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Nvidia Q4 revenue and profit are both better than expected chip shortage may affect short-term supply

iconFeb 25, 2021 14:17

After US stock trading on Wednesday, graphics card giant Nvidia (Nvidia) announced its results for the fourth quarter and full year of fiscal 2021. The company's fourth-quarter revenue and profit both exceeded analysts' expectations, and guidance for the first quarter of fiscal 2022 was better than expected, according to the results. However, the stock changed from rising to falling after trading, raising concerns about the shortage of chips and the sales prospects of cryptocurrency mining processors.

According to the company's specific financial data, Nvidia's fourth-quarter revenue was $5.003 billion, higher than analysts' expectations of $4.82 billion, an increase of 61% from $3.105 billion in the same period last year and an all-time high for three consecutive quarters. Net profit was $1.457 billion, up 53% from $950 million in the same period last year. Adjusted earnings per share were $3.10, higher than analysts' expectations of $2.81, up 64% from a year earlier.

The data center and game graphics chip business are still the two main sources of revenue for Nvidia. By business, revenue from the gaming division in the fourth quarter was $2.5 billion, up 67% from a year earlier, higher than market expectations of $2.39 billion and breaking the record high of $2.27 billion in the third quarter; revenue from the data center was $1.9 billion, up 97% from the same period last year; revenue from the professional visualization division was $307 million, down 7% from the same period last year; and revenue from the automotive division was $145 million, down 11% from the same period last year.

For the full year of fiscal 2021, Nvidia's revenue reached a record high of $16.675 billion, up 53% from $10.918 billion in fiscal 2020; net profit was $4.332 billion, up 55% from $2.796 billion in fiscal 2020; and diluted earnings per share were $6.90. up 53% from $4.52 in fiscal 2020.

Huang Renxun, founder and CEO of Nvidia, said that 2020 was a groundbreaking year for Nvidia's computing platform, with record revenue in the fourth quarter. "our pioneering work in accelerating computing has made games the most popular form of entertainment in the world", and the popularity of supercomputing devices has made AI the most important force in technology.

Looking ahead, Nvidia expects revenue in the first quarter of fiscal 2022 to reach $5.3 billion, up and down 2%, exceeding analysts' expectations of $4.49 billion; gross margins in accordance with and without GAAP are expected to reach 63.8% and 66.0%, respectively, and fluctuate by 50 basis points.

The challenge is still in after-hours trading, the share price has changed from rising to falling.

Although Nvidia's results and performance guidance were better than expected, the company's shares fell in after-hours trading because of chip supply problems and concerns about the sales prospects of cryptocurrency mining processors.

Colette Kress, Nvidia's chief financial officer, said the chip shortage was limiting the supply of its products. "throughout the chip supply chain, there has been a significant increase in global demand for limited capacity and available components, especially in the gaming business," he said.

Nvidia is a Fabless (semiconductor company without a fab). Its business model is to design and sell chips for profit, and the chip production process is produced by TSMC, Sandian and other contract manufacturers. Recently, the production capacity of contract manufacturers is tight, which also affects the supply of Fabless like Nvidia.

Recently, Nvidia announced the launch of the GPU series for professional cryptocurrency mining to meet the special needs of etheric currency mining. The new GPU series, called cryptocurrency mining processor (CMP), features an optimized design that allows users to mine more efficiently and recover their mining investment more quickly. Nvidia said that the first batch of CMP graphics cards will be released in March this year.

In response, Nvidia founder and CEO Huang Renxun (Jensen Huang) said on the earnings call that he did not think this would be a large part of the company's business. "We expect this to be a small part of our business as we grow," he said.

In response to the ARM merger, Huang Renxun said in a statement: "We are making good progress in acquiring Arm, which will create huge new opportunities for the entire ecosystem." In September, Nvidia said it planned to buy ARM, from Softbank Corp. for $40 billion, a deal that would have a profound impact on the semiconductor industry.

Nvidia shares rose more than 2 per cent to $579.96 in regular trading on Wednesday. After the results were announced, the stock rose 3 per cent at one point, but then fell, eventually falling more than 2 per cent to $567 a share. Nvidia shares have risen more than 120 per cent over the past year, while the s & p 500 is up 25 per cent over the same period. At present, Nvidia has a market capitalization of nearly $360 billion, surpassing Intel to become the largest American semiconductor company by market capitalization.

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