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Since the peak of the coronavirus pandemic, Nvidia has been amassing profits from its latest generation of graphics cards.
Software company Nvidia Corporation (NASDAQ: NVDA) missed analysts’ expectations for revenue and earnings in its Q2 fiscal 2023 results. The Q2 fiscal 2023 financial report tallies the preliminary earnings Nvidia announced weeks ago. The company has already warned that it will miss the quarterly estimates. In the preliminary financial results, Nvidia highlighted revenue of $6.70 billion, lower than the outlook of $8.10 billion. In reaction to the preliminary Q2 fiscal 2023 report, Nvidia plunged 8%. At the time, the company referred to low sales of gaming products. Again, the software company emphasized disappointing gaming sales fueled by macroeconomic conditions for the slow growth.
Nvidia Releases Q2 Fiscal 2023 Results
In line with the preliminary earnings, Nvidia said adjusted earnings per share for the Q2 fiscal 2023 was $0.51. Revenue for the quarter was $6.7 billion. The figures came in lower than Refinitiv consensus estimates of adjusted earnings per share of $1.26 and revenue of $8.10 billion. Announcing the Q2 fiscal 2023 results, Nvidia specified that the gaming department revenue dropped sharper than anticipated. The department revenue shed 33% YoY to $2.04 billion. The software firm mentioned reduced sales of its gaming products. Speaking to analysts on a call, Chief Financial Officer at Nvidia, Colette Kress, noted that “macroeconomic headwinds across the world drove a sudden slowdown in consumer” for the company’s gaming products during the Q2 fiscal 2023.
To combat the “challenging market conditions,” Nvidia is adjusting its prices with its retailers. Also, the company expects that the challenging time will continue through the current quarter. However, the company said its data center business rose 61% year-over-year to $3.8 billion. Nvidia said the gain was influenced by “hyperscale” customers. The report also highlighted the financial performance of other aspects of businesses in Nvidia. While the Professional visualization business fell 4% on an annual basis to $496 million, automatic increased 45% over the same period to $220 million. Also, revenue from crypto mining chips, CMP) was “normal” through Q2 fiscal 2023, contributing to a 66% annual decrease in its OEM and other categories.
Nvidia vs Crypto Market
Since the peak of the coronavirus pandemic, Nvidia has been amassing profits from its latest generation of graphics cards. The graphics cards saw hot demand for PC gaming amid the global health crisis. According to the software company, it does not have visibility of the degree to which the current crypto market impacts its product demand. The CFO explained:
“Volatility in the cryptocurrency market – such as declines in cryptocurrency prices or changes in method of verifying transactions, including proof of work or proof of stake – has in the past impacted, and can in the future impact, demand for our products and our ability to accurately estimate it. We are unable to accurately quantify the extent to which reduced cryptocurrency mining contributed to the decline in Gaming demand.”
Nvidia stock is currently trading down 3.79% to $165.59 in premarket trading.