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Nvidia sees record profits, serious growth

Nvidia sees record profits, serious growth

Nvidia's record profits are helped by serious growth in its Tegra business, but gaming remains an important part of the company's outlook - with founder Jen-Hsun Huang having particular praise for free-to-play titles.

Nvidia's latest financial figures are out, and if the global market is in a slump somebody forgot to tell the green camp: the company has shown impressive growth, but it's not in the PC market.

According to the company's quarterly earnings report, published late yesterday, its year-on-year revenue has hit a record high of $4.28 billion - 7.1 per cent up on last year's figures - despite a dip quarter-on-quarter that saw it end the year on a 8.1 per cent sequential slump. The company's quarterly net profit figure is the stand-out headliner, however, growing 50 per cent year-on-year to $174 million - despite a stock repurchase programme that saw the company spending $100 million in the last financial quarter and a further $46.9 million in dividends to shareholders, resulting in a dip from Q3's $209 million profit figure.

Nvidia's secret to riding out the flagging PC market is, if you hadn't guessed, Tegra. The company's system-on-chip processor division, responsible for one of the most popular chips for Android - and, more recently, Windows RT - tablets, grew its revenue 50 per cent in 2012 hitting a high of $540 million. While that's only a small fraction of the company's entire $4.28 billion turnover for the year, that figure is only likely to grow further in the coming years. Nvidia's GPU division, meanwhile, continues to dominate Nvidia's earnings, pulling in $3.2 billion in revenue for the financial year.

Speaking in an earnings call with press and analysts, Nvidia co-founder Jen-Hsun Huang was clear about his company's focus on growing its Tegra platform to account for a larger proportion of the company's revenue - a plan which, he claims, is going well. 'At this point we have more design wins [with Tegra 4] than we had at this point with Tegra 3,' Huang claims. 'You also heard we are now sampling our 4G LTE modem, and this is a pretty large market. It's still early in the overall modem market. It's about 150 million units large, projected this year, [and] growing about 50% per year. The overall connected device market is probably about one billion, north of a billion units.

'So there is a lot of LTE 4G modems that need to be shipped. And this is really the first year where we have the ability to engage the market. So we are really super excited about it. We are going to engage it very very hard. And we are sampling modems around the world now. And so those are good growth indicators for Tegra 4. In the first quarter, always we ramp down Tegra 3 as we ramp up Tegra 4. And hopefully in the future as we get more and more into lower-end devices where the lifecycle is a little longer, this transitional effect would be less pronounced. But this is something we expected and is something that will transition into Tegra 4 as fast as we can.
'

With Tegra 4 expected to ship in volume in July this year, Huang was doing his best to push the technology ahead of rival devices from ARM's other licensees, like Qualcomm's currently-shipping Snapdragon S4 Pro or Samsung's upcoming eight-core Exynos Octa. '[Soon] you will see performance evaluations of Tegra 4, and I think you’ll be quite pleased with them. Tegra 4 is many times higher performance than Tegra 3 in many areas and it’s designed to be very high performance. There’s a lot of confidence in why we can deliver that performance leadership. We said that about Tegra 3 and I think we delivered on that. This is an area that we’re quite good at. So, whether it’s CPU performance or GPU performance or camera performance, these are three areas that we’ve made big breakthroughs on.'

That's not to say Nvidia is moving away from graphics, of course. During the call, Huang described Kepler as 'the best GPU we've ever built - the best GPU the industry has ever built,' promising to bring the same chipset to its Quadro workstation line as quickly as possible. As for its consumer line, Huang claimed that the explosion in free-to-play titles will help drive growth there too: 'We have always said that PC gaming is vibrant. We have said that PC gaming is in fact growing, and the reason for that is because the PC platform is open and it allows for a lot of innovation, not only for technology but also for business models.

'One of the most important new growth dynamic has to do with free to play. Free to play is really a wonderful business model. So ,these free to play platforms are fabulous for PCs - and it attracts new gamers.
'

Naturally, nobody at Nvidia would be pushed on unannounced products or next-generation release schedules, but from the company's financials the future certainly looks bright.

16 Comments

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rollo 14th February 2013, 13:21 Quote
Nice work from nvidia actually seeing profits grow in most of there areas whilst others have really suffered in the current climate.
Shirty 14th February 2013, 13:26 Quote
Tegra just works.
Griffter 14th February 2013, 13:50 Quote
i only ever got nvidia cards... so this is coming from a fan...

"now to go the way of THQ - udraw pad with their ridiculous project shield nonsense" just when they up they decide to throw it all away with swollen heads and silly gimmicks.

come on nvidia.. show us something we want.
LightningPete 14th February 2013, 14:06 Quote
Nvidia are going to need one or two rivals however to keep this up otherwise driving for further innovation, performance and efficieny will decline in terms of growth. Well done though!
Hustler 14th February 2013, 14:16 Quote
I thought Tegra was just a custom ARM processor.
matee 14th February 2013, 15:06 Quote
I like nvidia cards - over the years I had much less problems with them than the AMD ones. Maybe I was just unlucky with Radeons. Glad to see them making money so they can spend it (hopefully on RnD).

But I don't agree on F2P. Sure it brings money and attracts more gamers, but I still prefer the old-school way of paying for a full game. Just imagine if they tried releasing FF7 under F2P. Disaster!

"The company's quarterly net profit figure is the stand-out headliner, however, growing 50 per cent year-on-year to $174 million - despite a stock repurchase programme that saw the company spending $100 million in the last financial quarter and a further $46.9 million in dividends to shareholders"

Quarterly profits have absolutely nothing to do with stock repurchase programme and same goes for dividend. "Spending" money on those two do not affect profits.
rollo 14th February 2013, 15:27 Quote
To maintain there profit growth on mobile they need htc, Motorola or another tablet to really see a huge sales win.

With Samsung and apple making there own chips and them 2 been the biggest I do wonder how well tegra4 will do this year.
pbryanw 14th February 2013, 20:36 Quote
Quote:
Originally Posted by matee
I like nvidia cards - over the years I had much less problems with them than the AMD ones. Maybe I was just unlucky with Radeons. Glad to see them making money so they can spend it (hopefully on RnD).
I've just switched over to a Nvidia card after years of Radeons and I'm very impressed with how they do things on the Green side. And it was worth getting a Nvidia just for the Geforce Experience program - it makes setting up all those hidden settings (and making your games look their best) a doddle.
dolphie 15th February 2013, 03:32 Quote
Hurry with the GTX 7xx, I need one asap.
LordPyrinc 15th February 2013, 09:22 Quote
For many years I only ran ATI cards. Once I bought my first NVidia card, I never looked back. I've always thought it was a mistake for ATI to sell out to AMD. I still believe that ATI would be a stronger company if it had not been bought by AMD.
Snips 15th February 2013, 11:59 Quote
It's good to see one of the better companies actually doing really well.
dolphie 16th February 2013, 02:13 Quote
Don't AMD have the fastest single card graphics card on the market?
CAT-THE-FIFTH 16th February 2013, 02:27 Quote
http://www.theregister.co.uk/2013/02/14/nvidia_q4_f2013_numbers/

GPU sales are actually down from last quarter.
Quote:
In the just-complted quarter, GPU sales were up 7.1 per cent compared to the year-ago period when the market was anxiously awaiting the launch of the "Kepler" family of GPUs. GPU sales were down 6.9 per cent sequentially, which indicates that pent-up demand for Kepler-based machines is waning a bit.

It is Tegra which is the main winner here,plus the GPU sales include the Tesla cards,which have shipped in large numbers to people like ORNL,and are high profit margin parts.
dolphie 16th February 2013, 07:51 Quote
Ahhh thanks, I was wondering.
maverik-sg1 17th February 2013, 21:36 Quote
I don't know about anyone else, the reason I have not puchased any of the current GPU's is that the older 570/580 cards handle 1080p gaming just fine.

If I were to upgrade to a 2550x1440 monitor, none of the current batch are strong enough to offer decent enough performance (at full eye candy settings) - which will only get worse with new releases.

Couple that with the current geforce cards being built from the GK104 variant rather than the full fat GK110 and we're being charged hi-end prices for mid ranged GPU's - the inbound GPU from Nvidia is rumoured to be $800, which is far too much money.....AMD are not helping the situation with no new silicone forecast for release this year means there's no reason for prices to drop.....they must both be waiting for (or needing) 20 or 14nm nodes to be mainstream?

The ever increasing prices of GPU's make next gen consoles more and more appealing (cost of GPU buys one Gen4 console).
dolphie 18th February 2013, 21:02 Quote
^ My problem exactly.

And I don't even have 1080p. I currently play at 1680x1050 on a 20" screen. It was great for keeping the cost down because my HD5870 can handle anything at this res.

But I really want something bigger (and my monitor is on the blink too). But going to 1080p would cost me a lot and is more of a stepping stone upgrade. So I really would prefer to go to a 2550x1440 monitor, but the graphics card is the problem. None of the single card solutions would cope too well, especially over the coming years. And I just can't bring myself to spend about £700+ on the dual card things. I really want a GTX 780.
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