NVIDIA Is On Steroids As Q3 Profit Grows By 588% & Revenue By 206%

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After having delivered several blockbuster quarters this year, chip designer NVIDIA Corporation continued its aggressive growth in its third quarter of the fiscal year 2024. NVIDIA shared its earnings report for the quarter moments back, showing that the firm’s revenue grew by a whopping 206% annually to sit at $18.12 for the period. This growth follows a year ago quarter that came during a slump in the semiconductor industry, and NVIDIA’s triple-digit percentage revenue growth came as its bread and butter data center division grew by 279% on an annualized basis to $14 billion from an unbelievable $3.8 billion in the year-ago quarter.

NVIDIA’s bottom line profits stood at $10 billion as they posted another shocking growth of 588% from the year-ago quarter’s $1.4 billion. Analysts had expected the revenue to sit at $16.2 billion during the quarter, with the latest results marking a hefty beat.

NVIDIA’s Revenue & Net Income Growth Appears More Like Fiction Than Fact

It’s not every day that a multi-billion dollar company delivers high triple-digit profit growth, but this is true with NVIDIA’s third quarter of fiscal 2024 earnings results. Not only did its revenue grow by 206% annually during the third quarter, but the firm’s operating and net incomes of $11.5 billion and $10 billion mark annual growths of 652% and 588%, respectively.

To further sweeten the deal for Team Green, the quarter also saw its margins improve after inflation across the U.S. maintained its downward trend in the wake of rapid interest rate hikes by the Federal Reserve. NVIDIA’s gross margin, the ratio of its post-direct cost earnings with its overall sales, was 75% during the quarter, up by a healthy 18.9% over the year-ago quarter to ensure that more of its sales flow through the income statement.

On a segment basis, the data center segment raked in $14.5 billion for the company as it led the back in both absolute and growth terms. The data center revenue grew by 279% and it was followed by the professional visualization division.

NVIDIA’s quarterly revenue trend for the third fiscal quarter of 2024. Image: NVIDA Corporation

Crucially for NVIDIA, its gaming division also performed well during the quarter. From the first quarter of the firm’s previous fiscal year to the fourth quarter, this division had seen successive sequential revenue drops. This was because high inflation and supply glut choked demand for the products, and now, it appears that gaming is stabilizing. During the quarter, this business division posted $2.8 billion in revenue for a respectable 81% annual growth, which was a breath of fresh air over the previous results.

NVIDIA’s chief financial officer, Collette Kress, attributed the gaming recovery to the supply chain stabilization, sharing that the “growth reflects higher sell-in to partners following normalization of channel inventory levels. Sequential growth reflects strong demand for our GeForce RTX 40 Series GPUs for back-to-school and the start of the holiday season.”

However, Ms. Kress went on to caution that sanctions on her firm’s products to stop them from being sold to China, Saudi Arabia, the U.A.E. and other countries will harm NVIDIA’s data center revenue during the current quarter. According to her, these product sales contributed roughly 20% to 25% of data center sales over the previous quarters, and performance in Q4 FY2024 could be affected as well.

For the current quarter, NVIDIA is aiming to earn $20 billion in revenue. The firm’s shares were erratic in aftermarket trading despite a 69-cent earnings per share beat as investors potentially factor in the slowdown in data center sales due to the sanctions and reflect on the percentage figures provided by the CFO.

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