Nvidia Financial Results. 4Q 2005

[ChrisRay]

NVIDIA Reports Operating Results for the Fourth Quarter and Fiscal Year 2005


Company Achieves Record Annual Revenue Exceeding $2 Billion, Quarterly Net Income Increases 99 Percent Year-Over-Year
For further information, contact:

Michael Hara
Investor Relations
NVIDIA Corporation
(408) 486-2511
mhara@nvidia.com

David Roman
Public Relations
NVIDIA Corporation
(408) 486-6250
droman@nvidia.com

FOR IMMEDIATE RELEASE

SANTA CLARA, CA─February 17, 2005─NVIDIA Corporation (Nasdaq: NVDA) today reported financial results for the fourth quarter of fiscal 2005 and the fiscal year ended January 30, 2005.

For the fourth quarter of fiscal 2005, revenue increased to $566.5 million, compared to $472.1 million for the fourth quarter of fiscal 2004, an increase of 20 percent. Net income for the fourth quarter of fiscal 2005 was $48.0 million, or $0.27 per diluted share, compared to net income of $24.2 million, or $0.14 per diluted share, for the fourth quarter of fiscal 2004, an increase of 99 percent.

Revenue for the fiscal year ended January 30, 2005 was $2.01 billion, compared to revenue of $1.82 billion for the fiscal year ended January 25, 2004. Net income for the fiscal year ended January 30, 2005 was $100.4 million, or $0.57 per diluted share, compared to net income of $74.4 million, or $0.43 per diluted share, for the fiscal year ended January 25, 2004.

"2004 was a turning point for NVIDIA. We produced a record number of market-leading products and platform-changing initiatives, and set the stage for growth in the coming years," stated Jen-Hsun Huang, president and CEO of NVIDIA. "Besides achieving record revenue, we continued to expand our market footprint beyond PC graphics and now have growing businesses in all of the major digital media device markets – PCs, cell phones, and consumer electronics."

Huang added, "Our results also reflected a major focus across the company to drive profitable growth and improve gross margins back toward historical levels."

Fourth Quarter Fiscal 2005 Highlights

NVIDIA and Sony Computer Entertainment Incorporated (SCEI) entered into a collaboration to jointly develop graphics and computer entertainment technology for the highly-anticipated next-generation PlayStation computer entertainment system.


NVIDIA and Intel signed a broad, multi-year patent cross license agreement and front-side bus license agreement that enables the Company to deliver the NVIDIA nForceâ„¢ platform technology on Intel-based systems.


NVIDIA launched and delivered volume production of four new desktop and notebook GeForceâ„¢ 6 graphics processing units (GPUs) designed for the value, mid-range and enthusiast segments including the GeForce 6200 with TurboCacheâ„¢ technology, Go 6800, Go 6600 and Go 6200. Unit shipments of all GeForce 6 GPUs more than doubled over the previous quarter.


The first NVIDIA® SLI™-Ready multi-GPU motherboard, the ASUS A8N-SLI, became available for the AMD64 platform. Nearly every enthusiast system builder is now shipping NVIDIA SLI technology-based systems. NVIDIA SLI technology earned the Popular Science "Best of What's New" Award and Maximum PC’s coveted Gear of the Year Award.


NVIDIA extended its share from 64 percent to 67 percent from the third quarter of calendar 2004 to the fourth quarter of calendar 2004 in the Performance DX9 Desktop GPU segment, and gained 3 percent during the fourth calendar quarter in the Total Desktop and Notebook segment according to Mercury Research’s Fourth Quarter PC Graphics Report 2004.


The NVIDIA nForce4 media and communication processor (MCP) set record sales growth during the fourth quarter by shipping nearly one million NVIDIA nForce4 MCPs since the product’s availability in December 2004. From the third calendar quarter of 2004 to the fourth calendar quarter of 2004, NVIDIA nForce MCPs increased their share of the AMD64 segment to 48%, as reported by Mercury Research for the quarter ending December 31, 2004. The NVIDIA nForce product line also achieved record revenue for the fourth quarter.


NVIDIA announced in February 2005 the new GoForce 3D 4800 wireless media processor (WMP) which integrates highly-realistic 3D graphics, multi-megapixel still imaging, and high-quality video capture and playback. The 4800 includes a hardware encoder called “NVIDIA FotoPack™†technology which automatically optimizes JPEG compression to allow users to store up to three times more photos in the limited memory space on cell phones. The WMP business unit also achieved record revenue for the fourth quarter.


NVIDIA announced the NVIDIA nForce Professional MCP, the industry’s only PCI-Express core-logic family for AMD Opteron processor-based server and workstation platforms. The NVIDIA nForce Professional family includes the 2200 and 2050 MCP.


NVIDIA announced PureVideoâ„¢ technology, a combination of dedicated video processing hardware and software technologies designed to accelerate the playback of MPEG-2 and high-definition video content at home theater levels of quality.

http://www.nvidia.com/object/IO_18533.html

 

[Geo]

Listening to the call.

"gaming super-computers"? Howza?

"one of the big growth drivers" in gpu business is SLI. That was a surprise --I would not have thought the volume was there to call it that. "SLI Demand has exceeded even our expectations." That would certainly lead one to believe that SLI is here to stay for at least the midterm, and is not just a one-hit blip in the architectural roadmap. So much for the "its just a stunt to win benchmarks" crowd (at least so far as NV's official position).

"We've clearly turned the corner". On what not exactly sure, but one wouldn't have to try too hard to insert "after the FX fiasco" as the implied thing that the corner was being turned from.

Re: Stragetic position for "Spring Refresh" in the PC industry --"Certainly not unclear to us that our competitions gpus are rather long in the tooth". "Cranking the clocks up is great for reviews but horrible for manufacturing". "We like to win with architectural advantages" (OWTTE).

Ducked softball opportunity to say that 90nm transition would be easier than the famously difficult (for NV at least) 130nm transition. "Every major node is hard."

"We really don't know" what to expect as to market share as they ramp up Intel chipsets. "We'll figure it out as we go." Going after high-end enthusiast market first with no integrated-gpu in first offering.

 

[SsP45]

Pretty good, but still a bit short of ATI's $614 million from last quarter.
________
BUY VAPORMATIC

 

[Richthofen]

Pretty good, but still a bit short of ATI's $614 million from last quarter.

well but still there is a big amound of FX line revenues in those numbers. That's why i am surprised how good their quater actually was.
If we compare the new lineup i would say its easy to guess that they did a lot better than ATI. It will be interesting to see the numbers from the next quater esspecially with GF6600 and GF6200 series ramping up in both markets - AGP and PCI-Express.

 

[Phantom69]

<snip>

"one of the big growth drivers" in gpu business is SLI. That was a surprise --I would not have thought the volume was there to call it that. "SLI Demand has exceeded even our expectations." That would certainly lead one to believe that SLI is here to stay for at least the midterm, and is not just a one-hit blip in the architectural roadmap. So much for the "its just a stunt to win benchmarks" crowd (at least so far as NV's official position).

<snip>

I suspect, although I don't actually know, that this is based on the sales of nF4 SLI chipsets as opposed to a survey of people buying dual SLI-capable GPUs. And I know more than a few people (myself included) who bought a nF4 SLI chipset based motherboard simply because there was no alternative. The nF4 Ultra boards appeared much later, and I wasn't gonna let my X850XTPE lie there unused for that long!

P69

 

[digitalwanderer]

I dunno, I can see how SLI really did exceed their expectations.

Personally I figured if more than 3 people bought 'em they'd exceed nVidia's expectations, I thought they did SLI purely for bragging rights.

 

[Tahir2]

You'll be surprised how much of a killer app SLI is for some consumers...it isnt just bragging rights - a lot of buyers are totally bought into the hype.

 

[Smurfie]

Well, we just got a row of 20 new 6800gt SLIed workstations for our office. Just talk to people doing professional graphics, there is great interest in SLI. Pricewise, beats a high end Quadro anytime.

 

[mczak]

Well, we just got a row of 20 new 6800gt SLIed workstations for our office. Just talk to people doing professional graphics, there is great interest in SLI. Pricewise, beats a high end Quadro anytime.

That comparison doesn't really make sense at all. For pixel-pushing, a single 6800GT is as fast as any quadro anyway. And if you've got some "non-gaming" work with lots of polygons, wireframe mode et al. you can add as many SLI cards as you want and it will still lag behind (quite a lot in some cases due to drivers) to a single quadro.
Though I haven't actually seen any specviewperf benches or something like that with SLI cards - I would suspect though SLI to be slower than a single card except maybe in ugs. Thinking about it, AFR mode might give some boost but I wouldn't count on it.

mczak

 

[Geo]

I can't promise that he didn't misspeak himself, but I can tell you he specifically said it was a big growth driver *in the gpu business*. He turned to mobos later in his talk before taking questions.

 

[Smurfie]

I don't have benchmarks to back me up. But my company does believe that consumer cards are good enough. The cost difference really helps influence the purchasing decision.

When we need precision, it's still Quadros and Wildcats. Using even a 6800 can result in all kinds of precision errors. But when it comes to cheap and quick, SLI is an effective answer.

It just depends on your scale.

 

[WaltC]

"We've clearly turned the corner". On what not exactly sure, but one wouldn't have to try too hard to insert "after the FX fiasco" as the implied thing that the corner was being turned from.

I think nVidia owes much of its improving fortunes of late not only to a better product line, but also to a distinct change in the company's publicly stated PR positions and campaigns and attitudes. For all of '03 and much of '04 it was "nVidia is right and everybody else is wrong--Microsoft was wrong both on the xBox2 and the DX API, ATi is wrong and DX9 is not the future of 3d gaming, FutureMark is wrong, then right, " etc. ad infinitum. It was truly a period of "nV against the world," more or less and nV was clearly losing.

Maybe it's my imagination, but nV's PR seems to have changed dramatically and the company has apparently decided that the markets really do know better after all, and so nV is trying to give people what they want as opposed to cramming what people don't want down their throats and demanding that they like it... It seems to me that the braindead hyperbole and nonsense of the company's public profile as it appeared in '03 into '04 is largely *gone* these days. Instead of arguing with its markets nV seems much more eager to please them these days.

Anybody else notice that nV's PR machine seems to have greatly matured as of late?... Or, do you think I'm seeing things?

 

[Tahir2]

Or, do you think I'm seeing things?

I think you are seeing things. What happened befor with NVIDIA is that their products did not speak for themselves and were poor in relation to their competition. To overcome this failing NVIDIA diverted attention away from their products and attacked the competition and the industry in general ina most vicious fashion.

Now however NVIDIA have products that can defend themselves and in many ways are superior to the competition (if not in every single way). NVIDIA is no longe needed to bark so much as the products bite fends NVIDIA off from any attacks.

I don't think I will forgive NVIDIA's management and PR for what they did in the 58xx to 59xx period - however this still has not stopped me from buying a good NVIDIA product (6600GT) for my own system - but that is because I dont see the behaviour of NVIDIA as a personal attack against my intellect

 

[digitalwanderer]

I think you are seeing things. What happened befor with NVIDIA is that their products did not speak for themselves and were poor in relation to their competition. To overcome this failing NVIDIA diverted attention away from their products and attacked the competition and the industry in general ina most vicious fashion.

Now however NVIDIA have products that can defend themselves and in many ways are superior to the competition (if not in every single way). NVIDIA is no longe needed to bark so much as the products bite fends NVIDIA off from any attacks.

Two things:

1. I'd state it more like, "Last round nVidia's cards sucked, so they lied and bullshitted like hell. This time their cards don't suck and are comparable to the competition, so they don't have to as much."; but the gist is the same.

2. That's what Walt said.

 

[Tahir2]

2. That's what Walt said. Rolling Eyes

No.. WaltC said NVIDIA's PR department had matured.

I was just disagreeing with that. Just wait til NVIDIA make another bad product.

I did misread when Walt wrote:

I think nVidia owes much of its improving fortunes of late not only to a better product line, but also to a distinct change in the company's publicly stated PR positions and campaigns and attitudes

To:

I think nVidia owes much of its improving fortunes of late not to a better product line, but also to a distinct change in the company's publicly stated PR positions and campaigns and attitudes

I'm human so I make mistakes, so please dont roll your eyes at me - is a bit scary ya know.

 

[WaltC]

I think you are seeing things. What happened befor with NVIDIA is that their products did not speak for themselves and were poor in relation to their competition. To overcome this failing NVIDIA diverted attention away from their products and attacked the competition and the industry in general ina most vicious fashion.

But you see, my point was that the strategy you outline didn't work. Rather than divert attention away from the shoddiness of the nV3x line, their PR conduct served to focus everybody's attention on it like a laser... The more nV protested the more critical people became of nV3x's shortcomings. Negative PR almost never works for you. I really think nVidia may have actually learned that because of their nV3x experience.

It did not divert attention from nV3x but rather amplified such attention enormously, imo. My opinion has always been that had nVidia not acted as it did nV3x would have gotten far less negative attention than it did--and the company would not have gotten such a huge black eye from it. IE, the fact that nV3x was so shoddy was only half the story during that time. nV hurt itself at least as much as ATi when nV drew so much attention to the disparity between R3x0 and nV3x. Speaking for myself, for instance, nV's PR conduct at the time put a bad taste in my mouth that has yet to subside.

Now however NVIDIA have products that can defend themselves and in many ways are superior to the competition (if not in every single way). NVIDIA is no longe needed to bark so much as the products bite fends NVIDIA off from any attacks.

Yes, but don't forget that nV40 is the most powerful repudiation of everything nVidia claimed was "wrong" with R3x0 that nVidia could possibly ever make... nV40 is literally nV eating every single negative word it uttered at the time. Everything "right" about nV40 is everything nVidia claimed was "wrong" with R3x0, isn't it? nV40 is nV following ATi's lead--not the other way around. Personally, I haven't seen any change in that, myself.

I don't think I will forgive NVIDIA's management and PR for what they did in the 58xx to 59xx period - however this still has not stopped me from buying a good NVIDIA product (6600GT) for my own system - but that is because I dont see the behaviour of NVIDIA as a personal attack against my intellect

Well, it certainly stopped me from buying nV--that, and the fact that ATi makes what I wanted, anyway. I also much prefer the Catalyst driver program. Last but not least, I find it much easier just to trust ATi. Every bit of that is fallout from nV's dark '03 period as we've discussed--plus a smidgeon of my personal dislike of nV for how it railroaded 3dfx (which I will admit is ameliorated by the fact that 3dfx more or less did itself in--but with a generous helping of "suicide sushi" happily served up by the grinning faces at nVidia through large doses of utterly spurious PR propaganda at the time...)

 

[Arun]

Yes, but don't forget that nV40 is the most powerful repudiation of everything nVidia claimed was "wrong" with R3x0 that nVidia could possibly ever make... nV40 is literally nV eating every single negative word it uttered at the time. Everything "right" about nV40 is everything nVidia claimed was "wrong" with R3x0, isn't it? nV40 is nV following ATi's lead--not the other way around. Personally, I haven't seen any change in that, myself.

I disagree - the NV40 is the logical evolution of the NV30. Just like the NV30 is the logical evolution of the NV20, and so on. It's not like the NV40 was using FP24 and didn't have register penalties *shrugs* The only real exception to that is the AF algorithm imo.

Uttar

 

[KimB]

Though I haven't actually seen any specviewperf benches or something like that with SLI cards - I would suspect though SLI to be slower than a single card except maybe in ugs. Thinking about it, AFR mode might give some boost but I wouldn't count on it.

As long as you're not limited by bus bandwidth or anything other than pure geometry performance, AFR essentially doubles geometry processing power.

 

[KimB]

Yes, but don't forget that nV40 is the most powerful repudiation of everything nVidia claimed was "wrong" with R3x0 that nVidia could possibly ever make... nV40 is literally nV eating every single negative word it uttered at the time. Everything "right" about nV40 is everything nVidia claimed was "wrong" with R3x0, isn't it? nV40 is nV following ATi's lead--not the other way around. Personally, I haven't seen any change in that, myself.

Like what, Walt? The NV40 still benefits from partial precision. It still supports FP32 (the main thing that nVidia claimed was "wrong" with the R3x0, if I remember correctly). Surely you're not equating a peformance-fixed core to repudiation.