Table of Contents
1. Brief Earnings Snapshots
The full Nvidia review will be published tomorrow with Coupang and Zscaler. The full Snowflake review will be published Friday alongside other earnings coverage (Salesforce, Trade Desk, Rocket Labs & Duolingo). Busy week! For now, here are the brief snapshots for Nvidia and Snowflake.
a. Nvidia (NVDA)
Demand:
- Beat revenue estimate by 2.9% and beat guide by 4.7%.
- Beat data center revenue estimate by 3.7%.
- networking revenue beat by 22% & compute revenue slightly missed estimates.
- Gaming revenue missed estimates by 6%.
- Professional Visualization beat $770M estimates by 71%.
- Auto revenue missed estimates by 6%.
Profits & Margins:
- Slightly beat GPM estimate & guide.
- Beat FCF estimate by 3%.
- Beat EBIT estimate by 3.1% and beat guide by 5.3%.
- Beat $1.54 EPS estimate by $0.08.
Guidance & Valuation:
- Q1 revenue guidance is 8.3% ahead of estimates.
- Q1 75% GPM guidance met estimates.
- Q1 EBIT guidance is 5% ahead of estimates. Nvidia is now including stock comp in non-GAAP EBIT guidance. That could explain why the profit raise was smaller than the demand raise.
Nvidia trades for 25x forward EPS. EPS is expected to grow by 65% Y/Y this year and by 28% next year.
b. Snowflake (SNOW)
Demand:
- Beat revenue estimates by 2.4%.
- The 28.5% 2-yr revenue CAGR compares to 28.4% Q/Q & 30.0% 2 quarters ago.
- Beat product revenue estimates by 2.5% & beat guide by 2.7%.
- Beat remaining performance obligation (RPO) estimates by 11%.
- Met 125% net revenue retention (NRR) estimates.
Profits & Margins:
- Roughly met 72% GPM estimates; beat 74% product GPM estimates by 110 basis points (bps; 1 basis point = 0.01%).
- Beat FCF estimates by 2.9%.
- Beat EBIT estimates by 54% & beat 7% EBIT margin guide by 380 bps.
- Beat $0.28 EPS estimates by $0.04.
Balance Sheet:
- $4B in cash & equivalents.
- $755M in long-term investments.
- $2.3B in convertible notes.
- 3.3% Y/Y diluted share count growth.
Guidance & Valuation:
- Annual product revenue guidance beat estimates by 2.9%.
- Annual 12.5% EBIT margin guidance beat 11% margin estimates.
- Annual 23% FCF margin guidance missed 24% margin estimates.
- Annual 75% product GPM guidance slightly missed estimates.
- Q1 product revenue guidance missed estimates by 1.2%.
At $170/share, SNOW trades for 105x forward EPS. EPS is expected to grow by 30% this year and by 39% next year. It also trades for 39x forward FCF. FCF is expected to compound at a 30% clip over the next two years.
2. Nu (NU) – Detailed Earnings Review
Read my Nu Deep Dive here to learn about the company in detail.