|NVDA’s Q2 2018 earnings call transcript|
The following comments were delivered by Collette Kress, EVP and CFO
Overall, quarterly revenue reached a record $2.23 billion, up 56% from a year earlier, up 15% sequentially, and well above our outlook of $1.95 billion. From a reporting segment perspective, Q2 GPU revenue increased 59% to $1.9 billion from a year earlier. Tegra processor revenue doubled to $333 million. OEM revenue reached $251 million, reflecting sales of our cryptocurrency-specific GPUs, partially offset by the lapse in our licensing agreement with Intel.
Let's start with our gaming platform. Gaming revenue was $1.19 billion, up 52% year on year and up 15% from Q1. This reflects the vibrant gaming ecosystem, underpinned by continued excitement over our recent launch GPUs and other technologies, great games, and growing interest in e-sports. Gamers continue to love our Pascal-based GPUs, with demand remaining strong for GeForce GTX 10 series products. Our new Max-Q design approach, enabling gaming notebooks that are thinner, lighter, and faster, is finding a strong market. Max-Q is being utilized in more than 20 new notebook models from a wide range of OEMs.
Quality games continue to drive GPU sales. At the E3 Gaming Expo in L.A., we showed the eagerly anticipated Destiny 2 running in 4K on PCs, which drew rave reviews. Major fall titles in addition to Destiny 2 include the new Call of Duty: WWII, Star Wars: Battlefront 2, and Middle Earth: Shadow of War. We're also seeing the rise of independent titles that have become runaway hits, most notably, a new last man standing shooter called PLAYERUNKNOWN'S BATTLEGROUNDS.
Gaming also continues to be driven by the surging popularity of e-sports. This week's biggest sporting event isn't playing out at Dodger Stadium or Wrigley Field. It's in Seattle at the International Dota 2 Championships. The $24 million in prize money is more than twice the purse of golf's richest event, the U.S. Open. For the third straight year, GeForce GTX is Dota 2's official graphics platform.
GPU sales were lifted by demand from increasingly mining activity, or Ethereum. We serve a large portion of this specialized market with a dedicated board, as seen in our OEM sales, and some with GeForce GTX boards. Our strategy is to stay alert to this fast-changing market, knowing that GPUs are highly efficient at running the algorithms used to mine cryptocurrencies.
Moving to professional visualization, Quadro revenue grew $235 million, up 10% from a year ago, up 15% sequentially, on the demand for high-end real-time rendering and for more powerful mobile workstations. Demand was especially strong in education, both among universities and large public school districts, as well as in the financial sector and defense industry.
And last week at SIGGRAPH's computer graphics show, we highlighted how AI will augment the process of content creation. This new OptiX 5.0 SDK uses AI to accelerate ray tracing when running on our DGX rendering appliance that provides the rendering capability of 150 standard dual-CPU servers. We also introduced NVIDIA eGPU system solutions. This creates a new category for our platforms, using an external chassis to expand access to Titan Xp and Quadro GPUs for the 25 million content creators using standard notebook PCs.
Next, data center, revenue of $416 million was up more than 2.5 times from a year ago. This growth, shared across AI, deep learning, high-performance computing, and GRID, is particularly notable, given that we announced and shipped production units of our Volta-based V100 accelerator as we transition from Pascal generation GPUs. Looking ahead, we see inferencing and video transcoding as emerging applications that are well suited for our GPUs. V100 was among the most important launches at this quarter's GPU Technology Conference [GTC]. It provides 10 times the deep learning power of its year-old predecessor, widely outpacing Moore's Law.
Some of the early V100 production units were given out in recent weeks to leading AI researchers attending the CVPR [Computer Vision and Pattern Recognition] and ICML [International Conference on Machine Learning] conferences. We made available our TensorRT 3 inference optimizer and run time for deep learning application. It delivers 100 times faster inferencing on V100 than the best CPU implementation, and it supports the industry's two most common AI frameworks, Google TensorFlow and Facebook's Caffe.
We also entered into a wide range of important partnerships based on AI. Among them, Baidu has aligned with us on Volta. It's bringing this new architecture to its cloud and optimizing the Paddle open source deep learning framework for Volta. Volkswagen is collaborating with us to bring the power of AI across their organization. And we announced a new partner program with Taiwan's top ODMs, including Foxconn, Inventec, Quanta, Wistron, to provide them with the early access to the HGX reference architecture, GPU computing technologies, and design guidelines.
Demand remains strong for our DGX AI supercomputer, as organizations take on multiple systems to build out AI-enabled applications. Facebook disclosed a system incorporating 128 DGXs. We have shipped systems to more than 300 unique customers, with 1,000-plus in the pipeline.
Our HPC business remained strong. The new Green500 list showed that the world's 13 most efficient supercomputers run on NVIDIA Tesla P100 accelerators. The top position is held by the Tokyo Institute of Technology's TSUBAME3.0 system. It achieved an extraordinary 14.1 gigaflops per watt, 50% higher efficiency than the previous leader, helping to point the way to exascale supercomputing.
Momentum continued in our GRID graphics virtualization business. Among key wins was Amazon Web Services, whose G3 instances now run on NVIDIA Tesla GPUs.
In automotive, revenue grew to $142 million, up 19% year over year. We announced important new partnerships based on our DRIVE PX AI platform, which is being used by more than 225 car and truck makers, Tier 1 suppliers, HD mapping companies, startups, and research institutions.
Additionally, production cars using our technology continued to make their way into the market. Audi announced last month that the 2019 A8 will be the first car to feature NVIDIA's powered Level 3 autonomous technology. This means that under certain specific use cases, it will be able to be driven by its own software without monitoring from the driver. Our DRIVE PX platform is already on the road in Tesla Motors' full line of cars, including the new Model 3, which uses the second-generation Tesla Autopilot.
This quarter, we also announced that Toyota selected NVIDIA DRIVE PX for their next-generation autonomous cars. Volvo, long a byword for safety and value, and Autoliv selected DRIVE PX for self-driving cars targeted to hit the market by 2021. ZF and HELLA have selected the NVIDIA DRIVE PX platform for their line of autonomous vehicle products. And Baidu announced that its Project Apollo open source self-driving platform for the China market will use NVIDIA DRIVE PX. You'll be hearing more from us in the months ahead at regional GTCs that we will be conducting in Beijing, Munich, Tel Aviv, Taipei, Washington DC, and Tokyo.