Nvidia (NVDA) earnings Q1 2021

Jen-Hsun Huang, president and chief executive officer of Nvidia Corp., speaks during the company’s event at Mobile World Congress Americas in Los Angeles, California, U.S., on Monday, Oct. 21, 2019.

Patrick T. Fallon | Bloomberg | Getty Images

Nvidia reported first-quarter earnings after the bell on Wednesday.

The stock fell over 1% in after-hours trading after losing a little more than 2% on the day.

Here’s how it did: 

  • EPS: $1.80, adjusted
  • Revenue: $3.08 billion

Wall Street had anticipated adjusted earnings per share of $1.69 on revenue of $3 billion, according to Refinitiv consensus estimates. However, it’s difficult to compare reported earnings to analyst estimates as the coronavirus pandemic continues to affect global economies and makes earnings impact difficult to assess.

“COVID-19 created challenges in supply and demand. Early in the quarter, our partners’ supply chains were disrupted. Shelter-in-place resulted in closure of retail outlets and China iCafes, affecting sales of our gaming products,” the company said in a letter from the CFO. “However, work from home, learn at home, and gaming drove a surge in e-tail demand.”

Last year during its first fiscal quarter, Nvidia reported adjusted earnings per share of $0.88 on revenue of $2.22 billion. 

Nvidia expects to report about $3.65 billion in revenue in its second fiscal quarter with gross margins around 58.6%. 

Under Nvidia’s fiscal calendar, the quarter ended on April 26, over a month after widespread lockdowns in the United States and other countries started. The company said that its employees are working from home “very effectively.”

Nvidia is best known for making graphic processing units. Its gaming segment was up 25% year-over-year to $1.9 billion, the company said. But its fastest growing segment is related to its chips for data centers, which are used for computationally intensive tasks, such as machine learning. Nvidia said that segment grew 80% year-over-year, topping $1 billion for the first time with revenue of $1.14 billion. The company also said that it said it closed the acquisition of Mellanox in April, which will also help Nvidia’s data center business.

“Gaming and workstation growth are directly tied to competitive products and the need to work, govern and school from home,” Patrick Moorhead, president and principal at Moor Insights & Strategy, said.

Not including the after-hours move, Nvidia shares are up more than 50% for the year while the S&P 500 is has fallen more than 8%.

Nvidia said on Thursday that it is evaluating the “timing” of its share repurchase program and that it will continue to pay dividends.

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