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Shares of Nvidia (NASDAQ:NVDA) are down more than 7% after the company reported preliminary revenue for the second quarter.
Nvidia said it expects second-quarter revenue of $6.70 billion, down 19% from the prior quarter and a big miss compared to the $8.10 billion consensus. Nvidia also reported a preliminary adjusted gross margin of 46.1%.
“The shortfall relative to the May revenue outlook of $8.10 billion was primarily attributable to lower sell-in of Gaming products reflecting a reduction in channel partner sales likely due to macroeconomic headwinds. In addition to reducing sell-in, the company implemented pricing programs with channel partners to reflect challenging market conditions that are expected to persist into the third quarter,” Nvidia said in a filing.
Gaming revenue is seen as $2.04 billion, down 44% from the prior quarter and 33% from the prior year. Data Center revenue rose 61% YoY to $3.81 billion.
“Our gaming product sell-through projections declined significantly as the quarter progressed,” said Jensen Huang, founder and CEO of NVIDIA. “As we expect the macroeconomic conditions affecting sell-through to continue, we took actions with our Gaming partners to adjust channel prices and inventory.”
Colette Kress, EVP and CFO of NVIDIA, added:
“We believe our long-term gross margin profile is intact. We have slowed operating expense growth, balancing investments for long-term growth while managing near-term profitability. We plan to continue stock buybacks as we foresee strong cash generation and future growth,” she added.
