Nvidia blasts off with 41% revenue boost in 4Q

Nvidia saw record revenues for sales to data center customers in the fourth quarter, even though the company has a reputation for PC gaming GPUs. (Nvidia)

Nvidia reported revenues of $3.1 billion for the fourth quarter, an increase of 41% over a year earlier. Net income was $950 million, up by 68% over the prior year.

However, the established GPU maker saw full-year revenue of $10.92 billion, down 7%. Net income was $2.8 billion, down 32%, the company said on Thursday. After markets closed, Nvidia stock sold for $270.78, down less than 1%.  At market opening on Friday, the stock soared by 6% to $287.79.

Citing the potential impact of the coronavirus outbreak, Nvidia also reduced its revenue outlook for the first quarter by $100 million down to $3 billion, plus or minus 2%. 

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For the full year, GPU revenues were $9.47 billion of the full-year total, down 7%. However, the fourth quarter saw revenues of $2.77 billion up 40% from a year earlier.

While gaming revenues dominated at $1.49 billion in the quarter, data center revenues were a record at $968 million, up 43% from a year ago. The growth was driven by hyperscale and vertical industry customers. Data center was one of the positive full-year revenue drivers, up by 2% to $2.98 billion.

The first quarter outlook does not include any contribution from the pending acquisition of Mellanox, and discussions with China’s regulatory agency for the purchase are progressing, Nvidia said in a statement. The $6.9 billion acquisition is likely to close in the early part of 2020.

RELATED: Nvidia eyes Mellanox for $6.9 billion acquisition

The two companies have a long history of collaboration and worked on building the world’s two fastest supercomputers, Sierra and Summit, which are operated by the U.S. Department of Energy.

Nvidia technology supports 5G, genomics, robotics and autonomous vehicles as well as data center uses and 200 million gamers. Nvidia GPUs support artificial intelligence recommendation engines as well, used by customers such as Microsoft. Nvidia last year introduced Tensor RT 7, an inference software development kit for use in conversational AI. A new version of Nvidia Isaac software development kit supports development and testing of robots.

“We are well positioned for the great technology trends of our time,” CEO Jensen Huang said.

“The primary driver of our growth is AI. The breakthroughs are quite amazing.” He said in a call with analysts that the AI technology growth falls into four areas: recommendation systems, inference, moving from hyperscale to public cloud and edge AI. 

“The future is going to be accelerated. We’re in the very early innings and accelerated computing is going to be more important,“ Huang said.

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