Nvidia 'still navigating macro environment' amid challenging quarter

The American giant has released its Q223 results for the period ending 31 July 2022 in its latest trading update

Nvidia has said it is still navigating its way through macro environmental challenges following a challenging second quarter which saw its operating income spiral.

The American giant has released its Q2 results for the period ending 31 July 2022 in its latest trading update.

While it reported a three per cent year on year increase in revenue of $6.70bn, this was down 19 per cent from the previous quarter.

Operating income also fell sharply, down 80 per cent year on year to $499m, while net income dropped 72 per cent to $656m in the same period.

This comes following Nvidia's failed takeover of British chip designer Arm due to "significant regulatory challenges".

Softbank, which owns Arm, kept the $1.25bn prepaid by Nvidia as part of the acquisition agreement, which the company said would be recorded as profit in the fourth quarter, while Nvidia will retain its 20-year Arm license.

However, Nvidia said it continues to navigate a challenging market environment with supply chain disruptions and falling demand for gaming graphic cards.

Nvidia's gaming revenue took a big hit, with second quarter revenue down 33 per cent from a year ago to $2.04bn.

Professional visualisation revenue also fell, down four per cent year on year to $496m.

"We are navigating our supply chain transitions in a challenging macro environment and we will get through this," said Jensen Huang, founder and CEO of Nvidia.

However, its data centre business saw strong revenue growth of 61 per cent year on year to $3.81bn while automotive revenue was up 45 per cent in the same period.

Huang added: "Accelerated computing and AI, the pioneering work of our company, are transforming industries.

"Automotive is becoming a tech industry and is on track to be our next billion-dollar business. Advances in AI are driving our Data Centre business while accelerating breakthroughs in fields from drug discovery to climate science to robotics."