NVIDIA (NVDA) 27 May 212022 Q1 Earnings call transcript

Good afternoon. My name is Sumitra, and I will be your conference operator today. At this time, I would like to welcome everyone to NVIDIA's Financial Results Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. you. Thank Instructions] [Operator may conference. you begin Jankowski, your Simona

are Thank conference until to you live on second be NVIDIA's Investor conference of The our call afternoon, website. discuss will and everyone, without Colette replay XXXX. quarter from fiscal The the Executive webcast Relations available Vice that content call webcast and to financial Financial NVIDIA's for can't It our and of welcome or Officer. being NVIDIA property. be today our for the call and With fiscal for transcribed Kress, on to call written you. Huang, call Officer; remind prior me today's is President Chief Good results NVIDIA's reproduced is XXXX. of consent. the Jensen President the Chief Executive first quarter like I'd

may this may These a subject to expectations. call, statements and During actual current significant uncertainties, we based on are materially. and our of make number forward-looking risks differ results

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as driven a Starting our and exceptionally billion product strong visualization of in with third billion revenue center This record beginning our XX%. with most tailwinds earlier. the sequentially launch $X.X XX year-on-year Thanks, total set We growth their quarter setting we records and across PC and XX% a Ampere best the base up businesses. launch quarter drive year-on-year structural XXXX Laptops Simona. ramping was GPU needs our on for revenue architecture and continue Ampere line $X.XX this Channel XX stack expect high we year. GeForce vast to upgrade. installed sales. desktop and upgrade strong GPU Series kick as inventories this spring the supply XX GPU GPU started and and the majority XXXX XXXX, based -- on all RTX remain across OEMs constrained as gear XXX% our in RTX professional revenue ups With laptop our leading, accelerating growth ever, architecture to by data Ampere into ever of up XX accelerating ramping the still and to gaming, now of cycle of QX of our gaming, was has driving major Based GeForce Series year into architecture, the across to laptops is been of refresh. GPU consecutive successful the incredible demand fall RTX we second our launch Earlier expect Series GPUs. part half laptops, with desktop the the the of lineup. from to both both the are in growth, and month,

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platform can partner cockpit silicon, center automotive our of lifetime. stack lead enhance systems, and services software full spans new Our NVIDIA AI joy models. over transform Starting industry amazing the software the technologies throughout infrastructure, with and safety through and air a enabling DRIVE business data defined software the the delivered upgrades vehicles to Benz, AI with Mercedes AV and driving

sequentially Hyperscale Moving built topped a first they quarter, include this to growing led in which up billion to time, services. AI quarter, from customers X% for their did the as year-ago not center. Mellanox. the $X XX% infrastructure data our Revenue growth and commercialize

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by and industries companies. consumer both internet vertical sequentially Our year-on-year grew led

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favorable GAAP margin basis up and XX rest points P&L. earlier down for XX by points XXX% of data $X.XX, $X.XX, and the EPS from was up increase the up from QX sequentially. the center was Non-GAAP a margin the flow products. was operations year gross GAAP to was gross cash year-ago. EPS earlier. CMP XXX of sequentially. driven mix up from XXX% billion. basis up year basis more Moving non-GAAP was $X.X a addition XXX points and Non-GAAP basis a from a earlier from a largely The first quarter sequential was year points within QX

to outlook for quarter Let fiscal me turn second of the the XXXX.

We expect broad sequential of base market in all our revenue year-on-year platforms. growth

in $XXX Our CMP. million outlook includes

to CMP, demand, will increasing flexibility with We increase miners to data CMP and QX expect strong CMPs largely both to have there center, significant rate drive CPUs, combined In and growth gaming are gaming support hash supplied sequential from and QX. core we in sequential these making In gaming. a demand center Aside compute believe is If effort more move provide the networking. GX is our an for additional amount with with data and in it. actions serve gamers. in low gaming, CMP driven the revenue GeForce our outlook by we cards business increase products, we to the of

upcoming are other both points. expected non-GAAP and be approximately $XX Computex Manuvir expenditures included be to or our to is In minus to website. XX X%. the X%, be non-GAAP XX.X%, tax highlight be U.S billion will that and an $X.XX expected GAAP are both several the gross expected XX financial information expected million. May look $X.X evening expense plus me respectively, non-GAAP, $XXX Jeff XX%, IR the rates operating financial to events of CFO minus QX. Capital of GAAP billion items. GAAP in other to non-GAAP minus are Fisher our XX.X% to plus excluding community. $XXX on plus and Revenue are be and on commentary respectively. approximately are and expenses well discrete to keynote available $X.XX outlook expenses closing, million. at to Further billion, are income million GAAP or approximately let Das time, and as for Now expected be and as margins details and basis expected and for or

Evercore BofA be will Investor TMT June June on June Conference Conference and the XXXX Virtual attending We Global virtually on on X, Conference the XX. the X, Technology NASDAQ

our Our poll With is results XX. discuss second Wednesday, questions. call scheduled earnings to quarter please open now, the for Operator, question. August we for you call will would for

comes Timothy your [Operator And Instructions] first from UBS. Arcuri with question

Thanks will know both from Colette, XXX from a wondering of I speak so I quarters. I those? Thanks. XXX if equally, center, the maybe assume guidance. piece. networking wondering than about center each a click bit CMP that gaming was the more of modestly double there. they're a I'm up within coming up. on it's XXX more the can it growth, few Can part data little XXX And about I'm in the to and and about past you said is you're you just to getting data you is roughly is second lot. we up that wondering outlook the like what guess of was can sounds be It

Yes. Thanks on guidance. much question the our so for

demand markets. off of first we across I with our start So to really see all want

sequentially. different our grow to do of we plan market All platforms

business, You And now the product we are share lion CMP from of CMP. right of growth our that gaming. center our outside in In correct, our a to we our lineup data growth, be are our data better. couldn't center our expecting come and expect increase

the made for both we're overall and that We've to have hyperscales like, a industries. that would on vertical cards And perspective effort deliberate across We strong demand given the see. the and we our seeing portfolio, our demand to gamers they gaming strong inferencing. a strong supply for training

receiving. also we that will growth that So sequential support are the

correct, center well gaming, you data quite sequentially see both coming we that contributing growth from are So do to our and growth.

Thanks a lot, Colette.

apologies, my on Mellanox. didn't second answer your question, I

we We quarter quite we this also our an of see our as grow growth expecting overall center. products. continue Additionally, center of data is our They but are part did to Mellanox do and move sequentially business, QX. again, grow. to is a we last It data with them are expect into important them to smaller integrated part overall

And from Muse C.J. your next question ISI. with comes Evercore

taking and for related data what you to Thank afternoon. from of vision should as half, remarks, hyperscale about good particularly in go much adding in second a about question. the data lead year-on-year, prepared driven of the think long you kind that talk about time how was acceleration you. you center quarter? we In growth year. interpret more Yes, up the the the ramp on And as that you for reported center heard April of think is in I think growth in terms we what could obligations I see your top through purchase that perhaps enterprise how XX% you Thank of as we

commitments take lead inventory. part and long just me inventory and definitely our our our of first regarding has where to products. Let market the changed we're your purchase seeing required both center data out times The in our what question are to build purchasing of

we make So longer we of so both we're customers stream that to great our we commit have. lineup products that with a serve on term can the steady can sure that

I will the part a times, of to really good question over systems. commitments those those purchase the full the about to of yes, components second create long So turn part the is lead Jensen.

the part question, Colette? was What second the of

in do seeing articulated in half pre enterprise. Thank you. second we it our lineup was, what acceleration. an remarks we of the regarding question to the And the Second that relates see we're part of as

recommender physical we're data analytics, From you and sciences, across accelerated strength demand. with all remote which more seeing We're on. cloud classical and seeing our learning Yes. XGBoost important classical inferencing importantly, board both in of know for AI data understanding base so scientific is learning computing well as is And a as for strengthening becoming centers, center and way natural language, range CGR, the both machine the life conversational graphics, as we applications. deep learning, work. models, like AI, training and computing, and because models machine to very data systems, of like cloud

have to applications so it's all on-prem largest as And for large taken EGX the Edge, applications the and these systems. data NVIDIA we out us AGX and They NVIDIA in several for AI and And GTC, centers. of our and that announced suite Enterprise this HGX range case HPC quarter, of way a DGX systems run accelerate hyperscalers one on autonomous from our to years. for we initiatives at to the

automation the the issues easily. You've that data seen to working that on done in on Enterprise And the course Edge. the can't or of cloud the we're to move bringing platform. open reason because last it we're the has EGX called AI to open the rate We're for out it over our -- the of to it's and that majority at bringing it years, issues, cloud, bringing is world that vast it's AI, sovereignty be democratizing has the out and several data in we're has it data enterprises,

has has the -- built cloud course, be And the be has the oftentimes be edge. we so to premise to performance, like their doing all be to platform have has built And has be that's the to it it modern be centers. secure, confidential, high remotely move way of And to cloud and it to computing and to to data manageable. the up The way the native. cloud, of

be And so stacks has modern. these to

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more endeavor as And industry is center industry vertical really to to are a easy it data faster. lot to early than than it's and XX% them because enterprises of is And business move reason is and easy adapt going then stack, large exciting. this our for already. It's indications vertical the really integrate so, the enterprise know, more allow XX% that a by to already creating and this you

that major on is -- a been I've this AI. we've so next quite time. wave exciting it's a working for for long working our initiative. the of And And is of very something This part been on

delighted I'm the launch the centers The with so at to. of rest this quarter And agree do data GTC.

As Colette for and strengthening. hyperscale demand We're networking. computing mentioned, seeing is that

know that that they deep billions drives inference of billions learning, centers data world's the percentage cloud because get of them. You dollars out and for predictive economics moving of small every to are

deep movement the workload so the because And so important. from away towards accelerators learning are shifts CPUs, center data

demand. called great then fuse so And great lastly, based a position the And supercomputing. data and approaches first to And great all seeing simulation intelligence. really hyperscale, there as very centers driven artificial we're based the traction out. as building is approaches are what we're for Supercomputer world time over in well

strength. for continue is some gaining we and growth time for the growing of come. And of board, our of segment going to just segment largest really this computing right as now you center. and the is so see years in computing -- we grow to is This data center it's know, to we're up great momentum. see across data strength And And set

Fargo. question And Aaron from comes your with next Wells Rakers

them for on first thanks questions. going here. results. I'm taking the Yes, to two slip in of the Congratulations

is the cycle of become about the think heels that's part in think revenue the become on things and model of was First of of really VMware's platforms context BlueField-X incremental when product they we starting growth should we just really the for BlueField-X, as question, should those you. material project how your all, company? upgrade about are install the curious Colette, Thank to behind That's then, last contributors or the question I kind tracing like ray kind much of you how pre-race base think the us. gaming on past the talked ray of about one. of And I still kind

terms moving to So, we approximately the yes, us traced a a we're early great probably still that that. GPUs. at that this we of from XX% strong time. up opportunity cycle have We've of little definitely And folks stages already, have but front in we of ray of in bit discussed our the had have moving in

So base, driver upgrading it's not to us our for the and only a to are that also RTX a just a great desktop opportunity install GPUs, part but folks with to great of continue good upgrade RTX. laptops growth of

want Colette, me do take one? the second you to

please. Yes,

question great -- good BlueField. a on Aaron,

all, fundamental the to be of change. very, data There several the reasons are architecture that reasons. modern has several to very for that First rearchitected center has it makes clear

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to -- zero it has has two to number be So trust. be

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it's estimate of makes think the it, center a run the put the much you and the inside probably assume thing only created the which of And that is is not data trust that's how on kind data money. data on that strange, CPU In fact, applications. cores running center you want center, to applications, because services you security it, to half how zero depending if want about you to

could data just like, of if other the center for even completely software soaked as that the you accepting, of the is those to you half The running imagine defined doing up computing provide cost And business. applications.

security the it and center data exposes the plane plane the commingles infrastructure, application the However, and to attackers.

on another already -- so accelerate ended of will, And To running it security effective. you which set is because good the really, the and change services CPU to CPUs, defined to more more CPUs law if it architecture has is effective, fundamentally to really moving that doesn't the software offload that of one system, make you want as set and and was it result going separating to make Moore's virtualization one a infrastructure that. of operating software

so and computing. offload a the take want software using and of that application accelerated And form you take that accelerators, to accelerated --

-- what And created so things cores. BlueField-X, -- a we fundamentally you us of in the XX And CPU already. all allows approximately of BlueField-X cores, we're BlueField these BlueField-X about. CPU XXX processor And the give sense that's is just to that which it are building it. -- replaces process replaces put approximately

we've aggressive really so, to pipeline a got this. do And

every software is every will packet, every data DPU single a processor. chip what check. of today's real that's Now, center about data network be I world intrusion. that market, will it be node most a networking think will accelerated and something infrastructure on big mix like it the offload centers for [indiscernible] single will But today. a time replace way have this world will it's importantly, where consuming And processing the is, about It enable that's -- of time smart to half it application in the server how in monitored with single will it. chip. being believe a And all is every will this the the future single It BlueField, programmable

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tell, it. of working can this. form computing And a accelerated I'm The a company really on hard a difference. this excited I put is You to And make energy about going it. lot my into that's really is of

comes Vivek Bank And your Securities. of next question from with America Arya

let's impact PC how of for CMP that if, whatever these And a about XXXX, saw XXX% So kind in brings reason, core you we question. B your gamer it is, Because of product? rate, of goes in crypto predictable part decline of we growth 'XX demand? do NVIDIA see away, your cycle. for than what able questions is more fence this think then kind year-on-year the say the when my sustainability. is lot taking Jensen, manageable Thanks and to even ring crypto

us the Thank two think of give gamer sustainability these one about fence of the demand? do on topics, ring your your you perspectives what effect? core crypto PC kind how just So you. And does

Sure. Thanks a lot.

it's estimate is much how crypto done. exactly all, where hard First of and being mining to

the by the in-house contributed However, professional of we like amount can only of increases [ph]. it assume mining is that majority tremendously when vast miners, especially

created GeForce CMP. we are and so fungible. And not And CMP the

GeForce You is use and GeForce. better use gaming. CMP of could doesn't CMP from mining, producing take you those yields can't away but for supply for the

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And your Credit next question with comes Pitzer John Suisse. from

two quick hopefully Yes. questions. me guys. Thanks for ask Good let Jensen, I had question. afternoon, the

days ago, something you've First, the of of been as guys put you very penetration doing hearken cost always more at the couple down out to monitor brought And to you analyst growth. you I back successful really drive more the you the save. spend,

sense trends? talks NVIDIA Enterprise? there's anything sort Enterprise in do your we AI, And And you business of curious Washington that security. up leadership maintain of government out of the at can is important I domestically. that cost government related, and that subsidies. to do then that NVIDIA And pent the can't subsidies these chip about you and of is when inside cost kind look or impact think of fabs How that goes a related have more on this COVID deployment how around unlocks? towards question industry, lockdown relative about subsidizing of your there building AI of AI either demand just my A or or with think so But think lot might whether I us down to is stack, national software second the you a the I'm customers the lot give much brings

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the accelerate, energy cost the been all a is system, XXx, TCO, because sometimes sometimes dramatic. sell has the and all the so component, entire of factors, and X sometimes and infrastructure system, the acceleration the And we do applications reduced TCO entire services the and for XXx, we by the the Xx. people However, the

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Rasgon question from comes Bernstein. And Stacy your with final

for [Indiscernible] Hi, my taking Colette. Thanks questions. guys.

like think that heard beginning of the all dance about. the of the year. of the think the that kind a the other also digestion in half, So it would I any the for, you've you kind do little to like case? one mean, of in sequentially, point reason there kind around then Is the business especially sequentially shouldn't guys, I guess you for talked tailwinds itself can that seeing is sounds quarters now other rest And could sequentially like response since question believe core But as trough and of grow that center your that first after rest that grow we're strength of And to you still clarify for year? be bit the gaming through grow center, a that? you few I guess, back, I same guess would hyperscale particular, the given belief in that data last suggested is gaming is the is of questions. QX year? as I company through data through Colette, that the of of well the and coming quarter I had still rest

Yes, Stacy, question. thanks the for

about looking at what we I of discussing with first and when lot So QX, results. a talked And really QX we we all our when about QX between QX. were we're start expected

still don't. knew overall often between provide more believed was, say. as continue working we strong then Given to demand absolutely demand continued we supply to which was would to and QX, grow. we the we for We have hard And that to and high What demand that we strength from grow we what gaming. lead again, QX growth are QX for QX the

about additional supply talked we have have We coming. that

expect the into the continue move to half gaming. to as second of We well grow as for year we

quite the on a out as quarter channel, know one guide we only our at take the but lean. we is serve to gamers, the channel is supply, Now, time, overall the building work plan

second all half growth And back-to-school, in particularly base. the cycles year, expect opportunity to us. important still lineup the games, coming, of and install do overall the we yes, great when RTX this, the so of the very a for upgrade holiday see And there's we

will here. work of in Now, our of guidance terms terms in data center,

of QX the center. And from growth up to planned things to for a have open data our guidance. accelerate second We see QX to year do continue in overall half time we the in as

using We couldn't also be the a host we added products of a now applications better that have, inferencing the here. that lineup of great again that our It products software we've overall and are lineup have.

well be to continued growth. opportunity as So this that an see could

growth we we We supply will the work that year. the both yes, But markets. see in these need terms the for of half second of definitely can serving of in

over Huang, are the Jensen The CEO, no questions further time. I'll at you. There call back turn to this

Well, Launched platforms are new several thank you. Thank ramping I you platform we for and joining is accelerating. There at are that computing us initiatives. NVIDIA GTC, today. mentioned. now

tens together We Omniverse, to and of enabled [indiscernible]. millions designers First, NVIDIA of a the artists virtual enable and fusion for in metaverse. of RTX, own AI virtual their to platform NVIDIA NVIDIA collaboration by built create worlds and

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Cloud, and enterprise to GeForce doing. progress model all DRIVE you. Fleet NVIDIA you're for NVIDIA NVIDIA partner, model. services the software our partners NVIDIA top on next license want of to our adds Command And beyond with see, work Edge, on of AI and HPC, look I NVIDIA can Now Enterprise, updating Thank amazing to also you quarter. We NVIDIA thank business platforms Enterprise as forward span our employees the lead Benz that. computing transformed NVIDIA the on our end-to-end you and top to As that Autonomous we've our chips. vGPU, subscription Omniverse of and PC, business Mercedes

concludes This conference call. today's

now may You disconnect.