EPS of $0.49 increased by 771.1% from previous year
Gross margin of 76.0%
Net income of 12.29B
""The world has reached the tipping point of a new computing era... the $1 trillion installed base of data center infrastructure is rapidly transitioning from general purpose to accelerated computing."" - Jensen Huang
NVIDIA Corporation (NVDA) QQ4 2024 Financial Results: Record Growth Fueled by AI and Data Center Demand
Executive Summary
In the fourth quarter of 2024, NVIDIA Corporation (NVDA) achieved extraordinary financial results, with revenue reaching $22.1 billion, representing a staggering 265% year-over-year (YoY) growth and a sequential increase of 22% from the third quarter. This robust performance can be attributed to significant advancements in AI technologies, particularly driven by the NVIDIA Hopper architecture and thriving data center operations. The company anticipates continued momentum into the upcoming quarters, forecasting first-quarter revenue around $24 billion, reflective of ongoing strong demand across various sectors, particularly in AI applications.
CEO Jensen Huang emphasized that the industry is at a pivotal point, transitioning from general-purpose computing to accelerated solutions, with NVIDIA's offerings positioned to capture substantial growth in the burgeoning field of generative AI. Management's insightful commentary throughout the earnings call highlighted NVIDIA’s strategy to enhance market penetration and its commitment to sustain a leadership role in AI infrastructure development.
Key Performance Indicators
Revenue
22.10B
QoQ: 21.98% | YoY:265.28%
Gross Profit
16.79B
75.97% margin
QoQ: 25.31% | YoY:338.06%
Operating Income
13.61B
QoQ: 30.69% | YoY:983.92%
Net Income
12.29B
QoQ: 32.91% | YoY:768.81%
EPS
0.50
QoQ: 31.58% | YoY:771.08%
Revenue Trend
Margin Analysis
Key Insights
**Revenue**: $22.1 billion (Q4 2024), up 265% YoY and 22% QoQ
**Gross Profit**: $16.8 billion, gross margin of 76.3%
**Operating Income**: $13.6 billion, operating margin of 61.6%
**Net Income**: $12.3 billion, net margin of 55.6%
**Earnings Per Share (EPS)**: $0.50 diluted, reflecting a 771.1% YoY increase
Financial Highlights
Financial Performance:
- Revenue: $22.1 billion (Q4 2024), up 265% YoY and 22% QoQ
- Gross Profit: $16.8 billion, gross margin of 76.3%
- Operating Income: $13.6 billion, operating margin of 61.6%
- Net Income: $12.3 billion, net margin of 55.6%
- Earnings Per Share (EPS): $0.50 diluted, reflecting a 771.1% YoY increase
- Cash Flow: Operating cash flow of $11.5 billion, free cash flow of $11.2 billion
Key Insights from Adjustments:
- Dramatic growth in data center revenues, totaling $18.4 billion for Q4, up 409% YoY, primarily from AI training and inference workloads.
- Strong demand for ASICs and the Hopper architecture, with management indicating a supply-constrained outlook for upcoming product launches, particularly the next-gen H200 series.
- Strategic increases in R&D spending (approximately $2.5 billion) signal commitment to innovation amidst soaring demand.
Income Statement
Metric
Value
YoY Change
QoQ Change
Revenue
22.10B
265.28%
21.98%
Gross Profit
16.79B
338.06%
25.31%
Operating Income
13.61B
983.92%
30.69%
Net Income
12.29B
768.81%
32.91%
EPS
0.50
771.08%
31.58%
Key Financial Ratios
currentRatio
4.17
grossProfitMargin
76%
operatingProfitMargin
61.6%
netProfitMargin
55.6%
returnOnAssets
18.7%
returnOnEquity
28.6%
debtEquityRatio
0.26
operatingCashFlowPerShare
$0.47
freeCashFlowPerShare
$0.46
dividendPayoutRatio
0.81%
priceToBookRatio
35.84
priceEarningsRatio
31.35
Net Income vs. Revenue
Expense Breakdown
Management Commentary
- CEO Jensen Huang stated: "The world has reached the tipping point of a new computing era... the $1 trillion installed base of data center infrastructure is rapidly transitioning from general purpose to accelerated computing."
- CFO Colette Kress remarked: "Q4 was another record quarter... driven by the NVIDIA Hopper GPU computing platform along with InfiniBand end-to-end networking."
- Market Performance: Huang emphasized the significant role of AI inference in data centers, estimating that approximately 40% of their data center revenue was derived from AI solutions.
- Management discussed expectations for first-quarter 2025 revenues of about $24 billion, reflecting continued strong demand across all sectors, particularly within AI-driven applications.
"The world has reached the tipping point of a new computing era... the $1 trillion installed base of data center infrastructure is rapidly transitioning from general purpose to accelerated computing."
— Jensen Huang
"Q4 was another record quarter... driven by the NVIDIA Hopper GPU computing platform along with InfiniBand end-to-end networking."
— Colette Kress
Forward Guidance
NVIDIA's forward guidance for the first quarter of fiscal 2025 anticipates revenue of approximately $24 billion, indicating sustained demand for AI-related products. Gross margins are expected to remain robust, with management projecting a return to mid-70% margins for the remainder of the fiscal year due to ongoing favorable component costs. NVIDIA's commitment to R&D amid high demand for accelerated computing solutions serves as a strategic lever to maintain market leadership as generative AI technologies evolve. Key factors to monitor include:
- Continued growth in data center revenues,
- The ramp-up and market acceptance of new product lines such as H200,
- Trends in enterprise adoption of AI across verticals including automotive, healthcare, and finance.
Competitive Position
Company
Gross Margin
Operating Margin
Return on Equity
P/E Ratio
NVDA Focus
75.97%
61.60%
28.60%
31.35%
INTC
45.70%
16.80%
2.53%
19.87%
TSM
53.00%
41.60%
7.28%
16.41%
MRVL
46.60%
-0.53%
-2.65%
-37.17%
MU
-10.80%
-36.70%
-3.24%
-13.39%
Gross Profit Margin
Operating Profit Margin
Return on Equity
P/E Ratio Comparison
Investment Outlook
The investment outlook for NVIDIA remains highly positive. The company's record revenue growth, driven by increasing demand for AI technologies and dominant positioning in the semiconductor market, suggests a continued upward trajectory. Investors should be cognizant of both the opportunities presented by expansive market growth and the challenges posed by regulatory risks and market competition. Overall, NVIDIA's combination of strong operational execution, ongoing innovation, and strategic investments affirms its status as a compelling candidate for investment within the technology sector.
Key Investment Factors
Growth Potential
NVIDIA's growth trajectory is exceptionally strong, particularly in AI and data center markets. The accelerating shift from general-purpose to accelerated computing positions NVIDIA to capture substantial market share and revenue growth as enterprises increasingly adopt AI solutions across sectors.
Profitability Risk
Regulatory risks associated with international markets, particularly China, which is facing stringent export controls from the U.S. Additionally, supply chain constraints and competition from companies like AMD and Intel present ongoing challenges to maintain rapid growth.
Financial Position
NVIDIA holds a robust financial position with $7.3 billion in cash and equivalents and $18.7 billion in short-term investments, equating to a healthy liquid asset base. The total debt stands at approximately $11 billion, well-managed given the substantial income generation and cash flow metrics.
SWOT Analysis
Strengths
Industry-leading technology in AI and accelerated computing
Strong brand recognition and market share in GPU and data center segments
Robust financial performance with increasing revenue and profit margins
Weaknesses
Heavy reliance on data center and gaming revenues that may fluctuate with market trends
Challenges in supply chain management and product availability
Opportunities
Expanding AI market and increasing investment in generative AI across multiple industries
Development of innovative products such as the H200 GPU for enhanced performance
Potential new revenue streams from software solutions including NVIDIA AI Enterprise
Threats
Increasing competition from AMD and Intel within the semiconductor and AI landscape
Regulatory pressures and geopolitical risks affecting supply chains, particularly in Asia