Nvidia’s net income for the first quarter of its 2020 financial year has taken a large hit, dropping a whopping 68 percent year-on-year. Despite this news, the founder and chief executive Jensen Huang claims the company is back on an upward trajectory.
In a recent company earnings call, Nvidia confirmed that its 2020 financial year is off to a troubled start. The company did earn an impressive $2.22 billion in revenue, up one percent quarter-on-quarter, but that is a huge 31 percent down from the $3.21 billion it earned for the same quarter last year.
Even more bad news followed, as the company’s gross margin has slipped from 64.5 percent to 58.4 percent, while a 21 percent hike in operating expenses has led to a net income of just $394 million – a 30 percent drop quarter-on-quarter and massive 68 decline year-on-year.
The news isn’t all bad though, as the call mentioned that Investors had expected significantly worse results from the company following its poor 4Q19 results, and Huang claims the worst may be behind the company now.
“Nvidia is back on an upward trajectory. We’ve returned to growth in gaming, with nearly 100 new GeForce Max-Q laptops shipping. And Nvidia RTX has gained broad industry support, making ray tracing the standard for next-generation gaming.” Huang told investors and press during the company’s earnings call.
‘The entire reason for Q4 and Q1 is attributed to oversupply in the channel as a result of cryptocurrency,‘ Huang continued. ‘It has nothing to do with Turing. In fact, Turing is off to a faster start than Pascal was and it continues to be on a faster pace than Pascal was. And so, the pause in gaming is now behind us, we’re on a growth trajectory with gaming, RTX took the lead on ray tracing and is now going to become the standard for next generation gaming support from basically every major platform and software provider on the planet.‘