+ Data Centre driving strong revenue beat. Revenue doubled YoY to US$13.5bn, beating company guidance of US$11bn. The strong performance was attributed to Data Centre business surging by 171% YoY to make up 76% of total revenue, driven by accelerating demand from cloud service providers and consumer internet companies for NVDA’s HGX server platform. Data Centre growth mainly came from US customers, while China makes up 20-25% of the segment’s revenue, in line with historical trends. Gross margins also expanded by 550bps QoQ and 26.6pps YoY as a result of larger revenue contribution from the server business.
+ An even stronger 3Q24 guidance. NVDA guided for a revenue of US$16bn (+/- 2%), a potential 170% YoY jump, largely driven by Data Centre strength as customers continue to focus their investments on generative AI and accelerated computing. NVDA said this allows it to have demand visibility that extends into CY2024. As such, the company is working with suppliers to expand production capacity, and will be increasing supply over the next several quarters to fulfill the demand. Gross margins are expected to be at 71.5% (+/- 50bps), another strong 17.9pps YoY expansion.
+ Gaming returns to positive growth. Sales was up by 22% YoY, the first positive growth following 4 consecutive quarters of YoY decline. The increase was fueled by the solid end-customer demand for the GeForce RTX 40 Series GPUs, partly driven by the back-to-school season. NVDA believes the global end demand has returned to growth following the slowdown in CY2022. Furthermore, it also believes the segment has a large upgrade opportunity as only 47% of its installed base are on GPUs equipped with its RTX technology.
– Professional Visualisation down YoY, Automotive down QoQ. Professional Visualisation (3% of revenue) declined by 24% YoY, but contraction has moderated significantly from the -53% in 1Q24. In Automotive, revenue was up by 15% YoY to US$253mn, but was down 15% QoQ due to the lower overall demand from Chinese OEMs.