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Nvidia Q1 Financials Mostly Positive, Icera Issue May Cast Pall

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Nvidia's fiscal Q1 ended on April 26, 2015. On May 7, the company reported its financial results for the first quarter of 2016 operations, and the news is mostly positive. With revenue and margins up, and many growth opportunities ahead, the company is excited about the year to come.

Revenue for the quarter is up 4 percent over Q1 2015, GAAP gross margins are at a record high of 56.7 percent, and as Jen-Hsun, President and CEO of Nvidia said, "The importance of visual computing is evident all around us."

The company expects to continue on this path of growth with new emerging technologies such as VR and self-driving cars, using its expertise in visual computing to position itself as a leader in these new markets, as well as advance deep learning. Q1 2015 saw revenue reach $1.10 billion, while Q1 2016 reported $1.15 billion. Expectations put revenue at $1.01 billion for Q2 2016.

Nvidia will be increasing its quarterly dividend payout by 15 percent. Stockholders of record on May 21 will receive $0.0975 per share, up from $0.0085. A total of $800 million is intended to be returned to shareholders within FY2016, between dividends and share buybacks. The board of directors has also voted to extend the repurchase program through December 2018, with the potential of up to $2 billion being used for this purpose.

A judge recently delivered a favorable pre-trial ruling over the litigation between Samsung/Qualcomm. Executives feel very positive about the overall outcome, stating they wouldn't defend so vigorously if they didn't expect a favorable financial outcome. Expectations of court costs run in the $70-$90 million range.

Not everything was good news, however. Further to the report that Icera Modem is up for sale, Nvidia estimates restructuring charges between $100 and $125 million. These costs are expected to incur if the sale of the Icera is not complete within fiscal 2016, and will be comprised of severance packages and other termination benefits, along with other costs associated with winding down the business. The company is open to either the sale of operations or technology.

Overall, things are looking pretty bright for Team Green right now. 

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4 Comments Comment from the forums
  • none12345 08 May 2015 18:36
    Wow financials for Q1 2016 eh? Thats amazing that they can see 1 year into the future! Or are cooking the books!

    Or you guys made a typo, probably that one!
    Reply
  • RooD 08 May 2015 19:28
    Pretty sure fiscal year is 1 year ahead of the actual date year
    Reply
  • mctylr 08 May 2015 20:05
    "Fiscal year" is accounting term which companies use to delimit their financial accounting. For various, mostly boring reasons many companies do not use a fiscal year that follows the (Gregorian) calendar year, that is January 1st to December 31st.

    My employer uses one that runs from April 1st year N to March 31st year n + 1. So for us, the current fiscal year is 2015-16, running from 1st April 2015, to 31 March 2016.

    I suspect that the Nvidia uses the shorthand of listing only the year when the fiscal year ends (e.g. 2016 for my previously mentioned 1st April 2015, to 31 March 2016) .

    That said, yes there is some needless confusion arising from omitting the distinction of fiscal year from calendar year in a non-finance publication like Tom's.
    Reply
  • kcarbotte 09 May 2015 17:26
    That said, yes there is some needless confusion arising from omitting the distinction of fiscal year from calendar year in a non-finance publication like Tom's.

    I started off the artical by mentioning that "Nvidia's fiscal Q1 ended" in April.
    I apologize that it seemed misleading. It felt redundant to keep repeating it.

    Nvidia's fiscal year starts on January 26th, and therefore it seems they are reporting a year in advance.
    Reply