NVIDIA Corporation (NASDAQ: NVDA) on 21st May 2020 announced the result for the first of quarter of 2021, the period of this quarter ended on 26th April 2020. The company has reported impressive results in this quarter, revenue has increased by 27% over a year, and the company has earned a net income of $ 917 million.
Financial Highlights of Q1 2021 result
- Revenue: In Q1 2021 revenue generated by the company was $3,080 million up by 27.92% from $2,220 million in Q1 2020.
- Gross Profit: Gross profit earned by the company in Q1 2021 was $2,004 million, increased by 54.62% from $1296 earned in Q1 2020.
- Gross Margin: Gross Margin of NVIDIA in the first quarter of 2021 and 2020 was 65.1% and 58.4% respectively.
- Operating Expense: NVIDIA’s operating expense in the first quarter of 2021 was $1,028 million, up by 9.5% from $938 million in the first quarter of 2020.
- Long Term Debt: Long term debt at the end of the first quarter of 2021 was $6,959 million, up by 71.38% from $1991 million at the end of the first quarter of 2020.
- EBITDA: NVIDIA’s EBITDA for Q1 2021 was $1113, increased by 125.76% from $493 in Q1 2020.
- Cash and Cash Equivalent and marketable securities: Cash and cash equivalents and marketable securities at the end of Q1 2021 was $16,354 million compared to $10,897 million at the end of Q1 2020.
- Net Profit: Net profit earned by NVIDIA in the first quarter of 2021 was $917 million increased by 57.03% from $394 million in the first quarter of 2020.
- Diluted EPS: The company’s diluted EPS in Q1 2021 was $1.47 compared to $0.64 in Q1 2020.
- Dividend: In this quarter company has distributed a dividend of $98 million compared to $97 million distributed in the same period year ago.
NVIDIA operates its business in four different segments. The company was able to increase it’s revenue in all the sectors in Q1 2021 with respect to the same period a year ago in all the sectors except the automotive sector.
- Gaming: This segment contributed the highest revenue amongst all the segments. IN Q1 2021 revenue generated by this segment was $1339 million, increased by 27% from $1055 million generated in Q1 2020. This segment could have reported more growth but was impacted due to supply chain disruption and closedown of retail outlets in China and China icafe. ‘NVIDIA GeForce Now’ has added 650 games, 1500 will soon be added, and has added 2 billion users since February. The company also launched 100 new laptops having super graphic process units, started at $999. Company that shipment of these laptops will increase in the second quarter. NVIDIA has also done a partnership with Microsoft to launch Minecraft with RTX as an open beta in Windows 10.
- Datacenter: This segment has provided a bright spot to the company due to the highest jump in revenue growth amongst all the segments. Revenue generated from this segment in the first quarter of 2021 was $1141 million, increased by 80% from $634 million reported in the first quarter of 2020. In this period company launched A100 (Ampere Architecture GPU) which company is shipping worldwide. A100 has been adopted by most of the cloud service providers such as HPE, Amazon, Alibaba, dell technology, Microsoft Azure, Google cloud platform, etc. DGX A100 launched by the company has been used by Argonne National Laboratory for research on COVID-19. NVIDIA has also launched EGX A100 and EGX Jetson Xavier NX which are used for larger commercial off-the-shelf servers and micro-edge servers.
- Professional Visualization: Revenue generated by this segment in Q1 2021 was $307 million, up by 15% from $266 million earned in the same period year ago. In this segment, revenue has increased due to an increase in demand in healthcare, education, and media and entertainment sector. An increase in sales of Workstation laptop has helped the company to accelerate growth in revenue. NVIDIA Quadro RTX has been integrated with Autodesk latest virtualization 3D (VRED 21) software to provide customers with AI power diagnostics.
- Automotive: In this segment, the company was able to generate revenue of $155 million in Q1 2021, down 7% from $166 million in Q1 2020. This segment reported negative revenue growth due to a decline in the automobile sector due to the COVID-19 crisis. NVIDIA announced the production of the Xpeng P7 all-electric sports sedan. The delivery of this vehicle will start from next quarter. This vehicle has NVIDIA DRIVE AGX platform and DRIVE OS software to provide level 3 automated driving and receive over the air updates.
NVIDIA has donated $10 million to those who were affected by coronavirus during this period. The company has also accelerated promotion and raises of employees by several months. Company is providing hardware and software to different institutes for doing research on COVID-19.
Acquisition of Mellanox
NVIDIA has successfully completed the acquisition of Mellanox on 27th April 2020. The company has approximately invested $6.9 billion for this acquisition. This acquisition has provided the opportunity to the company to increase its market share in cloud-based technology and artificial intelligence, this will further help the company to increases its revenue in the Data Centre segment.
NVIDIA expects that its revenue in the second quarter of 2021 will be approximately $3.65 billion. Analyzing report of the first quarter of 2021, it is expected that the company will be able to increase its revenue is all the segments except automotive. The successful acquisition of Mellanox will also increase the revenue in the next quarter. Datacenter will contribute the highest revenue amongst all the segments in the second quarter of 2021.