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Pascal leads Nvidia to massive increase in profit

By Scorpus
Aug 12, 2016
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  1. Nvidia's new collection of Pascal-based graphics cards, headed by the GeForce GTX 1080 and GTX 1070, has led the company to a record-breaking second quarter of their fiscal year.

    For their fiscal Q2 2017, Nvidia has reported $1.43 billion in revenue, which is up 24% on the same quarter last year. This beat the expectations of analysts, which were closer to the $1.35 billion mark, thanks to strong demand for Nvidia's new graphics card line-up. In fact demand has been so great that many Pascal-based GeForce cards, particularly the GTX 1080, remain out of stock at popular retailers like Newegg.

    Nvidia's profits have increased massively year-on-year as a result of higher revenue and lower operating costs. Operating income has quadrupled (up 317%), rising from $76 million in the same quarter last year, to $317 million this year. Net income is up a staggering 873% from $26 million to $253 million.

    On the back of these strong results, Nvidia shares have risen by two percent in after hours trading. The company expects next quarter to be just as strong, with expected revenue of $1.68 billion with a gross margin around 57.8%. This upcoming quarter could be bolstered by the release of Nvidia's notebook discrete graphics chips, along with a rumored GTX 1080 Ti using GP102 silicon.

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  2. Levi Sterling

    Levi Sterling TS Enthusiast Posts: 67   +21

    No ****, thanks for the numbers breakdown. I should point out that they in their words "spent a billion dollars on Research and development". I would like to guess that it paid off, now they need to burn another billion to shunt humanity's technological innovation ahead another generation. It would be great for gaming too.
     
    Reehahs likes this.
  3. yRaz

    yRaz TS Evangelist Posts: 1,897   +940

    Sales will level off once the market becomes saturated, just as it happens with every new generation of graphics cards. Their stock is currently over valued right now and will drop once sales slow.
     
    wiyosaya likes this.
  4. Reehahs

    Reehahs TS Addict Posts: 170   +70

    Or when they have proper competition.
     
    wastedkill and DAOWAce like this.
  5. Kenrick

    Kenrick TS Booster Posts: 187   +88

    Oh well hardreset wont be happy with this article.
     
    wastedkill and Steve like this.
  6. yRaz

    yRaz TS Evangelist Posts: 1,897   +940

    The high end market is the smallest and in many cases, least profitable. The 480 is the better buy over the 1060 and those are the real bread and butter cards. nVidia is having supply problems, it's not that these cards are selling that well. Its the reason that the founders edition was priced $100 more, they didn't have the supply.

    Their stock is over valued and the high end market is nearing saturation. Once that happens sales will drop and so will their stock price.
     
    darkzelda and Reehahs like this.
  7. OcelotRex

    OcelotRex TS Addict Posts: 135   +57

    I don't get the logic in this line of thinking: Nvidia spends time and money to improve their products but only in incremental amounts, just enough to keep ahead of AMD so as to not put them out of business while in turn secretly keeping true monumental leaps (of which they've created and could bring to market but choose not to) away from consumers?

    Why not just release the new tech and charge 500% more?
     
    Reehahs likes this.
  8. Skidmarksdeluxe

    Skidmarksdeluxe TS Evangelist Posts: 6,476   +2,034

    Ouch. I thought AMD was supposed to be working that angle. From what I've read and heard, that new Clitoris architecture of theirs is supposed to be quite competitive and stomps all over Pascal in Vulkan.
     
    Reehahs likes this.
  9. hahahanoobs

    hahahanoobs TS Evangelist Posts: 1,631   +432

    Um, the high end has the greater margins and only the 1080 is in short supply due to demand and possibly yields. The 1070 has been in stock and selling at MSRP for a while now. The 1060 is there now too.

    The 480 is still unavailable in any great numbers after promising 25x more supply than nVIDIA, and I promise you the margins on $200 cards are tiny.

    Thanks for playing!
     
    Reehahs likes this.
  10. mbrowne5061

    mbrowne5061 TS Evangelist Posts: 332   +131

    The margins are smaller, but they make up for it with MUCH larger volumes of sales. Not everyone can afford a flagship card - or think the few FPS extra they provide is worth the markup. The *60 series has always been the real money maker for NVidia.
     
  11. hahahanoobs

    hahahanoobs TS Evangelist Posts: 1,631   +432

    All their cards up to and including the x60 bring in the bulk of the revenue, except right now the 480 is still MIA at Newegg (except for one) and the 1060 isn't, and the 480 launched first and claimed 25x more supply than the green team. Now you might say the 480 is out of stock because demand is so high and that is true, but if you compare the customer reviews, you'll see the 1060 is outselling the 480 by a mile.
     
    Reehahs likes this.
  12. cldmstrsn

    cldmstrsn TS Booster Posts: 101   +51

    Would be nice if I could find a 1080 at MSRP 3 months after launch......
     
  13. yRaz

    yRaz TS Evangelist Posts: 1,897   +940

    After looking at reviews on newegg I see nothing to believe that the 1060 is outselling the 480 aside from supply. The 480 is avalible for msrp from other outlets, newegg isn't the only place to buy PC hardware. They're both "5 egg cards" from the reviews.

    I was looking for sales numbers on both cards, but can't find anything. I saw an evga 1060 with tons of reviews, but at $290 it isn't even close to the same market as the 480.

    The 8gb version of the 480 is stupid and show little if any performance increase so the 400 series is targeting the $200 and below market, which makes up a significantly larger portion than the high end market. Once this hits mobile I see it being the defacto discrete GPU in mid ranged laptops.
     
    Last edited: Aug 12, 2016
  14. poohbear

    poohbear TS Addict Posts: 104   +62

    they just reported a record quarter, and ure saying they're having supply issues? So if they didn't have supply issues, their quarter would've been even bigger?!?!??! Seems their stock is then UNDER valued not OVER valued.
     
    wastedkill likes this.
  15. yRaz

    yRaz TS Evangelist Posts: 1,897   +940

    Once the market becomes saturated sales will drop and stock price comes down. This litteraly happens with every new graphics card release. Their next quarter will not be a record quarter. They've already made most of their money. Q3 will slow down, Q4 will be high due to holiday sales and this will be followed by a sharp drop in Q1 with the actual value of their stock appearing in Q2 2017. If you're so confident in their share price go buy some nVidia stock. Now they need to start throwing money into developing the next series of graphics cards, which is exactly where those record profits are going to go.
     
  16. Evernessince

    Evernessince TS Evangelist Posts: 1,170   +577

    I hear the 400 series to mine some sort of new digital currency, forgot the name though. I don't know how the supply of 400 series cards is going but I do know that I called the local Microcenter when the 1070 and RX 480 released. They had about 22 of each RX 480 and less than a handful of each 1070.
     
  17. slamscaper

    slamscaper TS Booster Posts: 161   +26

    I have to admit that Pascal is very impressive and it pains me that I just didn't wait 6 months and build my latest system then so I could have used two GTX 1070's instead of two 970's, which I paid almost $800 for (they are the Nvidia branded 970's with the same cooler as the 980). But, this is part of the caveats of PC gaming and building your own rigs, as technology moves so fast. My two 970's are still crazy powerful, so I'm not really that upset. It's just Pascal is so damn efficient and impressive. I don't even wanna bother trying to sell my 970's and get 1070's because I'm only gonna get a fraction of what I paid for these 970's 6 months ago and I can't stomach it. When my two 970's struggle to run a newer game, I'll upgrade. By then the next generation will be out. I'm sad that I'm missing out on Pascal now, but there's nothing to be done about it. If you managed to wait it out (or you just have loads of money on hand and bought them anyway), cheers to you.
     
    Reehahs likes this.
  18. lripplinger

    lripplinger TS Addict Posts: 258   +89

    Well I would like to get one of these new cards to replace my old 660Ti, but that is impossible at the moment. You can't even get them at MSRP. And the inventory situation is a joke, so I guess I will continue the waiting game.....
     
  19. mbrowne5061

    mbrowne5061 TS Evangelist Posts: 332   +131

    At least by that point, you'll be buying a version of Pascal that has all the (admittedly few) bugs worked out, and perhaps even had some performance optimizations worked in.

    I always prefer to buy on the 'tock' of the tick-tock cycles (to borrow Intel's analogy), so that I have a tested architecture, firmware and drivers already exist, and Devs know how to take advantage of features afforded to them by the new architecture.

    However, I'm breaking that philosophy; my GTX 760 is really showing its age all of sudden (I blame the new console generation - graphics edged up just enough). So I'll probably be buying a couple 1070s, or even a 1080 or two.
     
    SantistaUSA likes this.
  20. slamscaper

    slamscaper TS Booster Posts: 161   +26

    I agree for sure, but the fact that a $250 GTX 1060 outperforms a GTX 980 makes me cringe at the thought of the $800 I spent on these two 970's, which now are only worth half what I paid. Pascal really made some huge increases, both in performance AND efficiency. For the first time, the mobile chips based on Pascal actually match their desktop counterparts on paper and in most scenarios will perform the same. The only thing holding them back will be power draw, which will likely cause them to perform only slightly worse than the desktop chips. Of course once you add overclocking into the mix, the desktop GPU's will take a further lead, but the fact that we have a mobile 1080 chip that's not even cut down from the desktop part is really amazing.

    Honestly I was so blown away by these 970's when I first upgraded to them. I was on dual 670's and the performance increase was insane, not to mention the build quality and heat output. But then Pascal comes along and just rains on my parade haha.

    That reminds me... I need to check on that $30 USD refund we can supposedly claim for Nvidia misleading customers regarding the well publicized VRAM issue with the GTX 970. As many people know, it was advertised as having 4GB, which is technically true, but that last .5GB runs at 1/8th the speed and is all but useless. At least I could recoup a total of $60 to make me feel a little better. If anyone knows if Nvidia is honoring those claims yet, let me know.
     
    Last edited: Aug 16, 2016

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