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Nvidia said it has “limited visibility” into how much the firm’s crypto mining hardware impacted its overall GPU demand in the second quarter this year, as revenue over the past three months ending July 31, 2022, fell to $6.5 billion, or 19% from the previous quarter.
The company's second-quarter revenue was significantly lower than the $8.10 billion Nvidia 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 cryptocurrency mining, though we have limited visibility into how much this impacts 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 have impacted demand for Nvidia’s products in the past.
“Volatility in the cryptocurrency market – such as declines in cryptocurrency prices or changes in method of verifying transactions, including proof of work or proof of stake—has in the past impacted, and can in the future impact, demand for our products and our ability to accurately estimate it,” said Kress.
The chip manufacturer’s net income fell 59% to $656 million in Q2.
What's next for Nvidia?
Nvidia forecast a sharp drop in revenue in the current quarter on the back of a slumping gaming industry, with the company’s shares plunging down about 5% in after-hours trading on Wednesday.
Althoughminers predominantly use specialized ASIC hardware, other proof-of-work blockchains, including , , and , can be mined using Nvidia’s GPU cards.
Ethereum, however, is expected to switch to a more environmentally-friendly proof of stake consensus algorithm next month, which could spell more trouble for the sales of the firm’s GPUs.
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.
In 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 in October last year at the price of $4,695.