NVIDIA Announces Preliminary Financial Results for Second Quarter Fiscal 2023

Mon짯day, August 8, 2022

  • Preli짯mi짯na짯ry second quar짯ter reve짯nue of $6.70 bil짯li짯on ver짯sus out짯look of $8.10 billion
  • Short짯fall ver짯sus out짯look pri짯ma짯ri짯ly dri짯ven by wea짯k짯er Gam짯ing revenue
  • Manage짯ment to dis짯cuss finan짯cial results and out짯look on Aug. 24 ear짯nings call

NVIDIA (NASDAQ: NVDA) today announ짯ced sel짯ec짯ted preli짯mi짯na짯ry finan짯cial results for the second quar짯ter ended July 31, 2022.

Second quar짯ter reve짯nue is expec짯ted to be appro짯xi짯m짯ate짯ly $6.70 bil짯li짯on, down 19% sequen짯ti짯al짯ly and up 3% from the pri짯or year, pri짯ma짯ri짯ly reflec짯ting wea짯k짯er than fore짯cas짯ted Gam짯ing reve짯nue. Gam짯ing reve짯nue was $2.04 bil짯li짯on, down 44% sequen짯ti짯al짯ly and down 33% from the pri짯or year. Data Cen짯ter reve짯nue was $3.81 bil짯li짯on, up 1% sequen짯ti짯al짯ly and up 61% from the pri짯or year.

The short짯fall rela짯ti짯ve to the May reve짯nue out짯look of $8.10 bil짯li짯on was pri짯ma짯ri짯ly attri짯bu짯ta짯ble to lower sell-in of Gam짯ing pro짯ducts reflec짯ting a reduc짯tion in chan짯nel part짯ner sales likely due to macroe짯co짯no짯mic head짯winds. In addi짯ti짯on to redu짯cing sell-in, the com짯pa짯ny imple짯men짯ted pri짯cing pro짯grams with chan짯nel part짯ners to reflect chal짯len짯ging mar짯ket con짯di짯ti짯ons that are expec짯ted to per짯sist into the third quarter.

Data Cen짯ter reve짯nue, though a record, was some짯what short of the company셲 expec짯ta짯ti짯ons, as it was impac짯ted by sup짯p짯ly chain disruptions.

Second quar짯ter results are expec짯ted to include appro짯xi짯m짯ate짯ly $1.32 bil짯li짯on of char짯ges, pri짯ma짯ri짯ly for inven짯to짯ry and rela짯ted reser짯ves, based on revi짯sed expec짯ta짯ti짯ons of future demand.

Our gam짯ing pro짯duct sell-through pro짯jec짯tions decli짯ned signi짯fi짯cant짯ly as the quar짯ter pro짯gres짯sed, said Jen짯sen Huang, foun짯der and CEO of NVIDIA. 쏛s we expect the macroe짯co짯no짯mic con짯di짯ti짯ons affec짯ting sell-through to con짯ti짯nue, we took actions with our Gam짯ing part짯ners to adjust chan짯nel pri짯ces and inventory.

NVIDIA has excel짯lent pro짯ducts and posi짯ti짯on dri짯ving lar짯ge and gro짯wing mar짯kets. As we navi짯ga짯te the짯se chal짯lenges, we remain focu짯sed on the once-in-a-gene짯ra짯ti짯on oppor짯tu짯ni짯ty to reinvent com짯pu짯ting for the era of AI, he said.

The signi짯fi짯cant char짯ges incur짯red in the quar짯ter reflect pre짯vious long-term purcha짯se com짯mit짯ments we made during a time of seve짯re com짯po짯nent shorta짯ges and our cur짯rent expec짯ta짯ti짯on of ongo짯ing macroe짯co짯no짯mic uncer짯tain짯ty, said Colet짯te Kress, EVP and CFO of NVIDIA.

We belie짯ve our long-term gross mar짯gin pro짯fi짯le is int짯act. We have slo짯wed ope짯ra짯ting expen짯se growth, balan짯cing invest짯ments for long-term growth while mana짯ging near-term pro짯fi짯ta짯bi짯li짯ty. We plan to con짯ti짯nue stock buy짯backs as we fore짯see strong cash gene짯ra짯ti짯on and future growth, she said.

  Q2 FY23 Out짯look1 Q2 FY23 Preli짯mi짯na짯ry Results
Reve짯nue $8.10 bil짯li짯on, plus or minus 2% $6.70 bil짯li짯on
Gross mar짯gin  GAAP
Gross mar짯gin non-GAAP
65.1%, plus or minus 50 bps
67.1%, plus or minus 50 bps
43.7%, plus or minus 50 bps
46.1%, plus or minus 50 bps
Ope짯ra짯ting expen짯ses  GAAP
Ope짯ra짯ting expen짯ses non-GAAP
$2.46 bil짯li짯on
$1.75 billion
$2.42 bil짯li짯on
$1.75 billion
GAAP and non-GAAP other inco짯me and expense $40 mil짯li짯on expense $24 mil짯li짯on and $16 mil짯li짯on expen짯se, respectively
GAAP and non-GAAP tax rate 12.5%, plus or minus 1%, exclu짯ding dis짯crete items -35% GAAP (bene짯fit) and 2% non-GAAP, inclu짯ding dis짯crete items

Announ짯ced in May 2022 in con짯nec짯tion with the company셲 press release announ짯cing its finan짯cial results for first quar짯ter fis짯cal 2023.

Reve짯nue by Mar짯ket Platform
($ in billions)
Q2 FY23
Preli짯mi짯na짯ry Results
Q/Q Y/Y
Gam짯ing $2.04 Down 44% Down 33%
Data Cen짯ter 3.81 Up 1% Up 61%
Pro짯fes짯sio짯nal Visualization 0.50 Down 20% Down 4%
Auto짯mo짯ti짯ve 0.22 Up 59% Up 45%
OEM and Other 0.13 Down 12% Down 66%
Total $6.70 Down 19% Up 3%

The preli짯mi짯na짯ry results for the second quar짯ter ended July 31, 2022, are an esti짯ma짯te, based on infor짯ma짯ti짯on available to manage짯ment as of the date of this release, and are sub짯ject to fur짯ther chan짯ges upon com짯ple짯ti짯on of the company셲 stan짯dard quar짯ter and year-end clo짯sing pro짯ce짯du짯res. This update does not pre짯sent all neces짯sa짯ry infor짯ma짯ti짯on for an under짯stan짯ding of NVIDIA셲 finan짯cial con짯di짯ti짯on as of the date of this release, or its results of ope짯ra짯ti짯ons for the second quar짯ter. As NVIDIA com짯ple짯tes its quar짯ter-end finan짯cial clo짯se pro짯cess and fina짯li짯zes its finan짯cial state짯ments for the quar짯ter, it will be requi짯red to make signi짯fi짯cant judgments in a num짯ber of are짯as. It is pos짯si짯ble that NVIDIA may iden짯ti짯fy items that requi짯re it to make adjus짯t짯ments to the preli짯mi짯na짯ry finan짯cial infor짯ma짯ti짯on set forth abo짯ve and tho짯se chan짯ges could be mate짯ri짯al. NVIDIA does not intend to update such finan짯cial infor짯ma짯ti짯on pri짯or to release of its final second quar짯ter finan짯cial state짯ment infor짯ma짯ti짯on, which is curr짯ent짯ly sche짯du짯led for Aug. 24, 2022.

Con짯fe짯rence Call and Web짯cast Information
NVIDIA will host a con짯fe짯rence call on Wed짯nes짯day, Aug. 24, at 2 p.m. PT (5 p.m. ET), to dis짯cuss its finan짯cial results for the second quar짯ter of fis짯cal year 2023.

The call will be web짯cast live (in lis짯ten-only mode) on investor.nvidia.com. The company셲 pre짯pared remarks will be fol짯lo짯wed by a ques짯ti짯on-and-ans짯wer ses짯si짯on, which will be limi짯t짯ed to ques짯ti짯ons from finan짯cial ana짯lysts and insti짯tu짯tio짯nal investors.

Ahead of the call, NVIDIA will pro짯vi짯de writ짯ten com짯men짯ta짯ry on its second-quar짯ter results from its CFO, Colet짯te Kress. This mate짯ri짯al will be pos짯ted to investor.nvidia.com imme짯dia짯te짯ly after the company셲 results are publicly announ짯ced at appro짯xi짯m짯ate짯ly 1:20 p.m. PT.

The web짯cast will be recor짯ded and available for replay until the company셲 con짯fe짯rence call to dis짯cuss finan짯cial results for its third quar짯ter of fis짯cal year 2023.

Non-GAAP Mea짯su짯res
In addi짯ti짯on to U.S. GAAP finan짯cial mea짯su짯res, this press release includes preli짯mi짯na짯ry esti짯ma짯tes of non-GAAP mea짯su짯res of cer짯tain com짯pon짯ents of finan짯cial per짯for짯mance. The짯se preli짯mi짯na짯ry esti짯ma짯tes of non-GAAP mea짯su짯res include non-GAAP gross mar짯gin, ope짯ra짯ting expen짯ses, other inco짯me and expen짯se, and inco짯me tax expense.

The짯se non-GAAP finan짯cial mea짯su짯res exclude stock-based com짯pen짯sa짯ti짯on expen짯se, acqui짯si짯ti짯on-rela짯ted and other cos짯ts, gains or los짯ses from non-affi짯lia짯ted invest짯ments, inte짯rest expen짯se rela짯ted to amor짯tiza짯ti짯on of debt dis짯count and the asso짯cia짯ted tax impact of the짯se items, whe짯re applicable.

A preli짯mi짯na짯ry updated recon짯ci짯lia짯ti짯on of GAAP to non-GAAP gross mar짯gin, ope짯ra짯ting expen짯ses, other inco짯me and expen짯ses and tax rate is as follows:

Recon짯ci짯lia짯ti짯on of GAAP to non-GAAP Finan짯cial Measures
($ in millions)
Q2 FY23
Preli짯mi짯na짯ry Results
GAAP gross margin 43.7%
Stock-based com짯pen짯sa짯ti짯on expen짯se, acqui짯si짯ti짯on-rela짯ted cos짯ts, and other costs 2.4
Non-GAAP gross margin 46.1%
   
GAAP ope짯ra짯ting expenses $2,416
Stock-based com짯pen짯sa짯ti짯on expen짯se and acqui짯si짯ti짯on-rela짯ted costs (667)
Non-GAAP ope짯ra짯ting expenses $1,749
   
GAAP other expen짯se, net $24
Los짯ses from non-affi짯lia짯ted invest짯ments and other costs (8)
Non-GAAP other expen짯se, net $16
   
GAAP tax rate (bene짯fit) (35%)
Tax impact of non-GAAP adjustments 37
Non-GAAP tax rate 2%

NVIDIA belie짯ves the pre짯sen짯ta짯ti짯on of its non-GAAP finan짯cial mea짯su짯res enhan짯ces the user셲 over짯all under짯stan짯ding of the company셲 finan짯cial per짯for짯mance. The pre짯sen짯ta짯ti짯on of the company셲 non-GAAP finan짯cial mea짯su짯res is not meant to be con짯side짯red in iso짯la짯ti짯on or as a sub짯sti짯tu짯te for the company셲 finan짯cial results pre짯pared in accordance with GAAP, and the company셲 non-GAAP mea짯su짯res may be dif짯fe짯rent from non-GAAP mea짯su짯res used by other companies.

About NVIDIA
Sin짯ce its foun짯ding in 1993, NVIDIA (NASDAQ: NVDA) has been a pio짯neer in acce짯le짯ra짯ted com짯pu짯ting. The company셲 inven짯ti짯on of the GPU in 1999 spark짯ed the growth of the PC gam짯ing mar짯ket, rede짯fi짯ned com짯pu짯ter gra짯phics and igni짯ted the era of modern AI. NVIDIA is now a full-stack com짯pu짯ting com짯pa짯ny with data-cen짯ter-sca짯le offe짯rings that are res짯ha짯ping indus짯try. More infor짯ma짯ti짯on at https://nvidianews.nvidia.com/.

Cer짯tain state짯ments in this press release inclu짯ding, but not limi짯t짯ed to, state짯ments as to: NVIDIA셲 preli짯mi짯na짯ry results for the second quar짯ter of fis짯cal 2023; our excel짯lent pro짯ducts and posi짯ti짯on dri짯ving lar짯ge and gro짯wing mar짯kets; chal짯len짯ging mar짯ket con짯di짯ti짯ons expec짯ted to per짯sist into the third quar짯ter; our expec짯ta짯ti짯on that the macroe짯co짯no짯mic con짯di짯ti짯ons affec짯ting sell-through will con짯ti짯nue; our focus on the once-in-a-gene짯ra짯ti짯on oppor짯tu짯ni짯ty to reinvent com짯pu짯ting for the era of AI; our belief that our long-term gross mar짯gin pro짯fi짯le is int짯act; slo짯wing ope짯ra짯ting expen짯se growth, balan짯cing invest짯ments for long-term growth while mana짯ging near-term pro짯fi짯ta짯bi짯li짯ty; our plan to con짯ti짯nue stock buy짯backs; our belief in our strong cash gene짯ra짯ti짯on abili짯ties and future growth; and NVIDIA셲 quar짯ter-end finan짯cial clo짯se pro짯cess and pre짯pa짯ra짯ti짯on of finan짯cial state짯ments for the quar짯ter are for짯ward-loo짯king state짯ments that are sub짯ject to risks and uncer짯tain짯ties that could cau짯se results to be mate짯ri짯al짯ly dif짯fe짯rent than expec짯ta짯ti짯ons. Important fac짯tors that could cau짯se actu짯al results to dif짯fer mate짯ri짯al짯ly include: glo짯bal eco짯no짯mic con짯di짯ti짯ons; our reli짯ance on third par짯ties to manu짯fac짯tu짯re, assem짯ble, packa짯ge and test our pro짯ducts; the impact of tech짯no짯lo짯gi짯cal deve짯lo짯p짯ment and com짯pe짯ti짯ti짯on; deve짯lo짯p짯ment of new pro짯ducts and tech짯no짯lo짯gies or enhance짯ments to our exis짯ting pro짯duct and tech짯no짯lo짯gies; mar짯ket accep짯tance of our pro짯ducts or our part짯ners pro짯ducts; design, manu짯fac짯tu짯ring or soft짯ware defects; chan짯ges in con짯su짯mer pre짯fe짯ren짯ces or demands; chan짯ges in indus짯try stan짯dards and inter짯faces; unex짯pec짯ted loss of per짯for짯mance of our pro짯ducts or tech짯no짯lo짯gies when inte짯gra짯ted into sys짯tems; as well as other fac짯tors detail짯ed from time to time in the most recent reports NVIDIA files with the Secu짯ri짯ties and Exch짯an짯ge Com짯mis짯si짯on, or SEC, inclu짯ding, but not limi짯t짯ed to, its annu짯al report on Form 10멚 and quar짯ter짯ly reports on Form 10멡. Copies of reports filed with the SEC are pos짯ted on the company셲 web짯site and are available from NVIDIA wit짯hout char짯ge. The짯se for짯ward-loo짯king state짯ments are not gua짯ran짯tees of future per짯for짯mance and speak only as of the date hereof, and, except as requi짯red by law, NVIDIA dis짯claims any obli짯ga짯ti짯on to update the짯se for짯ward-loo짯king state짯ments to reflect future events or circumstances.

짤 2022 NVIDIA Cor짯po짯ra짯ti짯on. All rights reser짯ved. NVIDIA and the NVIDIA logo are trade짯marks and/or regis짯tered trade짯marks of NVIDIA Cor짯po짯ra짯ti짯on in the U.S. and/or other count짯ries. Other com짯pa짯ny and pro짯duct names may be trade짯marks of the respec짯ti짯ve com짯pa짯nies with which they are asso짯cia짯ted. Fea짯tures, pri짯cing, avai짯la짯bi짯li짯ty, and spe짯ci짯fi짯ca짯ti짯ons are sub짯ject to chan짯ge wit짯hout notice.