Two weeks after Nvidia issued a sales and margin warning, all eyes are on quarterly guidance expected in the company’s earnings report on Wednesday.
Among analysts polled by FactSet, the consensus is for Nvidia to report July quarter (fiscal second quarter) revenue of $6.7 billion, GAAP EPS of $0.35 and non-GAAP EPS of $0.50. The revenue consensus matches the number for the quarter given in Nvidia’s Aug. 8 announcement.
For the October quarter — Nvidia typically shares guidance on quarterly sales, margins and expenses in its reports — consensus revenue is $6.91 billion (down 3%).
Real Money tech writer Eric Jhonsa will be live reporting Nvidia’s earnings, which are expected at 4:20 p.m. eastern time, along with a conference call with management scheduled for 5 p.m.
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4:34 p.m. ET: Nvidia CFO Commentary Completed. Here is a table showing revenue at the segment level:
4:30 p.m. ET: Nvidia notes it spent $3.44 billion on buybacks/dividends in FQ2 and says it plans to continue buybacks in FY23 (ends Jan ’23).
The “payments related to common stock repurchases” line on Nvidia’s cash flow statement shows $3.35 billion in repurchase-related payments.
4:26 p.m. ET: Also perhaps helping: The company is guiding for a non-GAAP FQ3 gross margin of 65%, plus or minus 50 bps. This suggests that it does not expect to make significant inventory charges during the quarter.
4:25 p.m. ET: Might Help Nvidia Shares: The company says that while Gaming and Professional Visualization segment revenue is expected to decline Q/Q in FQ3, Data Center and Automotive revenue is expected to increase.
4:24 p.m. ET: FQ3 sales guidance is well below consensus. However, investor expectations were low after Nvidia’s warning. Shares are now down just 0.6%.
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4:22 p.m. ET: Shares are down 1.9% after hours.
4:21 p.m. ET: The results are out. FQ2 revenue of $6.7 billion matched consensus. Non-GAAP EPS of $0.51 earns $0.01.
Nvidia is guiding for FQ3 revenue of $5.9 billion, plus or minus 2%. That’s below a consensus of $6.91 billion.
4:11 p.m. ET: One thing to watch out for, according to Nvidia: Whether the company will take more inventory-related charges in FQ3.
In its warning, Nvidia said it is taking $1.32 billion worth of charges (mostly inventory-related) for FQ2, with the company’s GPU purchase commitments with foundries believed to be the main culprit. Due to the charges, Nvidia forecast FQ2 non-GAAP gross margin of just 46.1% (+/- 50 bps), well below initial guidance of 67.1%.
4:01 p.m. ET: Nvidia closed up 0.2%. The FQ2 report is due at 4:20 p.m. ET.
4:00 p.m. ET: Along with the FQ3 sales guidance, any comments Nvidia shares on demand trends for the Gaming and Data Center segments will be closely watched.
In its warning, the company estimated that gaming division sales fell 33% year-on-year in FQ2, thanks to softer gaming GPU demand and channel inventory corrections. On the other hand, Data Center revenue was estimated to grow 61% year-over-year, thanks in part to strong server GPU demand from cloud giants.
3:56 p.m. ET: Ahead of the report, Nvidia stock rose 0.7% today to $172.90. However, shares are still down 41% YTD, thanks to broader tech sector weakness and concerns about gaming GPU demand trends.
3:53 PM ET: The FactSet consensus is for Nvidia to report FQ2 revenue of $6.7 billion (as per the number given in its warning) and non-GAAP EPS of $0.50.
FQ3 revenue consensus is $6.91 billion, though it’s possible (given Nvidia’s warning) that unofficial expectations are lower.
3:51 p.m. ET: Hi, this is Eric Johnson. I’ll be live streaming Nvidia’s earnings report and calling.