Nvidia has just released today its figures for the third quarter (ending October 30, 2022) of its current fiscal year. They are clearly in strong decline. Within these figures, we discover the revenue of 5.93 billion dollars down 17% compared to the previous year and 12% compared to its second previous year. Its GAAP earnings per diluted share are down 72% from last year, but it should be noted that this decline is only 4% from the previous quarter.
Nvidia: a sharp drop in numbers from the previous year
If the computing / AI division is doing well, it is clearly the gaming division that suffers the most. During this third quarter, the turnover is only 1.57 billion dollars, which is 51% less than last year and 23% less than the previous quarter. However, it is important to take into account that this quarter is weakly affected by the release of the RTX 4090, which was launched on October 12 and even if Nvidia’s partners had placed orders for GPUs earlier, we will have to wait until the fourth quarter to know its real impact on the figures (along with those of the 4080).
Consolation in these bad numbers, the automotive and embedded systems sector has reached a revenue of $251 million, 86% more year on year and 14% quarter on quarter. The main reason is NVIDIA DRIVE Thor, a next-generation embedded computer. However, it should be noted that this fast-growing sector only represents 1/6 of the sharply declining gaming figures. A very small consolation therefore.
And if we ignore the two years 2020 & 2021 (boosted by the Covid), what does that give?
But what if we were to ask ourselves about Nvidia’s situation BEFORE the Covid craze? Let’s take the company’s Q3 FY2020 results (which corresponds to Q3 2019) for that.
Without being a high ranking financial analyst, you’ll see that Team Green went from 3 billion in revenue in Q3 2019 to 5.9 billion for this bad third quarter of 2022…Quite an increase. So even if the margin ratio drops a little bit, the result (the net margin) is very comfortable. In this context of ambient catastrophism in the industry, it is good to return to “real” benchmarks and not to consider the two years “Covid” as normal accounting exercises in the life of a company.