Nvidia’s Q4 FY21 results

$5.03 billion in sales, $1.46 billion profit—sales up 6% from last quarter.

Nvidia reported record revenue for the fourth quarter ended 31 Jan 2021, of $5 billion, up 61% from $3.1 billion a year earlier, and up 6% from $4.7 billion in the previous quarter.

The company’s Graphics business revenue was $3 billion, up 10% from last quarter and up 47% from last year.

“Q4 was another record quarter, capping a breakout year for Nvidia’s computing platforms,” said Jensen Huang, founder, and CEO of Nvidia. “Our pioneering work in accelerated computing has led to gaming becoming the world’s most popular entertainment, to supercomputing being democratized for all researchers, and to AI emerging as the most important force in technology.”

“Demand for GeForce RTX 30 Series GPUs is incredible. Nvidia RTX has started a major upgrade cycle as gamers jump to ray tracing, DLSS, and AI.”

“Our A100 universal AI data center GPUs are ramping strongly across cloud-service providers and vertical industries. Thousands of companies across the world are applying Nvidia AI to create cloud-connected products with AI services that will transform the world’s largest industries. We are seeing the smartphone moment for every industry.”

“Mellanox has expanded our footprint across the data center. And we are making good progress toward acquiring Arm, which will create enormous new opportunities for the entire ecosystem,” he said.

Nvidia’s financial results for 12 quarters. (Source: Nvidia)

Gaming revenue for the fourth quarter was up 67% from a year ago and up 10% sequentially. The year-on-year increases reflect higher sales across desktop and laptop GPUs for gaming and game-console SOCs. GPUs for gaming benefited from the ramp of the GeForce RTX 30 Series based on the Nvidia Ampere architecture. The sequential increase from desktop and laptop GPUs for gaming was partially offset by a decrease in game console SOCs.

Professional Visualization revenue for the fourth quarter was down 7% from a year earlier and up 30% sequentially. Full-year revenue was down 13%. The year-on-year decreases were due to lower sales of GPUs for desktop workstations as enterprise demand was impacted by COVID. The sequential growth reflects an increase in sales of GPUs for both desktop and mobile workstations.

Data Center revenue for the fourth quarter was up 97% from a year ago and comparable to last quarter. Full-year revenue was up 124%. The year-on-year revenue growth was driven by the Mellanox acquisition and the ramp of the Nvidia Ampere GPU architecture. In fiscal 2021, Mellanox revenue contributed 10% of total company revenue. Sequentially, double-digit growth in Data Center compute products was offset by the anticipated decline in Mellanox revenue.

Automotive revenue for the fourth quarter was down 11% from a year earlier and up 16% sequentially. Full-year revenue was down 23%. The year-on-year decreases reflect lower revenue from the expected ramp down of legacy infotainment modules and autonomous driving development agreements, partially offset by increases in AI cockpit and autonomous vehicle solutions. The sequential increase reflects higher sales of AI cockpit solutions, autonomous vehicle solutions, and recovery in legacy infotainment modules.

OEM and Other revenue for the fourth quarter were up 1% from a year ago and down 21% sequentially. Full-year revenue was up 25%. The sequential decline was primarily due to the lower volume of entry-level laptop GPUs. The increase for the full year was primarily due to the higher volume of entry-level laptop GPUs.


Nvidia SVP Jeff Fisher said, “COVID-19 continues to affect our business in both positive and negative ways. There is uncertainty around their duration and impact. Nvidia’s Gaming and Data Center market platforms have benefited from stronger demand as people continue to work, learn, and play from home. In Professional Visualization, mobile workstations continue to benefit from work-from-home trends, and desktop workstation demand has started to recover, although not back to pre-COVID levels. In Automotive, COVID is no longer having a significant impact on demand. Throughout our supply chain, stronger demand globally has limited the availability of capacity and components, particularly in Gaming.”

Nvidia’s outlook for the first quarter of fiscal 2022 is as follows:

  • Revenue is expected to be $5.30 billion, plus or minus 2%.
  • GAAP and non-GAAP gross margins are expected to be 63.8% and 66.0%, respectively, plus or minus 50 basis points.
  • GAAP and non-GAAP operating expenses are expected to be approximately $1.67 billion and $1.20 billion, respectively.
  • GAAP and non-GAAP other income and expense are both expected to be an expense of approximately $50 million.
  • GAAP and non-GAAP tax rates are both expected to be 10%, plus or minus 1%, excluding any discrete items. GAAP discrete items include excess tax benefits or deficiencies related to stock-based compensation, which are expected to generate variability on a quarter-by-quarter basis.

What do we think?

Nvidia, like other suppliers, has benefited from the work-at-home policies created due to COVID. The company has also benefited from a run-up in cryptocurrency processing, which has created abnormal speculation and buying frenzy in the AIB and to a lesser extent the notebook market.

Change in sales by platform. (Source: Nvidia)

Pro viz was up 30% from last quarter, and Automotive was up 16%.

Datacenter, however, has shown the greatest growth (on a percentage basis) over the past five years.

Rate of change of Nvidia’s business centers over five years. (Source: Nvidia)

The numeric values are shown in the following table.

($ in millions) FY 20 Q4 FY 21 Q1 FY 21 Q2 FY 2 Q3 FY 21 Q4
Gaming $1,491 $1,339 $1,654 $2,271 $2,495
Pro Visualization $331 $307 $203 $236 $307
Datacenter $968 $1,141 $1,752 $1,900 $1,903
Auto $163 $155 $111 $125 $145
PC & Tegra OEM/IP $152 $138 $146 $194 $153
Total $3,105 $3,080 $3.866 $4.726 $5,003
Nvidia quarterly revenue trend by markets. (Source: Nvidia)

Nvidia continues to enjoy a high P/E ratio (79.7 on 25 Feb’21), and the company enjoys a trailing-twelve-months P/E of 65.40X compared to the Semiconductor–General industry’s P/E of 25.89X.

The launch of the Ampere GPU for the data center and gaming has been very successful for the company, and demand has exceeded supply. The company has released several new AIB to its gaming line up and introduced the CMP line to try and shift crypto miners and scalpers away from the gaming AIBs. See TechWatch: https://www.jonpeddie.com/news/nvidia-takes-steps-to-protect-gaming-business.

The company’s share price continues to soar.

AMD, Intel, and Nvidia’s share price relative to NASDAQ.

Even before they acquire Arm, Nvidia is on the path to being a $20 billion. The company has successfully transformed itself from a component supplier of GPUs to a systems company offering AIBs, supercomputers, automotive computers, network systems, and a full stack of software, and its gross margins reflect that.

Comparison of gross margins

The company has surpassed legendary Intel when it comes to gross margin.

The impact of Crypto

The impact of cryptocurrencies continues to haunt and disrupt the AIB market.

Bitcoin was also down some 11% on Tuesday, 23 Feb, around $47,800, after spiking above $55,000 in recent days. Tesla said this month it had bought $1.5 billion of bitcoin, an announcement that sent the cryptocurrency soaring.

Ethereum daily value in US dollars

Tesla news, rumors, and comments now have a dramatic impact on bitcoin. However, its inflated price is also being tested by comments from the Fed. Federal Reserve Chairman Jerome Powell told Congress on Tuesday that the Fed is “looking carefully” at whether it should issue a digital US dollar.

A digital currency developed by the fed is a “high priority project for us,” Powell told Congress, but he added that there are “significant technical and policy questions” related to a digital US dollar.

This looks like a classic bubble scenario to us. The artificial inflation of bitcoin prices, followed by other coins like Ethereum which make use of GPUs, has created a buying frenzy among get-rich-quick adoptees and scalpers. Remember the old adage, the only people who got rich in the gold rush were the shovel salesmen. Well in this case AMD and Nvidia are selling the shovels, as fast as they can build them. But the poor farmer, weekend gardener, and grave digger can’t afford to buy one now.


If you just look at the hash rate, or coin prices, you could easily conclude all the AIBs are going to crypto mining. However, what is not being taken into consideration is the huge installed base of last-generation mining rigs and the gamers. With the coin prices soaring (that is until just a few days ago) anyone who was in mining, and many who have thought about it, are in now with installed-base systems—not new ones.

Nvidia’s shipments didn’t double or triple like coin prices and the hash rate has. And Nvidia is using Samsung’s fab for Ampere, so they are not begging for more wafers from TSMC like many others.

Nvidia’s gain in Q4 came largely from ASP, as we will illustrate in our Market Watch report next week.

Nvidia also did well in the gaming notebook market which has gone up 7X in seven years.

It is true that AIBs are sold out—the channel is empty. That doesn’t particularly help Nvidia, AIB partners (MSI, EVGA, etc.), and the channel (Amazon, New Egg, etc.) are benefiting from the demand. But who is the demand? We think it is speculators. And every AIB a speculator buys (and then tries to sell at a higher price) cannibalizes the gaming market.

Nvidia has offset the demand a bit by introducing the CMP (see Jonpeddie.com News: Nvidia takes steps to protect the gaming business ) and by producing more Turing chips. Turing fills out the low-end, and Ampere covers the mid-range and high-end. Ampere also goes to professional graphics (up 30% Qtr-qtr) and Nvidia’s datacenter AIBs.

Nvidia learned its lesson in the 2017–2018 Crypto pandemic and is being cautious this time around. Shortages are a drag on their key segment, gaming, and hopefully in a quarter or two, the CMP products will remove the strain.

The downside is once the coin price stabilizes, or drops, all those speculators are going to try and dump their inventory. We could be looking at an unusually big drop in supply-side demand in Q2’21.

We will be publishing our estimation on the sales of AIBs for Crypto next week.