with its results for the second quarter and outlook for the third quarter, it exceeded market expectations. Still, investors seem to have expected more. Shares are down 4% at $120.40 after market close.
Nvidia reported in the second quarter revenue of $30.04 billion versus last year’s $13.51 billion and against estimates of $28.86 billion. At the same time, sales exceeded market estimates for all divisions. Data center revenue was $26.3 billion ($10.32 billion y/y, $25.08 billion est.). Gaming revenue rose 16% year-over-year to $2.9 billion (est. $2.79 billion). Professional visualization revenue rose 20% year-over-year to $454 million, beating the market estimate of $451.1 million. And auto sales swelled 37% year over year to $346 million, the market estimate of $347.9 million.
However, they had to subsidize the increase in sales higher research and development costswhich climbed 51% year-over-year to $3.09 billion, finishing slightly above the market estimate of $3.08 billion. Adjusted operating expenses rose 52% year-over-year to $2.79 billion (market estimate $2.81 billion).
Adjusted operating profit still swelled to $19.94 billion up from $7.78 billion last year and beating the market estimate of $18.85 billion. Adjusted profit per share is 68c, the market estimate is 64c. Adjusted gross margin climbed to 75.7% from last year’s 71.2% (market estimate 75.5%). it also has free cash flow that has more than doubled year-over-year to $13.48 billion. And although it is keeping its quarterly dividend at 1c per share, it has approved an additional $50.0 billion in share repurchases.
It forecasts sales of $32.5 billion in the third quarterplus or minus 2%, while the average analyst estimate was $31.9 billion. Adjusted operating expenses should be about $3.0 billion, above market estimates of $2.98 billion. However, adjusted gross margin should be between 74.5% and 75.5%, with expectations of 75%.
Production of the new generation Blackwell architecture will begin in the fourth quarter, when it is expected to bring in several billion dollars, and will continue until 2026. In the second quarter, Nvidia has already sent test samples of this architecture to its clients. Demand for the Hopper architecture is strong and deliveries are expected to increase further in the second half of fiscal 2025.
According to a Bloomberg survey, 66 analysts have a buy recommendation on Nvidia and 8 advise holding the stock.
Source: Bloomberg
