Do you want to know what’s next for the game industry? Join gaming executives to discuss emerging areas of the industry at GamesBeat Summit Next in October. Register today.
Nvidia reported profit for its second fiscal quarter ended July 31 amid a slowdown in PC and game sales. Earnings financial results met diminished expectations set after Nvidia warned that quarterly results would be weaker than expected.
The company’s game graphics and AI chips business saw massive growth in 2020 and 2021 during the pandemic, but now it’s slowing down in gaming. In after-hours trading, Nvidia’s stock is down 3% to $167.58 a share.
Revenue came in at $6.7 billion, up 3% from a year ago and down 19% from the prior quarter. Analysts expected revenue of $6.7 billion compared to $6.5 billion last year. Earnings per share came in at 26 cents on a GAAP basis, compared to expectations of 35 cents per share.
For the data center, analysts expected $3.8 billion compared to $24 billion last year. And for gaming, they expected $2.0 billion versus $3.1 billion last year.
Nvidia released its preliminary results on August 8, when it warned investors that the company would miss its own expectations for the quarter as gaming sales weakened. Nvidia saw weakness from the war in Ukraine and a slowdown in China, with macroeconomic slowdowns around the world negatively impacting consumer demand. The company said it cannot determine what impact declining crypto mining demand had on lower revenues.
GAAP earnings per diluted share for the quarter were 26 cents, down 72% from a year ago and 59% down from the prior quarter. Non-GAAP earnings per diluted share were 51 cents, down 51% from a year ago and down 63% from the prior quarter.
“We are navigating our supply chain transitions in a challenging macro environment and we will get through this,” Jensen Huang, founder and CEO of Nvidia, said in a statement. “Accelerated computing and AI, our company’s pioneering work, are transforming industries. The automotive industry is turning into an engineering industry and is on track to become our next multi-billion dollar business. Advances in AI are driving our data center operations, accelerating breakthroughs in areas from drug discovery to climate science to robotics.”
He added: “I’m looking forward to next month’s GTC conference where we will share new developments in RTX, as well as breakthroughs in AI and the metaverse, the next evolution of the Internet. Join us.”
During the second quarter of fiscal 2023, NVIDIA returned shareholders $3.44 billion in share repurchases and cash dividends, after returning $2.10 billion in the first quarter. The company still has $11.93 billion under its share buyback authorization through December 2023. Nvidia plans to continue to repurchase its own shares this fiscal year.
Nvidia said it expects revenue for its third fiscal quarter, which ends Oct. 31, to be $5.9 billion. Gaming and professional visualization revenues are expected to decline in succession as computer manufacturers and channel partners lower inventory levels to meet current demand and prepare for Nvidia’s next-generation chips. The company expects that decline to be partially offset by sequential growth in data centers and automotive.
GAAP and non-GAAP gross margins are expected to be 62.4% and 65.0%, respectively, plus or minus 50 basis points.
Data Center Revenue
Second quarter revenue was $3.81 billion, up 61% from a year ago and up 1% from the prior quarter.
Nvidia said Grace superchips are being used to make HGX systems by some of the world’s leading computer manufacturers — including Atos, Dell Technologies, Gigabyte, HPE, Inspur, Lenovo and Supermicro.
Gaming and Visualization
Second quarter revenue was $2.04 billion, down 33% from a year ago and down 44% from the prior quarter. Professional visualization revenue in the second quarter was $496 million, down 4% from a year ago and down 20% from the prior quarter.
Announced a major release of Omniverse with new frameworks, tools, apps and plugins, including 11 new connectors for the Omniverse USD ecosystem, bringing the total to 112. It also co-founded the Metaverse Standards Forum to work with other members to find the best ways to build the foundations of the metaverse.
Automotive
Second quarter revenue was $220 million, up 45% from a year ago and up 59% from the prior quarter.
The GamesBeat credo when talking about the game industry, is ‘where passion and business meet’. What does this mean? We want to tell you how important news is to you — not just as a decision maker in a game studio, but also as a game fan. Whether you’re reading our articles, listening to our podcasts, or watching our videos, GamesBeat helps you learn and have fun with the industry. Learn more about membership.
