Nvidia shares dipped 8% on Monday morning after the company released preliminary earnings that show second-quarter revenue of $6.70 billion, well below its initial outlook of $8.10 billion.
The company said the shortfall primarily reflects weaker than forecasted gaming revenue, which is down 44% sequentially and 33% from the prior year. Nvidia said the report is “primarily attributable to lower sell-in of Gaming products reflecting a reduction in channel partner sales likely due to macroeconomic headwinds.”
It also said that its Data Center segment has been impacted by supply chain disruptions and preliminary revenue of $3.81 billion is below the company’s expectations. That figure is still up 1% over last quarter and up 61% year-over-year, however.
Colette Kress, EVP and CFO of Nvidia, said she believes the company’s long-term gross margin profile remains intact.
“We have slowed operating expense growth, balancing investments for long-term growth while managing near-term profitability,” she said. “We plan to continue stock buybacks as we foresee strong cash generation and future growth.”
Nvidia reports second-quarter fiscal 2023 results on Aug. 24.