Outlook

NVIDIA’s outlook for the second quarter of fiscal 2023 is as follows:

• Revenue is expected to be $8.10 billion, plus or minus 2%. This includes an estimated reduction of approximately $500 million relating to Russia and the COVID lockdowns in China.
• GAAP and non-GAAP gross margins are expected to be 65.1% and 67.1%, respectively, plus or minus 50 basis points.
• GAAP and non-GAAP operating expenses are expected to be approximately $2.46 billion and $1.75 billion, respectively.
• GAAP and non-GAAP other income and expense are expected to be an expense of approximately $40 million, excluding gains and losses from non-affiliated investments.
• GAAP and non-GAAP tax rates are expected to be 12.5%, plus or minus 1%, excluding any discrete items.
  

Highlights

NVIDIA achieved progress since its previous earnings announcement in these areas: 

Data Center

• First-quarter revenue was a record $3.75 billion, up 83% from a year ago and up 15% from the previous quarter.
• Announced the NVIDIA Hopper™ GPU architecture, delivering an order of magnitude performance leap over its predecessor; the NVIDIA^® H100 Tensor Core GPU, the first Hopper-based GPU, featuring 80 billion transistors; and the NVIDIA DGX™ H100 system, the fourth generation of this purpose-built AI infrastructure.
• Announced the Arm ^{® -} based NVIDIA Grace™ CPU Superchip with two CPU chips connected coherently over NVLink ^® -C2C, a new high-speed, low-latency chip-to-chip interconnect.
• Announced that Taiwan’s leading computer makers are set to release the first wave of systems powered by NVIDIA’s Grace Hopper and Grace CPU Superchips, on track to launch in the first half of 2023.
• Unveiled NVIDIA Spectrum™-4, the world’s first 400Gbps end-to-end networking platform, enabling the extreme performance and robust security needed for data center infrastructure at scale.
• Announced major updates to NVIDIA AI — which includes enterprise-ready software for advancing speech, recommender systems, hyperscale inference and more — as well as the new NVIDIA AI Accelerated program, to help ensure performance and reliability of AI applications from NVIDIA’s partners.
• Announced NVIDIA OVX™ — a dedicated, scalable server reference design for creating industrial digital twins in Omniverse — combining high-performance GPU-accelerated compute, graphics and AI with high-speed storage access, low-latency networking and precision timing. 
• Unveiled 60+ updates to the NVIDIA CUDA-X™ collection of libraries, tools and technologies across a broad range of disciplines.
• Unveiled NVIDIA Clara™ Holoscan MGX , a platform for the medical-device industry to develop and deploy real-time AI applications at the edge, designed to meet required regulatory standards.
• Collaborated with Microsoft Azure to preview a scaled virtualized cloud offering using NVIDIA vGPU software and the NVIDIA A10 Tensor Core GPU.
• Announced a strategic collaboration with The Kroger Co. to reimagine the shopping experience using AI-enabled applications and services.
• Teamed with UF Health, the University of Florida’s academic health center, to develop a neural network that generates synthetic clinical data.

Gaming

• First-quarter revenue was a record $3.62 billion, up 31% from a year ago and up 6% from the previous quarter.
• Introduced the GeForce RTX^® 3090 Ti, the fastest-ever consumer GPU.
• Announced 15 new game titles optimized for NVIDIA RTX — including Dying Light 2 Stay Human, Ghostwire: Tokyo and Shadow Warrior 3 — bringing the total to over 250 games and applications.
• Announced that gamers can now access RTX 3080-class streaming with GeForce NOW™ monthly subscription plans.  
• Expanded the GeForce NOW library with over 100 games — including Lost Ark, Need for Speed: Heat and Life is Strange: Remastered — bringing the total to over 1,300.
• Launched Fortnite on GeForce NOW with touch controls for mobile devices, streaming through the Safari web browser on iOS and the GeForce NOW Android app.

Professional Visualization

• First-quarter revenue was $622 million, up 67% from a year ago and down 3% from the previous quarter.
• Added new NVIDIA Ampere architecture RTX GPUs for workstations, widening access to AI and ray-tracing technology.
• Announced the Omniverse Cloud service for instant access to NVIDIA Omniverse™ — including by millions of Mac and Chromebook users — enabling the collaborative editing of large 3D scenes from anywhere when available next year.
• Announced that Amazon Robotics is building AI-enabled digital twins of its warehouses, using Omniverse Enterprise, to optimize warehouse design and train more intelligent robotic solutions.

Automotive and Robotics

• First-quarter Automotive revenue was $138 million, down 10% from a year ago and up 10% from the previous quarter.
• Started production of the NVIDIA DRIVE Orin™ autonomous vehicle computer, which has been chosen by over 35 automakers. 
• Announced wins with Lucid Motors and BYD, bringing its automotive design-win pipeline to over $11 billion over the next six years.
• Introduced NVIDIA DRIVE™ Map, a multimodal mapping platform — based in part on DeepMap survey mapping technology — designed to enable the highest levels of autonomy while improving safety.
• Set records in AI inference with NVIDIA Orin in its MLPerf benchmark debut, running up to 5x faster than its predecessor with an average of 2x better energy efficiency.
• Announced availability of the NVIDIA Jetson™ AGX Orin developer kit, with production modules shipping in July, and Isaac Nova Orin, a state-of-the-art AI compute and sensor reference platform built to accelerate development of autonomous mobile robots.

CFO Commentary
Commentary on the quarter by Colette Kress, NVIDIA’s executive vice president and chief financial officer, is available at https://investor.nvidia.com/.

Conference Call and Webcast Information
NVIDIA will conduct a conference call with analysts and investors to discuss its first quarter fiscal 2023 financial results and current financial prospects today at 2 p.m. Pacific time (5 p.m. Eastern time). A live webcast (listen-only mode) of the conference call will be accessible at NVIDIA’s investor relations website, https://investor.nvidia.com. The webcast will be recorded and available for replay until NVIDIA’s conference call to discuss its financial results for its second quarter of fiscal 2023.

Non-GAAP Measures
To supplement NVIDIA’s condensed consolidated financial statements presented in accordance with GAAP, the company uses non-GAAP measures of certain components of financial performance. These non-GAAP measures include non-GAAP gross profit, non-GAAP gross margin, non-GAAP operating expenses, non-GAAP income from operations, non-GAAP other income (expense), net, non-GAAP net income, non-GAAP net income, or earnings, per diluted share, and free cash flow. For NVIDIA’s investors to be better able to compare its current results with those of previous periods, the company has shown a reconciliation of GAAP to non-GAAP financial measures. These reconciliations adjust the related GAAP financial measures to exclude acquisition termination costs, stock-based compensation expense, acquisition-related and other costs, IP-related costs, legal settlement costs, gains and losses from non-affiliated investments, interest expense related to amortization of debt discount, the associated tax impact of these items where applicable, domestication tax benefit, and foreign tax benefit. Free cash flow is calculated as GAAP net cash provided by operating activities less both purchases of property and equipment and intangible assets and principal payments on property and equipment and intangible assets. NVIDIA believes the presentation of its non-GAAP financial measures enhances the user’s overall understanding of the company’s historical financial performance. The presentation of the company’s non-GAAP financial measures is not meant to be considered in isolation or as a substitute for the company’s financial results prepared in accordance with GAAP, and the company’s non-GAAP measures may be different from non-GAAP measures used by other companies.