Nvidia announced that its business’ finances are now back to normal after the company was hit by a decline in cryptocurrency mining and a slowdown in the data center business over the past year. The company posted 17% revenue growth to $2.58 billion, mostly helped by a 24% growth in the gaming market. It also saw positive growth in the data center business, albeit by only 3%.
Nvidia Chief Financial Officer Colette Kress told analysts on a conference call that:
“Essentially our business is normalized. We’ve reached normalized levels through the last couple quarters and this quarter, just very similar to what we will see going forward.” In a brief interview with MarketWatch after the call, Kress added, “We feel really good about sequential growth, we have sequential growth across all of our platforms.”
Taking a step back from the sequential results, the “new normal” for Nvidia seems to be significantly lower revenues compared to last year. Nvidia’s revenues are still 17% down compared to a year ago, given by a 27% revenue loss in the gaming business and a 14% revenue decline in the data center, compared to a year ago.
However, although the company’s guidance for the third quarter of this year is still predicting a single-digit decline year-on-year, the company expects its total revenues to grow from $2.58 billion to about $2.9 billion. That would be 12.4% sequential growth and an 8.8% decline from the $3.18 billion it brought home in the third quarter of 2018.
Nvidia suffered some significant losses in the gaming business as it transitioned to selling more expensive/higher-cost GPUs with ray tracing. The company has improved its pricing at the high-end and has launched new lower-tier and higher-value GPU products, which seem to have helped the company get back on the revenue growth path.
In the data center business, Nvidia seems to have less control over its sales, as the data center clients have slowed down their purchases are they are now attempting to make use of the hardware they’ve bought recently.