-quarter revenues was pegged at $28.4 billion.
NVIDIA Corporation Price, Consensus and EPS Surprise
NVIDIA Corporation price-consensus-eps-surprise-chart | NVIDIA Corporation Quote
NVIDIA’s Market Platform Top-Line Details
Based on the market platform, revenues from Data Center (87.7% of revenues) jumped 112% year over year and 17% from the previous quarter to $30.77 billion. This robust rise was mainly driven by higher shipments of the Hopper GPU computing platform that is used for the training and inference of large language models, recommendation engines and generative AI applications. Our estimate for this end-market’s fiscal third-quarter revenues was pegged at $28.5 billion.
NVIDIA witnessed strong demand for its chips used in the Data Center by all customers in both compute and networking markets. During the fiscal third quarter, large cloud providers represented half of Data Center revenues while the remaining stemmed from consumer Internet and enterprise companies.
Gaming revenues increased 15% year over year and 14% sequentially to $3.28 billion, accounting for 9.3% of the total revenues. The year-over-year rise reflected increased sales of its GeForce RTX 40 series family of GPUs and game console system-on-chips. Our estimate for the Gaming end-market’s third-quarter revenues was pegged at $3.11 billion.
Professional Visualization revenues (1.4% of revenues) increased 17% year over year and 6% sequentially to $454 million. The increase was primarily driven by the ramp of RTX GPU workstations based on the Ada architecture. Our estimate for the Professional Visualization end-market’s fiscal third-quarter revenues was pegged at $475.7 million.
Automotive sales (1.2% of revenues) in the reported quarter totaled $346 million, up 37% on a year-over-year basis and 7% sequentially. The increase was mainly driven by a rise in self-driving technology using NVIDIA Orin and robust demand for new autonomous vehicles (NAVs). Moreover, NVDA also experienced a surge in demand from Volvo, which is launching its fully electric SUV using NVIDIA Orin and DriveOS. OEM and Other revenues (0.3% of revenues) were up 33% year over year and 10% sequentially to $97 million. Our estimates for the Automotive and OEM end markets’ fiscal third-quarter revenues were pegged at $340.3 million and $86.8 million, respectively.
NVDA’s Operating Details
NVIDIA’s non-GAAP gross margin remained flat year over year at 75%. However, the non-GAAP gross margin contracted 70 basis points (bps) sequentially. The sequential decline was mainly due to a shift in the product mix toward more expensive H100 systems in the Data Center.
Non-GAAP operating expenses increased 50% year over year and 9% sequentially to $3.05 billion. The increase was due to higher development costs for new products introduced across compute, infrastructure and engineering development. However, as a percentage of total revenues, non-GAAP operating expenses declined to 8.7% from 11.2% in the year-ago quarter and 9.3% in the previous quarter.
The non-GAAP operating income jumped 101% year over year and 17% sequentially to $23.27 billion, driven by higher revenues. Non-GAAP operating margin improved 250 bps to 66.3% from the year-ago quarter’s 63.8% due to higher gross margin and lower operating expenses as a percentage of revenues. Sequentially, non-GAAP operating margin contracted 10 bps due to a reduction in gross margin.
NVIDIA’s non-GAAP net income margin of 57% for the fiscal third quarter improved 170 bps year over year and 60 bps sequentially.
Balance Sheet and Cash Flow
As of Oct. 27, 2024, NVDA’s cash, cash equivalents and marketable securities were $38.4 billion, up from $34.8 billion as of July 28. As of Sept. 27, the total long-term debt was $8.46 billion, which remained unchanged sequentially.
NVIDIA generated $17.63 billion in operating cash flow, up from the year-ago quarter’s $7.3 billion and the previous quarter’s $14.5 billion. In the first three quarters of fiscal 2025, it generated an operating cash flow of $47.5 billion. NVIDIA generated a free cash flow of $16.78 billion in the fiscal third quarter and $45.2 billion in the first three quarters of fiscal 2025.
In the fiscal third quarter, the company returned $245 million to shareholders through dividend payouts and repurchased stocks worth $11 billion. In the first three quarters of fiscal 2025, the company paid out $589 million in dividends and bought back stocks worth $25.9 billion.
On Aug. 26, 2024, NVIDIA’s board of directors approved a new $50 billion share repurchase authorization, bringing the total authorization to $57.5 billion, which has no expiration time. As of Oct. 27, 2024, the company has the remaining authorization of approximately $46.5 billion.
NVDA’s Q4 Guidance
For the fourth quarter of fiscal 2025, NVIDIA anticipates revenues to be $37.5 billion (+/-2%). The Zacks Consensus Estimate for the same is pinned at $36.84 billion.
The non-GAAP gross margin is projected to be 73.5% (+/-50 bps). Non-GAAP operating expenses are estimated to be $3.4 billion.
Zacks Rank & Other Stocks to Consider
Currently, NVDA sports a Zacks Rank #1 (Strong Buy).
Blackberry (BB - Free Report) , Amphenol (APH - Free Report) and Celestica (CLS - Free Report) are some other top-ranked stocks that investors can consider in the broader Zacks Computer & Technology sector.
BB, APH and ATEYY sport a Zacks Rank #1 each at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
The consensus mark for Blackberry’s 2025 earnings has been revised upward by 3 cents to a loss of 2 cents per share over the past 60 days, indicating a 140% year-over-year decline. BB shares have plunged 34.8% year to date.
The consensus mark for Amphenol’s 2024 earnings has been revised upward by 2 cents to $1.17 per share over the past seven days, indicating a 58% year-over-year increase. The long-term expected earnings growth rate for the stock stands at 42.60%. APH shares have jumped 43% year to date.
The consensus mark for Celestica’s 2024 earnings has been revised upward by 20 cents to $3.85 per share over the past 30 days, indicating a 58.4% year-over-year increase. CLS shares have jumped 197.1% year to date.