Today NVIDIA announced their earnings for the third quarter of their fiscal year 2016 (yes their fiscal year is almost a full year ahead of calendar) and the company posted record revenues for this quarter at $1.305 billion. This is up 7% from last year, and 13% from last quarter. Gross margin was 56.3%, with an operating income of $245 million and a net income of $246 million for the quarter. This resulted in diluted earnings per share of $0.44, which was up 42% year-over-year.

NVIDIA Q3 2016 Financial Results (GAAP)
  Q3'2016 Q2'2016 Q3'2015 Q/Q Y/Y
Revenue (in millions USD) $1305 $1153 $1225 +13% +7%
Gross Margin 56.3% 55.0% 55.2% +1.3% +1.1%
Operating Income (in millions USD) $245 $76 $213 +222% +15%
Net Income $246 $26 $173 +846% +42%
EPS $0.44 $0.05 $0.31 +780% +42%

NVIDIA also reports Non-GAAP figures, which excludes stock-based compensation and acquisition costs, restructuring, and warranty. Gross margin was slightly higher at 56.5% compared to GAAP results, with operating income at $308 million and net income of $255 million. Earnings per share on a Non-GAAP basis were $0.46. The Non-GAAP numbers are important this quarter because of the large write-down NVIDIA took last quarter on their Icera modem division.

NVIDIA Q3 2016 Financial Results (Non-GAAP)
  Q3'2016 Q2'2016 Q3'2015 Q/Q Y/Y
Revenue (in millions USD) $1305 $1153 $1225 +13% +7%
Gross Margin 56.5% 56.6% 55.5% -0.1% +1.0%
Operating Income (in millions USD) $308 $231 $264 +33% +17%
Net Income $255 $190 $220 +34% +16%
EPS $0.46 $0.34 $0.39 +35% +18%

NVIDIA saw great gains in GPU sales, which are the bulk of the company. GPU based revenue was up 12% year-over-year and up 16% over last quarter, with gaming GPU revenue up 40% over last year, and now sits at record levels. The Quadro side of the house did not fare so well, with revenues of $190 million, which is up 8% over last quarter, but down 8% compared to the same time last year. Tesla and GRID revenue was $80 million, growing since last quarter 13%, but down 8% year-over-year.

Tegra processors are still a mixed bag for NVIDIA. They have tried their hand in the mobile phone and tablet space, but with little success, but they have seen good performance from Tegra in automotive applications, and this continues to be the growth area for Tegra. For the quarter, Tegra revenue was $129 million, which is down 23% year-over-year. This decline is due to the tablet and smartphone space, because their automotive attributed revenue was $79 million, which is up 11% since last quarter and up more than 50% year-over-year. There is still hope for Tegra, but it appears to be less and less likely to be in the tablet space. NVIDIA did win the Google Pixel C tablet but it’s unclear yet how it will fare in the difficult tablet market.

NVIDIA also still receives $66 million per quarter from Intel due to a patent license agreement.

NVIDIA Quarterly Revenue Comparison (GAAP)
In millions Q3'2016 Q2'2016 Q3'2015 Q/Q Y/Y
GPU $1110 $959 $991 +16% +12%
Tegra Processor $129 $128 $168 +1% -23%
Other $66 $66 $66 flat flat

During Q3 2016, NVIDIA paid back $53 million in dividends to shareholders and bought back 4.6 million shares. Their goal for FY 2016 is to repay $800 million, and through three quarters, they are now at $604 million. NVIDIA is planning on paying approximately $1.0 billion to shareholders for their next fiscal year.

Breaking down the numbers a bit more, NVIDIA has seen big growth in the gaming segment, with revenues increasing from $468 million since Q1 FY 2015 to $761 million this quarter. Year-over-year, the gaming market has grown 44%, at a time when the PC industry as a whole has contracted. PC gaming appears to be alive and well. This has covered the drop in NVIDIA’s other segments, with the biggest drop being PC & Tegra OEM, which fell from $350 million in revenue last year to just $192 million this quarter, which is a drop of 45% year-over-year. Automotive is growing, but it is still some ways away from matching the Tablet market for sales.

Overall, any time you can set a record for a quarter it is clearly good news. Not all of NVIDIA’s business is growing as quickly as they would like, but luckily for them, their largest segment is the one that is growing at a much quicker pace than the rest of the industry.

Looking ahead to next quarter, NVIDIA is expecting revenues of $1.30 billion, plus or minus 2%, with GAAP margins of 56.7%.

Source: NVIDIA Investor Relations

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  • Samus - Sunday, November 8, 2015 - link

    >"R9 285 and even the R9 280X are both faster than the R9 380"

    "Sure the 280x is faster than the 285 (as it should be it has a bunch more processors) But the 380 is faster than the 285."

    Do you care to explain how the R9 380 is faster than the R9 285 when they are IDENTICAL? The R9 380 is just a rebadged card. The only difference is the clock speed, something easily rectified in 30 seconds.

    I'm going to go on record here and say I have an MSI R9 285 and an Asus GTX 960, both running 1920x1080 monitors on overclocked Core i5's, and the GTX 960 is faster in Battlefield 4 (a game optimized for Radeon GPU's) and the R9 285, mildly overclocked to 1020MHz (a clockspeed the R9 380 ships at in many cards I believe) is faster in Bioshock.

    If you want to throw overclocking into the mix, the GTX 960 will beat the R9 285/380 in just about everything, because it can clock beyond 1400MHz in some cases. I've gotten mind to 1425/8000 and although it seems to throttle sometimes, it still bests the R9 285 by a few FPS.

    Just because the R9 285/380 has more was FP performance and a 256-bit bus doesn't make it faster. That memory bus actually causes more power consumption and is mostly underutilized. Probably explains why AMD is shipping a R9 380X next week with hand-picked chips to clock it higher. Then the GTX 960 won't be as relevant, unless of course AMD actually ships the card for $250 as is rumored. That'll be insulting to the GTX 970, which can be had for $270-$280.
    Reply
  • BurntMyBacon - Monday, November 9, 2015 - link

    @Samus: "Do you care to explain how the R9 380 is faster than the R9 285 when they are IDENTICAL? The R9 380 is just a rebadged card. The only difference is the clock speed, something easily rectified in 30 seconds."

    This is what you should have said earlier. A 5.6% increase in clock speed with no other changes is not going to be more than 5.6% faster. That's at best going from 30 fps to 31.5 fps. More likely a lot less than that. Also, as you said, easily rectified by a R9 285 in 30 seconds. Again, I'll skip the nVidia vs ATi comparison. It doesn't interest me at the moment. Probably be more interested when ATi's next gen HBM architecture and Pascal hit.
    Reply
  • just4U - Friday, November 6, 2015 - link

    I've used the 380 in all it's incarnations thru the years.. and I also own a 4G960. I purchased the 960 because it doesn't run as hot and it doesn't use as much power but there's no way it's as fast as the 380.. Reply
  • Samus - Saturday, November 7, 2015 - link

    Depends on your 380 and depends on your 960. If your 380 is overclocked from factory (most are) then you might want to overclock your 960 (some are, and those that are, its very mild)

    On a level playing field, the 960 is generally faster mostly because more games favor NVidia. Even if its the weaker GPU, it's irrelevant if the engines are not optimized for it. We all thought this would change when AMD secured design wins for all the next-gen consoles, but it hasn't.
    Reply
  • tamalero - Thursday, November 12, 2015 - link

    You know, its funny that you accuse someone else of using excuses.
    You're doing wild in the comments with excuses.
    Reply
  • just4U - Monday, November 16, 2015 - link

    No Samus.. I have one of the fastest clocked 960s (from MSI) and I've used many different variants on what's now called the 380 and speed wise? It's not as good. Reply
  • BurntMyBacon - Monday, November 9, 2015 - link

    @Samus: " All the benchmarks I've seen show the R9 380 is practically on-par with the R9 280, which isn't a surprise because its the same damn GPU clocked higher."

    I'm not interested in arguing the performance aspect, but the R9 380 is definitely not the same GPU as the R9 280. GCN 1.2 vs GCN 1.0. 256bit memory bus vs 384bit memory bus. Tonga vs Tahiti. I'll source this information right here at anandtech:
    http://www.anandtech.com/show/9387/amd-radeon-300-...

    @Samus: " It's important to point out the R9 285 and even the R9 280X are both faster than the R9 380"
    See the link above. The R9 380 is the same silicon as the R9 285 (Tonga) with a higher clock rate. Now I'm not going to argue the merit of a paltry 52MHz, and you could argue it isn't faster, but faster is definitely not slower.
    Reply
  • just4U - Monday, November 16, 2015 - link

    It's actually based off the 285.. Reviewers loved it but criticized it's 2G memory.. and the fact that it really didn't have a place at the time with the 280X being better. But it brought all the goodies to the table (feature wise) introduced in other products. Reply
  • webdoctors - Friday, November 6, 2015 - link

    The last AMD financial statement revealed their margins are too low, and they're bleeding money because of it. Now you're suggesting they FURTHER reduce prices, so they can increase market share.

    EXCELLENT! They'll lose money with negative margins, but make it up in volume....
    Reply
  • Samus - Saturday, November 7, 2015 - link

    Take a macroeconomics class and you'll understand precisely how economies of scale work. Reply

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