Quarterly numbers: Nvidia’s server GPUs are picking up slack at GeForce

As expected, Nvidia’s sales continued to decline in the third quarter of fiscal 2023: At $5.9 billion, group sales were 17 percent lower than a year earlier, and sales were down 12 percent compared to the second quarter. Sales of gaming products (such as GeForce) decreased by 51 percent, while server sales increased.

Sales breakdown with GeForce

Nvidia’s revenue from games in the August-October period was $1.57 billion, compared to $3.22 billion a year ago. Compared to the second quarter, the decline in sales was 23 percent. At the high point of the mining boom, in the fourth quarter of 2021 (Q4FY2022), Nvidia calculated sales of $3.42 billion in the gaming division. It is not known how high the percentage of gaming products that are not purchased for gaming PCs but for mining farms is high.

In the third quarter of this year, hardware sales for mining systems are likely to lean toward zero. Additionally, the two-year-old RTX 3000 product portfolio has experienced significantly cooled consumer behavior of end customers around the world.

Things went uphill on the server

The decline was not entirely in sales of gaming products, but was largely offset by the sale of products in the data center segment, namely Ampere and, for the first time, Hopper (H100) GPUs for servers. In this area, sales were up 31 percent from a year earlier to $3.83 billion, compared to last quarter where growth was 2 percent. With a factor of 2.4, server sales versus gaming products have never been shown before.

Losing to the Omniverse, he scores in the car

At a low now of $200 million, sales in the “Professional Visualization” segment were down significantly from the prior year with a 65 percent decline. The division mainly includes Nvidia’s Omniverse ecosystem. The Automotive & Compact Vehicle division once again achieved a new sales record of $251 million, an 86 percent increase in the segment.

There is no decrease in profit

Compared to the second quarter, net profit did not decrease, but increased: Nvidia managed to increase its gross margin (profit after deducting variable costs (materials, production, etc.)) from $656 million to $680 million from 43.6 to a record 53.2. percent, while fixed costs increased slightly. Compared to last year, the drop was again significant: Nvidia managed to make $2.5 billion in profit in that time, and the total mark was 65.2 percent higher.

Revenue remains at $6.0 billion

For the fourth quarter, Nvidia again expects sales of $6.0 billion with gross margin rising significantly from 56.1 to 63.2 to 66.0 percent. Recently, Nvidia was able to post sales in the fourth quarter, including the Christmas business, that were higher in the single-digit percentage range than in the third quarter. Nvidia has yet to bottom out in terms of sales according to its own projections, but the downturn has clearly lost momentum. Nvidia does not make separate forecasts for individual product segments.