NVIDIA Corp announced the Q2 financial results after the US stock market trading this morning. The data center business after the consolidation of Mellanox increased by 168% compared with the same period last year, surpassing the traditional game business. And give a very strong Q3 guidance, single-quarter revenue will hit an all-time high.

-Editor's Note

NVIDIA Corp entered the darkest hour at the beginning of last year after experiencing a mining accident. Since then, under the east wind of the outbreak of the data center and the strong growth of PC, it has seized the opportunity of the times.NVIDIA Corp officially got rid of the name of the game company this quarter, and the king of AI is well deserved.

Q2 financial report depends on Non-GAAP data

NVIDIA Corp Q2 Financial report Summary:

• Revenue was 3.866 billion US dollars, up 50% from the same period last year and 26% month-on-month.Set a record high.

• GAAP gross profit margin was 58.8%, down 0.95 pct from the same period last year, and 6.26 pct from the previous month.Hit an one-year low.

• Non-GAAP gross profit margin was 66%, up 1.4 pct from the same period last year, down 0.2 pct from the previous month.At an all-time high.

• GAAP's net profit was $622 million, up 13% from the same period last year and down 32% from the previous month.Hit an one-year low.

• Non-GAAP 's net profit was US $1.366 billion, up 79% from the same period last year and 22% from the previous month.Set a record high.

You can seeThere is a big gap between NVIDIA Corp's GAAP data and Non-GAAP data in this quarter.We mentioned in the research newspaper earlier thatMainly affected by the acquisition of Mellanox.

According to the financial report, $245 million in Mellanox-related M & A costs were credited to COGS, affecting gross margins.In addition to the impact of gross profit, a large part of the profit side is related to the advance of wages due to the human epidemic.NVIDIA Corp's administrative expenses totaled US $627 million this quarter, an increase of 136 per cent over the same period last year.

The operating cash flow that hit a record high can better reflect the achievements made by NVIDIA Corp in this quarter.

Game business Q3 will explode! Automobile business and visualization business have been hit hard by the epidemic.

NVIDIA Corp completely distanced himself from AMD this quarter, both in terms of revenue and profit.

From a business point of view, first of all, let's talk about the automobile business and professional visualization business hit by the epidemic. The automotive business has previously given a guideline that it is down 40% from the previous month. Actually, Q2 is down 28%, compared with Intel Mobileye. Professional visualization business has previously grown for 17 consecutive quarters compared with the same period last year, and Q2 has unexpectedly dropped by 30% compared with the same period last year. Its customers are mainly concentrated in film, television, engineering and other industries affected by the epidemic, and the decline is indeed understandable.

NVIDIA Corp's original business game business Q2 is still king, Switch, notebook take off during the epidemic.The revenue of Q2 game business was 1.654 billion US dollars, up 26% from the same period last year and 24% from the previous month.This far exceeds the company's single-digit growth guidance on a month-on-month basis.

The game business mainly benefits from the increase in shipments of notebooks and Switch.Yesterday"forward-looking results | NVIDIA Corp's Q2 revenue may reach an all-time high! Data center revenue is expected to surpass games. "It is described in detail in this article. As the AMD RDNA2 desktop card has not yet been launched, the notebook RDNA2 product is a long way off.NVIDIA Corp basically monopolized the notebook market during this gap.

The most shocking thing about NVIDIA Corp's financial report is the guidance of the game business Q3. Teleconference based on financial reportNVIDIA Corp is extremely optimistic about the PC game market in the second half of the year. Q3 is expected to grow by 25% month-on-month, and revenue in a single quarter will exceed $2 billion for the first time.

NVIDIA Corp declared that although PS5 and Xbox X are the SoC of AMD, the trend of transplanting PC into next-generation console games will lead to the outbreak of the PC game market. Of course, this is both good news and bad news. Because it means that the Q3 game business will surpass the data center business.

NVIDIA Corp officially became a data center company, and Mellanox bought too much.

Now when it comes to NVIDIA Corp, more people still think that it is a company that sells graphics cards. But this quarter NVIDIA Corp finally ushered in the time to correct his name.

NVIDIA Corp Q2 data center business revenue of 1.752 billion US dollars, an increase of 168% over the same period last year, higher than our forecast of 154%Revenue surpasses the game business for the first time!

Mellanox, who merged for the first time, is the number one hero.The Mellanox that NVIDIA Corp spent 7.13 billion dollars to acquire in a year is absolutely good value for money, so he has to admire Huang Renxun's vision.We've mentioned it before.The biggest feature of Mellanox is that it is highly consistent with NVIDIA Corp data center customers, which also means that the combination of the two has a strong synergy, which is reflected incisively and vividly in Q2.

According to the financial report, Mellanox's revenue accounted for about 14% of the company's revenue in the quarter and more than 30% of the data center revenue.It is estimated that Mellanox Q2 revenue is about $541 million, an increase of 74.4% over the same period last year!Among them, the shipment of Ethernet equipment reached an all-time high. In addition, in June this year, NVIDIA Corp also acquired Cumulus Networks, a software company that does high-performance computing. According to NVIDIA Corp, Mellanox and Cumulus have a strong synergistic effect.

If you look at the companies that NVIDIA Corp has acquired, you have to admire their vision. At the same time, it can also be seen that NVIDIA Corp has high requirements for profitability of the acquisition target, and given the poor financial situation of arm, he may not be able to get into the eyes of the old yellow.

That's for sure,Excluding Mellanox, NVIDIA Corp's data center revenue for the quarter was $1.211 billion, an increase of 85% over the same period last year and 6% month-on-month growthIt was also a good performance.

Although NVIDIA Corp's new nuclear bomb A100 is in the climbing period, the shipping speed has reached a new high. Amazon.Com Inc AWS, Microsoft Corp Azure, Google Cloud, Aliyun, Tencent Cloud and Baidu Cloud have all deployed A100.Management says the A100 Q2 contributes about 25% of the data center's revenue, and the potential is still huge.

For the Q3 outlook of the data center, NVIDIA Corp gives a more optimistic guide to single-digit growth on a month-on-month basis. Specifically, according to the earnings call, NVIDIA Corp is optimistic about hyperscale business Q3, and is expected to increase the proportion of vertical industry business Q3. And the business performance of GPU represented by A100 will be stronger than that of Mellanox.

NVIDIA Corp will be a software company in the future, and the stock price still has room to rise.

NVIDIA Corp Q2 financial results are too excellent, but the market seems to be more concerned about the acquisition of arm, so the stock price not only did not rise but fell. Arm is a bottomless pit in Softbank Corp. 's hands. It does need a real semiconductor company to support it, but it's hard to say whether this company is NVIDIA Corp.

Arm is a well-known asset, but few people know about it: bottomless investment, poor profitability. More importantly, it is almost impossible for this M & A to pass the antitrust review of our country.

Back to NVIDIA CorpHuang Renxun repeatedly stressed in the earnings call: NVIDIA Corp will be a software company in the future, and hardware is just the beginning of everything. In the future, AI will bring deep changes to the software.Considering that NVIDIA Corp has such a high PS, it is indeed in line with the identity of a software company.

NVIDIA Corp expects Q3 revenue of $4.4 billion, which will be an all-time high.It is worth noting that there is a small catalyst for NVIDIA Corp's stock price recently. NVIDIA Corp will release RTX30 series new products on September 1st.According to the warm-up, this will be the biggest performance improvement in the history of Nvidia game graphics card.