Preliminary financial data show that NVIDIA Corp's game business was in the doldrums in the second quarter, with quarterly revenue of $2.04 billion, down 44 per cent from the previous quarter.
NVIDIA Corp, US stocks opened 7 per cent lower on Monday. Preliminary financial data show that affected by the downturn in game revenue, the company's revenue in the second quarter was significantly lower than expected, down 19% from the previous quarter.
Prior to the US stock market trading on August 8, NVIDIA Corp released preliminary figures for the second quarter of fiscal 2023, showing quarterly revenue of $6.7 billion, well below market expectations of $8.1 billion, down 19 per cent from the previous month and up 3 per cent from a year earlier. Revenue from the game business fell sharply short of market expectations, with quarterly revenue of $2.04 billion, down 44 per cent from the previous month and 33 per cent from a year earlier. Data center revenue was $3.81 billion, up 1% month-on-month and 61% year-on-year.
NVIDIA Corp's US stocks opened 7 per cent lower on Monday on the news. The company will announce its official second-quarter results on August 24 and hold an earnings call.
For the decline in game revenue, NVIDIA Corp said it was mainly affected by the decline in sales of game products, reflecting the impact of the economic downturn on the sales of the company's channel partners. As the macroeconomic situation affecting sales is expected to continue, the company and game partners take action to adjust channel prices and inventory. Although the data center business revenue is a record, the overall figure is slightly lower than the company expected due to the disruption of the supply chain.
NVIDIA Corp currently expects the second-quarter results to include $1.32 billion in fees, mainly reflecting inventories and related reserves, based on revised expectations for future demand.
Colette Kress, executive vice president and chief financial officer, said the huge fees incurred in the quarter reflected NVIDIA Corp's long-term procurement commitments during a severe component shortage, as well as the company's current expectations of continued macroeconomic uncertainty:
We believe NVIDIA Corp's long-term gross profit margin is intact. Our company has slowed down the growth of operating expenses, balanced long-term growth in investment, and managed near-term profitability.
In anticipation of strong cash generation and future growth, we plan to continue share buybacks.
Edit / lydia