EPS of $0.60 increased by 622.9% from previous year
Gross margin of 78.4%
Net income of 14.88B
""Data Center revenue of $22.6 billion was a record, up 23% sequentially and up 427% year-on-year."" - Colette Kress
NVIDIA Corporation (NVDA) Q1 2025 Financial Results - Exceptional Growth Driven by AI and Data Center Demand
Executive Summary
In an extraordinary first quarter of fiscal 2025, NVIDIA Corporation reported a record revenue of $26 billion, representing an impressive 262% year-over-year (YoY) growth and an 18% increase from the previous quarter (QoQ). The growth was propelled mainly by the data center segment, which achieved $22.6 billion in revenue, up 427% YoY due to the rising demand for NVIDIA's Hopper GPU architecture in AI computing. Management emphasized that their technology’s integration in enterprises globally has allowed customers to generate substantial returns on their investments, with estimates suggesting a potential to earn $5 for every $1 spent on NVIDIA AI infrastructure. This performance is a testament to NVIDIA's pivotal role in the accelerating AI revolution, which is expected to redefine productivity across various industries. Looking forward, NVIDIA anticipates continued momentum and estimates Q2 revenue to reach approximately $28 billion, supported by anticipated strong market demand across all platforms.
Key Performance Indicators
Revenue
26.04B
QoQ: 17.83% | YoY:262.12%
Gross Profit
20.41B
78.35% margin
QoQ: 21.53% | YoY:339.03%
Operating Income
16.91B
QoQ: 24.20% | YoY:690.14%
Net Income
14.88B
QoQ: 21.13% | YoY:628.39%
EPS
0.60
QoQ: 20.00% | YoY:622.89%
Revenue Trend
Margin Analysis
Key Insights
**Revenue:** $26.0 billion (Q1 FY2025) - YoY increase of 262% and QoQ growth of 18%.
**Gross Profit:** $20.4 billion, representing a gross margin of 78.3%.
**Operating Income:** $16.9 billion with an operating margin of 64.9%.
**Net Income:** $14.9 billion yielding a net profit margin of 57.1%.
**Earnings Per Share (EPS):** $0.60, up 622.9% YoY.
Financial Highlights
Financial Highlights:
- Revenue: $26.0 billion (Q1 FY2025) - YoY increase of 262% and QoQ growth of 18%.
- Gross Profit: $20.4 billion, representing a gross margin of 78.3%.
- Operating Income: $16.9 billion with an operating margin of 64.9%.
- Net Income: $14.9 billion yielding a net profit margin of 57.1%.
- Earnings Per Share (EPS): $0.60, up 622.9% YoY.
NVIDIA's figures highlight its robust operating efficiency and profitability, reflecting strong demand for its gaming and data center products, particularly in AI and high-performance computing.
Income Statement
Metric
Value
YoY Change
QoQ Change
Revenue
26.04B
262.12%
17.83%
Gross Profit
20.41B
339.03%
21.53%
Operating Income
16.91B
690.14%
24.20%
Net Income
14.88B
628.39%
21.13%
EPS
0.60
622.89%
20.00%
Key Financial Ratios
currentRatio
3.53
grossProfitMargin
78.4%
operatingProfitMargin
64.9%
netProfitMargin
57.1%
returnOnAssets
19.3%
returnOnEquity
30.3%
debtEquityRatio
0.23
operatingCashFlowPerShare
$0.62
freeCashFlowPerShare
$0.61
dividendPayoutRatio
0.66%
priceToBookRatio
43.97
priceEarningsRatio
36.3
Net Income vs. Revenue
Expense Breakdown
Management Commentary
Management Insights:
- Data Center Growth Realization: Colette Kress, NVIDIA CFO, stated, "Data Center revenue of $22.6 billion was a record, up 23% sequentially and up 427% year-on-year, driven by continued strong demand for the NVIDIA Hopper GPU computing platform."
- AI Infrastructure Returns: Jensen Huang, CEO, noted, "For every $1 spent on NVIDIA AI infrastructure, cloud providers have an opportunity to earn $5 in GPU instant hosting revenue over four years."
- Expectations for Future Growth: Management highlighted expectations of Q2 revenue reaching approximately $28 billion, with continued robust growth across their segments.
"Data Center revenue of $22.6 billion was a record, up 23% sequentially and up 427% year-on-year."
— Colette Kress
"The next industrial revolution has begun, with companies and countries partnering with NVIDIA to shift the traditional data centers to AI factories."
— Jensen Huang
Forward Guidance
NVIDIA anticipates Q2 revenue within the range of $28 billion, plus or minus 2%, reflecting ongoing strong demand across all market platforms, particularly in data centers and automotive sectors. Gross margins are expected to remain solid, at around mid-70% range for the year. Management emphasized monitoring demand for new products such as H200 and Blackwell as essential growth drivers moving forward.
Competitive Position
Company
Gross Margin
Operating Margin
Return on Equity
P/E Ratio
NVDA Focus
78.35%
64.90%
30.30%
36.30%
INTC
41.00%
-8.40%
-0.36%
-123.92%
TSM
53.10%
42.00%
6.20%
26.04%
MRVL
45.50%
-12.80%
-1.49%
-68.72%
MU
-0.74%
-23.90%
-2.88%
-16.96%
Gross Profit Margin
Operating Profit Margin
Return on Equity
P/E Ratio Comparison
Investment Outlook
NVIDIA's positioning in the AI and data center market presents a compelling bullish investment case. The substantial YoY growth across key segments and management's optimistic outlook for future quarters suggest that NVIDIA's strategic initiatives are resonating well with the market. Investors should watch for further developments in AI product capabilities, competitive responses, and global regulatory conditions that could influence NVIDIA’s operational landscape.
Key Investment Factors
Growth Potential
NVIDIA is well-positioned in the rapidly expanding AI market with opportunities arising from Sovereign AI investments globally and the growing need for advanced computing and data center infrastructure.
Profitability Risk
Ongoing supply constraints and competitive pressures, especially in international markets like China, could impact product availability and pricing dynamics. Additionally, the dynamic competitive landscape in AI could pose threats from emerging technologies and competitors.
Financial Position
NVIDIA has a strong financial structure with substantial cash reserves (approximately $7.6 billion in cash and equivalents) and manageable debt levels, boasting a net debt of $3.65 billion, which illustrates a strong balance sheet health.
SWOT Analysis
Strengths
Dominance in AI and GPU computing markets demonstrates strong brand recognition and customer loyalty.
High gross margins ensure strong profitability, with gross margins reported at 78.3% for Q1.
Robust product innovation pipeline with momentum in data center applications and AI technologies.
Weaknesses
Dependence on the semiconductor supply chain which could impact production capacity in the future.
Vulnerability to pricing pressures in competitive segments like gaming and consumer graphics.
Opportunities
Expanding markets for AI-powered applications and data centers, with growing global investment in Sovereign AI initiatives.
Potential for revenue gain through software offerings in generative AI and cloud computing.
Threats
Intensive competition from both established players and new entrants in the AI hardware and software space.
Regulatory challenges and geopolitical tensions affecting international operations, especially in the Chinese market.