Nvidia Q1 FY 2022 Earnings Soar: Revenue Hits $5.66B, Gross Margin at 66.2%

Nvidia (NVDA) delivered a stellar Q1 FY 2022 performance, exceeding analyst predictions on both earnings and revenue fronts.

Highlights

• Gross margin reached 66.2%, outperforming forecasts and marking the highest level in over four years.
• Record-breaking revenue driven by strong growth in gaming, data center, and professional visualization platforms.
• Gaming revenue surged 106% year-over-year (YOY), data center revenue climbed 79% YOY, and professional visualization revenue rose 21% YOY.

Source: Analyst consensus data from Visible Alpha

In-Depth Financial Analysis of Nvidia (NVDA)

Nvidia's Q1 FY 2022 adjusted earnings per share (EPS) skyrocketed by 103.3% YOY, significantly beating analyst estimates. The company reported revenue of $5.66 billion, an 83.8% increase compared to the same quarter last year. Despite this strong performance, shares dipped slightly by over 0.5% in after-hours trading. Over the past 12 months, Nvidia's stock has delivered an impressive total return of 80.3%, outperforming the S&P 500's 40.3% return.

Understanding Nvidia's Gross Margin

Gross margin, a critical profitability metric calculated as (Total Revenue - Cost of Goods Sold) / Total Revenue, climbed to 66.2% this quarter. This is particularly notable in the semiconductor industry, where pricing power is limited and cost management is essential due to the commodity nature and cyclical pricing of chips.

Revenue Growth Drivers

Nvidia's record revenue was fueled by substantial gains in key sectors: gaming revenue increased by 106% YOY, data center revenue grew 79% YOY, and professional visualization revenue expanded 21% YOY. Additionally, OEM and other revenues surged 137% YOY, largely propelled by the incorporation of cryptocurrency mining processors amid a booming crypto market that has intensified global semiconductor demand.

Outlook for Q2 FY 2022

Looking ahead, Nvidia projects Q2 revenue around $6.3 billion with an expected gross margin of approximately 66.5%. The company also announced a proposed four-for-one stock split, pending shareholder approval at the annual meeting scheduled for June 3, 2021, which would double outstanding shares from 2 billion to 4 billion.

Nvidia's next earnings release for Q2 FY 2022 is anticipated on August 17, 2021.

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