The crypto related revenue for the major chipmaker Nvidia reached $5.93bn in revenue for the third quarter. The figure was higher than expected, despite a slump in demand from both crypto miners and gamers.
According to the company’s latest earnings report, Nividia’s total revenue for the third quarter stood at $5.93bn, down 17% year-over-year and down 12% compared to the previous quarter.
Adjusted earnings per share came in at 58 cents.
Before Wednesday’s release, most analysts expected the Nvidia to post adjusted earnings of 71 cents per share, while revenue was expected to drop 18% year-over-year to come in at $5.77bn.
The expected reduction in revenue was by many seen in relation to reduced demand for mining equipment, partly due to Ethereum’s switch to proof-of-stake (PoS), and partly due to lower crypto prices this year.
“We believe the recent transition in verifying Ethereum cryptocurrency transactions from proof-of-work to proof-of-stake has reduced the utility of GPUs for cryptocurrency mining,” the company said.
Ethereum miners have traditionally used consumer-grade GPU’s that are also used by gamers, often produced by Nvidia. This differs from Bitcoin miners, who generally use more specialized mining hardware known as ASICs.
Gaming demand also down
In addition to lower demand from crypto miners, demand from gamers – a core consumer group for Nvidia – also fell, with the company citing macroeconomic headwinds as the main reason.
According to the earnings report, gaming related revenue fell 51% to $1.57bn, while product inventory for the company rose to a record high.
“We delivered record data center and automotive revenue, while our gaming and pro visualization platforms declined as we work through channel inventory corrections and challenging external conditions,” Nividia’s chief financial officer Colette Kress commented in an earnings call.
She added that sell-through for gaming products was “relatively solid” in the Americas and EMEA (Europe, Middle East, Africa) region, but “softer in Asia Pac as macroeconomic conditions and COVID lockdowns in China continued to weigh on consumer demand.”