Nvidia (NASDAQ:NVDA) Beats Earnings and Revenue Expectations. Announces 10-for-1 Split
Nvidia (NASDAQ:NVDA) just announced its Q1-2025 earnings results, which beat both earnings and revenue expectations, sending the stock higher after hours. Here are the highlights:
EPS of $6.12 vs. $5.60 expected — up 461% year-over-year and 19% quarter-over-quarter. Last year’s Q1 EPS was $1.09
Revenue of $26B vs. $24.59B expected — up 262% year-over-year and 18% quarter-over-quarter. Last year’s Q1 revenue was $7.19 billion.
Gross margin of 78.9% vs. 66.8% the year earlier.
Q2 revenue outlook of $28B, plus or minus 2%. CEO Jensen Huang said, “We will see a lot of Blackwell revenue this year.”
Increases dividend by 150% to $0.10 per share
Announces 10-for-1 stock split
Free cash flow rose from $2.643B to $14.936B.
TTM free cash flow of $39.24B
Nvidia’s Q2 Outlook
For the second quarter of fiscal 2025, NVIDIA projects:
Revenue: Approximately $28.0 billion, plus or minus 2%, as stated above.
Gross Margins: GAAP gross margin of 74.8% and non-GAAP gross margin of 75.5%.
Operating Expenses: GAAP operating expenses of $4.0 billion and non-GAAP operating expenses of $2.8 billion.
Tax Rates: GAAP and non-GAAP tax rates of 17%, excluding discrete items.
How Did Each Sector Perform?
Data Center
Record revenue of $22.6 billion, up 23% from the previous quarter and 427% from last year.
Launched the Blackwell platform and DGX SuperPOD™ for generative AI supercomputing.
Gaming and AI PC
First-quarter revenue of $2.6 billion, down 8% from the previous quarter but up 18% from last year.
Introduced new AI gaming technologies and optimizations for NVIDIA GeForce RTX AI PCs.
Professional Visualization
First-quarter revenue of $427 million, down 8% from the previous quarter but up 45% from last year.
Introduced new NVIDIA RTX GPUs for laptops and desktops, enhancing AI workflows.
Automotive and Robotics
First-quarter revenue of $329 million, up 17% from the previous quarter and 11% from last year.
Announced several partnerships with leading electric vehicle makers and introduced the Project GR00T foundation model for humanoid robots.
Below, you can see a breakdown of its income statement, courtesy of @EconomyApp on X:
Is NVDA Stock Undervalued?
Let’s do some calculations to see if Nvidia stock is undervalued. Here are the inputs:
TTM free cash flow of $39.24B
TTM FCF per share of $15.77
Discount rate (cost of equity) of 10%
Terminal growth rate of 3%
Current after-hours price of $972
Using our reverse DCF calculator, the market is pricing NVDA to grow its free cash flow per share by 22.392% annually for the next 10 years and then by 3% every year after that. See the image below.
Essentially, if you think NVDA can surpass this growth rate, then it's underpriced, and vice versa.
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