NVDA - Earnings call transcript Q1 2007

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Harlan Sur

Okay. Why don’t we go ahead and get seated, because we are going to start in about a minute here.

Okay.

So, good morning everyone and Happy New Year. Welcome to J.P. and Forum Technology Consumer at Annual Show. Electronics XXth Automotive here Investor the Morgan’s

value you know Peterson, technology, from cover semiconductor some analyst; who that our is got covers of equipment European colleagues, of chain; I've our semiconductor me pleased those and who I've For Emerging don’t here solid and a companies I for colleagues RF Asumendi, firm. my automotive day got covers the networking who of the presenting. sectors. IT to analyst joining Brinkman Ryan Technologies have Bill Chatterjee Applied Harlan automotive, & me, Coster, are my am and semiconductor tech equipment J.P. the hardware and and and automotive Morgan capital Samik sectors; semiconductor, the Very José general Sur. Paul U.S. name my Also telecom

that time this and expand Lear. conference participate Gentex the our continue and have we Xilinx, year, our We at Microchip, Cree, management teams Gentherm, companies to Qualcomm, at from first CES the for Conference

hope we enjoy So, conference Remember guys. you the is for this you conference.

investor ask team now CES GTC showcasing Colette technology, Officer ahead just you’ll in the what I recent tradition of then a go So got today an us the in compute And and of next-generation off the the that, the GTC hear the Colette line-up because or gaming and is architectures the off kick few to artificial – that kicks of the that a past, team with learning, am next-generation and conference, at for name kick our to now Shanghai trends overview of the intelligence here we’ll or Financial Kress, maybe about introduce things. years very NVIDIA I’d five deep to automotive, of ask with Chief six NVIDIA. It’s Q&A. pleased a is companies. driving great We’ve questions. been off think much I team

again you joining So for morning. this us with thank that, Colette,

Colette Kress

introduction to actually. are am and excited you, thank six here years seven I Halan be for the kick Okay, and and off to think I going your we on be

forgetting we’ve But So, a many we been acceleration. how on here. times great we’ve are I seen think

As computing an know, you we accelerated company. are

Our focus is that different highlights let we Starting the some we first place the since start and at in with great have seen. many I which talk me are markets gaming, is here Electronics Show. of a to Consumer think about

quite doing is business well. gaming Our

in than RTX, introduction off the been more has start. is market a great Our for of which year a to

ray games what We that wave of today have for can different a used Ray more we other focused overall market places. and is than on high-end a couple believe the overall tracing. but be lot the graphics gaming dozen of graphics next in high-end tracing

laptops We are focused our notebooks but overall here introducing at the overall CES Max-Q. on and capabilities, more also RTX

here in even and You on ones laptops will bringing introduction many another with telcos overall gaming overall in China there December, with partnership our of China. our GTC an overall and we cloud of to our with gaming partnerships market important in the announced Tencent, reached cloud We’ve more you gaming, have overall a focused XXX of about here cloud than a talked our that will today. see now probably focused total gaming RTX we see on new

brings We overall or a the is which overall form of of great, what very we great taken and esports the such to terms important is are off on many world higher XXX of playing again hertz has that games exclusive esports. are out G-SYNC, in a there. We a our here new part to around of It hertz that at LG very with competitive monitors announcing about also overall overall in overall on as see a gaming CES strides. environment know

what overall in Additionally, computing our not focusing gaming on of terms in on accelerated only terms but means of this business, focusing the datacenter.

have fueled underpinnings right of in a both of also with their announced important and overall that processing. hyperscales, purchasing a natural increasing a lot we what now very engines has overall of AI by the We are great seeing industry conversational language acceleration been key. very are of the Recommendation

focus overall are TensorRT, to with our part growing we So a market. off to this influence big inferencing and our software overall of really

China GTC, computing. in We edge also overall on we focused focused

EGX next which overall are platforms. will we is platform our probably focus on So cloud

as warehouse focusing overall You’ve management is seen platform demand supply areas the we Walmart, U.S. in help either or those such of many some with on Postal major wins as think Service in focus about overall edge just the and to as companies terms the that our see. that management well when we of using

we Over forward automotive. today of that of there I’ll of with focusing have These that faster Moving of you’ll But the lot terms work key the in data probably we of in China, overall inside in Xavier. terms for in also with later terms is Orin, architecture overall our architecture way the start on a both current platform had - the for training, great the announced available in and the terms automotive one that summary. be from just next-generation DiDi. a platforms of car. which but with end-to-end everybody datacenter are than true are Xx overall quick our announced takes on on for our automotives simulation focused platforms DRIVE We’ve production see a area here, focused other we all of to and of with announcements

Harlan Sur

at the a for inventories. introduction. thanks cryptal what time, we talking a were about great datacenter about in year year, difference this It’s were the well, makes. We talking no, the Last business. No, slowdown

XXXX year entered year-over-year. with about your You business down XX% calendar

year datacenter, you’ll XXXX, your calendar calendar year hit Help this in that longer-term, drive which Consensus and you automotive? to fiscal businesses, the this guys XXXX proviz quarter, and cycles for the up and XX% fiscal going overall guidance are for at XXXX, year-over-year. exited fiscal is XXXX. If profile should year, XX% trends gaming, your growth actually how think about we us different understand you says plus the product

Colette Kress

In the we overall well are very, positioned. gaming, perspective very of

have gaming – of always at a we We full points. that a lineup overall lot as allows price different do

We tracing. are the provider now is that on overall focusing ray

overall great seasons First existing for out. market been knowing upgrading incorporate in We for even terms cards in the we to overall turning a would season into games that of year that market, and the had holiday and also overall our a holiday went be our coming what SUPERs. RTX were this

games as Call Duty, our using and terms ray of You coming to Wolfenstein of overall also in such will see capabilities. market tracing

through move the of as the focus setting we we gaming, take on to So forward, just tracing not the ray only desktop. for next-generation are overall way but us

different world won overall market notebooks we market of area As to its with Max-Q. at the overall still partnerships of is the an of probably and of up our that the high-end important of you And we know, to But a cloud gaming a know then tracing ray gaming untouched mobility overall overall that we overall opening the the many in to are overall focus. that best lastly, overall can telcos bring are many the bringing infancy. of incorporating performance

So entertainment leading being an as well will overall our edge. industry, of platform as to we continue as see importance gaming the

its datacenter on a in Now, wave AI. when are probably we of focus we datacenter, terms and of new approaching overall opportunity,

the Google image changed natural commands for but evolving consumer image its back you overall many GPUs people detection, timeframe, with the the and model, of enterprises. processing market of early expansion how If the language of key a quite solve overall for about of understand have were of they overall as created as this XXXX are that lot the went companies, but an better also time how to a people how to its a timeframe did the apps. excited for to language it, blog actually categorization overall using only hyperscales, we seen not in it for and in BERT use summer was is What that search of both to internet startups, showing important because overall early technique is bringing better natural processing are terms and

focus seen training, AI beginning. on only that a a takes we This probably XXXx overall wave of of a have but seen inferencing conversational in just and is more the It’s now history. on what on than we the are focus something only a overall You’ve side. performance computing not also

double-digits Inferencing what now also in is in seen the overall within our we a case overall solidly But shipping training. our terms cards more seeing you datacenter You’ve overall percentage of are as where inferencing we business. have of of a terms than are inferencing. growth

using not only forward, engines a we AI, great the overall the So going recommendation broadly but path have with conversational GPUs.

Harlan Sur

the with of It’s datacenter. your a overall So, roughly revenues. quarter stick let’s

sustainability just it’s about talk wave you You your wave But anticipated cloud, inferencing this as of enterprise of mentioned the the new spending of AI. hyperscale beyond the these XX% Can business type their XXXX with you’ve rates back computing. got language, are the calendar more of three pause year-over-year customers second rates cloud you and than business edge in conversational half the will and as all natural that? quarter to customers. in applications new of mentioned, of just started business, XX%, as coming business kind year NVIDIA to dynamics back the AI, by like just growth is what just ramp a be next of growth cycle. three had emerging well spending as team XXXX, XX% with reacceleration We There after as your the you hyperscale, year-over-year exiting this year trending

Colette Kress

Sure.

to hyperscales. So about is, the the did overall the our what we in start QX purchasing results of of had overall terms with improvement we talked see

knew we overall the of we the to year, these terms intact of engagements many get on As the hiring hiring post of in and point focused digestion in engineers knew to earlier new on the would compute. areas, focus continue hyperscales. the our were we had overall the engineering see of many We we

tremendous overall you AI. a see the focusing You see and start-ups AI on of amount papers

in shoring the second half have of So started off to the see we year, the of hyperscales. overall the comeback

build out they just use. overall The the cloud capabilities begin to both need Now, hyperscales overall their in them remain It older overall their not have cloud, the But for may the of internal allows don't to on in that work the for that seeing is those computing, infrastructure. cloud. for the opportunity the focused we're return overall of those.

or of data a to in a seeing return be for complexity, worldwide the milliseconds with think GPUs slowly do the in terms This the terms other a overall we be of have of that and in a of all short require that RTX we inferencing. traditional overall of used of CPU over start something of that complexity future it requires, we period of What type mined adoption will overall also locations our just CPU were to is datacenter amount we is and or performance of overall an of the hyperscales, inferencing to terms important will is using But fine. happen. a processing the couple we I of are the of language the a almost in seeing needs are different that actually inferencing processor of high that knew in AWS to working complexity platform, see natural is an on hundred GPU and broad-based that. a We within amount incumbent the time moment inferencing

So positioned but training, the positioned, side. the also we on are only inferencing not well on

Harlan Sur

your You recognition business. with adoption in and wave AI product consecutive the this first growth and strong was know, classification years your datacenter cycle of drove image three classification for strong of

and Given, magnitude, models, for order training conversational cycle datacenter conversational for have growth these real-time the inferencing. as top a strong and business? some multi-year, you the requirements kind required language, of compute for of on AI drive this that, natural of mentioned, potential to, Does the NVIDIA’s of complexity AI again,

Colette Kress

has that growth conversational conversational AI, believe very the next more forward. stages it, overall of things also use wave do to add both it. that complexity is going We still can the but early large We're see we understanding in cases the for it a to AI of

we now example, on really single a right language. are For focused

overall or a of translation to on processing. still is either of overall the that international. in focused English But focus overall some terms there large in that piece are in We

So, the just cases, looking for hyperscales. use and capable at conversational overall AI not it’s

and you see using dialogue everything AI of that You opportunity that callcenter, moving the have an focusing of first that on the of in to focus overall on enterprises terms this do. to in communication work their terms they streamline

Harlan Sur

had datacenter platform. TX of success with is On your overall the double-digits inferencing big your have percentage now Inferencing inferencing you side, business.

few got looking years? of you think time training the even do you’ve or can next your inferencing that to over this of kind exceed and market next Now out your years, the approach business the three understand business that to five over size

Colette Kress

inferencing, we pieces. believe in So, what than probably larger the a have terms other of do is market we

are we this. Inferencing concentrate in inferencing overall Edge. is So, but datacenter continuing the to also on remember, at important, the

Harlan Sur

Right.

Colette Kress

Edge Inferencing Edge of terms also computing, autonomous very be will in but devices key.

for us not the those You focus processor are different also capabilities, on software seeing but stack. only the

address is industry’s last focus the months, overall our six in of out that are One really overall nine months the that areas packages the applications last unique software there.

overall is overall on healthcare. to with places a deal of or CLARA. of of terms you see in our terms maybe focusing platform software software the that Metropolis cities, just focus You not capabilities focused and of but on our building the world inside Metropolis, anything in is us CLARA otherwise.

us robotics thinking see platform on and is focused overall our the piece. Isaac. about autonomous You on focus Isaac

about course think overall platform. can DRIVE our also You of

one focusing automotive. application. Our help in connection we DRIVE platform just is And every Edge in work required terms influence to to the of that that what been not that focused and them with really is but Each important is our overall single datacenter, acceleration the the is is and the on. have the in of

Harlan Sur

verticals. versus help just platform wide your cloud your compare of of EGX you that’s different accelerated an a you of Can datacenter and like mentioned times, data GPU vector AI-based talk another analytics applicability number type platform. But this? your just maybe platform more about platform. this Edge you It out has us several platforms? seems Can product of across contrast versus rolled it’s which platform You it’s a analytics the computing

Colette Kress

the terms a the is It overall way all Edge capabilities cloud it in overall about to focus have doesn’t what thinking to Sure. of form in of necessary go a the is for allow that functioning. at terms back to of cloud that the to

respond is So for terms to that nature in cloud. the a is milliseconds you form and/or computing needed don’t that back overall in in of either looking that are confidential incorporates overall want of you data the

see past of that terms of and in some scanning healthcare, scanning things that have of instantaneous results devices the the we devices, that seen are we So these industry. entire may have do the overall otherwise could time what in in in terms you of of or the amounts rather than

In terms what checkout. capabilities you of in store and of already is store of see see inside both terms the of what we use end in

manual using overall the look capabilities in I at could Postal by quickly their You same manner. Service the move the How can mail through overall U.S. AI overall than function.

to in our will for So be of Edge we this the that accelerate platform focusing very happen well believe compute years platform will every single that ability to device is the on and an overall of We’ll come. type believe a is positioned that. the part something we enormous see

Harlan Sur

Great.

are on if to Before I move in wanted just are microphone. wait audience. the I would questions the I see any to ask If gaming, for just for there to you the questions, there

year this over XX%. you Okay, of your well of gaming why we side to with your entered XX% business? overall down business move business, the don’t the

XX% games The that with desktop platforms a you of go But normal ray trends what’s games is XXXX, on ramp trends. strong are on for RTX moment Sticking SUPER be you of And GTX for console You demand to retailers, it with holiday level strong business, with with your your technology. this along your the with and up for partners, a Board coming talking support this seasonal and blockbuster year? mainstream desktop do primarily it sequential the lineup tracing that new upgrade year-over-year. exiting your into is your developers, platforms. lineup demand your as being of to pool down, the going how driving basis a a SUPER and season? look notebooks But cycle see sense from game QX, just

Colette Kress

Sure.

into So, example, holiday XX/XX. for important starts start Holiday not as holiday the season. November. starts overall A that we're we very The season actually season on with Singles’ done. entered as holiday Day early of and

We you through seen waiting have are now the end Chinese Year is for as which and that that quarter, we of actually for with a that each our available. discussions channel partners New do holiday well overall points the usually our tail overall is overall at planned the But have going quite of It’s probably through expectations the full we well. had lineup it's quite overall and going season.

focuses and have retail But not focus $XXX overall down overall to influence the desktop. a capabilities. We on overall able upper us all bringing ray be price lineup ray tracing sales, that on a also the now types just this of to into of you for to allows tracing tracing appreciate ray

you we notebooks. on in terms know, have As focused the of

over the in outgrow to have notebooks the desktop. have years Our of seen what continued last we terms several

overall whole. notebook is business Our a our gaming approximately as business approaching overall of one-third

design. The of CES. see them important significant you'll to out in an that their notebook here in gamers notebook for own So the as overall at The desktops, attract overall performance an can now have overall focused unique piece, necessarily niche amount interested and this their on a OEMs have that building but high overall that aren’t gamers.

as notebooks standpoint tracing is of with our good Our on and a path more sales overall has of in be from XX% desktop terms well. the than the desktop making even overall a to ray now accumulated

Harlan Sur

talk about cloud it. about the the let’s segment gaming of so market. talk Got let's And – - then,

its cloud has gaming platform. GeForce Now NVIDIA So,

GTC gaming and company partnership going global NVIDIA platform, your you them your China, At you go the mainstream? telco us gaming supplying GeForce can are announced partnerships China, to Tencent, by providing supporting providers. in recent cloud to to do be supporting Or You’ve more you with Now will kind more products? this be Tencent GPU power service with largest regional expect your just gaming when service company in you partnership? where into announced the you their some give globally largest the the GPU And them with Will insights architecture? be of technology

Colette Kress

a Testing testing. in overall live. to soon of that terms of that overall their relationship go of out market important we are an gaming. has overall overall terms as in in market. for focusing Tencent us align the now, our datacenter. continuation opportunity in stages. overall they necessary, a not will gaming But partner ready important NVIDIA endorse China. win-win and pass where excited This to for growth both It’s been in both there Tencent, of to is datacenter are to even are but gaming in to the gaming respect to out So, the only first on and into early on They now that we some with terms overall their continue overall the also still overall Tencent was China, will come in relationship come right though of ecosystem always very focusing allows in have software the right us here partnership, building with of as as partnership a focused the this about address an they of cloud and overall the pods cloud a later in

Harlan Sur

come datacenter but that's is specifically a the Tencent are obviously, the up I of demand, out well. China, And Tencent, your good especially calls, in started and segue, largest remember, gaming China, company key actually, in weak many I the in world, called gamers the also bring XXX because Tencent but always in world in the in it home gaming China. largest demand back as China, a strong. the year when China seems gaming you calendar gaming off million customers because in is to are they company of conference like XXXX, I have And said market largest trends China

China the help understand what’s driving us demand? So,

Colette Kress

you China think we quarters our see our in an is business, expected. than there of I but a things But a of year our overall important stack. full as in business stand China. very going did where part overall ago, slower is have now, in gaming part China we well probably right some But different quite probably of inferred. Yes, datacenter we important space the what also had are adoption

we not iCafe always are also Our may full is not not allows the they whole important that ray in worldwide, that them about terms It’s iCafe new but of overall market to market be you a gaming necessarily have both part even sell think on just our cards into architecture of just of if something overall overall stack but its overall focused for The the important important an tracing. ray market when China. as there. that’s but piece one own tracing,

We market continue of to opportunities China significant to see a them looking our for the many hold continue we of peers. overall our and against share platform upgrade in

Harlan Sur

market is more autos, expected move the why segments X%, I the a as towards Gaming transitions your questions tailwind we Datacenter Auto? any on roughly or with the grow audience don’t on either in to is Auto and long more business of to Okay, strongly X% autonomous switch to but of and Before business? there driving.

with maybe us help at difference to timelines the discuss in should understand production You OEM differences on we you Help your between platforms auto the Shanghai, you first announced your the announced SoC and platform. success and major us of Xavier your guys Orin with as Orin mentioned platform when volumes start Xavier, Orin GTC your partners? strong platform, AV understand between see

Colette Kress

Great.

focusing on partnerships. big overall of and on our architecture the announced a overall automotive we that for So, our next piece SoC

standpoint competitive is the capacity with what against as we data Xavier. speed So, of overall future. importance of be a the AV about of of PowerPoint’s was overall had of overall to something inside that the forward. had that probably top collection, Xavier probably is And of compute Xx cars any from terms processing the their they in data even a Orin in of we line know view necessary have move it going the We may

So, this platform. see years important customers something finishing ahead, we overall out our the of the of in that in terms have hands we’ll but in full an as auto couple that piece

and focused is terms production, view terms in on not AV platform of back in datacenter. just it’s in well cars focus Our as of of the as terms the focused,

You’ve creating significant training data with focus ability seen on both for their test these live overall to of us the overall data overall them and/or simulated overall cars. platforms for a data. There amount AV is the

call we’ll We three, fork AV the level looking on removing what focusing other at of OEMs are but overall We four cars many things can working high-end also with on of level our in confined we’ll and working are overall AV of on four road that seeing is overall on to a the is focus side, passenger focusing two level with that separately overall level robo-taxis of focusing plus in two the do or on on what the the high-level above. type and find moving two with will on scenarios. we these driver

have we that’s out, timeframe to is bit longer. little what a it’s earlier bit overall taking in previously that what going communicated. to they for to is we had them need draw this focus automotive seeing something than versus Now investment XXXX them a the probably market closer the The are on little

still are with working we So, them.

they only build a probably actually upon, that production test are upon today that would with can of one inside full platform the be We ones of the something car. of

Harlan Sur

proposed Great. I acquisition approval. Any China you of Mellanox? us updates on are for the waiting know for

Colette Kress

fall announced our with QX believe of had our that closure the acquisition that regulatory we of and couple areas first have then, Mellanox overall overall would XXXX even EU. probably the we the with since we results, So, into reached approval

with With of us the when actually close. unconditional holding in back nothing we EU, and terms

And yes, of we do on So, the first in we close China. again, XXXX. waiting believe will this are part

Harlan Sur

that… – of First Is XXXX? half so,

Colette Kress

have we of The see. XXXX, first part to

Harlan Sur

XXXX. of part First

higher gross financials. during in There quarter, half on to question the normalization datacenter very big kind are strongly you step-up The is very, the to the of XX%. business last part business, XXXX, guys margins of, levels to holiday. the is inflect first gaming and that margin inventory last perform the overhang. is continues Okay, into a back of of the The past starting gross margin

XX% – the So, how think sort profile of we should going of plus, you how do forward? gross the margin about sustainability

Colette Kress

been the our gross biggest business and margin mix by so, overall inside mix. has gaming overall probably being starts with our our Yes, business. always overall influenced piece our even gaming The with

We gaming, growth of that overall overall and just influence platforms the have overall many margin. high-end cards gross

see for terms seen well, Then to does terms higher-end gross tracing growth. upgrade continue of overall in overall the biz our the appreciate that card. gross pro margin opportunity We higher allows as datacenter both to ray margins. an to we’ve people upgrade now and you choosing discuss also return a But a capability what us to in our of and

Harlan Sur

Yes.

Colette Kress

training from and/or margins. an well Both can, overall a that gross as inferencing influence our overall standpoint

growth probably the likely mix. to quarter-by-quarter we it will But will continue future. we a with improve that forward, concentrate in As the move bit change and see

Harlan Sur

Great. for Colette, thank Well, of out time. you participating. with we as always are that,

Colette Kress

so Thank it. you much. I appreciate

Harlan Sur

thank appreciate. I Yes, you.

NVIDIA (NVDA) 7 Jan 202007 Q1 Earnings call transcript