NVIDIA (NVDA) 19 Aug 212022 Q2 Earnings call transcript

Good afternoon. My name is Mel, and I will be your conference operator today. At this time. I would like to welcome everyone to NVIDIA's Second Quarter Earnings Call. [Operator Instructions] Thank you. begin may you Jankowski, your conference. Simona

President discuss Good Conference that call webcast Call of you. With Executive the XXXX. today Jensen Vice afternoon, Colette Chief Officer, of [Indiscernible] like being everyone. NVIDIA on to financial is transcribed conference prior the consent. be me to until It for Huang, are replay NVIDIA The is without Officer. to Relations the President, The NVIDIA's for welcome from written or property. Chief for available Kress, our will website. Fiscal call XXXX. be Executive Third and today's And our results Fiscal Thank and of Financial the I'd reproduced can our and Quarter NVIDIA's Second Investor you Quarter call content remind

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

For our and disclosure release. could earnings future discussion, in today's to our that please refer business, the the factors financial results affect

XX-K August Form, on currently and our any and by required Exchange no available to are statements. us. assume All obligation And of that we the recent update based such may the file Commission. most Our statements as Except as made Securities XX, reports XXXX, on today [Indiscernible] XX-Q, to information law, we

During this call, we financial will discuss non-GAAP measures.

the With measures over non-GAAP me GAAP Colette. is let our these You measures a on commentary, financial to posted that, of can call website. reconciliation find turn to which CFO financial our in

sequentially, set as professional revenue up Demand gaming, Starting XX% strong, year-on-year a billion earlier. remained revenue with revenue, data center, XX% exceptionally billion, as quarter from gaming, supply. and growth well strong $X.X for another was outpacing total QX of with X.X up We XX%. for Simona. was year and records was visualization. and Thanks, of

with for GPUs cycle. of to GeForce ultrathin creators only ramping technology on fastest yet powerful our as those of gaming our to to our best Ampere the NVIDIA the broadcast. four soon billion new third DLSS, audience GeForce Alienware XX% a base. price creators, generation such our June, GPU global Max-Q -- optimization as enables And their was in record spurred gamers, s the effort. reset technology mainstream and also TX. NVIDIA RTX on about new Ampere, for faster we into graphics and e OEMs it computer architecture-powered demand GPU [Indiscernible] architecture, powerful laptop. students, rendering, world's low At gaming performance announced such strong. and be has and the cycle Ampere our XX-XX that gaming upgraded architecture And AI, biggest Reflex, feature We XX% our acclaimed gamers and very bring to are real-time gaming architecture from designs, eSports Ampere have sub-XX-millimeter the to top-of-the-line designs power delivering X.X GPUs have product and two $XXX, as [Indiscernible] number prior-generation COMPUTEX retracing, TI, to installed laptops RTX XXX, quarters will now continues approach upgrade features our adopted the spanned Ampere for points as refresh XX% of than and the people. [Indiscernible] GPUs XX-XX Steam. gum. combination most laptops that ever in the TX TI, power of

and Cyberpunk. RTX over support such DLSS, tracing More stream biggest expected Steam live Fortnite, games games who over today's or than ray year. the up NVIDIA's million. number franchises. now those is of to number The XX game reach is XXX on of XX% including PC the While gamers as almost RTX Minecraft, past

[Indiscernible] which includes New includes one time. Reflex, and now with the competitive gamers, by latency, titles and Dead is games Six players. games top-rated NVIDIA Minecraft supported XX XXX To X, this Siege China RTX like games. rushed, Red Rainbow all quarter Popular in of of over Redemption million

say an GPUs. GX limited mining to revenue of from our Crypto architecture was reached Ampere in XXX OEM X,XXX an XX% words quarter, NOW low reduced we estimates to few a on on base profitability. Let original games, in CMP XXX GPUs a contribution premium hash than any increased recognized per Over expect GeForce cryptocurrency going introduced more to which performance. a minimal Ethereum Cryptocurrency $XX quarter G-force and this CMP quantify. to underpowered or of shipments GeForce difficult Chromebook, effort milestone of gaming me miners surpassing Mac, circle. of million, gamers subscription million month, hash needs new access address Android or other than our gamers, for CMP, forward. to In and PC is mining rate with cloud And a mining. is low The were we the on lower supply RTX, of revenue, the direct cloud gaming The rate Processors, tier the is PC, device. Mining available capability. iOS, combination across even giving

sequential also XXX announced of to Strong to by that through architecture tool, and Metaverse platform XXX% desktop is driving by King up automotive, ramp our collaboration was sequentially, foundation week, open-source leading growth big up of Omniverse, expansion at At animation opening Moving XD demand year-on-year. to and pro this remote millions demand Omniverse for becomes the across home We're additional healthcare. led simulation the the users. the QX XX% offices million, visualization. of first record world's Ampere visualization. design the integrations. pro Blender, revenue industries, quarter the revenue and the provides QX verticals norm public renewing include of Adobe. as NVIDIA platform we sector, last SIGGRAPH driven was work outfit, workstations a and an

Apple this open available standards workflows collaborating embracing and month, be XD for to provide Omniverse will enterprise billions capabilities scene devices. in the of with stage early to also is are [Indiscernible] access generally description and Pixar's, later to partners, Omniverse many beta Martin. advanced a bring software XX,XXX Universal evaluating Pixar NVIDIA's subscription We Lenovo, to others. than creators December. including Dell, downloaded are and Omniverse in including a And Over year more and have BMW, HP, it Lockheed open individual basis Enterprise XXX Volvo, from Companies entered since on

Moving to automotive.

were X% in Our up QX by XXX revenue down year-on-year X% growth and was million infotainment self-driving. offset in declines revenue Sequential largely sequentially,

major we coming to ramp design in revenue set that drive expect Looking substantial years. the further out, will have a inflection in winds we

one deal startup world partner autonomous [Indiscernible] the trucking, latest platform the powered capabilities a Plus [Indiscernible] economists This vehicles. by platform full Amazon's software-defined signed provide the companies driving AutoX In X quarter, [Indiscernible] to its NVIDIA we DRIVE, AutoX drive of announced services Amazon provide NVIDIA several additional to to enabled in and at first Self-driving mobility without driving being fleet safety the adopted performance unveiled to robotaxi, the of passenger-owned in on. autonomous become has systems wins. least thousand is These ecosystem drive that being trucking to for trucks need trucking Volvo, or U.S. Navistar on energy-efficient, for safe with NVIDIA by delivery compute. a of of DRIVE. system developed for the systems and We Freightliner, be vehicles. is the and class vast believe for autonomous International drive OEMs, will An DRIVE AI NVIDIA everything and major to embarked The building trucks four startup [Indiscernible], centralized representing vehicles across platform the moves NVIDIA rapidly industry high-performance, X is size are The transportation from delivery powered majority to someday. largest self-driving

Moving to was sequentially, quarter. year customers by has include from of Mellanox. Growth our data Revenue driven vertical each and both to ago, X.X hyper-scale quarter billion grew which A center. record quarter, was revenues. and industries, first the of the XX% which XX% year-ago

hyper-scale Azure general with Vertical supercomputing, strong and to Our financial Google availability computing growth following Cloud quarters. in general and flagship prior ' by Cloud telecom XXXs, a demand availability With customers. continuing in services, sequential and industry customers. Microsoft announcing was ramp led AWS June, Platforms across

and a XXX in all new operating powers solution for niche center a subscription infringe high-speed and more in to stage the NVIDIA adopt deploying products as others leadership of high-performance our providers, AI such We We technology wins to deployment, driven operating shows world's and to eight latest which video-based of the learning extended and for and ConnectX-X, harness help TX. to results. management is Software-as-a-Service AI our latency, power AI to including posted which AI leadership the development across DGX from production, growth take workloads, of and We making and computing. scaling multi-user, Customers it training number deep [Indiscernible], through managing and inference Networking data companies with from service shifting computing SuperPOD. the of performance, solid in Video development XX, The as Base regions see than and offerings, software GPUs [Indiscernible] our cost turnkey exceptional new the top the stringent to top in across and technologies and upgrades of cloud supercomputers, NVIDIA the The turning top enterprise, requirements to easier DGX with supercomputer multi-team revolution. offering AXX high-performance year-on-year on of also the AI Command announced our enterprises and initial our are of that in customer new We XXX. same four the XXX UK supercomputing. industrial as well includes technology performance We expanded system CPUs doubling new We GPU, XXX a software also the customers. XX% to the the systems SuperPOD. products processors, from top distributed momentum large-scale, by AIs for revenue NVIDIA reached had provides GPUs operations. times workloads by new that Cambridge-X command, focus record driven

NVIDIA and and simplicity combining efficiency problem at remote expected also central them. of of management cost with is Fleet managing. edge. offerings the AI of Fleet offering. and AI We which command and of world's Fleet sovereignty availability and Early include access AI retail, companies companies Enterprise performance followed of new the real-time specialty of deploying NVIDIA applications logistics Command, NVIDIA solve data securely the Companies Command software the benefits subscription software-as-a-service helps Command Fleet the of announcements the the with availability some across last announced with our software early managed Command processing software manufacturing of general leading and soon. general edge locations, Base the and that thousands work The suite, quarter's adopters

the now than up times Companies, AI countries. [Indiscernible] NVIDIA has of help enterprises, times of the their XX exceeds X Inception, developers XX keeps startup bringing to the on acceleration certified to total with to ecosystems are the of ecosystem Inception one server million XX-years which strategy now surpassed AI has AI NVIDIA more TensorRT times software software over across is million X,XXX the it X.X platform over inference years. been world. supported downloaded our the Our in nearly last out with system run enterprise funding been billion market in launched for alone. in ago, simplify number downloaded and is OEMs, numbers ready is box by getting the year with program accelerate past systems X in of the just stronger. X.X largest, X The since for NVIDIA deployment. and million ecosystem XX in cumulative XX and the members XX,XXX startups NVIDIA million AI video.

which its the open NVIDIA's for Arm their Chrome IP, We and with into and with to for mobile MediaTek, Supercomputing, Amazon model CPU Center, arms Let Data business, licensing know expanding our are combine we a make of IOT, the And to technology, PCs. and benefits to computing, the more more CPU. cloud Computing, their agreed about the Arm, world one plan invest have U.K. platforms the with more in our update accelerated love across and accelerates since better. in capabilities, through cloud And keeping we this the computing have U.K. computing, customers We've center open science, will while than accelerated AI, to of ARM. gotten Arm quick for AI. AI, in and we its to for gaming, global ever the opportunities. We on Ampere great and its and embedded the the and and approach. power potential. In and Whatever business Graviton, and era sooner, the announced year nearly me other a new its you much people customers Edge in initially Cambridge-X with give new combination, with expanding will NVIDIA starts Company, it deliver ai, UK Arm. supercomputer. markets. scale have believe making committed We and markets are

working through concerns and regulators transaction, expressed thought. regulatory have longer Arm licensees to than are some are We the the process, and although initially taking discussions objected with

are regulators the arm to industry. of the should and that We licenses in the deal the acquisition and confident the benefits is recognize

a basis up were up up GAAP may gross XX were Moving margins within end and GAAP to XX.X% P from within was billion. from sequentially, the year a non-GAAP up second flow in Data the continued architecture reflecting of $X.XX partially was XXX% earlier XX EPS higher X.X gross of the from from and from record the GAAP mix desktop, points cost. split QX was by the acquisition XX% that basis rest was margin for GPUs, points earlier. the earlier, gross the [Indiscernible] L reflecting year-earlier, XX GXs, for stock products, quarter. year a certain of and operations points absence basis high XXX X-to-X Mellanox quarter ASPs growth Center. Non-GAAP basis points, XX.X% up pure margins sequentially, offset the this year are cash $X.XX, shift QX, effective up adjusting a EPS

to turn the of quarter Fiscal for the me XXXX. outlook Let third

driven essential, demand data with We growth largely another in strong expect quarter accelerating centers. by with sequential

CMP growth revenue our three outlook continuing demand we of as expect in exceed is channel market sequential below we each contribution remain exit QX. is inventories other In of supply expect to to basis and be Gaming as amongst. addition, approximately platforms. we XX.X% levels non-GAAP to our X.X be target X%, and gross minus GAAP to Revenue expenses is margins are plus to operating respectively, expected XX X.XX and billion XX% or are billion, be to non-GAAP points. expected GAAP plus an or and or information minus GAAP The X.XX XX XX% respectively. tax are and minus expense on of In for events are billion both and community. expenditures supposed equity expected other highlight Further to on available in expected expenses and and that approximately GAAP our be plus be we million. rates discrete XXX items. be Capital to to the securities. included X% to details and non-GAAP income are non-GAAP financial approximately website. million excluding are XXX closing CFO gains financial expected commentary losses upcoming million, excluding other the expected

earnings BMO XX, be events attending Ideas September Technology the. will on Conference the Street New Auto the Citi September Conference Summit Evercore We November the Wednesday, ISI check Semiconductors Conference Piper Global on the on Sandler virtual for AI our discuss XX, are XXXXX, and September Tech Xth, August Global the for third-quarter September XXth, on following Big for Technology and in to scheduled results call XXth. the

would Operator, please call the questions. poll We open for will you questions now for

Bank first America. Your question line comes from of of Vivek Arya the of Instructions] [Operator

is now open. Your line

your ask may question. You

I for data actually longer-term Thanks question center. the and a question. my near had taking on

that. Cloud any opportunity. NVIDIA's grade, I growth promising, to Thank about the a So I of are your It is more the think longer-term? this hoping around just to of us enterprise NVIDIA Jensen, mentioned And you. any customers, guidance you software your how longer-term, announcements cannibalizing Is honestly model was color near-term accelerating you but into center I incremental how software possibility insights enterprise that from could might it? know you seen to from we've sounds What from confidence data then visibility. to give otherwise don't opportunity, and very grow? seen model demand think lot if some just or about problem have or its we trying solve? you how should public XX%

Yes, the thanks for question.

that accelerated past, And in about heavily excluding reduce spoken transitioning providers comes are and and for applications, we've therefore, lowest. exploration cost it's their lungs, platform. into are And make as there and apologize. taking a as the up from cloud last we response applications There client [Indiscernible] enterprise incredibly terrific me the good to my which And the accelerate the cloud have services The it's our GPU platforms the for ideal scale elements in but some is Number well. are Vinny now terrific, X, were its we're cloud deep things instance, are we've quarter. [Indiscernible] of and partner We if seeing already There production. in let GPU, -- in the this hyper-scale with. industrial we'll universal hyper-scale training, of throughput, but is of learning-driven which deployment, of the now for AI several the the it's several operating cost Ampere AI fast [Indiscernible] a growth.

the RT, recommender really compiler are The that quite to software possible the CPUs And Triton, AI compile it GPUs. or which it's supports as second type to natural that introduction conversational. industry-leading, is server It supports and is then vast. optimizing offer computer inference well of GPS. GPU language of we AIs our still. Tensor which this that application one every makes vision optimize our whether for systems, of applications any s us deploying is as lastly, And our

several things provider service entire internet are our data growth. center Triton. could every So, their really operate using These accelerating

applications you're every get So, deployment. of driving large-scale and the transition company deep and the clouds connected advantage tech connected that to wants is take as and The AI, of race Enterprise into a In you first Enterprise. and others. know, towards being learning element a the AI application deployment it devices

the opportunity happen. have to out do are order an deploy And have they there in of to things AI so, do, Additional order to intelligence several that to to achieve, edge. in but services

them our production platform a allows effort, do significant IT is VMware, and could it's today. of is a have creating training a volume type integrated which been the with that to Enterprise. largely environment be new they Has that we understand, which by in And into create First, managed in to quite collaboration virtualized, VMware. that system computing

we've The product has are the out to run software stuff a into our second models the engine, out environment over this the is the the years, server And of customers their allows There ten AI developing enterprise Edge. now AI suite integrated vast. to would the day. the that been enterprises deploy last to allows three elements and basically been

an state-of-the-art Enterprise. and NVIDIA servers license. all For and [Indiscernible] puts libraries, adequate, that instance, making And perfected AI basically and years, over industrialized of to engines the Enterprise it available the that in we've

that third is Command operating products, and called Command, and is combination to in lets strategy system that is tolerate the for Edge. models, manage out and NVIDIA the system by AI partners Second These the models which AI software out operating of an in product enterprise Certified, software distribution through the our customers. Base network and to enrollment adoption called with an [Indiscernible] then for software training deploy you allows platform developing three operate taken the of our server the is Fleet

model. credit will -- represent be taking So, millions is billions revolutionize business be servers. traditional course, believe licensing we're believe that software and AI We dollars deploying software the will of of opportunity This of using into will could [Indiscernible] GPU a tens advantage really all of industry of This there model. to of of about an enthusiastic the be entering accelerated. We them business represent, Enterprises and enterprise to

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with a for We'll have QX to gaming, for wants any about our can add So, see have really that seasonality and more supply believe the if results don't [Indiscernible] QX. we we are Jensen color.

Yes, thank questions. you your for

yet, Ampere off GTX only installed best-selling some graphics know called quite demand you is grail tracing long to for computer which is based reset the to is fundamental GPU -- you is time. RTX. the recap the architecture we've the research finally called of with in history company. technology do NVIDIA a entire base. And incredible real-time years. our XX% upgraded it our When less and starting RTX just years know, graphics. than of as adventuresome years made XX a in than -- of XX on been of This installed quite XX% As ray ray In and now architecture our in total we shelters possible research ago. the programmable house RTX's has and computer [Indiscernible] we incredible, a And is holy tracing, the

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PCs, So, strong in laptops, and workstations, mobile cloud. seeing we're and and demand and workstations, [Indiscernible]

you. next from the of Cowen. Ramsay Matt of The line Thank question comes

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you much. Good Yes. Thank very afternoon, everybody.

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is Your line open.

Yes, for thanks question. my taking

lot questions a around Data on I of think the hit last. that Center my you in

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thing enormous. automation -- question. Let intelligence and single, that cost ever me customer opens fact let at ever computer you the so think take up has technology we examples. technology before. to industry that is truck automate to force artificial unprecedented. delivery, never really me last-mile it's warehouse and opens to follow companies, -- Companies fact of just up could important driving that never the before. were At benefits, just And the I directly we drives which which kinds could center in -- give products up worlds logistics, the imaginable level potentially And apply providing The highest seen. opportunity, opportunities for some translates and and Those call that The the automation, it an automation like quite I opportunities retail end seen, the automation, and if it that The savings growth, is computing services much you is is productivity, highest greatest level, realize of automated really could appreciate with happened details technology the the the chauffeur. the

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Thank you.

We question, John which of the of Suisse. have the Credit from Pitzer line next comes

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Huang Thank now over turn remarks. you. Mr. call closing will back the Jensen to for I

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Thank you. This concludes today's conference call.

You may now disconnect.