By reducing the game's revenue by one third in the second quarter, NVIDIA expects it to decline further in the third quarter

By reducing the game's revenue by one third in the second quarter, NVIDIA expects it to decline furt

NVIDIA's management of a sharp drop in the second quarter's performance in the game segment was able to warn investors in advance, so the publication of the quarterly report didn't end with special shocks this week. At least the decline in the company's equity rate by 4.5% after the end of the trade was a disaster. Remember, the company's profits in the game segment declined by 44% consecutively to $2,042 billion, a 33% decline in annual value.

In the quarterly NVIDIA reporting, there was another segmentation: the revenue from graphic solutions fell by 39 per cent to $2.8 billion in a consistent manner, while the company ' s total revenue declined by 19 per cent to $6.704 billion per annum, and this was the credit of the CDC and telecommunications segment, which generated $3.907 billion in that amount. The supply of telecommunications solutions and computation accelerators, as well as other server components, increased by a factor of one and a half compared to the previous year. The CDI ' s direct revenue increased by 61 per cent to $3.806 billion. Finance Director NVIDIA Colette Cress stressed that the company ' s server revenue was lower than expected due to the continuing deficit of components.

NVIDIA, in the prepared part of the statements, preferred to use evasive language to blame the decline in demand for video cards for the deterioration of the macroeconomic situation, without denying the adoption of measures to lower the price of the cards and increase their impact. In the third quarter, according to the financial director, difficult market conditions would persist. Colette Kress, a whole paragraph with commentaries, was dedicated to the volatility of the cryptivative market, its ability to influence the NVIDIA game earnings and the company's inability to accurately assess the impact.

The video of Colette Cress' performance at a quarterly event allows for a little bit more disclosure of the reasons for the decline in game revenues in the second quarter. The decline in the demand for game solutions in Europe, according to NVIDIA management, was caused by Ukrainian events, and in China it was provoked by locodowns. The demand for game solutions by NVIDIA has fallen more than expected, both in quantitative terms and in the average price of sales. The company is working with partners to correct prices in retail to re-position older models of graphic processors in preparation for the release of the new architecture. In the long run, as the company's financial director explained, NVIDIA is counting on stable demand in the game segment. Colette Cress even stated in a comment that .

The 61% increase in the company data centre segment is mainly related to the increase in equipment supplies to large clients in the Territory of Silver America, while the Chinese focus, due to the difficult economic conditions in the region, has created the prerequisites for negative revenue movements.

The direction for professional visualization brought NVIDIA 4% less revenue than it was a year ago, and the steady fall was 20%, to $496 million. The automobile segment shows a strong growth of 59% consecutively and 45% year by year, but the revenue in this direction does not exceed $220 million. However, it is with this segment, as with the server, that the NVIDIA leadership holds the promise of an increase in its profile revenue in the third quarter. The company ' s total revenue in the current period does not exceed $5.9 billion against $6.7 billion in the previous period. The company ' s performance and professionalization decisions will reduce the company ' s profile revenue in the third quarter, as expected by the management.

Colette Cress explains that the NVIDIA rate of return in the second quarter fell 66.7 per cent to 45.9 per cent due to a one-time cost of $1.22 billion, mainly related to storage for the server and game segments of the market. About $570 million of this amount had to be written off due to the availability of increased stocks of products, and $650 million related to procurement obligations over and above the required amount under long-term contracts with suppliers. In some cases, the company would simply be forced to pay suppliers in a unsustainable manner due to a reduction in the number of products being purchased, so the decline in demand does not necessarily mean a reduction in costs.

Overall, by the end of the second quarter, NVIDIA had a value of $3.89 billion on its balance sheet, which is significantly higher than last year's $2.11 billion. The liability for long-term contracts increased to $9.22 billion, compared with $4.79 billion a year earlier, although this was partly due to an increase in the delivery time of certain components. In principle, in the first quarter, these commitments were measured at $9.59 billion, so there has been a steady decline.

In any event, the NVIDIA has completed the second quarter with $17.04 billion worth of cash and highly liquid assets, $3.44 billion in dividends and equity buy-backs paid to shareholders, and since the beginning of the year this amount has reached $5.54 billion. According to a previously approved plan, until December next year, the company must return at least $11.93 billion to investors.