Nvidia revenue falls 17% but data center growth remains strong

Nvidia reported fiscal third-quarter results connected Wednesday for the play ending successful October with income beating expert expectations but net per stock coming successful light.

Nvidia banal roseate implicit 2% successful extended trading.

Here's however the institution did versus Refinitiv statement estimates:

• EPS: $0.59, adjusted, versus $0.69 expected
• Revenue: $5.93 billion, versus $5.77 cardinal expected

Nvidia said it expected astir $6 cardinal successful income successful the 4th quarter, little than Refinitiv statement estimates of $6.09 billion.

Gross borderline for the 3rd 4th was down 11.6 percent points to 53.6%, which the institution attributed to taking an inventory complaint due to the fact that of debased request for information halfway chips successful China. Revenue was down 17% connected a year-on-year basis.

Nvidia expects gross borderline for the existent 4th to retrieve to betwixt 63.2% and 66.0%.

Nvidia is intimately watched by analysts and investors arsenic a starring indicator for the wellness of the exertion industry, due to the fact that it sells chips and bundle to truthful galore PC makers and unreality providers.

In the past fewer months, spot companies similar Nvidia person been slashing bid expectations and informing that their customers are overstocked with machine parts. In May, Nvidia said it would dilatory the gait of its hiring.

Nvidia CEO Jensen Huang said successful a connection that the institution was "adapting to the macro environment."

The PC gaming marketplace is slowing aft the pandemic boom. Nvidia graphics cards, which had been hard to find successful banal successful 2020 and 2021, are present seeing retail discounts. Nvidia besides precocious announced a caller procreation of graphics cards which are priced higher than the erstwhile models.

Nvidia's gaming part reported $1.57 cardinal successful sales, down 51% year-over-year. Nvidia said it was selling little to retailers due to the fact that they person much inventory than existent demand. It said that macroeconomic conditions, successful summation to China's zero-Covid policy, are hurting user demand.

A brighter spot was Nvidia's information halfway business, which reported $3.83 cardinal successful sales, up 31% year-over-year. Nvidia attributed the maturation to income to U.S. unreality work providers and user net companies.

In July, Nvidia chopped its guidance for the October quarter. Nvidia besides warned successful August that it would beryllium deed by U.S. export controls that forestall immoderate accelerated artificial quality chips from being sold to Chinese companies. In November, it revealed a caller spot that is designed to conscionable the U.S. export rules.

Nvidia said that the reduced income from the GPUs barred successful China would beryllium mostly offset by its alternate products.

Nvidia has a fewer smaller lines of business, including nonrecreational visualization and automotive chips. They are small. Professional visualization shrunk 65% connected an yearly ground to $200 million. Automotive grew 86% but is inactive precise small, reporting $251 cardinal successful sales.

The company's "other" class reported $73 cardinal successful revenue. It includes Nvidia's cryptocurrency mining chips (CMP). The institution said income from the CMP chips were "nominal."

Nvidia said it spent $3.75 cardinal connected stock repurchases and dividends during the quarter.