Today NVIDIA announced their results for the third quarter of their 2020 fiscal year, and the company’s results took a hit compared to their Q3 2019 results with earnings of $3.014 billion this quarter, down 5% year-over-year. Gross margin was up though to a very healthy 63.6%, up 3.2% from a year ago. Operating income was down 12% to $927 million, with net income down 27% to $899 million. Earnings-per-share fell to $1.45, down 26% from $1.97 a year ago.

NVIDIA Q3 2020 Financial Results (GAAP)
  Q3'2020 Q2'2020 Q3'2019 Q/Q Y/Y
Revenue $3014M $2579M $3181M +17% -5%
Gross Margin 63.6% 59.8% 60.4% +3.8% +3.2%
Operating Income $927M $571M $1058M +62% -12%
Net Income $899M $552M $1230M +63% -27%
EPS $1.45 $0.90 $1.97 +61% -26%

NVIDIA breaks its business into two high-level categories, with GPU and Tegra. GPU revenue was down 8% to $2.565 million, while Tegra was up 10% to $449 million.

Breaking these down into markets, NVIDIA’s Gaming revenue was down 6% to $1.659 billion, with NVIDIA attributing this to a decline in desktop GPU sales. A year ago, NVIDIA launched their Turing platform, meaning they are now a year into their latest platform, with sales not quite as high as when it launched. However, the desktop GPU sales drop was partially offset by increased notebook GPUs as well as gaming platform SoCs.

Professional Visualization set a record for revenue, up 6% from a year ago and coming in at $324 million. NVIDIA has stated that they’ve had strong sales in mobile workstation products.

Data Center revenue was down 8% to $726 million. NVIDIA has seen lower enterprise revenue, and sales of products with lower margins than some of their top-tier datacenter products, but this drop was partially offset by increased hyperscale demand.

Automotive revenue was down 6% to $162 million, with lower sales of autonomous vehicle solutions and legacy infotainment modules being singled out, but growth in AI cockpit solutions helped stem the decline.

Finally, OEM and Other revenue was $143 million, down 3% from a year ago.

NVIDIA Quarterly Revenue Comparison (GAAP)
($ in millions)
In millions Q3'2020 Q2'2020 Q3'2019 Q/Q Y/Y
Gaming $1659 $1313 $1764 +26% -6%
Professional Visualization $324 $291 $305 +11% +6%
Datacenter $726 $655 $792 +11% -8%
Automotive $162 $209 $172 -22% -6%
OEM & IP $143 $111 $148 +29% -3%

NVIDIA has been riding a large wave of success over the last several years, and the company has diversified itself significantly, but the last couple of quarters have seen the company fall back to earth somewhat. But with strong margins, they are investing heavily in R&D, with $53 million more spent in this quarter than a year ago, and for first nine months of their 2020 fiscal year, they’ve spent and additional $163 million so far, bringing the total for 2020 to $400 million.

Looking ahead to Q4, NVIDIA is expecting revenue of $2.95 billion, plus or minus 2% with a gross margin of 64.1%, plus or minus 0.5%.

Source: NVIDIA Investor Relations

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  • Cellar Door - Thursday, November 14, 2019 - link

    What clearly is needed are RTX 3080 cards, that will cost 30% more then last RTX generation and just barely beat a 1080Ti.
  • Arkturus - Thursday, November 14, 2019 - link

    So, for the entire year Nvidia is just trying to milk the consumer part of their business (gamers) to fund their failed attempts to compete in other areas such as automotive & data center; neat... Though, hopefully this shows Nvidia that they can't pull off shitty Apple style pricing schemes and still expect everyone to buy their GPU's like there's no tomorrow. Sadly though, until there's any good financial reason for them to make better GPU's like we want, the milking part will probably continue, let's just hope prices will be somewhat reduced for 3000 series cards.
  • michael2k - Friday, November 15, 2019 - link

    You sound salty.

    NVIDIA can't both be trying to milk gamers, and milk them. They are either successful at it, or they aren't. Given the lack of competition for the most part I think they're successful.

    Likewise, you don't fund failed attempts if those attempts are growing.

    From 2014 you can see how far they've come:

    GPU $898m -> $1,659m
    Tegra $139m -> $162m (automotive)
    Other $66m -> $143m (OEM & IP)
    Visualization $0 -> $324m
    Data Center $0 -> $726m

    Put shortly, the two new groups, Visualization and Data Center, bring in more revenue now than all of GPU + Tegra in 2014.

    You can't win bets if you don't make them, and these things don't happen overnight. Tegra was originally a mobile strategy, and they had to switch course in 2016 when they sold of Icera and refocused on Jetson, Automotive, and sales to Nintendo. Automotive is a really long bet, but it will be a much slower ramp as cars are sold at much lower rates than handheld gaming units.

    I wouldn't bet against NVIDIA.
  • eva02langley - Friday, November 15, 2019 - link

    I would not bet on them either. There is competition in town now...
  • Operandi - Friday, November 15, 2019 - link

    There is?
  • michael2k - Friday, November 15, 2019 - link

    Technically, Intel has their Xeon Phi products for deep learning and and GPGPU clusters, as well as purchasing MobilEye for their automotive division.

    So far no one else has a competitive GPU (AMD doesn't quite count, in that if AMD can't hit the high end mark then they aren't competing in the same markets), nor a competitive mobile part (Qualcomm definitely has a decent CPU in the SnapDragon, but their Adreno isn't designed to scale the same way Maxwell, Tesla, Volta do, since Volta cores from their desktop part are found in their Tegra) or embedded part (Their Xavier part can use on board Volta or a discrete GPU)
  • eva02langley - Friday, November 15, 2019 - link

    Yeah, AMD is not having a 1080 TI competitor for 400$... (sarcasm)
  • webdoctors - Friday, November 15, 2019 - link

    I think you misunderstood that table. The decrease in automotive revenue and the tiny automotive revenue is bad for consumers, not just Nvidia. They're the leader in autonomous driving platform, if they're not selling any that means no one's gonna have selfdriving cars.

    The sad fact that automotive manufacturers haven't migrated to selfdriving cars sucks for all of us, they dont have any incentive and the industry is stagnating. I thought by next year we'd already have lvl 4 selfdriving cars and it looks like we're going to be several years past that target.

    My biggest fear when I leave the house is getting killed on the road. There's so many idiot drivers and they keep increasing. Ppl don't know what turn signals are for, and think alcohol makes them smarter behind the wheel.
  • bobhumplick - Friday, November 15, 2019 - link

    we dont need better cars. we need better people. we need the highway overhaul that has been put off for the last decade. we need cars that people can afford so they dont have to work 60+ hours a week and fall asleep at the wheel driving home. the tech industry cant get a game launch right and yet we want them to drive our cars? no thanks.

    i have no TV, no high end stereo, my phone cost 50 dollars new and i just use it for calls and a couple authenticator apps. my one luxury item that i make room for is my computer so ill spend a bit more for a gpu than i should. but i dont want my life staked on ANY companies drivers.
  • flgt - Friday, November 15, 2019 - link

    That's because making autonomous vehicles is super hard. And once you start making computer systems that can literally kill people the level of regulatory scrutiny goes up a 1000X. It's not a good fit for the silicon valley whiz kids who have a 5 minute attention span and expect to be millionaires in 3 months. I think we're at another decade away.

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