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Nvidia (NVDA) earnings Q2 2023

Nvidia Corp. President and CEO Jen-Hsun Huang speaks at the company’s event at Mobile World Congress Americas on October 21, 2019 in Los Angeles.

Patrick T. Fallon | Bloomberg | Bloomberg | Getty Images

NVIDIA reported second-quarter earnings, which fell short of Wall Street’s expectations for earnings and earnings per share.

The report is in line with Nvidia’s preliminary earnings two weeks ago. chip makers warned Growth slowed significantly as game sales were disappointing due to the macroeconomic conditions, which could fall short of Wall Street forecasts.

Nvidia missed out on revenue, but Refinitiv’s estimates remained unchanged after the company warned about guidance and expected to report $6.7 billion in the fourth quarter. Nvidia’s stock has fallen more than 4% in long-term trading.

Here’s a comparison with the consensus estimates from Nvidia and Refinitiv:

  • EPS: $0.51, adjusted, expected $1.26
  • Earnings: $6.7 billion vs. $8.1 billion forecast

Refinitiv’s consensus forecast is $6.95 billion, while third quarter revenue is expected to be $5.9 billion.

Nvidia’s gaming division reported revenue of $2.04 billion, down 33% year-over-year, well below the company’s expectations. Nvidia said it was primarily due to declining sales of its gaming products, which are graphics cards for his PC.

“Macroeconomic headwinds around the world have led to a sudden slowdown in consumer demand for the company’s gaming products,” Nvidia CFO Colette Kress said on a conference call with analysts.

Nvidia said it will adjust pricing with retailers to address “challenging market conditions” in the industry expected to continue this quarter.

The company’s data center business improved slightly. On an annual basis, he grew 61% to $3.8 billion, driven by major cloud providers that the company calls “hyperscale” customers.

Nvidia also has several smaller business units. The Professional Visualization business, which sells graphics chips for the enterprise, fell 4% year-over-year to $496 million. Autos remain small, even though he’s up 45% year-over-year to $220 million. Nvidia said its revenue from his CMP, a dedicated cryptocurrency mining chip, was “insignificant,” contributing to a 66% year-on-year decline in the OEM and other categories.

Nvidia’s stock is down more than 42% so far this year. The company was a darling of the pandemic as working from home prompted purchases of graphics cards and server chips, accelerating Nvidia’s business and driving his 61% revenue growth in fiscal 2022.

May, Nvidia Said The pace of hiring will slow in the face of macroeconomic challenges.

Limited Visibility into Cryptocurrency Mining Demand

Nvidia’s success over the past two years is largely due to the quality of its latest generation graphics cards, which were in high demand for PC gaming during the pandemic.

But questions remain as to whether some of Nvidia’s growth was driven by cryptocurrency miners. They like Nvidia graphics cards because they can efficiently mine his Ethereum.

May, Nvidia said It will pay $5.5 million as part of a settlement with the SEC for how it informed investors about how cryptocurrencies are fueling demand for graphics cards in 2017. for its products, even though cryptocurrency prices have plummeted this year.

“Cryptocurrency market volatility has affected us in the past and will continue to do so, including falling cryptocurrency prices and changes in how transactions are validated, including proof of work and proof of stake. We need to estimate it accurately,” CFO Kress said in a statement.

“It is not possible to quantify exactly how much the decline in crypto mining contributed to the decline in gaming demand,” Kress continued.


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