Nvidia again beats market expectations and reports record results📊

Nvidia beat market expectations for another consecutive quarter. In addition to outperforming expectations on all of its most significant financials, the company also announced a 10-1 stock split and a dividend increase. In response to the results, the company is trading up about 4% in after-hours trading. 

Nvidia shares are up 4% in after-hours trading. Source: xStation

The company reported revenues of $26.04 billion (+260% y/y), a level as much as 5% higher than forecast. In y/y terms, this translates into a growth rate of 262%. Among segments, the Data Center segment continued to perform best, rising to $22.56 billion and beating market expectations by 6.78%. Nvidia also performed better in Gaming, its second most important revenue segment, where it reported $2.6 billion (1.17% higher than consensus). 

Nvidia revenues per segment. Source: Bloomber Finance L.P., XTB Research

In addition to higher revenues, the company also managed to report slightly lower-than-forecast operating expenses, which resulted in a strong y/y improvement in margins (gross margin rose 12.1 p.p. to 78.9%). As a result, the company achieved an operating profit of $18 billion, up 492% year-on-year, and a net profit of $15.24 billion (+461% y/y and +9% against analysts' expectations). At the EPS level, the company reported $6.12, which also beat the market consensus forecast of $5.65.

Nvidia financial results (in bln $ except for EPS). Source: Bloomber Finance L.P., XTB Research

“The next industrial revolution has begun — companies and countries are partnering with NVIDIA to shift the trillion-dollar traditional data centers to accelerated computing and build a new type of data center — AI factories — to produce a new commodity: artificial intelligence,” said Jensen Huang, founder and CEO of NVIDIA.

Due to the record results and optimistic forecasts for the future, Nvidia has announced a 10-1 stock split and increased dividend payout. The stock split will take place on June 7, 2024, and the dividend payout will be increased by 150% to $0.10, which after the split will mean $0.01 per share. 

The company' outlook for fiscal 2Q25 is also above expectation. It forecasts to reach $28 billion (+/- 2%) in revenues, which is above market forecasts of $26.8 billion. The projected gross margin ranges from 74.8-75.5%, and for the full fiscal year 2025 the company expects values of around 75%. The projected increase in operating expenses for the full year is about 40%, and they expect expenses of about $4 billion in Q2. 

The stock split and dividend increase are signs of Nvidia's confidence in its growth prospects. The company's results sustained the company's strong performance, and cemented it as a true leader in the technology race related to AI proliferation.The broad use of its products, from games and graphics to autonomous cars and data centers, means that strong growth prospects continue to present themselves to the company, especially as the company proves with successive reports that it can nurture both robust revenue growth and improved margins.The stock split and dividend increase should make its shares more attractive to retail investors.