Nvidia reports $3.08 billion in Q1 2020 revenue, up 39% as AI and cloud soar

Nvidia posted revenues of $3.08 billion for the first quarter ended April 26, up 39% from a year earlier. The revenues beat expectations, and earnings per share of $1.80 also blew past expectations as datacenter revenues from artificial intelligence and the cloud grew.

Santa Clara, California-based Nvidia makes graphics processing units (GPUs) that can be used for games, AI, and datacenter computing. While many businesses have been hit hard by the pandemic, Nvidia has seen a boost in those areas.

Datacenter revenue was $1.14 billion, up 80% from a year earlier. Gross profit margins, or the profit on products sold, were 65.1%, a new record and much better compared to 58.4% a year earlier.

A year ago, Nvidia’s revenues for the first quarter were $2.22 billion. Analysts expected revenue of $3 billion and non-GAAP earnings per share of $1.68. EPS came in at $1.80 on a non-GAAP basis, up 105% from 88 cents a year earlier. Nvidia’s stock is down 1% in after-hours trading to $347.62 a share.

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During the quarter, Nvidia completed its $7 billion acquisition of Mellanox Technologies, a maker of key technologies for connecting its chips in datacenters. Nvidia also said that last week’s GPU Technology Conference keynote speech of CEO Jensen Huang was viewed 3.8 million times in the first three days, and that more than 55,000 registrants participated in the online-only event.

Huang said in a statement that the company salutes the first responders, health care workers, and service workers who are fighting COVID-19, and he also thanked scientists for working on finding a vaccine. Nvidia’s GPU technology is aimed at helping such scientists do their work faster, and Nvidia has made donations on that front to help with the effort.

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To help its own employees, Nvidia also moved raises forward by six months to make sure employees can adjust to the hardships of the pandemic. Huang said Nvidia employees have donated $10 million to fight the .

Last week, Nvidia launched its Ampere-based A100 GPU, an enormous AI chip with 54 billion transistors and a design based on a new generation of AI technology.

Nvidia's A100 chip has 54 billion transistors.

For the second fiscal quarter that ends at the close of July, Nvidia expects revenue of $3.65 billion and gross profit margins of 58.6% on a GAAP basis and 66% on a non-GAAP basis.

Game industry revenues for Nvidia’s chips  was $1.34 billion, up 27% from the same period a year earlier. Big titles such as Minecraft could help push forward adoption of Nvidia’s RTX real-time ray tracing technology, which gives computer images much better shadow and lighting effects. More than 100 new laptops are using Nvidia GeForce GPUs with RTX technology.

Datacenter revenue of $1.14 billion was up 80% from a year earlier. Professional visualization revenues were $307 million, up 15% from a year earlier. Automotive revenue was $155 million, down 7% from a year earlier.

Colette Kress, chief financial officer at Nvidia, said in a statement that COVID-19 challenges created supply chain delays early in the quarter. Shelter-in-place rules in China forced the closure of retail outlets and internet gaming cafes, hurting sales of gaming products there. But work-from-home also drove a surge in demand for both gaming and commercial computers as companies equipped employees with work tools.

Automotive “informatainment” and autonomous car spending is expected to decline for the next several quarters. Graphics chip revenue was $1.17 billion, up 25% from a year ago.

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