Nvidia has announced its earnings for the second quarter of the 2020 financial year, and it appears that the graphics giant is still feeling the effects of the death of cryptocurrency, with revenue falling by 17%.
A few years ago, the cryptocurrency craze was in full swing, with people able to make a decent amount of money using their graphics cards to ‘mine’ for cryptocurrencies like Bitcoin and Ethereum.
This led to a surge in graphics card sales, with Nvidia (and particularly AMD) enjoying spectacular results (despite shortages in stock).
The huge popularity of cryptocurrency couldn’t go on forever, and when it became harder to make money, sales for graphics cards dropped off sharply.
This was a big blow to Nvidia’s revenues, and as its recent results show, it’s still being impacted. However, while on paper these results don’t look that great, they actually beat analyst expectations, with $2.58 billion (compared to $2.54 billion). This news helped Nvidia’s stock rise by 7%.
Strength in gaming
According to the results, Nvidia’s gaming products remain its biggest revenue driver, bringing in $1.31 billion, compared to $1 billion last quarter, and still accounts for over 50% of Nvidia’s total revenue.
While it was up compared to the last quarter, gaming revenue was actually down from $1.8 billion a year ago, again highlighting how much the end of the cryptocurrency craze is impacting Nvidia.
So while things look bad, it at least seems like Nvidia has turned a corner, once again thanks to its gaming division.
“Essentially our business is normalized,” Nvidia’s chief financial officer Colette Kress said. An increase in sales for gaming laptops using Nvidia tech, as well as the success of Nintendo’s Switch console (which uses Nvidia graphics) and the announcement of the Switch Lite, all point to a rosier future.
While ‘returning to normal’ isn’t the most exciting of results, in these uncertain times – and with a possible US/China trade war looming – that seems to be good enough for Nvidia.