Nvidia Clears Its Crypto Cloud

Marco Green
August 18, 2018

Non-GAAP earnings were $1.94 per share on revenue of $3.12 billion, up 40 percent year-over-year.

Nvidia is reporting a "substantial decline" in revenue as a result of declining sales to cryptocurrency miners.

Nvidia's gaming division, which makes up almost 60 per cent of total group sales, saw revenue rise 52 per cent from a year ago, while the company's fastest pace of growth came from its data centre unit, where revenue was up 83 per cent.

Despite the crypto market's slump, Nvidia was still able to raise its total revenue in Q2 to a record $3.12 billion, above analysts' estimate of $3.11 billion. But that demand has fallen off sharply, as specialized crypto-mining chips made their way to the market-just in time for a collapse in cryptocurrency values.

Nvidia shares fell as much as 5.6% in after-hours trading Thursday after the company warned that demand for its cryptocurrency-related chips is drying up. Even that prediction was too high.

Nvidia CEO Jensen Huang echoed that sentiment. He has convinced owners of data centers that modified graphics chips are the best solution to handle the surge in artificial intelligence processing that is fueling the growing use of voice and image recognition. Nvidia's GeForce 1080 could fetch more than $800 in January. Turing, as it's called, will also make its way into gamer- and data-center chips. The prospect of the new design coming later this year may be causing some to hold off on purchases of its predecessor.

Nvidia cut its guidance for the next quarter and now sees its revenue to be within 2% of $3.25 billion versus its previous estimate of $3.34 billion.

Revenue from original equipment manufacturers and intellectual property, including products for cryptocurrency mining, was down by 70 per cent at $116 million (£91m), well below the $188 million (£147m) analyst estimate, according to Reuters.

Nvidia had a profit of $1.1 billion, or $1.76 a share, in the fiscal second quarter, compared with $583 million, or 92 cents, in the same period a year earlier. Analysts estimated $3.11 billion.

With the quarter's results, Nvidia revenue is on course to more than double from 2016.

Ahead of a conference call with analysts, shares were down 3.6 percent to $248, still quadruple their value two years ago.

Other reports by Click Lancashire

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