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PC gaming market boosts Nvidia profit in Q1

Posted: 13 May 2014     Print Version  Bookmark and Share

Keywords:Nvidia  GPU  PC gaming  Maxwell  Tegra 

Resulting from a robust PC gaming market, Nvidia Corp. has attained double-digit profit growth in Q1 of fiscal 2015. The GPU chip maker announced that net income climbed 75 per cent YoY but dropped seven per cent from Q4 of fiscal 2014 to $137 million. GAAP earnings per share rose 85 per cent from a year earlier to $0.24, added the company.

Revenue rose 16 per cent from a year earlier but fell four per cent from the fiscal Q4 to $1.1 billion. Nvidia management attributed the drop to seasonal weakness.

The GPU business unit is Nvidia's largest revenue contributor, accounting for nearly 81 per cent of its overall revenue. GPU unit sales grew 14 per cent from a year earlier but fell five per cent from Q4 to $898 million. The company cited strong demand for its high-end GTX GeForce desktop and notebook GPUs, including the GTX 750, the first GPU based on Maxwell, which generated sales growth of 57 per cent.

Specifically, two areas of strength were desktop GPU demand in China, the US and Europe and high-end gaming notebooks. However, revenue from notebook GPUs fell due to continued weakness in the notebook sector.

The fabless chip company said a richer mix of high-end desktop and notebook GPUs as a per centage of revenue contributed to higher gross margins in the quarter. The GAAP gross margin was 54.8 per cent, versus 54.3 per cent a year earlier and 54.1 per cent in Q4.

GRID processors for server graphic solutions and Tesla devices for data centre and high-performance servers and workstations also contributed to revenue growth.

Sales from Nvidia's Tegra mobile processors for tablets and smartphones increased 35 per cent from a year earlier to $139 million, buoyed by healthy demand from the smartphone and automobile sectors. However, the gains were offset by slower growth in Android tablet SoC sales. Revenue from Tegra processors for automobiles grew more than 60 per cent, while revenue associated with game consoles and embedded devices decreased.

Jen-Hsun Huang, the company's president and CEO, said it expects to be in full production this year with the Tegra K1, a high-performance, 64bit processor aimed at gaming, automotive and differentiated products.

"TK1, as you know, is the most advanced GPU that's ever been built for mobile devices and it's taking the world's most advanced GPU, Kepler and mobilising it for the very first time," Huang said.

This quarter, the company expects to post revenue of $1.1 billion, plus or minus two per cent, and GAAP and non-GAAP gross margins of about 53.7 per cent and 54 per cent, respectively. Revenue growth will depend on the steepness of the overall PC consumer market's seasonal decline, according to Nvidia management.

- Ismini Scouras
  EE Times

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