Nvidia enjoys $130B annual earnings despite gaming segment ‘supply constraints’

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Nvidia enjoys $130B annual earnings despite gaming segment ‘supply constraints’

Nvidia on Wednesday

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its financial results for the final quarter of its fiscal 2025 and shared progress of its Blackwell GPU ramp. The company’s earnings for the FY2025 exceeded a whopping $130 billion, which is an all-time high for the company. Nvidia’s sales of Blackwell GPUs for datacenters also significantly exceeded expectations in Q4 of FY2025. However, the company admitted that it was constrained to meet demand for its gaming products last quarter, which is why sales of GeForce GPUs dropped both sequentially and year-over-year.

Record Q4 amid drop of gaming revenue

Nvidia posted revenue of $39.33 billion for Q4 FY2025, marking a 12% sequential increase and a massive 78% year-over-year (YoY) growth. The company’s net income achieved $22.091 billion as its gross margins hit 73%, down 3% compared to the same quarter a year ago due to Blackwell ramp as well as production of low-yield Blackwell material in the previous quarter. For the year, Nvidia earned $130.497 billion, up 114% YoY. The company’s net income was $72.88 billion and its gross margin was 75%, up 2.3% from 2024.

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In the final quarter of FY2025, Nvidia’s datacenter segment continued to dominate the company’s earnings. It generated $35.58 billion, up 16% QoQ and 93% YoY. Compute GPUs accounted for the lion’s share of Nvidia’s datacenter sales ($32.556 billion), whereas sales of networking products totaled $3.024 billion. Nvidia says that sales of its Blackwell GPUs in the fourth quarter reached $11 billion, significantly more than Nvidia planned. The company indicated that demand for Blackwell GPUs for AI and HPC is overwhelming, which explains significant Blackwell revenue.

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By contrast, Nvidia’s gaming revenue dropped to $2.54 billion, down 22% QoQ and 11% YoY, due to supply constraints as demand remains strong. Considering the fact that Nvidia now uses the same TSMC production lines for AI and gaming GPUs, it is not surprising that the company prioritizes production of expensive AI processors to lower-margin client products.

“ Full year [gaming] revenue of 11.4 billion increased 9% year-on-year, and demand remains strong throughout the holiday,” said Colette Kress, chief financial officer of Nvidia. “However, Q4 shipments were impacted by supply constraints.”

Still, Nvidia’s professional visualization (ProViz) revenue reached $511 million, up 5% QoQ and 10% YoY, and OEM and other contributed $126 million, up 30% QoQ and 40% YoY. The Automotive segment saw the most significant YoY growth at 103%, reaching $570 million (up 27% QoQ), fueled by adoption of Nvidia’s platforms by various automakers.

Record year

For the whole year, Nvidia’s revenue totaled $130.5 billion, marking an impressive 114% year-over-year growth compared to $60.9 billion in FY2024. Nvidia’s datacenter segment was of course the primary driver, generating $115.2 billion (up 142% YoY), followed by gaming revenue with $11.35 billion (up 9% YoY), ProViz business with $1.88 billion (up 21% YoY), and Automotive with $1.694 billion. OEM and other businesses earned Nvidia $389 million, up 27% YoY.

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Impressive

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Nvidia projects Q1 FY2026 revenue of $43 billion ±2%, reflecting continued strong demand for AI GPUs for datacenters. Gross margins are expected to be 70.6% due to Blackwell ramp up, which costs Nvidia a lot of money.

To support ramp up of Blackwell (both for datacenters and gaming PCs) as well as eventual ramp up of Blackwell Ultra (B300-series), Nvidia has to pre-purchase production capacity. As of the end of FY2025, Nvidia’s purchase commitments and obligations for inventory and production capacity were $30.8 billion, including new capacity commitments and components for rackscale and other solutions. Supply and capacity prepayments were $5.1 billion.

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#Nvidia #enjoys #130B #annual #earnings #gaming #segment #supply #constraints

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