NVIDIA Q406: Record results & $205M net profit (non-GAAP)
- Thread starter Arun
- Start date
My only concern from these numbers is that inventories seem quite high. I dont think they expected Vista upgrades/purchases to be this slow and it isnt helping that their Vista drivers are getting bad press.
epic
epic
- Growth led by MCP division, which had revenues up 16% and its 10th consecutive record quarter.
- $50M of GF8800 revenue; nearly 400K units shipped => $125 revenue/chip.
- ASPs were slightly down in desktop GPUs, but relatively flat everywhere else.
- Memory grew by $10M from quarter to quarter. Will hopefully decline in Q1.
- 45% margins getting close, all divisions improved margins quarter over quarter.
- 446 new employees in Q4, ended the year with 4083 employees. 1300 new employees(!) throughout the year.
- Inventory declined by $19M [which is a good thing], and is down to 65 days. Mostly decreased inventory of non-GeForce 8 GPUs.
- Revenue is expected to be down 5% due to seasonal factors in Q1; there won't be industry factors to compensate, Vista is unlikely to do any major difference in Q1.
- Going to limit headcount increases in Q1 and cost reduction, less one-time stuff, thus operating expenses should remain flat.
- GeForce 8-based products ramping or on the verge of ramping in all market segments, including notebooks, desktops, professional, GPU computing products and motherboard GPU products (integrated graphics). Apparently, the G80 IGP is on the verge of taping-out and ramping afterwards.
- Unit shipments of GeForce 8 Series GPUs are unlikely to go above those of the GeForce 7 Series until the end of the year, or even next year. Revenues will be at the break-even point much faster, though.
- Regarding PortalPlayer, the hope is to introduce an amazing combined product at the end of the year, and ramp that up in 2008. Very large and exciting area for us to expand into.
- Intel IGPs: Very enthusiastic, customers [OEMs] WANT us to enter the market.
[cpu hint]
- Handhelds: lot of the focus has been on Motorola and the models they got into weren't as successful as they had hoped. Going to extend that focus.
- Revenue of $108M in handheld for the year. Expecting nice growth now that they have more design wins, but hard to say how much exactly.
- Vista: cautious about impact on the first quarter, optimistic for the future.
- Focus on the formfactor issue for laptops: discrete GPUs don't make much sense in some markets, so IGPs are a requirement in that market - and that's OK, it's just another way to sell GPUs for them.
- AM2 and Conroe now being much more present in the channel is helping their MCP business.
- Margins grew for all divisions. Higher professional also helped, while higher memory contributed negatively to that. Public target remains 45% for now.
- Biggest new competitors with application processors: Texas Instruments, Samsung and Marvell. Focus will be on the segments where the phone does music+video.
- Vast majority of sold chipsets right now are for the AMD platform, but looking to expand further in the Intel area in the future; 680i/650i are ramping more and more.
- Tax credit from congress helped for Q4, hoping to keep the tax rate as low as 14% in Q1 though.
- $50M of GF8800 revenue; nearly 400K units shipped => $125 revenue/chip.
- ASPs were slightly down in desktop GPUs, but relatively flat everywhere else.
- Memory grew by $10M from quarter to quarter. Will hopefully decline in Q1.
- 45% margins getting close, all divisions improved margins quarter over quarter.
- 446 new employees in Q4, ended the year with 4083 employees. 1300 new employees(!) throughout the year.
- Inventory declined by $19M [which is a good thing], and is down to 65 days. Mostly decreased inventory of non-GeForce 8 GPUs.
- Revenue is expected to be down 5% due to seasonal factors in Q1; there won't be industry factors to compensate, Vista is unlikely to do any major difference in Q1.
- Going to limit headcount increases in Q1 and cost reduction, less one-time stuff, thus operating expenses should remain flat.
- GeForce 8-based products ramping or on the verge of ramping in all market segments, including notebooks, desktops, professional, GPU computing products and motherboard GPU products (integrated graphics). Apparently, the G80 IGP is on the verge of taping-out and ramping afterwards.
- Unit shipments of GeForce 8 Series GPUs are unlikely to go above those of the GeForce 7 Series until the end of the year, or even next year. Revenues will be at the break-even point much faster, though.
- Regarding PortalPlayer, the hope is to introduce an amazing combined product at the end of the year, and ramp that up in 2008. Very large and exciting area for us to expand into.
- Intel IGPs: Very enthusiastic, customers [OEMs] WANT us to enter the market.
[cpu hint]
- Handhelds: lot of the focus has been on Motorola and the models they got into weren't as successful as they had hoped. Going to extend that focus.
- Revenue of $108M in handheld for the year. Expecting nice growth now that they have more design wins, but hard to say how much exactly.
- Vista: cautious about impact on the first quarter, optimistic for the future.
- Focus on the formfactor issue for laptops: discrete GPUs don't make much sense in some markets, so IGPs are a requirement in that market - and that's OK, it's just another way to sell GPUs for them.
- AM2 and Conroe now being much more present in the channel is helping their MCP business.
- Margins grew for all divisions. Higher professional also helped, while higher memory contributed negatively to that. Public target remains 45% for now.
- Biggest new competitors with application processors: Texas Instruments, Samsung and Marvell. Focus will be on the segments where the phone does music+video.
- Vast majority of sold chipsets right now are for the AMD platform, but looking to expand further in the Intel area in the future; 680i/650i are ramping more and more.
- Tax credit from congress helped for Q4, hoping to keep the tax rate as low as 14% in Q1 though.
Thanks for the notes Arun.
Thats amazing.
Is this a normal trend, i.e. GF7 took the same time?
Can you shed more light on this? I was under the impression that their inventory levels were actually higher than last year. I guess they just have more of the lower end items?
epic
Sure. I think one part of that is when you have higher revenues, a higher inventory doesn't mean that much higher days of inventory. Furthermore, I'd say inventory is pretty fine now - it was a tad high in Q2/Q3 on the other hand though, iirc.
Random Digital
Newcomer
Makes me wish I had money to invest, and that I invested that money a few years ago.
Well, the analysts are doing their hardest to keep me convinced that they don't know sh*t about the things they cover. Didn't someone issue a sell rating recently on NVidia because PS3 sales were slow or something - as if that was the core of their business? These people are completely detached from reality...
BUT, thanks for the conference call breakdown Arun - appreciated!
BUT, thanks for the conference call breakdown Arun - appreciated!
Actually its a good time now. I just put my money on NV today, the stock price went below 30 and thats a good jumping in point. It might dip as far as 28 because of investor panic, but in 2 or 3 months time you'll be wishing you got in.
epic
edit: NV is going to $23-24 within a 2 weeks.
chavvdarrr
Veteran
and acording to theinw, AMD just issued warning that they'll miss 1st quarter target.... not that anyone in his mind expected something else