NVIDIA management managed to warn investors about the sharp decline in revenue in the gaming segment for the second quarter in advance, so the publication of quarterly reports this week did not end with special shocks.At least, a 4.5% drop in the company's shares after the close of trading could hardly be called a catastrophe.Recall, the company's revenue in the gaming segment decreased by 44% sequentially to $2.042 billion, on a year-over-year basis it decreased by 33%.Source image: NVIDIAIn NVIDIA's quarterly reports there is another segmentation: revenue from graphics solutions decreased by 39% sequentially to $2.8 billion, on a year-over-year basis it decreased by 28%.The company's total revenue, while falling 19 percent sequentially to $6.704 billion, increased 3 percent year over year, and that was due to the data center and telecommunications segment, which accounted for $3.907 billion of that total.Deliveries of telecommunications solutions and computing gas pedals, as well as other server components, helped to increase profile revenue by one and a half times compared to the previous year.Strictly in the data center business, revenue was up 61 percent to $3.806 billion.Colette Kress, chief financial officer at NVIDIA, stressed that in the server business, revenue was below expectations because of the continued shortage of components.On the reasons for the sharp decline in gaming revenue NVIDIA management preferred to speak evasively in prepared statements, preferring to blame the deteriorating macroeconomic situation for the drop in demand for graphics cards.At the same time, there was no denying that measures were taken to help reduce the price of graphics cards and increase their sales.In the third quarter, according to the CFO, difficult market conditions will persist.A whole paragraph in the material with Colette Kress' comments was devoted to the volatility of the cryptocurrency market, its ability to affect the gaming revenue of NVIDIA and the inability of the company itself to accurately assess the extent of this impact.It was just noted that the supply of cryptocurrency mining gas pedals to professional market participants for the second quarter in a row almost wiped out, although a year ago it provided the company with $266 million in revenue.Image source: NVIDIAThe transcript of Colette Kress' speech at the quarterly event allows to reveal a little more about the reasons for the decline in gaming revenue in the second quarter.The decline in demand for gaming solutions in Europe, according to NVIDIA executives, was caused by the Ukrainian events, and in China it was triggered by lockdowns.Demand for NVIDIA gaming solutions fell harder than expected, with both shipments in quantitative terms and the average selling price affected.The company is working with partners to adjust retail prices in order to review the positioning of senior models of graphics processors in preparation for the release of carriers of the new architecture.In the long term, as the company's CFO explained, NVIDIA expects stable demand in the gaming segment.Colette Kress even said in one comment that \"new gaming products are on the horizon.\" The 61% revenue growth in the data center segment was mainly attributed to an increase in equipment shipments to large customers in North America, while the Chinese segment, due to the difficult economic conditions in the region, created the grounds for negative revenue dynamics.Visualization Solutions business brought NVIDIA 4% less revenue than a year ago, and the sequential decline has reached The company's total revenue in the current period will not exceed $5.9 billion compared to $6.7 billion in the previous period.This is almost a billion dollars lower than analysts expected, which is why the NVIDIA stock price and rushed down after the publication of statements, which in part of the second quarter was already predetermined.Gaming and professional imaging solutions will cut into the company's core revenues in the third quarter, management expects.Colette Kress's comment piece explains that NVIDIA's profit margin declined from 66.7% to 45.9% in the second quarter due to one-time expenses of $1.22 billion, mostly related to inventory for the server and gaming market segments.Of that amount, approximately $570 million was written off due to higher inventory levels and $650 million relates to a liability for purchasing products beyond the quantities required under long-term contracts.
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AMD to unveil Radeon RX 7000 graphics cards tonight
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