Nvidia has ‘limited visibility’ on crypto mining impact of Q2 revenue drop
by Arthur · August 25, 2022
Nvidia said it has “limited insight” into how much the firm’s crypto-mining hardware affected its overall GPU demand in the second quarter of this year, as revenue in the three months ended July 31, 2022 fell to $6.5 billion, or 19% from previous quarter.
The company’s second-quarter revenue was significantly lower than Nvidia’s $8.10 billion forecast in May.
Revenue for Nvidia’s gaming division fell 44% from the previous quarter to $2.04 billion, with the firm citing “challenging market conditions.”
“Our GPUs are capable of mining cryptocurrency, although we have limited visibility into how much this affects our overall GPU demand,” said Nvidia CFO Colette Kress.
According to Kress, Nvidia is “unable to accurately quantify the extent to which reduced cryptocurrency mining contributed to the decline in gaming demand.”
Kress also highlighted the decline in crypto prices and user switching between different blockchain networks has affected demand for Nvidia’s products in the past.
“Volatility in the cryptocurrency market – such as falls in cryptocurrency prices or changes in the method of verifying transactions, including proof of work or proof of effort– has in the past affected, and may in the future affect, the demand for our products and our ability to estimate it accurately, said Kress.
The chipmaker’s net income fell 59% to $656 million in Q2.
What’s next for Nvidia?
Nvidia forecast a sharp drop in revenue for the current quarter on the back of a faltering gaming industry, with the company’s shares plunging around 5% in after-hours trading on Wednesday.
Although Bitcoin miners mainly use specialized ASIC hardware, other proof-of-work blockchains, incl Ethereum, LitecoinandZcashcan be mined using Nvidia’s GPU card.
However, Ethereum is expected to switch to a more environmentally friendly proof of stake consensus algorithm next month, which could spell more trouble for the firm’s GPU sales.
Earlier this year, Nvidia paid a $5.5 million penalty for failing to disclose the impact of crypto mining on the firm’s gaming business in two quarterly filings in 2018.
By 2018, the Nvidia GeForce GTX 580, which was marketed for gamers, had become popular among crypto miners.
Nvidia’s CMP 170HX, billed as the firm’s flagship GPU for Ethereum mining, went on sale last October at a price of $4,695.
