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Nvidia Earnings, released after the bell, beat Wall Street expectations and provided stronger-than-expected guidance for the current quarter.
Nvidia shares fell 8% in after-hours trading.
Here’s how the company’s actual performance compared to the London Stock Exchange’s consensus expectations:
- Earnings per share: Adjusted price is 68 cents, expected to be 64 cents
- income: $30.04 billion, higher than the expected $28.7 billion
Nvidia said it expects revenue of about $32.5 billion for the quarter, while analysts at StreetAccount expected $31.7 billion. That would be an 80% increase from the same period last year.
The chipmaker’s revenue continues to soar, with year-over-year growth of 122% this quarter, following year-over-year growth of more than 200% in each of the previous three quarters.
Net income more than doubled to $16.6 billion, or 67 cents per share, in the quarter from $6.18 billion, or 25 cents per share, a year earlier.
Nvidia has been a major beneficiary of the AI boom. Nvidia shares are up more than 150% this year after surging nearly 240% in 2023. Its market value recently topped $3 trillion, and Nvidia briefly became the world’s most valuable public company, though it is now second only to Apple.
Revenue from Nvidia’s data center business, which includes its artificial intelligence processors, rose 154% from a year ago to $26.3 billion, accounting for 88% of total sales. The business also beat StreetAccount’s expectations of $25.24 billion.
Not all of those sales came from AI chips. Nvidia said Wednesday that $3.7 billion of revenue came from the company’s networking products.
The bulk of the company’s business is with a handful of cloud service providers and consumer internet companies, including Microsoft, Alphabet, Meta, and Tesla. Nvidia’s chips, such as the H100 and H200, are used in the vast majority of generative AI applications, such as OpenAI’s ChatGPT.
Many customers are waiting for Nvidia’s next-generation AI chip, Blackwell. Nvidia said it shipped samples of the Blackwell chip this quarter and made improvements to the product to make it more efficient in manufacturing.
“In the fourth quarter, we expect Blackwell to be in the billions of dollars in revenue,” Nvidia Chief Financial Officer Colette Kress said on a conference call with analysts.
“The face shield replacement is complete. No functional changes are required,” Nvidia CEO Jensen Huang said on the call.
“When I say start production in the fourth quarter, I mean shipping. I don’t mean start shipping,” he continued.
However, Nvidia said it expects total shipments of its current-generation chip, Hopper, to increase over the next two quarters, rather than taper off.
“Demand for Hopper remains strong, and anticipation for Blackwell is incredible,” Huang said in a press release. Nvidia noted that supply of Hopper is increasing, while Blackwell remains in short supply.
Nvidia said its gross margin fell to 75.1% this quarter from 78.4% in the previous quarter, but was still higher than 70.1% in the same period last year. The company said it expects full-year gross margin to be “in the mid-70s.” StreetAccount said analysts expected full-year gross margin to be 76.4%.
Nvidia’s gaming business was once a major focus for the company before its data center business took off. Gaming revenue grew 16% from the previous year to $2.9 billion, beating StreetAccount’s estimate of $2.7 billion. The company said this was partly due to increased shipments of PC game cards and “console SOCs.” Nvidia supplies chips for Nintendo’s game consoles.
Nvidia also makes chips for high-end graphic designers as well as for cars and robots. The company’s professional visualization business grew 20% to $454 million in revenue. Nvidia reported $346 million in automotive and robotics revenue, while StreetAccount expected $344.7 million.
Nvidia also said it has authorized an additional $50 billion in stock buybacks.
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