As the sluggish PC market drags on Nvidia's performance, the fabless chip design company is eyeing the AI hype that is driven by services, especially ChatGPT.
Nvidia posted its fiscal fourth-quarter financial results that ended on January 29, 2023. According to the press release, Nvidia's revenue fell by 20.83% year-on-year to US$6.05 billion, and its net income for the quarter declined by 52.91% annually to US$1.4 billion. For the full year of 2022, Nvidia's sales of US$26.9 billion remained flat from a year ago, and its operating income and net income both dropped by more than 50% annually.
Nvidia's fourth-quarter revenue generated by the Data Center business was US$3.62 billion, up 11% annually. Nvidia CFO Colette Kress said at the earnings call that sales generated from hyper-scales customers are below expectations, as some cloud service providers paused at the end of the year to recalibrate their build plans.
The revenue from the Gaming business dropped 46% year-on-year to US$1.83 billion. Kress said that the annual decline reflected the impact of channel inventory correction, which was largely behind Nvidia, with demand seeing strong seasonal growth in the fiscal fourth quarter in most regions.
Nvidia's revenue outlook for the first quarter of fiscal 2024 (February 2023 to January 2024) is expected to be US$6.5 billion, plus or minus 2%. GAAP and non-GAAP gross margins are expected to be 64.1% and 66.5%, plus or minus 50 basis points.
Nvidia said it is partnering with leading cloud service providers to offer AI-as-a-service, NVIDIA AI Cloud Service, in which customers can engage each layer of NVIDIA AI, including the AI supercomputer, acceleration libraries software, or pre-trained generative AI models.
During the earnings call, Nvidia CEO Jensen Huang said that ChatGPT is a wonderful piece of work, and the OpenAI team did a great job with it. Regarding the reason for Nvidia's AI-as-a-servic, Huang said that the cumulation of technology breakthroughs had brought AI to an inflection point, and generative AI's versatility and capability has triggered a sense of urgency at enterprises around the world to develop and deploy AI strategies. Nvidia will share more details about its AI cloud services at the upcoming GTC, Huang said.
Nvidia financial results (US$ m) | |||||
Financial items | Jan-22 | May-22 | Jul-22 | Oct-22 | Jan-23 |
Sales | 7,643 | 8,288 | 6,704 | 5,931 | 6,051 |
Gross profit | 4,999 | 5,431 | 2,915 | 3,177 | 3,833 |
Operating income | 2,970 | 1,868 | 499 | 601 | 1,257 |
Net income | 3,003 | 1,618 | 656 | 680 | 1,414 |
Source: Company, compiled by DIGITIMES Asia, February 2023
