NVIDIA Q4: Revenue as awful as expected, margins/income miss
Tuesday 10th February 2009, 11:35:00 PM, written by Arun
NVIDIA just concluded their quarterly conference call, and the results weren't pretty. Sequentially, revenue was down 47% for GPUs, 44% for Quadro, and 51% for MCPs, for a total of only $481M. Further inventory write-offs and a one-time charge related to the cancellation of a campus construction project made their margins and income misses even worse.
We've got a summary/semi-transcript up in the forums, and the only good news is that they estimate channel inventory to be down from 2.5-3 months to 1-1.5 months and they do not expect that to be able to fall any further. Therefore, future sales should meet or exceed end-user demand which should compensate what is seasonally a down quarter - although as Jen-Hsun said, "there is nothing we are experiencing right now that is seasonal". They claim they were hit especially hard in Q4 because the industry fell off a cliff in November for everyone, and unlike many others their quarter didn't include October because they're not on a calendar year.
NVIDIA refused entirely to hint at anything related to 40nm, but was extremely optimistic about Ion - they claimed there would be new design win launches every quarter and it should hopefully be fully ramped up for Q3/Q4. While also optimistic on Tegra, they were much more vague on that, implying real revenue ramp would be for the second half (so perhaps a few products in Q2, but nothing significant). Tegra margins should "not be a drag" and Ion should be in the mid-30s.
The forecast for Q1 was filled with "we really don't know!" disclaimers, but they did say they expect revenue to be flat to slightly up and margins to be in the mid-30s anyway given the current channel inventory dynamics. Still pretty ugly.
We've got a summary/semi-transcript up in the forums, and the only good news is that they estimate channel inventory to be down from 2.5-3 months to 1-1.5 months and they do not expect that to be able to fall any further. Therefore, future sales should meet or exceed end-user demand which should compensate what is seasonally a down quarter - although as Jen-Hsun said, "there is nothing we are experiencing right now that is seasonal". They claim they were hit especially hard in Q4 because the industry fell off a cliff in November for everyone, and unlike many others their quarter didn't include October because they're not on a calendar year.
NVIDIA refused entirely to hint at anything related to 40nm, but was extremely optimistic about Ion - they claimed there would be new design win launches every quarter and it should hopefully be fully ramped up for Q3/Q4. While also optimistic on Tegra, they were much more vague on that, implying real revenue ramp would be for the second half (so perhaps a few products in Q2, but nothing significant). Tegra margins should "not be a drag" and Ion should be in the mid-30s.
The forecast for Q1 was filled with "we really don't know!" disclaimers, but they did say they expect revenue to be flat to slightly up and margins to be in the mid-30s anyway given the current channel inventory dynamics. Still pretty ugly.
Tagging
nvidia ± results, q4, cc, ion, tegra
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