Tegra revenue down 48% Y/Y

[ams23]

I'm sorry, but what do you mean by "obviously indicate"? Gross margin *is* revenue - COGS.

Gross margins are obviously an indicator of gross profits.

And Nvidia doesn't break down the Tesla segment, but you can get the numbers from historical data and market research reports.

No you can't. There is absolutely no way that you or anyone else would be able to break down NVIDIA's GPU profits net of expenses by line of business. You would need extremely detailed information on revenues, cost of goods sold, operating expenses, R&D expenses by each line of GPU business. And since R&D expenses are leveraged across all lines of GPU business, there is no fruitful way to allocate that.

And Tesla isn't profitable, regardless of what you believe.

Which is very illogical given that Tesla GPU R&D is shared with other lines of business, given that gross profit margins are higher than corporate average, and given that this is no longer a nascent business.

 

[mrmt]

If you look at AMD financials. They rarely ever turned a profit. Ever! They generated enough cash flow to keep the business alive. But the majority of the qtrs they have lost money. Nvidia can keep plowing money into this project as long as they can afford it. Right now they can clearly afford it. And the potential payoff is more than any short term losses.

I can't believe you are comparing a junk, mismanaged company like AMD with Nvidia, that has been consistently raking profits for the largest part of their corporate history.

Microsoft still sells the xBox though through its lifecycle it has lost 6 billion dollars.
Nvidia right now has the luxury of professional markets to keep funding Tegra.

Professional market is only as profitable because the consumer segment spreads the R&D bill around millions of cheaper SKUs. If the downwards spiral continues, they won't have a professional market to talk about.

 

[mrmt]

Gross margins are obviously an indicator of gross profits.

And that "obviously" isn't what you said in the first place. Gross margins don't have a direct relationship with net profits, as you were trying to imply in the first place.

I can recall dozens of situations of high gross margins companies having losses and low gross margins companies being extremely profitable, but let's drop that subject here, I can't stand see you tapdacing around basic financial metrics.

No you can't. There is absolutely no way that you or anyone else would be able to break down NVIDIA's GPU profits net of expenses by line of business. You would need extremely detailed information on revenues, cost of goods sold, operating expenses, R&D expenses by each line of GPU business.

Just because *you* can't doesn't mean others can't. That's why banks and consulting firms pay millions of dollars each quarter to have access to channel and insider information. See how much it costs to get access to Mercury Research standard data, then try to figure how much would cost a *custom* report of what you want.

Of course you shouldn't have spend much money to have a good idea of where a business sits. By reading the Q&As and the annual reports, and messing a bit with the numbers you can get a very good idea of each product line. That's what most stock brokers do.

Which is very illogical given that Tesla GPU R&D is shared with other lines of business, given that gross profit margins are higher than corporate average, and given that this is no longer a nascent business.

And do you think that the Tesla business is just about getting a Geforce, re-flash the firmware and sell it for 5 times more the MRSP price? No, it isn't. They have to develop specific CUDA libraries and functions, they have to field engineering teams at their biggest customers to help to tune the code for GPU execution, they must send engineers to help OEMs to design products with Tesla, and their customers will demand around the clock support if anything goes wrong. That costs *a lot* of money, it's OPEX, and it is *not* shared with the rest of the GPU lines.

 

[sontin]

nVidia's net profit is rising*. Which means every GPU product now is making a tons of money.

The net profit would be lower if Tesla didn't make any money because Tesla had a record year and the money share is increasing every year.

*Ignoring the dividend and the higher Opex from FY2013 -> FY2014.

 

[mrmt]

The net profit would be lower if Tesla didn't make any money because Tesla had a record year and the money share is increasing every year.

It wouldn't, because Tesla never made any significant amount of money. The money maker is Quadro. Every workstation out there uses Nvidia technology. Intel is just aiming at HPC but refraining of entering in workstation because they have no suitable product to that market, and AMD software support is a joke and nobody takes them seriously. And given that Nvidia is delivering sizable performance uplifts between generations, there's plenty of reason to upgrade.

 

[sontin]

First announced design with Tegra 4i - LG's G2 mini for latin america:
http://www.lgnewsroom.com/newsroom/contents/64310

The money maker is Quadro.

The money maker has always been nVidia's Geforce business with more than half of the revenue of the whole GPU business.

 

[erunion]

Every workstation out there uses Nvidia technology. Intel is just aiming at HPC but refraining of entering in workstation because they have no suitable product to that market.

Intel had attempted it with larrabee. So despite not having a product, I think Intel does want that market. Maybe they'll reattempt with integrated graphics on xeons?

 

[bullzz]

@sontin - from ur link
Key Specifications:
- Chipset: 1.2 GHz Qualcomm Quad-Core MSM8926 (LTE) / MSM8226 (3G)
1.7GHz Nvidia Quad Core Tegra 4i (LATAM LTE version)

so there are 2 versions of G2 mini, one with qualcomm and one with tegra? thats strange

 

[mrmt]

The money maker has always been nVidia's Geforce business with more than half of the revenue of the whole GPU business.

PSB earned more than Geforce.

 

[Stuka87]

@sontin - from ur link
Key Specifications:
- Chipset: 1.2 GHz Qualcomm Quad-Core MSM8926 (LTE) / MSM8226 (3G)
1.7GHz Nvidia Quad Core Tegra 4i (LATAM LTE version)

so there are 2 versions of G2 mini, one with qualcomm and one with tegra? thats strange

Its not uncommon for phones in different regions to have different components. It typically is a result of the radios that are available in them.

 

[bullzz]

samsung usually does that as they use exynos in some versions. I dont understand why LG uses differnt vendors

 

[Roland00Address]

The money maker has always been nVidia's Geforce business with more than half of the revenue of the whole GPU business.

The profit maker of Nvidia has always been Quadro (the term profit maker is a better term than money maker for it is more descriptive on what we are talking about, profits vs revenue.). Consumer GPUs always sold more than Quadro GPUs, and when nvidia used to disclose revenue by division (in 2012) we knew consumer gpus had 3 times as much revenue compared to professional gpus (Quadro and Tesla). Nvidia simply sold more consumer gpus than they did professional gpus.

That said the amount of profit per consumer gpu was always small, it is low margin business. It was with quadro gpu you get a much higher margin. For example

Nvidia Quadro K4000 is a die harvested GK106 die (aka a GTX 650 TI) it goes for $800
Nvidia Quadro K5000 is a GK104 die (aka a GTX 680/GTX770) it goes for $1800
Nvidia Quadro K6000 is a GK110 die (aka a GTX 780ti) it goes for $5000

Now these are binned parts, with more memory, professional drivers, and extra certification cost, but these cards cost 6 to 8 times as much as a similar desktop card cost, yet the silicon is the same, only some extra memory chips. Thus if you sell 5 grand of gpus, consumer or professional Nvidia rather these gpus would be professional for their costs are lower, and thus their profits are higher (better margins.)

 

[Raghu]

The MSM8926 is quad-A7. The Tegra4i is quad-A9r4. Would have been nice to see a 720p screen. Any idea about the price point of this device?

 

[sontin]

Tegra business is up 200% Y-Y and first half is up 97% from last year.

 

[mrmt]

Tegra business is up 200% Y-Y and first half is up 97% from last year.

Got it, last year, when their tegra business was down 70% YoY. That also means that they didn't get to 2013 levels.

 

[ams23]

Got it, last year, when their tegra business was down 70% YoY. That also means that they didn't get to 2013 levels.

True, but two years ago they had significantly more console royalty revenues (which is included in Tegra revenues), and also had Tegra 3 ramping for Nexus 7 and HTC One X. So to even be close to that is pretty good. Also note that Tegra expenses are much more under control now that they are able to leverage their desktop GPU architecture. Anyway, the important takeaway is that Tegra is experiencing growth again after the trough period last year.

 

[tviceman]

Got it, last year, when their tegra business was down 70% YoY. That also means that they didn't get to 2013 levels.

So far with only 2 TK1 devices on the market, IMO Tegra revenue is better than expected. Since TK1 is the reference platform for Android TV, there should be some more products coming with TK1 in the coming months. Plus, Nvidia forecast higher revenue in the coming quarter. 1 + 1 +1 = 4. Or something.

 

[xpea]

automotive is showing some impressive growth. From Nvidia financial transcript:

Our automotive business grew more than 70% year-on-year. Volkswagen announced that the upcoming Passat will use Tegra to power its infotainment system following on from the Golf which is already shipping with Tegra. The new GT which features two Tegra chips has started production in Europe and Audi has upgraded the A7's infotainment system to include Tegra, evidence of the faster cycles possible with the use of our Visual Computing Module. Separately, BMW has started shipping the i3 and announced its i8, both powered by Tegra.

then next quarter will see Chromebooks with TK1 like Acer CB5 and Xiaomi is selling every Mi Pad they produce in few seconds.
All in one I expect Tegra to be finally profitable this year. Then Erista will destroy again all competition on pure performance and 2015 may be a good year for Nvidia SoC business...

New thread, guys. This is 6 months dead (which is an eternity for anything financial)
-ViRGE