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Must-know: Nvidia’s 4Q15 earnings review

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4Q15 earnings review

On February 11, 2015, Nvidia Corporation (NVDA) reported its fiscal 4Q15 results. The company posted revenue and non-GAAP (generally accepted accounting principles) earnings per share (or EPS) of $1.25 billion and 35 cents, respectively. For fiscal 2015, Nvidia reported revenues and EPS of $4.68 billion and $1.12, respectively.

Revenues grew by 9% on a quarter-over-quarter basis and by 13% on a year-over-year (or YoY) basis. EPS rose by 34% on a quarter-over-quarter basis and by 43% on a YoY basis.

In 4Q15, Nvidia’s results beat analysts’ expectations for revenues and EPS by $50 million and 14 cents, respectively. The market rewarded the company by pushing its stock to appreciate by 8% on the day of the earnings announcement.

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GAAP net income for 4Q15 and fiscal 2015 stood at $2.19 billion and $631 million, respectively, showing a 29% improvement on a quarter-over-quarter basis and a 43% improvement on a YoY basis.

You can consider investing in the VanEck Vectors Semiconductor ETF (SMH) and the PowerShares QQQ Trust (QQQ) to gain exposure to Nvidia. The company makes up about 1.94% of SMH and roughly 0.22% of QQQ.

Operating segment performance

As the chart above shows, Nvidia generates the majority of its revenues from its GPU (graphics processing unit) business. The GPU segment recorded $1.07 billion and $3.84 billion revenue in 4Q15 and fiscal 2015, respectively. On a quarter-over-quarter and YoY basis, GPU saw revenue increases of 13% and 11%, respectively.

On the other hand, Nvidia’s Tegra segment recorded $112 million and $579 million in revenues for 4Q15 and fiscal 2015, respectively. On a quarter-over-quarter basis, Tegra suffered a decline of 15%, but on a YoY basis, the segment recorded a 45% increase.

Key markets

Here are Nvidia’s key markets:

  • gaming, design, and visualization
  • high-performance computing (or HPC)
  • data center, automotive, and smart devices that require high-end visuals

Nvidia’s SHIELD gaming device lets players enjoy Google’s (GOOGL) Android games. Microsoft’s (MSFT) Xbox, a leading gaming console, uses Nvidia’s graphics chips.

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