NVIDIA Q3 2024 Earnings: Data Center Dominance Continues

NVIDIA Posts Record Revenue on AI Chip Demand

NVIDIA reported Q3 FY2025 revenue of $35.1 billion, up 94% year-over-year. The company's data center segment drove nearly all of this growth, reflecting sustained enterprise demand for AI training and inference hardware.

Revenue Breakdown

The numbers paint a clear picture of where NVIDIA's business is heading:

• **Data Center**: $30.8 billion (88% of total revenue)
• **Gaming**: $2.9 billion (8% of total)
• **Professional Visualization**: $486 million
• **Automotive**: $449 million

Data center revenue alone grew 112% compared to the same quarter last year. This segment now represents the overwhelming majority of NVIDIA's business, a significant shift from just three years ago when gaming was the primary revenue driver.

Gross Margins Hold Strong

Despite supply chain pressures and increased manufacturing costs, NVIDIA maintained gross margins above 70%. This speaks to the pricing power the company holds in the AI accelerator market, where demand continues to outstrip supply for their latest Hopper and Blackwell architectures.

What the Numbers Tell Us

Looking at the income statement flow:

1. **Cost of Revenue**: Approximately $9.5 billion, representing the manufacturing and component costs
2. **Gross Profit**: $25.6 billion, showing the substantial value-add in NVIDIA's chip designs
3. **Operating Expenses**: R&D spending reached $3.1 billion as the company invests heavily in next-generation architectures
4. **Net Income**: $19.3 billion, a record for the company

Forward Outlook

Management guided Q4 revenue to approximately $37.5 billion, suggesting continued momentum. The Blackwell architecture is ramping production, with customers including major cloud providers and enterprises building out AI infrastructure.

Key risks include geopolitical tensions affecting China sales (now approximately 12% of revenue, down from 25% historically) and potential inventory corrections if AI spending slows.

Visualizing the Flow

Using Sankify's visualization tools, you can see exactly how NVIDIA's revenue flows through their income statement—from the data center dominance at the top, through cost structures, and down to the substantial net income at the bottom. The Sankey diagram makes it immediately clear why this company commands such a premium valuation.