Nvidia has announced results for the second quarter of fiscal year 2023, which are preliminary financial results for the quarter ended July 31, 2022.Purpose of Nvidia qualifier (opens in new tab) It seems to be warning investors that it had a significantly worse quarter than expected. Simply put, Nvidia previously forecast revenue of $8.1 billion for the second quarter of fiscal 2023 (guidance from May), but the company has now revised that figure to $6.7 billion. I’m here. All in all, we’re about 21% off our target. Of particular interest to our readers is the main reason for this loss of revenue. Nvidia said this reflected the game’s lower-than-expected earnings.
And the decline in major revenues, but not only. In the background numbers, we can see that gross margin (Nvidia’s “profit” from pre-deduction sales) has dropped from his 65.1% to 43.7%. Moreover, if most of the $1.4 billion shortfall can be attributed to games, that would indicate that game sales fell by about 40%.
Earnings charts by market segment from Prelim shed light on Nvidia’s book rebalancing in the wake of this game’s bombshell. It’s been an Nvidia mainstay for a long time, though. In the chart above, we can see that gaming is now overshadowed by the data center, with revenue down 44% quarter-over-quarter and down 33% year-over-year. Additionally, data centers are still trending upwards, and cars seem to be booming. In summary, Nvidia’s diversification strategy (from gaming) keeps its boat afloat.
the markdown you need
Nvidia CEO Jensen Huang released a statement accompanying these qualifiers. “Our game product sell-through forecast has dropped significantly as the quarter progressed,” said Huang. “We are working with our gaming partners to take action as we expect the macroeconomic conditions to continue impacting sell-through. Adjust channel prices and in stock. ” Nvidia’s CFO also complained about the negative financial impact of long-term purchase deals. Nvidia made these efforts at a time of much-talked-about component shortages in 2021 and early 2022.
What Jensen told Tom’s Hardware in May
At Nvidia’s Q&A session in May, Tom’s Hardware’s Paul Alcorn asked Jensen Huang directly about the potential disaster of pre-ordering capacity. This question was asked in the context of very clear indications that the cryptocurrency crash was not a passing problem on the radar. Huang’s answer started with his assertion that “the market for GPUs is very different now”. Nvidia’s CEO backed his statement by saying the GPU market is three times bigger than it was before the last crypto crash, with twice the number of workstations and ten times more cloud GPU business. He said that it has become more diverse, such as expanding to
On the topic of prepayment and its potential pitfalls, Huang hinted that prepayment has become the industry standard because of lead times. In fact, other chip designers would have had to compete with TSMC, Samsung, and others in this prepaid market to secure capacity amid the recent crisis. It’s interesting to see the scale of output Nvidia has set aside for his Ada Lovelace/GeForce RTX 40 graphics card. If Huang got it right in his May, “every way graphics chips are sold has changed significantly from previous generations of cryptocurrencies,” Nvidia should weather this storm well this time around.
Ampere price cuts continue
Since the beginning of the year, we have regularly reported on the price decline of graphics cards. But I have to say that the price cuts have been pretty impressive. EVGA has spotted the GeForce RTX 3090 Ti GPU this weekend at a price cut to $1,149. The price is nearly 45% below his MSRP.
Therefore, Nvidia’s partners seem to feel an urgency to drop Ampere graphics card prices and clear inventory ahead of the arrival of Lovelace-based 40-series cards.
Nvidia said it will release full and final results for the second quarter of 2023 on Tuesday, August 23rd. .
