The world famous chipmaker based in California, NVIDIA (NVDA, Financial), posted its final quarter numbers of its fiscal year 2015 that ended January 25, 2015 and left investors and analysts dazed by posting whopping numbers. With the chip maker targeting all types of devices including mobiles, car communication and entertainment system as well as computers its growth rate can be stated to have increased manifold in the past few years. And the Q4 of FY2015 was better than the Q3 which had also exhibited record growth in revenue for the chipmaker. Let’s get into the numbers and decipher the major takeaways.
Making a record almost twice in the year
Boosted by the growth of its major business line, the GPU business, the revenue for the quarter rose sequentially 2% to $1.25 billion from the third quarter of FY2015 and nearly 9% from that reported a year earlier. Revenue clearly surpassed the analysts’ expectations of $1.2 billion. Even non-GAAP earnings stood at $0.43 a share for the quarter, which was over the analyst expectations of $0.29 a share.
The launch of GTX 960 GPU as well as GTX 965M during the quarter drove the revenue up to $1.073 billion for the quarter. This represented a 13% year-over-year improvement and an 8% jump from that reported in the third quarter of FY2015. NVIDIA’s high-end offerings have been more than welcome in the PC gaming industry and the GTX 960 GPU has ideally introduced the power and efficiency of the Maxwell architecture in the gaming zone.
During the CES 2015, NVIDIA displayed the Tegra X1 chip, that could be used in two different computers targeted at cars. As per news sources, NVIDIA’s new chip when used on two different computers- one can operate the dashboard and entertainment systems of the car, while the other can possibly become the brain of the car. This clearly portrays that NVIDIA chips are now diversifying their use in the auto sector and notably the automotive infotainment sales more than doubled in the final quarter of the fiscal year 2015.
Overall Tegra sales were hurt this quarter with revenue standing at $112 million, down from $168 million in the third quarter and $131 million a year back. But its growth has gained traction in the auto sector which is a strong market for such processors.
President and CEO of NVIDIA, Jen-Hsun Huang, stated, “Momentum is accelerating in each of our market-specialized platforms, driving record revenue in the quarter and full year… GeForce (PC graphics chips) and Shield (gaming tablet) are extending our reach in the rapidly growing global gaming market. Our Drive auto-computing platform is at the center of the advance toward self-driving cars.”
Gross margins improved 1.8% reaching 55.9% over Q42014 on a GAAP basis, and NVIDIA holds cash and cash equivalents of around $4.6 billion at the end of the fiscal year 2015.
Investors remain well rewarded
During the quarter, besides growing its top and bottom lines, the company also paid cash dividends to the tune of $46 million to its investors and bought back 200,000 shares through the share buyback process. In the entire fiscal year, the company has paid a total of $186 million as dividends and has repurchased nearly 44.4 million shares for $814 million. This reflects that the company has enough cash to repay its investors and investors who are interested in a dividend stock might opt for NVIDIA as a best bet in their investment kitty. Because NVIDIA has paid back nearly $1 billion cash to its shareholders in FY2015, which is remarkably an achievement by the company as it has stressed on increasing shareholder value in the long run.
Last word
NVIDIA is on a growth trajectory and the management are expecting to witness sales gaining more momentum in the coming fiscal year. Let’s stay tuned and keep watching how the 3D graphics card maker performs across sectors ranging from PCs, mobiles, gaming market and even cars.
