NVIDIA Q2 Net Income Soars 168%, Stock Drops 7%
On August 28, NVIDIA released its financial results for Q2 of the 2025 fiscal year, which ended on July 28, 2024. The company delivered strong performance for the quarter, but its guidance for Q3 was lower than market expectations, resulting in a notable drop in NVIDIA's stock price by 6.89%, following an initial decline of up to 8% in after-hours trading.
For Q2, NVIDIA achieved a record-breaking revenue of $30 billion, representing a remarkable 122% increase year-over-year and a 15% rise from the previous quarter. This performance exceeded analysts' predictions of $28.86 billion. The company's net income soared to $16.599 billion, up 168% from the same period last year and 12% from the previous quarter, surpassing the forecasted $14.64 billion. Adjusted net income, excluding GAAP measures, reached $16.952 billion, marking a 152% year-over-year increase and an 11% quarter-over-quarter rise. The adjusted gross margin stood at 75.7%, up from 71.2% a year earlier and slightly above the expected 75.5%. Adjusted earnings per share (EPS) were $0.68, a significant improvement from $0.27 in the prior year and better than the anticipated $0.64. NVIDIA also maintained its quarterly dividend at $0.01 per share and approved an additional $50 billion stock buyback program.
Examining the performance by business segment, NVIDIA's data center revenue for Q2 was $26.3 billion, reflecting a 154% increase year-over-year and surpassing the anticipated $25.08 billion. The gaming and AI PC segment generated $2.9 billion, up 16%, while the professional visualization segment, which includes advanced graphics workstation chips, earned $454 million, a 20% increase. The automotive and robotics segment, including automotive chips, saw revenue of $346 million, a 37% increase.
NVIDIA’s founder and CEO, Jensen Huang, highlighted, “The demand for Hopper chips remains strong, and expectations for the upcoming Blackwell chips are exceptionally high.” He further stated, “As global data centers accelerate their adoption of accelerated computing and generative AI, NVIDIA has achieved new revenue milestones. We have begun shipping Blackwell chip samples to partners and customers. Our new products, Spectrum-X Ethernet and NVIDIA AI Enterprise software suite, are scaling rapidly, demonstrating that NVIDIA is evolving into a comprehensive data center platform. We are supporting a diverse range of customers, from leading model developers to consumer internet services and various enterprises. Generative AI is poised to revolutionize every industry.”
Looking ahead to Q3, NVIDIA projects revenue of $32.5 billion, with a variance of 2%. While this is above the forecast of $31.9 billion, it represents a 79% increase year-over-year, marking the first time in five quarters that growth has not doubled. The most optimistic analyst forecast for Q3 is $37.9 billion.
Despite a decrease in gross margin from 78.4% last year to 75.1% this quarter, the figure remains above the 70.1% from the previous year. NVIDIA anticipates an annual gross margin around 70%, compared to the earlier expectation of 76.4%. For Q3, the adjusted gross margin is projected to be 75%, with a potential variance of 50 basis points.
NVIDIA CFO Colette Kress noted in the earnings call that Blackwell architecture chip samples have been dispatched to partners and customers. Mass production of Blackwell chips is scheduled to begin in Q4 and continue through 2026, with revenues projected to reach billions of dollars in Q4. The market’s expectations for Blackwell chips are extremely high. Demand for Hopper architecture chips remains robust, with increased shipments anticipated in the second half of 2025.
