NVIDIA closed the book on another record financial year this afternoon and announced their results for the company 2021 and Q4 2021 for the company. For the last quarter of their financial year, NVIDIA recorded just over $ 5 billion in revenue with a profit of $ 1457 million, indicating NVIDIA’s first quarter of five billion dollars, and earned records across the board. Meanwhile, NVIDIA recorded just under $ 16.7 billion in revenue for the full financial year, with net revenue for the year of $ 4.3 billion.
| NVIDIA Q4 2021 Financial Results (GAAP) | |||||
| Q4’2021 | Q3’2021 | Q4’2020 | V / V | Y / Y | |
| Income | $ 5003 million | $ 4726 million | $ 3105 million | + 6% | + 61% |
| Gross margin | 63.1% | 62.6% | 64.9% | + 0.5% | -1.8% |
| Operating income | $ 1507 million | $ 1398 million | $ 990 million | + 8% | + 52% |
| Net income | $ 1457M | $ 1336 million | $ 950 million | + 9% | + 53% |
| VPA | $ 2.31 | $ 2.12 | $ 1.53 | + 9% | + 51% |
With the compilation of revenue and profit records, NVIDIA ended their year on a high note again. The $ 5 billion in revenue they discussed had their best quarter ever, an increase of 61% over the previous year. Meanwhile, NVIDIA’s record $ 1457 million in net revenue is a significant jump, reaching the Q4 ‘2020 by 53%.
NVIDIA’s gross margin for the quarter was just as strong. NVIDIA recorded a gross margin of 63.1%, a slight decrease from the NVIDIA record margin in Q4’2020, but still incredibly comfortable for a fabulous semiconductor company.
| NVIDIA Quarterly Revenue Comparison (GAAP) ($ in millions) |
|||||
| A million | Q4’2021 | Q3’2021 | Q4’2020 | V / V | Y / Y |
| Play | $ 2495 | $ 2271 | $ 1491 | + 10% | + 67% |
| Professional visualization | $ 307 | $ 236 | $ 331 | + 30% | -7% |
| Data center | $ 1903 | $ 1900 | $ 968 | Flat | + 97% |
| Motor | $ 145 | $ 125 | $ 163 | + 16% | -11% |
| OEM and IP | $ 153 | $ 194 | $ 152 | -21% | + 1% |
The breakdown of their revenue by segment was NVIDIA’s gaming segment, as you would expect. What GeForce covers – video cards and services like GeForce Now – among the many records NVIDIA set for Q4 was gaming revenue. For the quarter, NVIDIA booked $ 2.495 billion in gaming revenue, which was just half of all revenue for the company.
Promoting gaming revenue was a mix of demand for gambling and mining, a thorny issue that NVIDIA is taking quite extreme steps to address. Although the company is not entirely hostile to industrial miners, the demand for hardware from Ethereum miners is exacerbating NVIDIA’s gaming market, and the instability of the market makes it difficult to prepare for the consequent ups and downs. in the mining market. This has led the company to take steps such as artificially limiting forward Ethereum performance on GeForce cards, launching the RTX 3060, and introducing a companion, mine-focused focus card with the upcoming CMP components.
The big, earnings-related question everyone is thinking is how much Ethereum mining contributed to NVIDIA’s fourth-quarter defeat; and the answer to it remains hazy. NVIDIA believes that a large number of video cards have been purchased by industrial miners, but because the bulk of their sales are to AIB partners, they are unable to accurately locate or quantify what the cards are used for. To that end, NVIDIA’s very uncertain estimate from the ballpark that mining drove $ 100 million to $ 300 million in revenue for the quarter is a surprisingly small portion of their total gaming revenue. But even if the series is right, it was definitely enough to point the market scales to empty shelves and unlucky players.
With a view to Q1, NVIDIA expects to launch CMP card shipments next month. First-month sales will be fairly limited, with the company’s revenue of just $ 15 million. But this is a start; and the company will also break out CMP sales in the coming quarters to help quantify the impact of mining on their core.
Furthermore, NVIDIA’s other big car for the fourth quarter was the data center market. Keep in mind that NVIDIA has folded the bulk of Mellanox revenue into this segment – so year-on-year comparisons are tricky – at the end of the day NVIDIA still sets revenue records for this segment. Interestingly, according to the company, sales of Mellanox in the quarter are therefore that the computer side of the data center market has grown enough to absorb the decline and then a bit.
Otherwise, the other segments of NVIDIA were a mixed bag. NVIDIA’s usually reliable professional visualization segment still feels the impact of COVID to some extent; now that the immediate rush of work-from-home purchases has been done, sales of desktop workstation GPUs have not fully recovered from the COVID decline, and mobile workstation sales are not enough to cover the difference. Meanwhile, NVIDIA’s OEM and IP business remained steady on a year-on-year basis, and motor vehicles declined as some legacy products for infotainment were retired.
| NVIDIA FY2021 Annual Financial Statements (GAAP) | |||
| FY2021 | FY2020 | FY2019 | |
| Income | $ 16675 million | $ 10918 million | $ 11716M |
| Gross margin | 62.3% | 62.0% | 61.2% |
| Operating income | $ 4532 million | $ 2846M | $ 3804 million |
| Net income | $ 4332 million | $ 2796 million | $ 4141 million |
| VPA | $ 6.90 | $ 4.52 | $ 6.63 |
As for the full picture of the 2021 financial year, NVIDIA’s Q4 is the cherry on top of what initially looked like it would be a shaky year for the company. Initially, there were fears that the technology industry would get a big hit from COVID – with NVIDIA’s financial year joining almost perfectly at the onset of the pandemic – but the technology industry rather benefited from the huge demand for products. As a result, NVIDIA posted a record $ 16.7 billion for the year, a 53% increase from FY2020. And net income was just as strong, and NVIDIA posted a record $ 4.3 billion profit, which was 55% higher than the previous year.
| NVIDIA Annual Revenue Comparison (GAAP) ($ in millions) |
|||
| A million | FY2021 | FY2020 | FY2019 |
| Play | $ 7759 | $ 5518 | $ 6246 |
| Professional visualization | $ 1053 | $ 1212 | $ 1130 |
| Data center | $ 6696 | $ 2983 | $ 2932 |
| Motor | $ 536 | $ 700 | $ 641 |
| OEM and IP | $ 631 | $ 505 | $ 767 |
If we look at NVIDIA’s full-year business segments, FY2021’s winners and losers are generally the same as the fourth quarter. The data center achieved by far the largest growth for the full year, with 124% to just $ 6.7 billion in revenue. As mentioned before, a big part of this is how NVIDIA rolled out Mellanox products in the segment. But even doing basic work to separate Mellanox’s contributions – according to NVIDIA, Mellanox contributed about 10% to the company’s FY2021 revenue – and it still has the computing side of the data center business growing by almost 70%. The vast majority of them, in turn, are powered by NVIDIA’s A100 accelerator, which was launched in the second quarter. NVIDIA continued to increase the A100 throughout the financial year, which is reflected in their ever-growing quarterly data center results.
Meanwhile, the game “only” increased by 41%, to $ 7.8 billion for the year. As with the data center market, NVIDIA has launched its next-generation Ampere parts in the gaming market over the past few months, increasing the usual increase in demand as players upgrade and build new systems. Ethereum mining undoubtedly also played a role, but NVIDIA could not meaningfully determine what the total contribution was there. Going forward, the case is potentially a significant risk for NVIDIA, as much of the GeForce RTX game hardware will enter the second-hand market when the Ethereum bubble appears; NVIDIA therefore wants to avoid another crypto-kater like 2018.
Otherwise, NVIDIA’s OEM and IP business increased by 25% compared to 2020, which is mainly due to improved sales of entry-level laptops. Although professional visualization and motor vehicles have been down for the year as a whole, due to the above issues of COVID, as well as the change in NVIDIA’s motor product mix.
Finally, with a view to FY2021 and Q1, NVIDIA is entering the year optimally. The company expects to post $ 5.3 billion in revenue for the quarter, with a gross margin of 63.8%.
The biggest limitation on NVIDIA’s growth opportunities during the year is probably the ongoing, disk shortage in the industry. Although NVIDIA makes no meaningful forecasts for the entire year, the company expects at least for the rest of this quarter (Q1); which means that disk supply remains tight while demand remains high. For gamers in particular, NVIDIA plans to keep the channel inventory for GeForce parts low during the quarter (even with tomorrow’s RTX 3060 launch). At the moment, there is no sign that it will be easier to get GeForce video cards in the next few months.