Nvidia hit new revenue records for gaming, data centre and professional visualisation in its 2022 fiscal year, but it was the latter that grew faster than the rest, doubling sales of GPUs for workstations.
The company reported its financial results for the fourth quarter of its fiscal year 2022, which ended 30 January 2022, on Thursday, a little more than a week after Nvidia terminated its deal to acquire British chip designer Arm after receiving regulatory pushback. Nvidia’s fourth-quarter revenue was US$7.6 billion, up from 53 percent year-over-year, beating Wall Street’s expectations by US$210 million.
That contributed to Nvidia hitting a record US$26.9 billion in 2022 revenue, a 61 percent increase from the previous fiscal year. While Nvidia’s gaming business constituted 47 percent of 2022 revenue, growing 61 percent to US$12.5 billion, its data centre business wasn’t far behind at US$10.6 billion, which was 58 percent higher than the previous year, representing 39 percent of total revenue.
Nvidia’s professional visualisation business was the third largest business with US$2.1 billion in 2022 revenue, but it grew much faster — 100 percent year-over-year — than any other unit, including the chipmaker’s OEM segment that saw a boost from Nvidia’s specialty silicon for cryptocurrency mining.
Colette Kress, Nvidia’s CFO, said the significant increase in professional visualisation business was the result of a ramp of the company’s Ampere workstation GPUs and “strong demand” for workstations in the face of enterprise customers increasingly supporting hybrid work environments where employees are working from home, working from the office or doing both.
Central to Nvidia’s future workstation efforts is the company’s new Omniverse Enterprise software suite, which CEO Jensen Huang believes is one of the company’s “largest graphics opportunities” yet.
Kress said customer feedback for Omniverse Enterprise has been “very positive” so far, with “multiple significant enterprise licensees already signed.”
Huang said he expects Omniverse Enterprise and other paid software products, like Nvidia AI Enterprise, will become a “very significant business opportunity” for the company.
Wallace Santos is CEO of Maingear, a US-based PC system builder, and while his business mainly focuses on the gaming segment, he did see high growth for workstation PC sales.
“There’s a lot more people working from home,” he said. “If you’re doing renders locally in a physical building, and you have a server room or render room, and now you have to work from home, you probably want to bring a workstation home.”
However, Santos said, Maingear’s workstation business was held back by a shortage of workstation CPUs, both from Intel and AMD – even as Nvidia deals with its own supply issues.
“That’s impacting our growth a bit,” he said. However, he added, the supply situation is much better for gaming CPUs from Intel and AMD.
As for Nvidia’s supply situation, Kress said the company still has supply constraints across some of its businesses, most notably data centre. She expects the chipmaker, which relies on foundries like TSMC to manufacture its chips, to improve supply every quarter this year.
Huang added that Nvidia’s improving supply situation is reflected in the company’s expectation that revenue will grow 43 percent year-over-year to roughly US$8.1 billion in the first quarter of its 2023 fiscal year, which began on 31 January 2022.
“We expanded our supply chain footprint significantly this year to prepare us for both increased supply base and supply availability in each one of the quarters going forward but also in preparation for some really exciting product launches,” he said.
Speaking on the failed Arm acquisition, Huang said Nvidia gave the deal its “best shot,” but the “headwinds were too strong, and we could not give regulators the comfort they needed to approve our deal.” As a result of the deal’s termination, Nvidia plans to record a nearly US$1.4 billion charge in the first quarter that reflects the write-off of the prepayment Nvidia made to Arm’s owner, SoftBank Group.
However, Huang reiterated the company’s commitment to build products using Arm technology across multiple business, which includes Nvidia’s data center CPU, Grace, that is due for 2023.
“You’re going to see a lot of exciting CPUs coming from us, and Grace is just the first example. You’re going to see a whole bunch of them beyond that,” he said.
As for fourth-quarter performance of Nvidia’s business units, gaming grew 37 percent year-over-year to US$3.4 billion due to higher GeForce GPU sales, data centre grew 71 percent to US$3.3 billion due to higher GPU sales for training and inference, professional visualisation grew 109 percent to US$643 million, automotive declined 14 percent to US$125 million and the OEM segment grew 25 percent to US$192 million.
Nvidia’s stock price was down roughly 1.9 percent in after-hours trading Wednesday.
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