Nvidia marks the death of crypto demand in Q2 of its fiscal 2019

Nvidia reported its results for the second quarter of its fiscal 2019 today. The company pulled in $3.12 billion in revenue, up 40% year-on-year, and operating income of $1.16 billion, up 68% year-on-year. Gross margin was 63.3%, up 4.9 percentage points on the year. The company reported record revenue across all of its divisions.

The GPU business made up the vast majority of Nvidia's revenue at $2.66 billion. The company said strong performance in its gaming, professional visualization, and data-center products made up for a “substantial decline” in cryptocurrency sales. Gaming revenue was up 52% from this time last year at $1.8 billion thanks to strong sales of Pascal cards for desktops and Max-Q notebooks. Professional visualization products brought in $281 million, 20% better than a  year ago, and data center revenue reached $760 million, up 83% from a year ago. Those data center results came thanks to sales of Volta products like the Tesla V100 and the DGX systems containing them, according to the company.

The company's OEM and IP bucket leaked 54% of the revenue it posted this time last year, down to $116 million, thanks to declines in demand from cryptocurrency miners for the green team's GPUs. The sequential drop of 70% in this line item underscores just how much crypto demand has faltered of late. Nvidia notes that it had predicted crypto-specific demand would be $100 million for this quarter, while actual revenues were $18 million. Furthermore, the company expects no meaningful contributions from cryptocurrency products to revenue for the remainder of its fiscal 2019. If there's a surer sign that enthusiasm for new mining power is dead, I'm not sure we'll find it.

The company's Tegra business, on the other hand, brought in $467 million, up 40% from a year ago. Tegra chips find their way into Nvidia's automotive products, embedded platforms, and most importantly, the Nintendo Switch. Tegra products for cars brought in $161 million, up 13% from a year ago, including infotainment systems, Drive PX boards, and software-development partnerships with automakers.

For its next quarter, Nvidia expects $3.25 billion in revenue, plus or minus two percent. That figure includes no income from crypto demand. Going by Nvidia's third-quarter fiscal 2017 results, that figure would represent a 23.3% year-on-year increase, suggesting the company's meteoric rise of late might be tapering off a bit. GAAP gross margin is projected at 62.6%, which would reflect a 3.1-percentage-point increase. With the release of new GeForce products imminent, we'll have to see just how much pent-up demand for next-generation gaming products the company is able to unleash as cryptocurrency demand finally seems to be dying off.

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    • Firestarter
    • 1 year ago

    and here I am hoping crypto will stay down long enough for me to buy my GPU. Don’t count on crypto being out of the game, it could easily start/continue to influence GPU pricing again

    • turtlepwr281
    • 1 year ago

    Wait, can you report financial results for 2019 in 2018? Odd. Wonder what their fiscal year is.

      • moose17145
      • 1 year ago

      Has to do with the fact that their fiscal year is offset from the calendar year. I think their fiscal Q1 starts roughly the same time as calendar Q2 starts.

        • JustAnEngineer
        • 1 year ago

        Fiscal year is defined by which January is included. NVidia decided years ago that it looked better to report all of their holiday sales as a single massive quarter a month later, so their fiscal year ends in the first quarter of the calendar year, usually around the fourth week of January.

    • moose17145
    • 1 year ago

    Does this mean we can finally see graphics card at or below MSRP again from both parties?

      • kvndoom
      • 1 year ago

      My guess is that we’re between bubbles (this isn’t the first one, so probably won’t be the last), and it’ll come back around. Hope for some good Black Friday deals and get the card you want. That’s my short-term plan anyway, to replace my GTX970 with something I can get 2 good years out of.

      • techguy
      • 1 year ago

      We’ve reached that point already. Took a long time, and hopefully it stays there.

        • moose17145
        • 1 year ago

        A quick Newegg check tells me that AMD Vega cards (either 56 or 64) are still AT LEAST 50 dollars above their release day MSRPs.

          • techguy
          • 1 year ago

          Right, but those are the exception to the rule. If it’s not still profitable at mining, it’s selling for at or below MSRP. Even RX 580s got back down to/slightly below MSRP recently. 1080 Ti models have been seen for almost $50 below MSRP even.

            • moose17145
            • 1 year ago

            Problem is that I already have a R9 290, so the RX 580 is not a huge upgrade (at least not for the money spent). I really need to bump up to either of the Vega’s to see an appreciable gain in raw gaming performance.

            I have a Nixeus EDG27 monitor, so I would like to stick with AMD for the FreeSync support. Wish NVidia would stop being greedy dicks and support AdaptiveSync already…

            Been thinking about just waiting another month or two and seeing if I can get a used (probably for mining) Vega 64 for cheap…

            • techguy
            • 1 year ago

            I find it amusing that AMD users often complain about Nvidia’s “greed” and proprietary technology, yet they limit themselves to only using AMD GPUs because they bought a Freesync monitor.

            • moose17145
            • 1 year ago

            Well considering NVidia could easily adopt AdaptiveSync, since it is an open VESA standard… but they are making money on that FPGA that has to be crammed inside each and every G-Sync monitor.

            The one thing I am hoping about IF intel actually enters the GPU market, is that they support AdaptiveSync (which I don’t know why they wouldn’t since their iGPUs already do as far as I am aware), which then in turn forces NVidia to finally adopt it.

            Plus I thought NVidia’s laptop/mobile chips were actually using AdaptiveSync instead of actual G-Sync as we know it in the desktop realm. Somebody correct me if I am wrong on that.

            That being said I would likely still be trying to stick with an AMD GPU anyways. I don’t know what it is… but I just have absolute crap luck with NVidia for some reason. The last chip of theirs I used where I did not have some weird and borderline show stopping issue was a GeForce FX 5200…

            • techguy
            • 1 year ago

            You can do with your money whatever you like. No one’s stopping you. Likewise, Nvidia can choose not to adopt Freesync and push their own proprietary technology in a bid to make more money. People act like this is some horrible action undertaken by the epitome of evil. It’s just business.

            • Srsly_Bro
            • 1 year ago

            You got down voted for that comment. It’s interesting that an explanation of the nature of business gets you down votes. +1

            #postfactera

            • moose17145
            • 12 months ago

            I agree with you and I wasn’t alluding to all the stuff you mentioned. But that also doesn’t make it any less aggravating.

            • Krogoth
            • 12 months ago

            Correct, Nvidia does use VESA VRR spec on their mobile GPUs. The funny part is that if you were to hook-up a Freesync mointor to a laptop equipped with a modern Nvidia GPU and enable “G-Sync for their mobile GPUs”. The Freesync monitor thinks that it is operating in “Freesync” mode.

            • moose17145
            • 12 months ago

            Really?!? I consider that important and also useful information to know… So I CAN have VESA AdaptiveSync from NVidia, but only if I get a laptop with one of their mobile GPUs…

            Makes me wonder then if the VRR works with an actual G-Sync monitor… I do not see any reason why it would not… but it would be funny, and also a total slap to the face if it did not for anyone who already happened to own a G-Sync monitor and wanted to hook their laptop up to it for some reason.

          • JustAnEngineer
          • 1 year ago

          Radeon RX Vega 56 with 3-game bundle:
          [url=https://www.newegg.com/Product/Product.aspx?Item=N82E16814202318<]$450[/url<]. August 2017 launch price was $400 without a game bundle or $500 with a game bundle. Radeon RX Vega 64 with 3-game bundle: [url=https://www.newegg.com/Product/Product.aspx?Item=N82E16814137326<]$550 -20MIR[/url<]. August 2017 launch price was $500 without the game bundle. That's also what I paid for mine at the beginning of October 2017.

      • deruberhanyok
      • 1 year ago

      Already happening. 1070ti cards are going for $400, 1080s for $430 at Dell right now:

      [url<]https://pilot.search.dell.com/7566%2C7729/geforce%20gtx[/url<] Radeon cards have almost all come back down too. Buy now if you want. Or at least, wait until Tuesday to see what happens with the new NVIDIA parts. (I personally expect them to be expensive, leaving the above cards at those prices still a good value, but I figure, 3 more days waiting wouldn't hurt).

        • Krogoth
        • 12 months ago

        It is mostly likely that only 1080Ti will see a price cut to make room for the new RTX cards. The rest of SKUs will remain on their price points until the inventory clears out while lesser Turing chips eventually replace them.

    • techguy
    • 1 year ago

    Let’s hope it doesn’t bounce back. Graphics cards are for gaming. Professional variants can handle professional workloads in addition to games, of course.

      • shank15217
      • 1 year ago

      I always found that annoying, a $700 card should be able to do a lot more than gaming.

        • techguy
        • 1 year ago

        I recall a time when people used to “mod” their Geforce into a Quadro, unlocking the performance in professional applications.

    • chuckula
    • 1 year ago

    So bye bye Miss Etherium Pie.

    Put my [url=https://en.wikipedia.org/wiki/Chevrolet_Vega<]Vega[/url<] up on eBay but the price wasn't high. And all the fanboys gave each other high fives, saying this will be the day that I buy.

      • tipoo
      • 1 year ago

      Take your upvote and see yourself out.

      • derFunkenstein
      • 1 year ago

      Hallelujah, holy shit! [url=https://www.youtube.com/watch?v=TQXuazYI_YU<]Pass the Tylenol[/url<].

      • kvndoom
      • 1 year ago

      And this is how the Internet was won on Friday, August 17th, 2018.

      • Mr Bill
      • 1 year ago

      The bitcoin I admire most

      met up with blockchain and now its toast

      Etherium’s here but she’s a ghost

      I guess I’ll go gameboy

      • JustAnEngineer
      • 1 year ago

      Radeon RX Vega 56 prices still look [url=https://www.ebay.com/sch/i.html?_fsrp=1&LH_PrefLoc=2&_sop=15&_sacat=0&_nkw=radeon%20rx%20vega%2056&_udhi=400&LH_ItemCondition=3000%7C2000%7C2500&_from=R40&_stpos=64030&_fcid=1&rt=nc<]relatively strong[/url<] for used hardware.

      • deruberhanyok
      • 1 year ago

      Can this just be a permanent top comment?

    • FireGryphon
    • 1 year ago

    Why is cryptocurrency not fashionable anymore, and how does nVidia know what its cards are used for?

      • K-L-Waster
      • 1 year ago

      Crypto values are down and new ASICs have been released.

        • Wirko
        • 1 year ago

        … which need fabs in order to be made. Lots of fabs.

      • Krogoth
      • 1 year ago

      I suspect it is from marketing types who probe online communities and their retail/etailers.

      It isn’t exactly that difficult to figure out when miners are the people who were purchasing several and to a large number of cards at a time.

      • derFunkenstein
      • 1 year ago

      As to the “why”, Ars had a reasonable guess as to the cause: speculative bubble burst.

      [url<]https://arstechnica.com/tech-policy/2018/08/bitcoin-and-ether-are-both-down-more-than-two-thirds-from-their-peaks/[/url<]

        • Voldenuit
        • 1 year ago

        There was also currency manipulation by traders like Bitfinex. I mean, allegedly.

      • Redocbew
      • 1 year ago

      Surveys and online registration forms most likely. When a company does the whole “register here to get support” thing it’s really just smoke and mirrors as a way to collect information about what consumers are doing with their stuff.

    • XTF
    • 1 year ago

    > The company’s OEM and IP bucket leaked 54% of the revenue it posted this time last year, down to $116 million, thanks to declines in demand from cryptocurrency miners for the green team’s GPUs.

    What does OEM and IP bucket mean exactly?
    How does nV know what cards were sold to gamers and what cards to miners?
    And what does this have to do with OEM and IP?

      • limitedaccess
      • 1 year ago

      What they’re referring to is specific and direct orders and not through other channels. They aren’t tracking whether or not their GPU/memory sold to Asus to make a graphics card which was then sold through Amazon ended up being used predominantly for mining or gaming.

    • squeeb
    • 1 year ago

    Good riddance !!!

    • NovusBogus
    • 1 year ago

    It’s not really dead, just in remission for a year or so. The really good news here is that NV is starting to seriously keep track of the cryptocurrency market, so hopefully they won’t be caught with their pants down when the boombust cycle resets itself.

      • albundy
      • 1 year ago

      of course they are going to keep track. how else are they going to manipulate the market prices? wouldnt it be funny if they have a kill switch on random older cards just at the right time when prices are at their peak? all it takes is a driver update and it phones home, and bam, insane video card revenue overnight.

        • K-L-Waster
        • 1 year ago

        Do you have any evidence whatsoever that they have anything like that in mind?

        Or is this just yet another “they’re NVidia, of course they’re going to find a new way to screw old customers over” conspiracy theory?

      • Krogoth
      • 1 year ago

      It isn’t going back to anywhere near the original hype levels though.

        • psuedonymous
        • 1 year ago

        That’s what people though after the first GPU mining peak/crash in 2014.

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