NVIDIA's financial performance peaked in fiscal 2022
NVIDIA, the US based technology brand and a global leader in Artificial Intelligence, had its best financial year in 2022. The company experienced solid growth in its net revenues and operating income in 2022 compared to prior year. NVIDIA broke several previous records in the latest fiscal.
The net revenue of the company grew 61% compared to the previous year, while its operating income grew by 122% and diluted EPS grew by 123%. The company enjoyed growth in sales across all its operating segments. Its revenue grew across all its geographic segments as well. Taiwan is the largest geographic market of the company, which experienced the highest growth in net sales in 2022 compared to the prior year. Both the operating segments of the company experienced 61% growth in net sales.
NVIDIA's business is divided into two main operating segments - 1. graphics 2. compute and networking. It has further divided its business into five product segments - 1. gaming 2. data center 3. professional visualization 4. Automotive 5. OEM and other products.
The company has divided its business into four geographic regions including Taiwan (its largest geogrphic market), China, the United States and other markets.
The annual net revenue of NVIDIA grew to $26.91 billion in 2022 compared to $16.7 billion in 2021. Both its operating segments experienced 61% growth in net sales. Net revenue from the graphics segment increased to $15.9 billion in 2022 compared to $9.8 billion in 2021. The company generated $11.05 billion in net sales from compute and networking in 2022 compared to $6.8 billion in 2021. Growth across the graphics segment was driven mainly by increased demand for gaming products, remote work and crypto currency mining.
Gaming revenue of NVIDIA increased 61% driven by increased sales of GeForce GPUs and a stronger demand of NVIDIA Ampere Architecture products. Net sales of gaming products reached $12.5 billion in 2022 compared to $7.8 billion in the previous year. Its data center revenue also increased 58% in 2022 compared to the prior year.
The gross margins of NVIDIA increased 260 basis points in 2022 compared to the previus fiscal rising to 64.9% driven by a higher end mix in gaming. Operating income of the company increased 122% to $10 billion.
NVIDIA's largest geographic market is Taiwan, followed by China and the United States. In 2022, NVIDIA generated $8.54 billion from Taiwan compared to $4.5 billion in 2021. Its net revenue from Taiwan increased by around 88% or $4 billion in 2022 compared to the prior year. China accounted for $7.1 billion in net revenues in 2022 compared to $3.9 billion in prior year. NVIDIA's net revenue from the United States increased to $4.3 billion in 2022 compared to $3.2 billion in 2021. The remaining markets accounted for $6.9 billion in 2022 compared to $5 billion in the prior year.
NVIDIA has released a nice range of game changing products in 2021. The company has advanced in some of the most impactful areas including AI, HPC, gaming, creative
design, autonomous vehicles, and robotics.
NVIDIA spent more on research and development in 2022 compared ot the previous fiscal. The company spent 34% higher on research and development in 2022 compared to the prior year. Its total research and development expenses in 2022 increased to $5,268 million compared to $3,924 million in 2021. The sales, general and administrative expenses of the company increased to $2,166 million in 2022 compared to $1,940 million in 2021, or 12% higher. Its total operating expenses increased to $7.4 billion in 2022 compared to $5.9 billion in 2021.
|Net Revenues||$26.91 billion||$16.7 billion|
|Net Income||$9,752 million||$4,332 million|
|Operating Income||$10,041 million||$4,532 million|
|Research and development expenses||$5,268 million||$3,924 million|
|Operating expenses||$7,434 million||$5,864 million|
As of January 30, 2022, NVIDIA had 22,473 employees working in 32 countries, of which 16,242 were engaged in research and development and 6,231 were involved in sales, marketing, operations and administrative positions. Its overall employee turnover rate in fiscal 2022 remained 4.9%.