NEW YORK -- Gaming chipmaker Nvidia Corp. couldn’t ward off the effects of the seasonal decline in the consumer PC market as sales in its second fiscal quarter of 2015 came in flat sequentially.
Still, Nvidia managed to grow its top line by 13%, to $1.103 billion from $977 million a year ago, and post a 30% jump in net profits, which reached $173 million. Compared with the previous quarter, Nvidia’s net income increased 4%. It also posted a record gross-profit margin of 56.1%, which was driven by strong average selling prices for consumer GPUs and record quarterly Tesla chip sales.
Compared with a year ago, GPU sales increased just 2%, to $878 million from $858 million, but fell 2% from $878 million the prior quarter. Although GPU sales growth was tempered by cyclical weakness in the consumer PC market, Nvidia saw strong demand for its GeForce GPUs in gaming applications and for its Tesla and Nvidia GRID products for datacenter and cloud applications.
“Growth was driven by Tegra processor sales, GeForece GPUs for gaming, and Tesla and Nvidia GRID for datacenter and workloads,” according to a prepared statement by Nvidia’s chief financial officer Colette Kress. Revenue from Nvidia’s GeForce GPUs for gaming desktops and notebooks grew 10%. The GeForce GPU line includes its recently released GeForce GTX750, GTX750 Ti, and Maxwell-based GPUs.
“Tesla and Nvidia GRID for datacenter and high-performance computing increased significantly amid VDI deployments and large project wins with cloud service providers, as well as high-end education and government customers. Quadro revenue increased, with particularly strong growth in mobile workstations,” according to Kress.
During a conference call with analysts following the earnings release, management said that Tesla GPUs now power the world’s 15 most energy-efficient supercomputers on the Green500 list. They also said that Tesla products power the fastest computer in the United States and Europe, as well as the world’s fastest enterprise supercomputer.
Sales in Nvidia’s Tegra line of mobile processors skyrocketed 200%, to $159 million from $59 million a year ago, and grew 14% from $139 million in the prior quarter. Nvidia’s Kress cited the automobile infotainment and mobile device markets, as in smartphones and tablets, as key growth drivers.
Analysts were pleased with Nvidia’s second-quarter results. “In our view, Nvidia's 2QF15 results and outlook are evidence that management's long term strategy for driving its GPU technology into servers, data centers and supercomputers is reaching critical mass,” stated Kevin Cassidy, an analyst with Stifel Nicolaus, in a note to investors. “Meanwhile, Nvidia's more traditional PC gaming related revenue should get a boost in 2HC14 as the gaming community upgrades their hardware in preparation for the new popular gaming titles coming out.”
Management expects revenue to reach $1.2 billion, plus or minus 2%, for the third quarter of fiscal 2015, with GAAP gross margins of 55.2%, plus or minus 50 basis points.
— Ismini Scouras writes about the semiconductor industry for EE Times.
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