NVIDIA Corporation Net Income dropped on 32.5% and Revenue decreased on 6.8%
02/13/2020 • About NVIDIA Corporation (
$NVDA) • By InTwits
NVIDIA Corporation reported FY2020 financial results today. Overall the company's long term financial model is characterised by the following facts:
- NVIDIA Corporation has low CAPEX intensity: 5 year average CAPEX/Revenue was 4.0%. At the same time it's in pair with industry average of 3.2%
- CAPEX is quite volatile: $489m in FY2020, $600m in FY2019, $593m in FY2018, $176m in FY2017, $86m in FY2016
- The company has highly profitable business model: ROIC is 22.7%
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
NVIDIA Corporation's Revenue decreased on 6.8%. Annual revenue decline showed slowdown in FY20Q4 - revenue surged on 40.8%. During the last 5 years Revenue growth topped in FY2018 at 40.6% and was decelerating since that time. Revenue decline was worsened by EBITDA margin decline. EBITDA Margin decreased on 4.1 pp from 34.7% to 30.6% in FY2020. During FY2016-FY2020 EBITDA Margin topped in FY2018 at 35.1% and was declining since that time.
Gross Margin increased slightly on 0.78 pp from 61.2% to 62.0% in FY2020. Gross Margin followed a growing trend at 1.4 pp per annum in the last 5 years. SG&A as a % of Revenue increased slightly on 1.6 pp from 8.5% to 10.0% in FY2020. During FY2016-FY2020 SG&A as a % of Revenue bottomed in FY2018 at 8.4% and was growing since that time.
Net Income margin decreased on 9.7 pp from 35.3% to 25.6% in FY2020. During the last 5 years Net Income margin topped in FY2019 at 35.3%.
Investments (CAPEX, working capital and M&A)
In FY2020 NVIDIA Corporation had CAPEX/Revenue of 4.5%. CAPEX/Revenue increased slightly on 1.9 pp from 2.5% in FY2017 to 4.5% in FY2020. Average CAPEX/Revenue for the last three years was 5.2%. During FY2016-FY2020 CAPEX as a % of Revenue topped in FY2018 at 6.1% and was declining since that time.
Return on investment
The company operates at high and attractive ROIC (22.7%) and ROE (26.0%). ROIC dropped on 14.2 pp from 36.9% to 22.7% in FY2020. ROE dropped on 23.3 pp from 49.3% to 26.0% in FY2020. During FY2016-FY2020 ROIC topped in FY2019 at 36.9%. During FY2016-FY2020 ROE topped in FY2019 at 49.3%.
Leverage (Debt)
Debt level is -2.5x Net Debt / EBITDA and 0.8x Debt / EBITDA. Debt jumped on 32.9% while cash jumped on 1,293%.
NVIDIA Corporation has no short term refinancing risk: cash is higher than short term debt (11,973.6%).
Valuation and dividends
The company's trades at EV/EBITDA 54.1x and P/E 67.6x.
Management team
Jen-Hsun Huang is a the company's CEO. Jen-Hsun Huang has spent 27 years with the company. Colette M Kress is a the company's CFO. Colette M Kress has spent 7 years at the company.
Financial and operational results
FY ended 01/26/2020
NVIDIA Corporation ($NVDA) key annual financial indicators| mln. $ | 2016 | 2017 | 2018 | 2019 | 2020 | 2020/2019 |
|---|
P&L
|
|---|
| Revenue | 5,010 | 6,910 | 9,714 | 11,716 | 10,918 | -6.8% |
| Gross Profit | 2,811 | 4,063 | 5,822 | 7,171 | 6,768 | -5.6% |
| SG&A | 602 | 663 | 815 | 991 | 1,093 | 10.3% |
| EBITDA | 944 | 2,121 | 3,409 | 4,066 | 3,341 | -17.8% |
| EBIT | 747 | 1,934 | 3,210 | | | |
| Interest expence | 47 | 58 | 61 | | | |
| Tax | 129 | 239 | 149 | | | |
| Net Income | 614 | 1,666 | 3,047 | 4,141 | 2,796 | -32.5% |
| Stock Based Compensation | 194 | 247 | 391 | | | |
Balance Sheet
|
|---|
| Cash | 596 | 1,766 | 4,002 | 782 | 10,896 | 1,293.4% |
| Accounts Receivable | 505 | 826 | 1,265 | | | |
| Inventory | 418 | 794 | 796 | | | |
| Accounts Payable | 296 | 485 | 596 | | | |
| Short Term Debt | 1,417 | 800 | 15 | 0 | 91 | |
| Long Term Debt | 97 | 2,020 | 1,985 | 1,988 | 2,552 | 28.4% |
Cash flow
|
|---|
| Capex | 86 | 176 | 593 | 600 | 489 | -18.5% |
| Dividends | 213 | 261 | 341 | | | |
Ratios
|
|---|
| Revenue growth | 7.0% | 37.9% | 40.6% | 20.6% | -6.8% | |
| EBITDA growth | -3.6% | 124.7% | 60.7% | 19.3% | -17.8% | |
|
|---|
| Gross Margin | 56.1% | 58.8% | 59.9% | 61.2% | 62.0% | 0.8% |
| EBITDA Margin | 18.8% | 30.7% | 35.1% | 34.7% | 30.6% | -4.1% |
| EBIT Margin | 14.9% | 28.0% | 33.0% | | |
| SG&A, % of revenue | 12.0% | 9.6% | 8.4% | 8.5% | 10.0% | 1.6% |
| SBC, % of revenue | 3.9% | 3.6% | 4.0% | | |
| Net Income Margin | 12.3% | 24.1% | 31.4% | 35.3% | 25.6% | -9.7% |
| CAPEX, % of revenue | 1.7% | 2.5% | 6.1% | 5.1% | 4.5% | -0.6% |
|
|---|
| ROIC | 13.1% | 27.3% | 35.3% | 36.9% | 22.7% | -14.2% |
| ROE | 13.8% | 32.6% | 46.1% | 49.3% | 26.0% | -23.3% |
| Net Debt/EBITDA | 1.0x | 0.5x | -0.6x | 0.3x | -2.5x | -2.8x |
| Interest expence / Average debt | 3.1% | 2.7% | 2.5% | | | |
People
|
|---|
| Insider ownership | 4.4% | 4.4% | 4.4% | | | |
| Employees | 9,227 | 7,282 | 8,191 | | | |
| Revenue/Employee, th. $ | 543 | 949 | 1,186 | | | |
NVIDIA Corporation ($NVDA) key quoterly financial indicators
| mln. $ | FY20Q1 | FY20Q2 | FY20Q3 | FY20Q4 | | YoY change |
|---|
P&L
|
|---|
| Revenue | 2,220 | 2,579 | 3,014 | 3,105 | | -30.8% | -17.4% | -5.2% | 40.8% |
| EBITDA | 476 | 691 | 1,047 | 1,127 | | -64.8% | -43.2% | -7.0% | 203.0% |
| Net Income | 394 | 552 | 899 | 950 | | -68.3% | -49.9% | -26.9% | 67.5% |
Balance Sheet
|
|---|
| Cash | 2,772 | 7,105 | 9,765 | 10,896 | | 262.4% | 889.6% | 1,254.4% | 1,293.4% |
| Short Term Debt | 80 | 84 | 89 | 91 | | 471.4% | 500.0% | 2,866.7% | - |
| Long Term Debt | 2,474 | 2,472 | 2,459 | 2,552 | | 24.6% | 24.4% | 23.8% | 28.4% |
Ratios
|
|---|
| Gross Margin | 58.4% | 59.8% | 63.6% | 64.9% | | -6.1% | -3.5% | 3.2% | 10.2% |
| EBITDA Margin | 21.4% | 26.8% | 34.7% | 36.3% | | -20.7% | -12.1% | -0.7% | 19.4% |
| Net Income Margin | 17.7% | 21.4% | 29.8% | 30.6% | | -21.0% | -13.9% | -8.8% | 4.9% |
Peers in Semiconductors
Below you can find NVIDIA Corporation benchmarking vs. other companies in Semiconductors industry. It's shown for the period of 5 years for the key financial metrics. Each table has median value for all the companies in the industry together with individual financial data of the top-5 companies in the industry by particular financial metric.
Top companies by Revenue growth, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Inphi Corporation ($IPHI) | - | 30.8% | -15.4% | 24.2% | 86.8% |
| Sequans Communications S.A. ($SQNS) | - | 5.9% | -16.6% | -23.3% | 65.0% |
| MaxLinear, Inc ($MXL) | - | 8.4% | -8.4% | -17.6% | 50.9% |
| Advanced Micro Devices, Inc. ($AMD) | - | 21.6% | 23.3% | 4.0% | 45.0% |
| Kopin Corporation ($KOPN) | - | 23.0% | -12.1% | 20.7% | 35.9% |
| |
|---|
| Median (43 companies) | 1.2% | 10.9% | 4.4% | -3.2% | 2.8% |
|---|
| NVIDIA Corporation ($NVDA) | - | 37.9% | 40.6% | 20.6% | -6.8% |
Top companies by Gross margin, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| CEVA, Inc. ($CEVA) | 91.6% | 92.1% | 89.8% | 88.4% | 89.3% |
| Universal Display Corporation ($OLED) | 83.9% | 80.8% | 75.5% | 78.5% | 80.1% |
| Rambus, Inc. ($RMBS) | 80.1% | 79.9% | 76.8% | 77.1% | 75.0% |
| Analog Devices, Inc. ($ADI) | 65.1% | 59.9% | 68.3% | 67.0% | 65.9% |
| MoSys, Inc. ($MOSY) | 49.0% | 46.9% | 61.8% | 61.0% | 65.7% |
| |
|---|
| Median (43 companies) | 47.2% | 48.6% | 50.2% | 50.4% | 49.2% |
|---|
| NVIDIA Corporation ($NVDA) | 56.1% | 58.8% | 59.9% | 61.2% | 62.0% |
Top companies by EBITDA margin, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Texas Instruments Incorporated ($TXN) | 43.5% | 46.7% | 48.6% | 47.5% | 47.6% |
| Intel Corp ($INTC) | 35.2% | 41.7% | 45.7% | 45.9% | 46.7% |
| Broadcom Inc. ($AVGO) | 19.9% | 40.4% | 44.2% | 40.9% | 46.2% |
| Universal Display Corporation ($OLED) | 44.8% | 51.6% | 35.3% | 48.0% | 45.9% |
| Analog Devices, Inc. ($ADI) | 36.2% | 32.1% | 43.2% | 42.1% | 42.0% |
| |
|---|
| Median (41 companies) | 9.2% | 10.7% | 9.3% | 12.9% | 17.3% |
|---|
| NVIDIA Corporation ($NVDA) | 18.8% | 30.7% | 35.1% | 34.7% | 30.6% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Micron Technology, Inc. ($MU) | 46.9% | 23.3% | 29.2% | 41.8% | 38.4% |
| Sequans Communications S.A. ($SQNS) | 11.8% | 13.3% | 22.9% | 29.6% | 27.1% |
| Intel Corp ($INTC) | 16.2% | 18.8% | 21.4% | 22.5% | 18.6% |
| First Solar, Inc. ($FSLR) | 7.9% | 17.5% | 33.0% | 21.8% | 15.4% |
| Power Integrations, Inc. ($POWI) | 3.1% | 7.5% | 5.9% | 5.7% | 14.5% |
| |
|---|
| Median (40 companies) | 3.7% | 4.7% | 4.2% | 3.7% | 3.6% |
|---|
| NVIDIA Corporation ($NVDA) | 1.7% | 2.5% | 6.1% | 5.1% | 4.5% |
Top companies by ROIC, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Texas Instruments Incorporated ($TXN) | 34.9% | 43.1% | 47.5% | 39.7% | 38.2% |
| Applied Materials Inc ($AMAT) | 19.0% | 31.2% | 36.4% | 27.7% | 32.1% |
| Advanced Micro Devices, Inc. ($AMD) | -21.7% | 7.3% | 21.6% | 21.5% | 31.8% |
| QUALCOMM Incorporated ($QCOM) | 15.8% | 5.7% | 2.2% | 38.0% | 28.1% |
| Skyworks Solutions, Inc. ($SWKS) | 33.7% | 33.1% | 32.3% | 23.2% | 21.2% |
| |
|---|
| Median (45 companies) | 1.4% | 3.2% | 2.2% | 2.2% | 5.3% |
|---|
| NVIDIA Corporation ($NVDA) | 13.1% | 27.3% | 35.3% | 36.9% | 22.7% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| SunPower Corporation ($SPWR) | - | - | - | - | 8.2x |
| MACOM Technology Solutions Holdings, Inc. ($MTSI) | 3.0x | 7.2x | 98.6x | - | 6.6x |
| Rambus, Inc. ($RMBS) | -0.1x | -0.1x | - | - | 5.9x |
| Inphi Corporation ($IPHI) | 4.5x | 33.7x | 32.2x | 4.5x | 3.4x |
| Canadian Solar Inc. ($CSIQ) | 11.3x | 6.8x | 2.7x | 3.4x | 3.3x |
| |
|---|
| Median (31 companies) | -0.0x | 0.4x | 0.3x | 0.5x | 0.5x |
|---|
| NVIDIA Corporation ($NVDA) | 1.0x | 0.5x | -0.6x | 0.3x | -2.5x |
