Analyst(s): Richard Gordon
Publication Date: February 28, 2025
Nvidia’s Q4 FY 2025 earnings highlight record-breaking AI-driven growth, with data center revenue soaring 93% YoY and full-year revenue doubling. Despite robust demand for Blackwell, margin pressures and supply constraints concerns weighed on sentiment. The company’s outlook suggests continued expansion, with AI acceleration remaining the key driver.
What is Covered in this Article:
- Nvidia’s Q4 FY 2025 financial results
- Record Blackwell-driven data center revenue growth
- Margin pressures from early-stage Blackwell production costs
- Gaming revenue decline, but RTX 50 Series set to drive recovery
- Professional Visualization and Automotive segments expand
- Q1 FY 2026 guidance signals continued AI-driven growth
The News: Nvidia Corporation (NASDAQ: NVDA) reported its Q4 FY 2025 results, delivering record revenue of $39.3 billion (+3.4% above consensus estimates), up 78% year-on-year (YoY). Non-GAAP gross margin declined to 73.5%, down 3.2 percentage points YoY. Non-GAAP operating income reached $25.5 billion (+4% above consensus estimates), up 73% YoY, with an operating margin of 64.9%, contracting from 66.7% in Q4 FY 2024. Non-GAAP net income rose 72% YoY to $22.1 billion (+5.7% above consensus estimates), while non-GAAP diluted earnings per share (EPS) increased 71% YoY to $0.89, which beat street expectations by 5.5%.
For FY 2025, Nvidia reported full-year revenue of $130.5 billion, up 114% YoY. Non-GAAP gross margin improved to 75.5%, up 1.7 percentage points YoY. Non-GAAP operating income surged 134% YoY to $86.8 billion, while net income grew 130% to $74.3 billion. Full-year non-GAAP diluted EPS was $2.99, reflecting a 130% YoY increase.
“Demand for Blackwell is amazing as reasoning AI adds another scaling law — increasing compute for training makes models smarter and increasing compute for long thinking makes the answer smarter,” said Jensen Huang, founder and CEO of Nvidia. “We’ve successfully ramped up the massive-scale production of Blackwell AI supercomputers, achieving billions of dollars in sales in its first quarter.”
Nvidia Q4 FY 2025: AI Momentum Strengthens Despite Margin Pressures
Analyst Take: Nvidia’s latest earnings reaffirm its stronghold in AI-driven computing, with record-breaking revenue driven by demand for Blackwell. The data center division now generates more revenue than Intel and AMD combined, highlighting Nvidia’s leadership in AI infrastructure. However, concerns over tightening margins, supply constraints, and investor expectations contributed to an 8.5% decline in Nvidia’s stock post-earnings. While hyperscalers and enterprises continue scaling AI deployments, Nvidia’s ability to manage production costs, sustain AI partnerships, and expand its networking capabilities will be critical for maintaining its competitive edge.
Blackwell Demand Soars, But Margin Pressures Weigh on Sentiment
Nvidia’s data center revenue surged 93% year-over-year (YoY) to $35.6 billion, exceeding estimates of $34.1 billion, as AI infrastructure spending accelerated. Blackwell contributed $11 billion in its first quarter, marking the fastest ramp-up of any Nvidia product to date. CEO Jensen Huang noted that many early GB200 deployments are focused on AI inference, signaling a shift in initial demand patterns. Blackwell’s efficiency in handling inference workloads is driving adoption across cloud, enterprise, and on-premise environments.
Major cloud providers, including AWS, Google Cloud, Microsoft Azure, and Oracle Cloud, have integrated GB200 systems into their AI infrastructure. Meanwhile, CoreWeave’s deployment of a 100,000-GB200 instance highlights Nvidia’s expansion beyond traditional hyperscalers into specialized AI cloud services. AI clusters with over 100,000 GPUs are expected to become standard in the industry, reinforcing Nvidia’s role in AI computing.
Despite high demand, gross margins declined, with the non-GAAP figure falling to 73.5%, down 3.2 percentage points YoY and 1.5 points sequentially. CFO Colette Kress attributed this to higher early-stage production costs for Blackwell and supply-chain inefficiencies but expects margins to recover to the mid-70% range by late FY 2025. Nvidia’s next-generation GPU, Blackwell Ultra, is scheduled for H2 FY 2026, featuring improvements in networking, memory, and processing while maintaining architectural consistency for a seamless transition. The execution of this rollout alongside margin recovery will be key focus areas moving forward.
Nvidia’s Gaming Revenue Declines, but RTX 50 Series Fuels Optimism
Nvidia’s gaming revenue fell 22% sequentially and 11% YoY to $2.5 billion, impacted by supply constraints despite solid holiday-season demand. The company anticipates a rebound in Q1 FY 2026 as supply improves and the GeForce RTX 50 Series enters the market.
Built on Blackwell architecture, the RTX 50 Series introduces DLSS 4, an AI-powered upscaling technology that enhances frame rates significantly. At launch, 75 games and applications already support DLSS 4, indicating early adoption. Additionally, new GPUs incorporate real-time transformer models, improving image quality and rendering precision. Although Q4 performance was affected by supply issues, Nvidia expects stronger demand for gaming GPUs in the coming quarters, supported by RTX 50 adoption and AI-driven enhancements.
Nvidia Expands AI-Driven Professional Visualization Capabilities
Nvidia’s Professional Visualization revenue grew 10% YoY to $511 million in Q4 FY 2025, with full-year revenue up 21% to $1.9 billion. Growth was driven by adoption in industries like automotive and healthcare. The launch of Project DIGITS, an AI supercomputer based on Grace Blackwell, aims to support AI research and development. Nvidia also expanded Omniverse integration, enhancing AI applications in robotics, autonomous systems, and vision AI. In media and content creation, Nvidia’s AI-powered Media2 platform brings automation to streaming, live media, and digital production. As AI adoption grows across industries, Nvidia’s professional visualization segment broadens its role in simulation, automation, and real-time media applications, though long-term growth will depend on sustained enterprise adoption.
Automotive and Robotics Gain Momentum
Nvidia’s automotive revenue grew 103% YoY to $570 million, supported by increasing AI adoption in autonomous driving and robotics. The company is on track to reach a $5 billion annual run rate, with FY 2025 revenue at $1.7 billion. At CES 2025, Nvidia announced that Toyota’s upcoming vehicles will incorporate its DRIVE AGX Orin platform, while Hyundai is leveraging Nvidia AI for autonomous mobility and smart manufacturing.
Beyond automotive, Nvidia is expanding into robotics, introducing the Cosmos platform at CES. This AI-driven system enables automation and autonomous decision-making, with Uber already integrating it into its delivery and ride-sharing operations. As AI adoption in mobility and industrial automation increases, Nvidia continues to broaden its role beyond GPUs.
Nvidia’s Q1 FY 2026 Forecast Signals Growth, But Cost Pressures Remain
For Q1 FY 2026, Nvidia forecasts revenue of $43 billion (+/-2%), slightly ahead of consensus estimates of $42.3 billion. Gross margins are projected at 70.6% (GAAP) and 71.0% (non-GAAP), with ongoing cost pressures from Blackwell production. Operating expenses are expected at $5.2 billion (GAAP) and $3.6 billion (non-GAAP), while other income is estimated at $400 million. Nvidia anticipates a 17% tax rate (+/-1%).
Margin pressures are likely to persist in early FY 2025 due to supply constraints and production costs, though management expects improvements later in the year as efficiencies scale. With Blackwell Ultra set to launch in H2 FY 2026, Nvidia’s ability to optimize production and manage costs will remain a key focus.
Read the full press release on Nvidia’s Q4 FY 2025 earnings results on the Nvidia website.
Disclosure: The Futurum Group is a research and advisory firm that engages or has engaged in research, analysis, and advisory services with many technology companies, including those mentioned in this article. The author does not hold any equity positions with any company mentioned in this article.
Analysis and opinions expressed herein are specific to the analyst individually and data and other information that might have been provided for validation, not those of The Futurum Group as a whole.
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Author Information
Richard Gordon is Vice President & Practice Lead, Semiconductors for The Futurum Group. He has been involved in the semiconductor industry for more than 30 years, first in engineering and then in technology and market research, industry analysis, and business advisory.
For many years, Richard led Gartner's Semiconductor and Electronics practice, building a 20-person global team covering all aspects of semiconductor industry research, from manufacturing to chip markets and end applications. Having served on Gartner's Senior Research Board and as Gartner's Chief Forecaster, Richard has extensive experience in developing and implementing methodologies for market sizing, share and forecasting, to deliver data, analysis and insights about the competitive landscape, technology roadmaps, and market growth drivers.
Richard is a sought-after technology industry analyst, both as a trusted advisor to clients and also as an expert commentator speaking at industry events and appearing on live TV shows such as CNBC.
