NVIDIA Q3 Net Profit Hits $19.31B, Soars 109% YoY

On November 20, 2024, NVIDIA reported its Q3 FY2025 earnings for the period ending October 27, 2024, surpassing market expectations in both revenue and net profit.

NVIDIA's Q3 revenue reached $35.1 billion, a remarkable 94% year-over-year increase and a 17% quarter-over-quarter rise, outperforming the market's forecast of $33.16 billion.

Under GAAP accounting standards, the net profit was $19.31 billion, a 109% increase from the previous year and a 16% quarter-over-quarter growth. This exceeded the market’s expectations of $16.93 billion. Earnings per share (EPS) stood at $0.78, up 111% from the previous year and 16% higher than the previous quarter, also surpassing expectations of $0.75. Gross margin was 74.6%.

On a Non-GAAP basis, net profit reached $2 billion, a 100% year-over-year increase and an 18% rise compared to the previous quarter. EPS was $0.81, up 103% year-over-year and 19% quarter-over-quarter. Gross margin was 75%.

Breaking down performance by department:

· The Data Center division set a new record with $30.8 billion in revenue, reflecting a 17% increase from the previous quarter and a 112% year-over-year growth.

· The Gaming and AI Computer division saw revenue of $3.3 billion, up 14% quarter-over-quarter and 15% year-over-year.

· The Professional Visualization division brought in $486 million, a 7% quarter-over-quarter increase and a 17% year-over-year rise.

· The Automotive and Robotics division achieved $449 million, reflecting a 30% quarter-over-quarter increase and a 72% year-over-year growth.

Looking ahead to Q4, NVIDIA forecasts revenue of $37.5 billion, with a 2% margin of error. While this is above the market's expectation of $37.08 billion, the quarter-over-quarter growth rate of 70% is a slowdown compared to the 265% growth observed in the same period of 2023. GAAP and Non-GAAP gross margin are expected to be 73.0% and 73.5%, respectively, with a potential variation of 50 basis points.

NVIDIA's CFO, Colette Kress, noted that the company shipped 13,000 Blackwell samples during Q3. Demand for Blackwell is “incredible,” with every customer eager to be the first to deploy the chip. Blackwell shipments began in Q4 and are expected to ramp up in 2025. Revenue from Blackwell is anticipated to exceed previous estimates of several billion dollars in Q4. Additionally, NVIDIA's current-generation AI chip, the H200, also saw significant growth this quarter.

Kress also mentioned that there are supply constraints for both the Hopper and Blackwell systems, with Blackwell's production expansion expected to continue until FY2026. The demand for Blackwell will likely outstrip supply for several quarters.

NVIDIA's founder and CEO, Jensen Huang, emphasized that the AI revolution is rapidly transforming industries worldwide, driving the global shift toward NVIDIA's computing architecture. With infrastructure providers scaling models for training, post-training, and inference, the demand for Hopper and Blackwell chips is extraordinary.

Huang further highlighted that AI is changing every industry, company, and nation. Businesses are adopting AI agents to overhaul workflows, and investments in industrial robotics have surged with breakthroughs in AI. Governments recognize the importance of advancing national AI capabilities and infrastructure.

Despite exceeding expectations, NVIDIA’s stock price dropped after the earnings report, with a post-market decline of over 5%.