NVIDIA Announces Financial Results for Third Quarter Fiscal 2016

[5150Joker]

NVIDIA just announced their third quarter financial results this morning and it seems they did pretty well:

• Record revenue of $1.305 billion, up 7 percent from a year ago, up 13 percent sequentially
• GAAP operating income of $245 million, up 15 percent from a year ago
• Quarterly cash dividend raised 18 percent to $0.115 per share. Company to return $1 billion to shareholders in fiscal 2017

"Our record revenue highlights NVIDIA's position at the center of forces that are reshaping our industry," said Jen-Hsun Huang, co-founder and chief executive officer, NVIDIA. "Virtual reality, deep learning, cloud computing and autonomous driving are developing with incredible speed, and we are playing an important role in all of them.

"We continue to make great headway in our strategy of creating specialized visual computing platforms targeted at important growth markets. The opportunities ahead of us have never been more promising," he said.

Source: http://www.streetinsider.com/Press+...s+for+Third+Quarter+Fiscal+2016/11043694.html

EDIT:

When reading further down the report, this is what caught my eye:

NVIDIA's outlook for the fourth quarter of fiscal 2016 is as follows:
GAAP and non-GAAP gross margins are expected to be 56.7 percent and 57.0 percent, respectively, plus or minus 50 basis points.

Contrast that with AMD's GAAP/non-GAAP gross margins of 23%, what a huge difference. No wonder AMD is always broke. Given how much the attach rate of discrete GPUs has sunk since 2007-2008, it makes sense that these companies need high margins to return a decent profit. If AMD were competitive, it would at least be able to command 35-45% margins but it doesn't even come close. In fact, since Q3 2014 it's gross margins slipped from 35% to 23% today (http://www.anandtech.com/show/9722/...computing-and-graphics-sales-hurt-bottom-line).

BUT some bad news will be coming for NVIDIA if Intel doesn't renew their patent licensing deal as it ends in 2016:

That means Intel's final cash payment to NVIDIA will be made in early 2016. From 2017 forward -- and judging by the size of Intel's annual payments -- NVIDIA would suffer a roughly 30% decline in earnings before interest and taxes if Intel chooses not to extend the agreement.

"ased on the current agreement," Covello elaborated, "Intel has access to the agreed-upon patents in perpetuity, implying that Intel would need to renew the licensing agreement if it wanted access to patents that NVIDIA filed after March 31, 2017."

Translation: Unless NVIDIA patents something Intel absolutely can't live without after that date, Intel will have no incentive to keep shelling out hundreds of millions per year in licensing fees.

http://www.investopedia.com/stock-a...intel-licensing-cliff-nvda.aspx#ixzz3qfZriiuz

They'll still be profitable but it will take a huge chunk out of their income.

 

[Tgrove]

Still needs bigger g sync monitors

 

[jwcalla]

The Intel license fees are $66m per quarter. That's not a lot compared to their overall revenue, but a decent portion of their total profit. But nvidia is also spending a lot every quarter on the stock buyback program which should end soon. I'm assuming the buyback money is considered an expenditure and thus not reflected as profit, but I have no idea how all the accounting tricks work.

 

[Richthofen]

Not only on the stock buyback but they also pay dividends and the question is whether the license agreement will just end or whether there will be renewed one.