NVIDIA’s (NVDA) CEO Jen-Hsun Huang on Q2 2015 Results – Earnings Call Transcript

Source: Seeking Alpha


Q2 2015 Earnings Conference Call

August 7, 2014 5:00 pm ET


Chris Evenden – IR

Colette Kress – EVP and CFO

Jen-Hsun Huang – Co-Founder, President and CEO


Gabriela Borges – Goldman Sachs

Vivek Arya – Bank of America Merrill Lynch

Harlan Sur – J. P. Morgan

Ross Seymore – Deutsche Bank Securities

Blayne Curtis – Barclays Capital

Matt Ramsay – Canaccord Genuity

David Wong Wells Fargo

Rajvindra Gill – Needham & Company

Doug Freedman – RBC Capital Markets


Good afternoon. My name is Colin and I will be your conference operator today. At this time, I would like to welcome everyone to the NVIDIA Financial Results Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers’ remarks, there will be a question-and-answer period. (Operator Instructions)

I would now turn the call over to Mr. Chris Evenden, Senior Director for Investor Relations with NVIDIA. Sir, you may begin your conference.

Chris Evenden – IR

Thanks, Colin. Good afternoon, everyone, and welcome to NVIDIA’s conference call for the second quarter of fiscal 2015. With me on the call today from NVIDIA are Jen-Hsun Huang, President and Chief Executive Officer; and Colette Kress, Executive Vice President and Chief Financial Officer. After our prepared remarks, we’ll open up the call to a question-and-answer session. Please limit yourself to one initial question with one follow-up.

Before we begin, I would like to remind you that today’s call is being webcast live on NVIDIA’s Investor Relations Web-site and is also being recorded. A replay of the conference call will be available via telephone until August 14, 2014, and the webcast will be available for replay until our conference call to discuss our financial results for our third quarter of fiscal 2015. The content of today’s conference call is NVIDIA’s property and cannot be reproduced or transcribed without our prior written consent.

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Beginning in September, we will start to use our Company blog and Twitter to inform investors about our participation in upcoming investor and industry conferences. The next conference for NVIDIA will be the Oppenheimer Conference next week on August 12.

During the course of this call, we may make forward-looking statements based on current expectations. These forward-looking statements are subject to a number of significant risks and uncertainties and our actual results may differ materially. For a discussion of factors that could affect our future financial results and business, please refer to the disclosure in today’s earnings release, our Form 10-Q for the fiscal period ended April 27, 2014, and the reports we may file from time to time on Form 8-K filed with the Securities and Exchange Commission.

All our statements are made as of today, August 7, 2014 based on information available to us as of today, and except as required by law, we assume no obligation to update any such statements. Unless otherwise noted, all references to market research and market share numbers throughout the call come from Mercury Research or Jon Peddie Research.

During this call, we will discuss non-GAAP financial measures. You can find a reconciliation of these non-GAAP financial measures to GAAP financial measures in our financial release, which is posted on our Web-site.

So let’s begin. Revenue was $1.1 billion, up 13% year-on-year and in line with our outlook. Gross margin was a record 56.1% and we delivered EPS up 38% year-on-year. The quarter’s gross margins and overall profitability were better than we had anticipated, driven by strength in PC gaming GPUs and in datacenter and cloud platforms.

PC gaming continued to deliver year-on-year growth in an expanding industry. GeForce sits at the center of the PC gaming ecosystem, now powering close to 100 million gaming PCs around the world. Our new entry-level GeForce GTX GPU delivers the performance of the latest generation consoles, making the GeForce gaming PC the largest target for developers of latest generation games. There’s no better place to look for evidence of the strength in PC gaming than eSports.

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Last month’s DOTA 2 Tournament in Seattle was televised on ESPN and carried total prize money of over $10 million, more than the British Open Golf Championship. The number of players playing League of Legends rose to about 67 million and they accumulated over 1 billion hours of playtime under the strong pipeline of AAA games launching on PC this fall, including new versions of Assassin’s Creed, Far Cry, and Call of Duty.

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