NVIDIA Q2 FY 2022 Earnings: $6.5B Revenue & 66.7% Gross Margin Beat Expectations

NVIDIA (NVDA) delivered impressive Q2 FY 2022 financial results, outperforming analyst expectations on both earnings and revenue.

Source: Analyst consensus data from Visible Alpha

Highlights

• Gross margin increased by 70 basis points year-over-year, exceeding forecasts.
• Adjusted earnings per share (EPS) and revenue outpaced predictions.
• Completed a 4-for-1 stock split in July, enhancing shareholder value.

In-Depth Financial Analysis of NVIDIA (NVDA)

NVIDIA reported an adjusted EPS of $1.04, which, when factoring in the recent 4:1 stock split, translates to $4.16 on a pre-split basis, surpassing analyst estimates. The company achieved a record quarterly revenue of $6.5 billion, marking a 68% year-over-year increase. This robust growth was primarily driven by outstanding performance in the Gaming and Data Center segments.

Gross Margin Insights

NVIDIA posted a gross margin of 66.7% for the quarter, beating expectations. Gross margin, calculated as (total revenue minus cost of goods sold) divided by total revenue, is a critical indicator of profitability, especially in the semiconductor industry where pricing power is limited due to the commodity nature of products. Maintaining a strong gross margin underscores NVIDIA's operational efficiency and cost management.

Outlook and Stock Market Response

Looking ahead, NVIDIA anticipates continued sequential growth in Q3 FY 2022, projecting revenue around $6.8 billion with a 2% margin of error and a gross margin increase to 67.0%. Following the earnings announcement, NVIDIA’s shares rose approximately 1.6% in after-hours trading. Over the past year, the stock has significantly outperformed the broader market, delivering a 55.5% total return compared to the S&P 500’s 29.8%.

Upcoming Earnings Release

NVIDIA is expected to report Q3 FY 2022 earnings on November 11, 2021.

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