Nvidia conference call – revenue down 21% year on year in Q4

Nvidia's Q4 report is out and there is some big falls but it seems to improve

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On Wednesday 22nd February 2023, Nvidia held its conference call over its financial report for the past year. Q4 for the report ended on January 29th and so this report covers the range from January 2022.

As a public company that has shares anyone can buy, as such, it reports its financials so shareholders know how their investment is going. And this year, they may not be as happy compared to the pandemic boom.

The headline of the report is that the quarterly revenue (Q4 2022 vs Q4 2021) is down 21%. For investors is not ideal, but with the run of prices and people’s finances, it’s not a surprise.

Q4 of the Financial Year 23 (2022-2023) had a revenue of $6.051 billion, down 21% from the Q4 of FY 22 of $7.643 billion. This comes with a gross margin decrease of 2.1 points, its expenses increasing by 27%, operating income down 58%, and net income down 53%. Meaning the earnings per share fell 52%.

Year after year it’s a big change and the stock price in the past year has fallen by 7.29%. But over its previous quarter, Nvidia has seen an improvement. The likely release of the Ada series has helped its gains.

With the same expenses, the revenue increased by 2% but the net income was 108% higher than the 9.7 pts increase in the gross margin. Which does show a return in direction with the whole new range

Nvidia gaming financial report

For its gaming range of cards, Nvidia released the RTX 40 series of cards. In particular, the RTX 4090 has been the biggest success so far.

Whilst both the other cards have their own issues and not selling out as the flagship. As the RTX 4080 has been deemed expensive and a large increase over previous years. Whilst the RTX 4070 Ti was relaunched after the RTX 4080 12GB debacle.

With that, Nvidia has seen a Q4 revenue of $1.83 billion for its gaming range. Which is down 46% over the previous year, but up 16% from the previous quarter. Showing an upward trend likely to continue on, especially as the fiscal year revenue was down 27% in total at $9.07 billion.

Nvidia also outlines all of its releases and announcements for the area. As it shows its shareholders how it plans to keep expanding and growing in the sector.

It has the recent RTX 40 series laptops that launched that will likely do well. The further launch of the RTX 4070 Ti, further DLSS 3 support in 50 games and apps. Another GeForce Now membership tier with Ultimate. As well as signing a 10-year agreement with Microsoft for Xbox PC games to come to GeForce NOW including Activision with the takeover.

Other sectors in the report

Although gaming might be the most important to us, it’s not the biggest revenue stream for the company. There are other areas it outlines in the report that we will briefly include.

Data Center

As its biggest revenue source, data center tech has continued to grow. Q4 revenue was at $3.62 billion, up 11% from the previous year, but down 6% from the last quarter. But in total, the year revenue grew 41% to a record $15.01 billion.

It also has plans in growing in this area. With a Deutsche Bank partnership for AI use in financial services. A Dell launch for 15 next gen PowerEdge systems for AI transformation of business. As well as announcing the A100 GPU for throughput and top latency.

Professional visualization

Another area with large falls in revenue is visualization. The revenue for FY23 was $226 million, down 65% from the previous year. But improving with a 13% increase over the previous quarter, as the year’s revenue decreased 27% to $1.54 billion.

Here it has expanded the Omniverse Enterprise capabilities, with workflows and capabilities with the new Ada range. It also is working with Lockheed Martin to build a twin of global weather conditions to monitor extreme events. And working with Mercedes-Benz to digitize its production with Omnivers.

Automotive and Embedded

A big boom in this sector, as the Q4 revenue got to the highest $294 million, an increase of 135% over a year and 17% over Q3. Whilst the fiscal year growth was 60% to $903 million.

It also is expanding still with a Foxconn partnership for autonomous/automated vehicle platforms on Nvidia DRIVE Hyperion/Orin. Whilst also updating Isaac Sim for its robotic simulations.