NVIDIA (NASDAQ: NVDA) today announced selected preliminary
financial results for the second quarter ended July 31, 2022.
Second quarter revenue is expected to be approximately $6.70
billion, down 19% sequentially and up 3% from the prior year,
primarily reflecting weaker than forecasted Gaming revenue. Gaming
revenue was $2.04 billion, down 44% sequentially and down 33% from
the prior year. Data Center revenue was $3.81 billion, up 1%
sequentially and up 61% from the prior year.
The shortfall relative to the May revenue outlook of $8.10
billion was primarily attributable to lower sell-in of Gaming
products reflecting a reduction in channel partner sales likely due
to macroeconomic headwinds. In addition to reducing sell-in, the
company implemented pricing programs with channel partners to
reflect challenging market conditions that are expected to persist
into the third quarter.
Data Center revenue, though a record, was somewhat short of the
company’s expectations, as it was impacted by supply chain
disruptions.
Second quarter results are expected to include approximately
$1.32 billion of charges, primarily for inventory and related
reserves, based on revised expectations of future demand.
“Our gaming product sell-through projections declined
significantly as the quarter progressed,” said Jensen Huang,
founder and CEO of NVIDIA. “As we expect the macroeconomic
conditions affecting sell-through to continue, we took actions with
our Gaming partners to adjust channel prices and inventory. “NVIDIA
has excellent products and position driving large and growing
markets. As we navigate these challenges, we remain focused on the
once-in-a-generation opportunity to reinvent computing for the era
of AI,” he said.
“The significant charges incurred in the quarter reflect
previous long-term purchase commitments we made during a time of
severe component shortages and our current expectation of ongoing
macroeconomic uncertainty,” said Colette Kress, EVP and CFO of
NVIDIA.
“We believe our long-term gross margin profile is intact. We
have slowed operating expense growth, balancing investments for
long-term growth while managing near-term profitability. We plan to
continue stock buybacks as we foresee strong cash generation and
future growth,” she said.
|
Q2 FY23 Outlook1 |
Q2 FY23 Preliminary Results |
Revenue |
$8.10 billion, plus or minus 2% |
$6.70 billion |
Gross margin – GAAPGross margin – non-GAAP |
65.1%, plus or minus 50 bps67.1%, plus or minus 50 bps |
43.7%, plus or minus 50 bps46.1%, plus or minus 50 bps |
Operating expenses – GAAPOperating expenses – non-GAAP |
$2.46 billion$1.75 billion |
$2.42 billion$1.75 billion |
GAAP and non-GAAP other income and expense |
$40 million expense |
$24 million and $16 million expense, respectively |
GAAP and non-GAAP tax rate |
12.5%, plus or minus 1%, excluding discrete items |
-35% GAAP (benefit) and 2% non-GAAP, including discrete items |
1 Announced in May 2022 in connection with the company’s press
release announcing its financial results for first quarter fiscal
2023.
Revenue by Market Platform($ in
billions) |
Q2 FY23Preliminary Results |
Q/Q |
Y/Y |
Gaming |
$2.04 |
Down 44% |
Down 33% |
Data Center |
3.81 |
Up 1% |
Up 61% |
Professional Visualization |
0.50 |
Down 20% |
Down 4% |
Automotive |
0.22 |
Up 59% |
Up 45% |
OEM and Other |
0.13 |
Down 12% |
Down 66% |
Total |
$6.70 |
Down 19% |
Up 3% |
The preliminary results for the second quarter ended July 31,
2022, are an estimate, based on information available to management
as of the date of this release, and are subject to further changes
upon completion of the company’s standard quarter and year-end
closing procedures. This update does not present all necessary
information for an understanding of NVIDIA’s financial condition as
of the date of this release, or its results of operations for the
second quarter. As NVIDIA completes its quarter-end financial close
process and finalizes its financial statements for the quarter, it
will be required to make significant judgments in a number of
areas. It is possible that NVIDIA may identify items that require
it to make adjustments to the preliminary financial information set
forth above and those changes could be material. NVIDIA does not
intend to update such financial information prior to release of its
final second quarter financial statement information, which is
currently scheduled for Aug. 24, 2022.
Conference Call and Webcast InformationNVIDIA
will host a conference call on Wednesday, Aug. 24, at 2 p.m. PT (5
p.m. ET), to discuss its financial results for the second quarter
of fiscal year 2023.
The call will be webcast live (in listen-only mode) on
investor.nvidia.com. The company’s prepared remarks will be
followed by a question-and-answer session, which will be limited to
questions from financial analysts and institutional investors.
Ahead of the call, NVIDIA will provide written commentary on its
second-quarter results from its CFO, Colette Kress. This material
will be posted to investor.nvidia.com immediately after the
company’s results are publicly announced at approximately 1:20 p.m.
PT.
The webcast will be recorded and available for replay until the
company’s conference call to discuss financial results for its
third quarter of fiscal year 2023.
Non-GAAP MeasuresIn addition to U.S. GAAP
financial measures, this press release includes preliminary
estimates of non-GAAP measures of certain components of financial
performance. These preliminary estimates of non-GAAP measures
include non-GAAP gross margin, operating expenses, other income and
expense, and income tax expense.
These non-GAAP financial measures exclude stock-based
compensation expense, acquisition-related and other costs, gains or
losses from non-affiliated investments, interest expense related to
amortization of debt discount and the associated tax impact of
these items, where applicable.
A preliminary updated reconciliation of GAAP to non-GAAP gross
margin, operating expenses, other income and expenses and tax rate
is as follows:
Reconciliation of GAAP to non-GAAP Financial
Measures ($ in millions) |
Q2 FY23Preliminary Results |
GAAP gross margin |
43.7% |
Stock-based compensation expense, acquisition-related costs, and
other costs |
2.4 |
Non-GAAP gross margin |
46.1% |
|
|
GAAP operating expenses |
$2,416 |
Stock-based compensation expense and acquisition-related costs |
(667) |
Non-GAAP operating expenses |
$1,749 |
|
|
GAAP other expense, net |
$24 |
Losses from non-affiliated investments and other costs |
(8) |
Non-GAAP other expense, net |
$16 |
|
|
GAAP tax rate (benefit) |
(35%) |
Tax impact of non-GAAP adjustments |
37 |
Non-GAAP tax rate |
2% |
NVIDIA believes the presentation of its non-GAAP financial
measures enhances the user’s overall understanding of the company’s
financial performance. The presentation of the company’s non-GAAP
financial measures is not meant to be considered in isolation or as
a substitute for the company’s financial results prepared in
accordance with GAAP, and the company’s non-GAAP measures may be
different from non-GAAP measures used by other companies.
About NVIDIASince its founding in 1993, NVIDIA
(NASDAQ: NVDA) has been a pioneer in accelerated computing. The
company’s invention of the GPU in 1999 sparked the growth of the PC
gaming market, redefined computer graphics and ignited the era of
modern AI. NVIDIA is now a full-stack computing company with
data-center-scale offerings that are reshaping industry. More
information at https://nvidianews.nvidia.com/.
For further information, contact:
Simona Jankowski |
Robert Sherbin |
Investor
Relations |
Corporate
Communications |
NVIDIA Corporation |
NVIDIA Corporation |
sjankowski@nvidia.com |
rsherbin@nvidia.com |
Certain statements in this press release including, but not
limited to, statements as to: NVIDIA’s preliminary results for the
second quarter of fiscal 2023; our excellent products and position
driving large and growing markets; challenging market conditions
expected to persist into the third quarter; our expectation that
the macroeconomic conditions affecting sell-through will continue;
our focus on the once-in-a-generation opportunity to reinvent
computing for the era of AI; our belief that our long-term gross
margin profile is intact; slowing operating expense growth,
balancing investments for long-term growth while managing near-term
profitability; our plan to continue stock buybacks; our belief in
our strong cash generation abilities and future growth; and
NVIDIA’s quarter-end financial close process and preparation of
financial statements for the quarter are forward-looking statements
that are subject to risks and uncertainties that could cause
results to be materially different than expectations. Important
factors that could cause actual results to differ materially
include: global economic conditions; our reliance on third parties
to manufacture, assemble, package and test our products; the impact
of technological development and competition; development of new
products and technologies or enhancements to our existing product
and technologies; market acceptance of our products or our
partners’ products; design, manufacturing or software defects;
changes in consumer preferences or demands; changes in industry
standards and interfaces; unexpected loss of performance of our
products or technologies when integrated into systems; as well as
other factors detailed from time to time in the most recent reports
NVIDIA files with the Securities and Exchange Commission, or SEC,
including, but not limited to, its annual report on Form 10-K and
quarterly reports on Form 10-Q. Copies of reports filed with the
SEC are posted on the company’s website and are available from
NVIDIA without charge. These forward-looking statements are not
guarantees of future performance and speak only as of the date
hereof, and, except as required by law, NVIDIA disclaims any
obligation to update these forward-looking statements to reflect
future events or circumstances.
© 2022 NVIDIA Corporation. All rights reserved. NVIDIA and the
NVIDIA logo are trademarks and/or registered trademarks of NVIDIA
Corporation in the U.S. and/or other countries. Other company and
product names may be trademarks of the respective companies with
which they are associated. Features, pricing, availability, and
specifications are subject to change without notice.
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