Nvidia’s second-quarter revenue shrinks as GPU sales fall 44%

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Chipmaker NVIDIA today released its preliminary fiscal second quarter earnings report, which showed a significant drop in earnings compared to the company’s second quarter guidance. NVIDIA is one of the latest companies to publish its earnings season results, and the report helps avoid major shocks to investor confidence and the stock market amid the poor results that also plagued Intel in its last quarter. NVIDIA said the firm had preliminary revenue of $6.7 billion in the second quarter, down from the guidance metric of $1.4 billion, and it blamed the poor performance on its gaming segment.

In its earnings report, NVIDIA divides its revenue into five segments: the graphics processing unit (GPU)-related gaming segment and the data center segment, which targets large-scale enterprise and other segments that drive net sales. A sharp reduction in any of them significantly affects the balance sheet, and this applies to the second quarter.

The chipmaker noted that during the quarter ending in July, Gaming posted a significant sequential drop of 44% and an equally significant year-on-year drop of 33%, while generating $2.04 billion in revenue. The second largest segment, data centers, was the largest segment during the quarter as it generated $3.81 billion in revenue with 1% sequential growth and a strong 61% YoY growth.


Overall, however, due to lagging behind Gaming, NVIDIA reported $6.7 billion in revenue as it fell a whopping $1.4 billion short of its revenue target, marking a sequential 19% drop and a slight year-over-year growth of 35%. NVIDIA’s statement was worded with caution as it indicated that the results are still preliminary and are expected figures for its upcoming earnings report later this month.

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