Nvidia's quarterly revenue reaches an all-time high of $6.5 billion, but CMP sales miss...

midian182

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In brief: Nvidia’s revenue for the second fiscal quarter of 2022 not only beat Wall Street expectations but also reached an all-time high. The company generated $6.507 billion, up a massive 68% compared to the same quarter a year earlier, and its gaming revenue jumped 85% to $3.06 billion.

Nvidia’s net income has also skyrocketed compared to last year: $2.374 billion Q2 FY2022, up 282% compared to the $622 million recorded in Q2 FY2021. Its gross margin was also up YoY, from 58.8% to 64.8%.

While it does have fingers in many pies, gaming is Nvidia’s primary earner. Demand for Ampere products has been through the roof since the first cards launched last year, and their high selling price is helping inflate the company's bottom line. The success of the Switch, for which Nvidia provides the Tegra X1, is also boosting gaming sales. In addition to the yearly revenue increase, the sector jumped 11% from the previous quarter.

Interestingly, Nvidia revealed that 80% of the new Ampere GPUs it shipped during Q2 FY2022 were the Low Hash Rate (LHR) versions. That suggests most of the cards sold ended up in the hands of gamers rather than miners, though we recently heard of a hack that restores 70% of LHR cards’ unlocked hash rates.

As for Nvidia’s dedicated Crypto Mining Processor (CMP) line, its sales were $266 million for the quarter. While that is up from the previous quarter’s $150 million, the company in May said it was expecting CMP sales to reach $400 million in Q2 FY2022. Nvidia CFO Colette Kress said that it expects a “minimal contribution” from its CMP sales going forward.

Elsewhere, Nvidia’s data center business also reached an all-time high of $2.37 billion, up 35% YoY, and the professional visualization segment was up 156% to $519 million. Not every sector experienced gains, though; its automobile business’ $152 million in sales was down compared to the last quarter. It was still up 37% YoY, but the pandemic had a devastating effect on the auto industry last year.

For the third quarter, which has always been Nvidia’s most successful, it expects revenues to hit $6.80 billion ±2% and gross margins to decrease to 65.2%. Shares in the company were up 2% in after-hours trading.

On the company's earnings call, CEO Jensen Huang, speaking about graphics card supply issues, said, “I would expect that we will see a supply constrained environment for the vast majority of next year is my guess at the moment.” Read more about that statement here.

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Not really surprising regarding CMP given LHR's recently got mostly un-nerfed by new mining software.
 
Isn‘t that odd considering that Ampere‘s msrp is at best equal to Turing‘s or lower? So considering the lower prices, wouldn‘t that mean they sold pretty much twice as many GPU ?
 
Isn‘t that odd considering that Ampere‘s msrp is at best equal to Turing‘s or lower? So considering the lower prices, wouldn‘t that mean they sold pretty much twice as many GPU ?
Not necessarily. Turing and ampere have a big range of cards with different prices
 
You know, Jensen was just talking about how he expects supply issues to last until 2023 at least and yet, he's making more money than ever.

Now I'm *not* saying that there's some sort of kick-up deals with distributors for some of those very profitable direct-to-miner sales we know happened and are still counting under that "gaming" bucket, but even without all that cheeky-but-baseless conjecture I just offered, it still reads as Nvidia making a ton of profit without miners just with their current anti-consumer strategies like:

- Not launching low end products, like, at all.

- Pushing the prices of every SKU in their stack in an accelerated upwards trend: the better Nvidia does the more it correlates with the price of the top end GPUs and it serves as a justification to take an sky like the X70 tier that used to be around the 400 mark as earlier as 5 years ago to 600 mark for the same X60 tier now: an almost 50% increase in price in just 3 generations from Pascal to Ampere today.

- Reinforcing the previous points by artificially pushing tech out of the door before it's ready to mass adoption by basically bribing and strong-arming publishers to include features like Ray Tracing. Again it would have been much better to wait for those features to be launched on the generation that will come *after* Ampere but we had em since Turing because the very top end tier cards, which were pushed in price greatly are capable of using the features.

The irony is that while Jansen is able to afford his filthy rich tickets to space now he's basically producing an alarming trend: he has the margins to sustain it but the AAA industry doesn't has the user base to sustain their investment and this is specially true if he's accurate to that 2023 claim for return-to-normal prices and supply.

More over, I am sure that by 2023 their next generation of cards will push the X70 tier to 800 USD entry price and their X80 to 1200 msrp so even with msrp being respected they're never going to stop the steady price increases.
 
The irony is that while Jansen is able to afford his filthy rich tickets to space now he's basically producing an alarming trend: he has the margins to sustain it but the AAA industry doesn't has the user base to sustain their investment and this is specially true if he's accurate to that 2023 claim for return-to-normal prices and supply.

More over, I am sure that by 2023 their next generation of cards will push the X70 tier to 800 USD entry price and their X80 to 1200 msrp so even with msrp being respected they're never going to stop the steady price increases.
I agree. IMO, prices will not return to "pre-pandemic/shortage levels" just because the experience now is proving that people will pay these out-of-this-world prices, and that means that nVidia will keep those prices just because they can.
 
Not necessarily. Turing and ampere have a big range of cards with different prices
That‘s true, I.e. there is no GTX Ampere version. Still, 3060, 3070 and 3080 all have a lower msrp than their 20X0 counterpart. Then you also had the super refresh. A 2060 Super has the same msrp as the 3060Ti…

So the biggest difference is the lack of lower end cards right now, plus the current top end prices are also lower.

Still at almost double the graphics revenue compared to Q2 2020 it must mean that nVidia sold considerably more RTX cards than they did earlier, so I find the current shortage a bit puzzling.
 
I don't think people are really grasping how big the demand for Ampere really is. I've seen interviews and business reports and the demand is through the roof to the moon.

If Nvidia alone had ample stock this whole time, we would have seen another absolute dominate year like Nvidia saw with Maxwell - 20% of AMD's dGPU market share - gone.

But even with all the roadblocks;highest revenue yet. Six B's. 65% margins.

F'ing impressive.
 
I agree. IMO, prices will not return to "pre-pandemic/shortage levels" just because the experience now is proving that people will pay these out-of-this-world prices, and that means that nVidia will keep those prices just because they can.

The market doesn't work this way
Just because at a specific point, with lockdowns, scalpers, crypto mining and a new (strong) architecture people were willing to pay up, this doesn't mean it will happen forever.
Those who are willing to pay up will secure the product earlier, but if you don't want your production to go to waste, you usually have to lower prices to capture larger segments.
Also don't forget that a 3rd player (Intel) with its own fabs has announced its entry into the market
 
The market doesn't work this way
Just because at a specific point, with lockdowns, scalpers, crypto mining and a new (strong) architecture people were willing to pay up, this doesn't mean it will happen forever.
Those who are willing to pay up will secure the product earlier, but if you don't want your production to go to waste, you usually have to lower prices to capture larger segments.
Also don't forget that a 3rd player (Intel) with its own fabs has announced its entry into the market
The problem is that "the market" just doesn't works because it's so easy to manipulate: You can just say that you still can't meet demand and constrain supply intentionally to retain the inflated prices. All you need is a monopoly or a very well coordinated effort to price fix the inflated price indefinitively and I bring this up because we know that actually has happened before with many of the exact same companies except for the price of ram chips and not processors but again, there's very few choices for high performance compute chips to be fabricated at.
 
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