Whose GPUs let it cruise to record revenues? Nvidia, that's who!

Nvidia performed better than expected for the fourth quarter of its fiscal 2015 and for the year, with strong graphics processor sales buoyed by its swiftly growing application processor business.

The chipmaker reported fourth quarter earnings of $0.43 per diluted share on record revenues of $1.25bn, both of which beat Wall Street's estimates handily. Quarterly sales were up 9.4 per cent from the year-ago period.

Revenues for Nvidia's fiscal 2015, which ended on January 25, were $4.68bn, a 13.4 per cent year-on-year increase.

The profit figures were even better. Net income for the fourth quarter was $193m, which was up a healthy 31.3 per cent from last year's quarter. Net income for the full year, meanwhile, was up 43.4 per cent, to $631m.

Sales of graphics processors remain Nvidia's lifeblood. GPU revenues for the quarter represented 85.8 per cent of the total and climbed 13.3 per cent from the year-ago period, to reach $1.07bn. GPU sales for the full year were $3.84bn, which was up 10.7 per cent.

As in the previous quarter, PC gaming remained a strong driver for Nvidia's graphics chip business, with sales of GeForce GPUs for gaming desktops and notebooks up 38 per cent from last year's quarter. But Nvidia said sales of its other GPU category, including the Tesla line for high-performance computing and the Quadro workstation chips, also delivered healthy results.

Nvidia's Tegra application processor business, while not as big a revenue generator as the GPU side of the house, was also strong in fiscal 2015. Tegra sales for the full year were $579m, a stomping 45.5 per cent increase over 2014.

The Tegra division did stumble in the fourth quarter, however. Its revenues were just $112m, which was down 14.5 per cent, year on year, and down 33.3 per cent from the previous sequential quarter. Nvidia characterized this as a hiccup resulting from "the product life cycle of several smartphone and tablet designs," but it could signal a worrying trend.

If the smartphone and tablet markets let Nvidia down this quarter, though, one bright spot was the automotive industry. The firm said sales of Tegra chips for automotive entertainment systems nearly doubled, year-on-year.

Not surprisingly, revenues from Nvidia's "Other" reporting category remained flat from the year-ago quarter. This is where the firm records licensing revenues from its patent cross-licensing agreement with Intel, and as with last year, the deal earned Nvidia $66m per quarter throughout fiscal 2015.

Nvidia said to expect revenues for the first quarter of 2016 to be around $1.16bn, which would be a 5.2 per cent gain on the previous year's first quarter. And not to worry, the company said; that takes into account litigation expenses for Nvidia's ongoing patent lawsuits against Qualcomm and Samsung.

In all, investors were content, and Nvidia's share price rose 4.5 per cent in after-hours trading on the news. ®

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