The News: NVIDIA revenue hit $6.05 billion for the fourth quarter of fiscal year 2023, beating analyst consensus estimates of $6.01 billion, as the GPU, AI, HPC, and supercomputing vendor reported its Q4 and full fiscal year 2023 (FY2023) earnings on February 22. NVIDIA also reported full FY2023 revenue of $26.9 billion for the year ending January 29, 2023, which is flat from $26.9 billion one year ago. Read the full earnings Press Release from NVIDIA.
NVIDIA Revenue for Q4 2023 Hits $6.05B, Beating Estimates
Analyst Take: NVIDIA revenue for Q4 of fiscal year 2023 continued to see the challenges the company has been facing for the last several quarters as year-over-year (YoY) demand was down in its Gaming and Professional Visualization segments, but the numbers were not unexpected.
As we wrote last quarter, product sales for NVIDIA and many other tech companies soared when the Covid-19 pandemic and global lockdowns began in March of 2020 and people needed tech gear to work and play from home. For NVIDIA, that meant large sales increases in gaming GPUs as years of normal demand were transformed quickly into massive immediate demand, boosting revenue and sales in a short timeframe. But as the pandemic began easing, the sales began to dry up and returned to pre-pandemic levels, which is why the sales and revenue figures dropped in recent quarters as a result.
This was an unfortunate after-effect for NVIDIA, but we still do not believe that it is an indicator of the company’s future once its sales again begin re-aligning with normal gaming and other product demand. Better times will certainly come again for this AI, HPC, gaming, and metaverse leader, we are sure.
Here are the NVIDIA Q4 and full FY2023 earnings figures by the numbers:
- Q4 2023 revenue of $6.05 billion, down 21 percent from $7.6 billion one year ago. NVIDIA’s $6.05 billion in revenue did beat the Q4 consensus estimate of $6.01 billion expected by analysts with Investing.com. In addition, despite the Q4 revenue being lower than a year ago, the Q4 revenue is up two percent from $5.9 billion in Q3, which shows at least a slight upturn.
- Q4 2023 non-GAAP net income of $2.17 billion, down 35 percent from $3.35 billion one year ago. That non-GAAP net income is, however, up 49 percent from the $1.45 billion brought in during Q3, again showing a significant improvement.
- Q4 2023 non-GAAP diluted earnings per share (EPS) of $0.88, down 33 percent from $1.32 per share one year ago. The EPS did beat the $0.81 per share expected by analysts with Investing.com. The EPS for Q4 is also up 52 percent from $0.58 per share in Q3.
- Q4 2023 non-GAAP operating income of $2.22 billion, down 40 percent from $3.67 billion one year ago. The operating income, however, is up 45 percent from $$1.53 billion in Q3.
- Q4 2023 non-GAAP gross margin of 66.1 percent, down from 67 percent one year ago.
- Full year FY2023 revenue of $26.97 billion, almost unchanged from $26.91 billion one year ago.
- Full year FY2023 non-GAAP net income of $8.36 billion, down 26 percent from $11.25 billion one year ago.
- Full year FY2023 non-GAAP diluted EPS of $3.34, down 25 percent from $4.44 per share one year ago.
- Full year FY2023 non-GAAP operating income of $9.04 billion, down 29 percent from $12.69 billion one year ago.
- Full year FY2023 non-GAAP gross margin of 59.2 percent, down from 66.8 percent one year ago.
In the big scheme of things, we view these as satisfactory numbers from NVIDIA as the global macroeconomic climate continues to remain challenging, especially for technology- and consumer-focused businesses.
NVIDIA Revenue by Business Segments
NVIDIA’s revenue in Q4 by market segments is where we can see the real progress being made by the company despite lower YoY revenue totals in two of its four categories. While YoY revenue was down in Gaming and Professional Visualization, revenue rose in Data Center sales and in NVIDIA’s Automotive and Embedded segment.
NVIDIA’s revenue in Q4 for its Data Center business rose to $3.62 billion, up 11 percent from one year ago, which was good news for its overall position. For full FY2023, Data Center segment revenue grew to $15.01 billion, up 41 percent from one year ago.
NVIDIA revenue in Gaming saw Q4 revenue at $1.83 billion, which was a 46 percent drop from one year ago. For full FY2023, Gaming revenue hit $9.07 billion, which was down 27 percent from one year ago. The Q4 Gaming revenue did, however, see a 16 percent rise from Q3, which shows some progress.
The big segment highlight for NVIDIA was in its Automotive and Embedded sales, which brought in Q4 revenue of $294 million, up a record 135 percent from one year ago. For full FY2023, revenue in this segment totaled $903 million, up 60 percent from a year ago and coming close to breaking the $1 billion mark in sales for the first time. And those numbers will likely continue to grow as NVIDIA’s Automotive segment has a healthy long-term growth potential due to the company’s Drive Orin platform, its ADAS and Automotive platform technology, and other related products in its pipeline.
In its Professional Visualization segment, NVIDIA saw Q4 revenue of $226 million, a drop of 65 percent from one year ago. While disappointing, we believe that this is an area that will grow in the future for NVIDIA due to its impressive work and products in the segment. NVIDIA Omniverse and its other metaverse offerings are continuing to gain features and use cases as NVIDIA bolsters and broadens its expertise in this rapidly expanding field. This includes the incredible NVIDIA Digital Twins technologies and other key simulation and autonomous technologies powered by Omniverse software, where we absolutely see incredible growth potential for these innovative products.
As NVIDIA continues to show how these products are useful and transformative for enterprises, we believe the company will grab broader traction in this segment.
We also see NVIDIA’s constant product innovations in GPUs, AI, machine learning, HPC, and supercomputing readying the next phases of growth for this company as it pursues its exciting road map of new products and technologies that are driving its business forward.
NVIDIA Provides Q1 FY24 Guidance
As part of its Q4 and FY2023 revenue and earnings report, NVIDIA also provided earnings guidance for the first quarter of FY2024.
NVIDIA revenue in Q1 is expected to be about $6.5 billion, plus or minus two percent, while its non-GAAP gross margin is expected to be about 66.5 percent, plus or minus 50 basis points. Non-GAAP operating expenses are expected to be approximately $1.78 billion, while non-GAAP other income and expense are expected to be an income of approximately $50 million, excluding gains and losses from non-affiliated investments.
NVIDIA Q4 and FY2023 Overview
Wow, what a roller coaster ride it has been in the world of NVIDIA, but in fairness it has been like this for almost every other company out there as well due to a wide range of market and global difficulties since the pandemic began in early 2020.
Yet despite those challenges, NVIDIA continues to stay strong and resilient, which likely comes from the strength of its executive team led by CEO and founder Jensen Huang. The CEO continues to guide NVIDIA with an eye on innovation and business savvy as he identifies and targets strong new markets that capture the emerging needs of industries. He is wise in being able to identify what will be the “next big thing,” and he does a remarkable job positioning NVIDIA to capture market share in the latest hot markets. NVIDIA remains in healthy growth mode due largely to Huang’s leadership.
As we have been saying for the last several quarters, we view NVIDIA as well-equipped to weather whatever comes next as the markets sort themselves out and the post-pandemic recovery continues. Yes, there are lingering supply chain issues, inflationary concerns, the war in Ukraine and other pressing macroeconomic issues adding more pressures around the world, but signs of a turnaround and progress are also appearing, giving hope to companies like NVIDIA that better times will return soon.
We also continue to reiterate the strength of enterprise tech for its deflationary properties, especially in positioning itself separately from consumer-facing companies that have been hard hit by inflation, foreign exchange rates, and other challenges. NVIDIA remains strong despite the tough gaming market headwinds that have cut its gaming revenue.
With its broad range of powerful products and technologies, we remain bullish on NVIDIA and the things it brings to the worlds of computing, gaming, science, consumer goods, research and more. This is a company with a strong future in the diverse and growing global marketplace.
Daniel Newman and his co-host of The Six Five Webcast, Patrick Moorhead of Moor Insights and Strategy discussed NVIDIA earnings in their latest episode. Check it out here and be sure to subscribe to The Six Five Webcast so you never miss an episode.
Disclosure: Futurum Research is a research and advisory firm that engages or has engaged in research, analysis, and advisory services with many technology companies, including those mentioned in this article. The author does not hold any equity positions with any company mentioned in this article.
Analysis and opinions expressed herein are specific to the analyst individually and data and other information that might have been provided for validation, not those of Futurum Research as a whole.
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Image Credit: NVIDIA
Author Information
Daniel is the CEO of The Futurum Group. Living his life at the intersection of people and technology, Daniel works with the world’s largest technology brands exploring Digital Transformation and how it is influencing the enterprise.
From the leading edge of AI to global technology policy, Daniel makes the connections between business, people and tech that are required for companies to benefit most from their technology investments. Daniel is a top 5 globally ranked industry analyst and his ideas are regularly cited or shared in television appearances by CNBC, Bloomberg, Wall Street Journal and hundreds of other sites around the world.
A 7x Best-Selling Author including his most recent book “Human/Machine.” Daniel is also a Forbes and MarketWatch (Dow Jones) contributor.
An MBA and Former Graduate Adjunct Faculty, Daniel is an Austin Texas transplant after 40 years in Chicago. His speaking takes him around the world each year as he shares his vision of the role technology will play in our future.
