Nvidia (NVDA) results for the 4th quarter of 2022

Nvidia (NVDA) results for the 4th quarter of 2022

Nvidia co-founder and CEO Jensen Huang attends an event during the annual Computex Computer Expo in Taipei.

Tyrone Siu | Reuters

Nvidia reported fourth quarter results and sales on Wednesday that beat analysts’ expectations and provided a good outlook for the current quarter. The stock fell about 2% in extended trading.

Here’s how the chipmaker fared against Refinitiv consensus expectations for the quarter ending January:

  • EPS: $1.32, adjusted, vs. $1.22 expected, up 69% year-over-year.
  • Income: $7.64 billion, versus $7.42 billion expected, up 53% year-over-year.

Nvidia said it expects first-quarter revenue of $8.1 billion, beating analysts’ expectations of $7.29 billion. Nvidia CEO Jensen Huang said in a statement that the company is seeing “exceptional” demand as its chips are useful for artificial intelligence and other intensive applications.

Huang also said Nvidia’s supply constraints are easing and the company’s product offering will “significantly” increase in the second half of 2022.

Nvidia shares rallied in 2021, but are down around 10% so far this year as investors seek safer investments in an inflationary environment.

Nvidia has received a boost as cloud providers and enterprises turn to its graphics processors which are used for artificial intelligence applications such as voice recognition and recommendations. Nvidia earned $3.26 billion in revenue for its data center business, up 71% annually.

During the quarter, Nvidia announced that Meta, Facebook’s parent company, would use its chips for AI research, for example.

Gaming remains Nvidia’s biggest market, as its latest GeForce graphics processors are ideal for playing advanced computer games. Gaming business grew 37% year-over-year to $3.42 billion, driven by GeForce sales, the company said.

Nvidia’s chips are also used by companies for applications such as computer-aided design and rendering. He reports those sales in his professional viewing business, which grew 109% annually to $643 million. The company said growth was driven by sales of workstation chips and hybrid work.

However, Nvidia’s automotive business fell 14% to $125 million. This is not a primary focus for the company, but represents a growth market for its chips. Nvidia said supply constraints from automakers were one of the reasons for its auto sales slump.

Nvidia said almost all of its GPUs now come with software that prevents them from being used to mine cryptocurrency and that miners can purchase specialized mining CPUs instead. It said it sold $550 million of crypto-specific cards in fiscal 2022, and just $24 million in the fourth quarter.

In a sign of how Nvidia is handling supply chain issues, the company said it had $9 billion in long-term supply obligations, up from $2.54 billion a year ago.

“We expect supply to improve every quarter going forward,” Huang said in a call with analysts.

Nvidia was in talks to buy chip technology company Arm from SoftBank, but the company announced earlier this month that the deal had collapsed under regulatory control.

“We did our best,” Huang said. “But the headwinds were too strong.”

Nvidia said it expects a $1.36 billion operating expense charge due to the failure of the Arm deal.

LOOK: Analysts will look at how companies are maneuvering supply chains