NVIDIA has reported Q1 revenue of $1.94 billion, buoyed by record datacenter sales of $409 million. The datacenter business has been growing by leaps and bounds for the graphics chipmaker, thanks largely to the rapidly expanding market for high GPUs in deep learning.
Revenue for the first quarter (Q1 FY18) beat analyst estimates and represents a 48 percent increase from last year at this time. Even more encouraging was net income, which amounted to $507 million for the quarter. That’s more than twice that reported for the first quarter in 2016. All of which is fueling hopes that NVIDIA’s remarkable performance in 2016 was not just a fluke.
Without a doubt, NVIDIA’s fastest growing segment is the datacenter business, which includes traditional high performance computing (HPC), deep learning, and data analytics. Just one year ago, datacenter sales were $143 million for the quarter, or about 11.0 percent of the company’s business. This quarter’s $409 million figure represents 21.1 percent of NVIDIA’s revenue over the last three months. The largest segment for the GPU-maker continues to be gaming – it earned a little over $1.0 billion for the quarter – but its dominance is slowly being whittled away as datacenter sales accelerate.
NVIDIA has recorded plenty of recent wins in this area. The biggest ones include Microsoft’s adoption of the Tesla P100 and P40 GPUs for its Azure cloud; Tokyo Tech’s selection of the P100 to power its future 12.2 petaflop TSUBAME 3.0 supercomputer; Fujitsu’s plan to deliver an AI supercomputer to RIKEN using 24 DGX-1 appliances; and multiple announcements of NVIDIA Tesla GPUs being deployed in some of the biggest public clouds in world – Google, Baidu, IBM, and Tencent.
Although traditional HPC is a large and thriving sub-segment of NVIDIA’s datacenter business, it’s the deep learning piece that is fueling the double-digit growth. To keep that momentum growing, the company plans to train 100,000 additional AI developers this year through the NVIDIA Deep Learning Institute. If the company manages to do that, it would represent a 10-fold increase in the number of developers trained in 2016. More importantly, it will fuel a critical need for these developers by industry.
The strong financial report comes as the 8th annual GPU Technology Conference (GTC) kicks off on NVIDIA’s home turf here in Silicon Valley, which runs from May 8-11. The company is expecting record attendance at this week’s event, and if the recent earnings report are any indication, they will beat expectations here as well.