Nvidia CEO Jen-Hsun HuangIDG News Service

Nvidia reports strong quarter as Tegra sales grow 200 percent

Although sequential growth was flat, Nvidia exceeded analyst expectations as the company's profits and revenue climbed compared to a year ago.

Of special note was the company's strength in its embedded Tegra processor business, which grew to $159 million. Although the Tegra represents a bit more than 10 percent of the company's $1.1 billion revenue for the quarter, that business grew by 200 percent compared to a year ago, with 74 percent of that growth in cars.

Overall, Nvidia reported net income of $128 million on revenue of $1.1 billion, representing growth of 33 percent in net income, and a 13-percent increase in revenue compared to a year ago. Nvidia reported earnings of 22 cents per share; analysts expected Nvidia to report 20 cents per share and revenue of $1.1 billion.

"We had a great quarter with strong gains in each of our three growth areas—Gaming, Datacenter & Cloud, and Mobile," said Jen-Hsun Huang, president and chief executive officer of Nvidia, in a statement. "Our Tesla datacenter business is in high gear, benefiting from strong demand from cloud service providers, and our new SHIELD tablet is generating considerable excitement. ‎ Nvidia's accelerating growth stems directly from investments in extending our visual computing leadership to the mobile-cloud revolution."

Although Nvidia reported healthy results, revenue was flat compared to the March quarter. The GPU business declined 2 percent sequentially due to the seasonal decline of consumer PCs, partially offset by continued strong demand for GeForce GPUs for gaming, the company said. It climbed 2 percent versus a year ago, however. 

Nvidia also said that revenue from GRID, its solution for running virtual graphics applications on a server, increased significantly, as government and education customers turned to running those applications in the cloud. The same Grid platform powers some of the cloud gaming platforms Nvidia has tied to its Shield tablet and mobile platform.

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