NVIDIA (NVDA) 25 Aug 222023 Q2 Earnings call transcript

Good afternoon. My name is Regina, and I will be your conference operator today. At this time, I would like to welcome everyone to NVIDIA’s Second Quarter Earnings Call. All lines have been placed on mute to prevent any background noise. After the speakers’ remarks, there will be question-and-answer session. Difficulty] [Technical Instructions] [Operator

Chief of the live NVIDIA of and are Colette call President Officer; for remind like me that NVIDIA’s you Chief content XXXX. financial for conference call today and the today’s our and Vice Relations Executive The from Jensen being results the Kress, Officer. second NVIDIA’s call can’t Investor I’d for until property. fiscal website. The to prior webcast transcribed webcast quarter be is With Executive replay Financial will on consent. fiscal Conference third is Huang, President call reproduced quarter discuss of without be our XXXX. written available It to our or

current risks are of materially. this a number uncertainties, to and expectations. These results During may based we call, may significant subject our make and actual forward-looking differ on statements

factors a and to please refer results discussion affect For financial in release. of our future business, earnings disclosure that the could today’s

and law, reports Forms Exchange most and X-K statements obligation as available All the based to Securities information today, XX, on update that on statements. no by file us. XXXX, are XX-Q such Form our August Our required we Commission. as and may we currently of assume with recent XX-K made to Except the any

this non-GAAP will financial discuss call, we During measures.

me in let financial You that, which can on find a the to website. non-GAAP our to CFO Colette. With measures commentary, financial reconciliation GAAP of these call posted our measures over is turn

$X.X we on call. of and X% down sequentially earnings This was up outlook $X.X Total a provided the billion below Simona. challenging was last revenue Thanks, quarter. our year-on-year, XX% billion

details challenging by down to driven down press pre-announcement we on XX% and market August with our X, we and sequentially outlook. more of results share Today, Starting experienced year-on-year, billion Gaming. primarily a revenue. in XX% our QX shortfall $X.XX As Gaming you reflecting will Revenue was we on QX with indicated release expectations conditions. weaker our

related war As due we Ukraine Gaming the driven The COVID and to was anticipated, and decline a Gaming sharper world in We than lower in in expected May, China. with in to sequential both sudden adjust ASPs. in units for high-end drove desktop in lower we decline revenue Gaming consumer in a revenue GPU position in and launch. discussed Europe to prepare architecture demand. softness by the channel a implemented our to slowdown current across headwinds pricing programs the as channel GPUs Macroeconomic new price partners lockdowns

to a gaming As noted last mining make cryptocurrency to demand. diminishing contribution quarter, we expected had

which We quantify to contributed extent are the accurately the in to unable demand. to reduced decline crypto gaming mining

on NVIDIA’s believe the applications. While of on fundamentals the long-term top significant GPUs GPUs short-term and Gaming RTX by we remain redefined almost computer by supported most users representing most the has exceed XX% concurrent GeForce emerged popular are period. and the even up than pandemic over form Estimated GeForce up XX same entertainment from million. XX% connectivity. now social also members more macroeconomic XXX XX strong. Steam. navigates games before and Steam pandemic, graphics Gaming brand more of coveted and sell-through time the NOW NVIDIA now is over since Gaming an popular challenges, registered in the is are gamers, peak has GeForce XX

Impact, titles, our bringing This Genshin quarter, the popular more to we added XX hugely X,XXX. total including over

particularly $XXX high X% at mobile from sequentially and in million year desktop of down the revenue, by than more Revenue A revenue ago. down Visualization. Professional sequential end. offset was lower a to Moving increase XX% was

slowed intensified, headwinds enterprise macroeconomic As OEMs worked reduce to and inventory. demand

QX. We expect these trends to persist in

of by opportunity have and over last with AI-powered month levers world’s Siemens to the to couple the We digital is the ecosystem Omniverse hybrid the professional to connecting the twins, This we market both cloud. defined announced Siemens enabled the year, it, advancements industries. with the at While Internet. Omniverse. and expanded the at as stay, version as and in home to several connection and we ProViz ecosystem NVIDIA we opens here graphic to need undergoing a June, believe NVIDIA AI workloads. Siemens of office largest premier of graphics foundational adjustment with in as NVIDIA announced partnership Earlier platform to XD conference, workstations, XD Siemens the this work design In Xcelerator near-term computer doubling a SIGGRAPH, last is of we the collaborative well of the metaverse, and enable technologies after industrial the believe vast years for Omniverse

Avatar Engine avatars, range enable to a Omniverse transforming of interactions NVIDIA deploy Cloud create and across industries. and businesses will First, assistants

creation bringing neural We Omniverse of of total also the and automate graphics the XX number Omniverse released new connectors their to connectors, which AI field of world. graphics, finally, unveiled to XXX. ecosystem SDKs USD And virtual help the new to intertwine we for

XX% and revenue, as wins great energy $XXX inflection quarter. driven increased the and for Revenue sequentially NVIDIA into volume. was strength include Automotive. self-driving self-driving in was AI believe cockpit to million year-ago AI particular point automotive Orin vehicle auto QX ramp from growth We which momentum. Moving has of our design solutions, an revenue with Strong by XX% new as

line all vehicles we Human from as Li Auto, JIDU OEM rollout Horizons DRIVE. trucks plans on self-driving and built quarter, Pony.ai’s as well new and NVIDIA During partners, of the announced of NIO, robotaxis,

our translate $XX we to win growth. design continued automotive expect pipeline billion to forward, Looking

of X% XX% $X.XX Moving to year-on-year. and Revenue Center. sequentially billion Data grew

and customers affected hyperscale were more disruptions. by data Although to graphics. this domestic customers offset systems, a training were our expectations North Revenue sequentially workloads autonomous language by America vehicle both, natural sales processing, supply Vertical conditions. year-on-year. China and include fleet, hyperscale lower increased grew growth but to driving by was industries record, cloud than and economic processing Sequentially, of Key chain doubled and recommender short hyperscale cloud computing somewhat sales impacted year-on-year. from customers nearly we as

million images. XXXx moving billion quarter XX% throughput its and by the latency for X,XXX a AXXX upgraded model in models next-generation which larger transitioned CPUs training. couple adopters, resulted ConnectX-X. a inference in a share company, and for strong XXX critical demand supercomputer has over And to our with led engagement, the XXX Ethernet use GPUs me momentum increase higher-quality recently examples. low from product deploy to Tesla autopilot users including ability GPUs. this Let win From a and Its ConnectX-X its to of high-speed recommender design over customer metric NVIDIA networking growth toward at from adapters Pinterest to a and high perspective,

new second Ethernet networking gigabit providers per also platform. We Spectrum-X XXX from see service growing our interest cloud for

top of our the architecture technologies supercomputers years, supercomputer ramping CPO. makers, our our Additionally, cloud are month, powered flagship into measured dollar by by performance the customers. more list improving of data Inspur, platform to is Hopper past is by to latest advances translates production. platforms. early customers top to Supermicro NVIDIA, HPE, Green run are neural today, performance. we adopting Currently, by on XX NVIDIA. software well build has center AI generation are ranks size announced are XX NVIDIA of the summarization, framework key launches real-time significant Microsoft XX% for from as content XXX training on models XX% language new software question supercomputers be Dell, the including soon. Grace, infrastructure we value tech next new In Grace can to the the the LLM Significant the are tens Lenovo and up top computer through largely next large in upcoming on as billions list of Megatron is the fastest Azure million optimizations. X are to multi-hundred they fastest conversational can delivered The Superchip in two Foundry other Last the generation chat armor HXXX available systems. Top box interfaces. supers. NVIDIA first Hopper used of access the Superchip DGX and as most of text, parameters. world’s Moreover, platform generation, XXX service AI with to one are ranging of the answering the Xx X NVIDIA the of world’s including in and XX Grace systems NeMo CPU in SuperPOD networks AXXX-based energy-efficient most our up customer in systems enterprise of for powered the DGX that capabilities these XX%, for industry trillion supercomputer. Selene the number new and Learning of to at to update and important XXX benchmark, XX over NVIDIA’s an by from MLPerf speed available a technologies platforms and GPU

models, language AI. large are space with the active in leaders industry and We very exciting of working a

from Non-GAAP charge $X.XX a GAAP and and was reserves. Arm in sequentially. the expectation We during gross to were from P&L. engineering severe inventory rest current included year during related primarily to of uncertainty. commitments operating XX.X%, well and up by of of employees is long-term in QX margin salaries time environment, warranty profile inflationary of shortages intact. as to margin termination a operating ago XX.X%. for and $X.XX X% in non-GAAP coming acquisition products support increases up year margin based margin made $XXX macro the ago were sequentially incurred the and These gross driven Moving reserves and These quarter the employee XX% includes charges up million future and as growth we was XX% expenses the down reflect high were that charges billion new increases believe market. our transaction. our purchase XX% expectations component on ongoing as related expenses our a costs, billion this revised of demand for development gross GAAP to Gross

long-term managing slowed while have for revenue balancing profitability. investments expense growth operating We growth, near-term

Our full to grow expected is year over XX%. OpEx non-GAAP

XXXX, form half to first dividends. $X.X billion We fiscal During repurchases. the of share continue we in to returned repurchases the share cash plan and shareholders of

through $XX nearly of our billion have under December remaining We XXXX. authorization

‘XX. outlook to turn me of third quarter Let the for the fiscal

revenue inventory expect as to levels partners prepare align of and We new Gaming generation. product reduce decline demand sequentially to OEMs channel for with and levels ProViz current and our

and gross margins expenditures $XXX Capital million, XX%, be expense by automotive. GAAP expenses to rates minus tax Revenue plus data expected GAAP non-GAAP billion. expenses be of and are be excluding to and the GAAP minus be to to details to any financial investments. expect discrete billion. to expected sequential and CFO excluding an points. are be expected other approximately are highlight non-GAAP and plus We operating GAAP items. income other upcoming or respectively, X%. website. expenses be IR are center are nonaffiliated XX.X% commentary be minus approximately non-GAAP closing, me approximately XX that for are $XX information or approximately and offset in expected plus included $X.X expected and X.X%, to billion on the Non-GAAP $XXX growth is community. our are $X.XX million expected in Further gains partially to million. to or operating decline expected $X.XX events basis let losses be X%, In and on financial available

XXth XXth. We August the on XXth. on September holding will a we will be keynote attending San September Francisco in following Sachs Q&A Jensen’s on the analyst And Jefferies financial with Goldman Conference management Conference be Chicago in GTC and

results Our November of quarter is earnings the Wednesday, call scheduled our XXth. for to fiscal third XXXX of discuss

poll you can We for Operator, will call now the assist? please questions? Would questions. open you for

[Operator Instructions] ISI. the with comes of Evercore Your line Muse question C.J. first from

how about outlook? well? I new And so for think about reserves we I for curious new framework, Thanks was Is part by normalized you cascading the of ‘XX to much. gaming the your the is does today. is that, as think it the all needed inflated not post as gaming that correction updated challenge in how appropriate a an first well. have or is is you revenues crypto guys? guess, meet future if But potential for there question And product fiscal thinking what to this of ‘XX be Obviously, recovery cycle? as we do you’re the half taken

end just there for the Across me QX I QX if completion first two undershipped here gaming quarters, ‘XX, have we ‘XX, our our Well, start of likely of for let the after we of now get how to provided and guidance think what significantly. of QX can those assist in see have QX. and about terms we to through demand

that demand sell-through essentially be QX those expect for or approximately billion. quarters combined two We QX our to $X of end and

include more market to around drivers as gaming Now, we the I’ll it with of over just to These keep top our segments mind a that plan to the on are that. can couple. this, bit to future. new talk growth of new reach that name gaming gaming our that consider Jensen introductions do well corner in we to a for about have as technology the turn little product

took a further we only regarding Now, types Keep mind, did our quarter, any with needed what term. inventory thorough and looking provisions what reflect in but into shortages need for just all in we write-downs for of of at products. not we assessment this this this long more that supply perspective, quarter, still when the the we we some that extreme on write-downs a ago our almost than supply had purchasing were we account did of to a year back in

of macroeconomic given resize terms And an so, supply. conditions, needed this what was to we us in for opportunity the

were this he expectations turn our Jensen to them I’ll it to to So, over higher, took to opportunity add down to see if we are. what write expectations our more. and current wants

our Thanks, in highs is Yes. off Colette. solid. beginning very year, C.J., it’s of the still sell-through but the the

In has XX% since -- fact, is pre-COVID, increased pre-pandemic. sell-through

-- of of ways are for content, so, VTuber, medium fundamentals influencers, gaming used -- are that the the mention well. are gaming engaging gaming PCs creating being new is used games. Not to time content, and platforms very this doing and really with bloggers, being kinds gaming of V sharing spending people And video our there’s all it’s clear is strong,

let quarter, channel Obviously, correct. sell-in worse. and Our sharply strategy the macro off the to inventory next this -- is quarter the highs, to we’re condition turned the reduce sell-in reduce

to most And first to the to current next quarters position best in we’ve the sell-in GPU the so, for price time. And the is popular XX GPUs some is next-generation is created. products channel ever and inventory. our GPUs on strategy the Ampere It popular programs in our it will for reduce prepare it top also to couple world, successful Steam. most gaming in very of correct instituted We’ve products. remains be

it’s layered have do coming and we on going However, to exciting that. next-generation new top of be

we’ve reduced our the done programs we’ve inventory and in price so, two we’ve our sell-in the let for to -- We’ve And in implemented channel next channel partners correct things. with to position generation. taken preparation products

plan year. good All of going Oka? our this being shape working a in is. were towards into that’s anticipate we So, a path what to next game

Arya Your next question will Securities. America with come from the line Bank of of Vivek

Jensen. Actually, I clarify, just wanted to

risk might the is assume we are kind gaming given is could there expressed sense question pretty that should correction macro And will And at to be concern center to into of launch, that a similar depending there. the just and right make is assumption your CapEx on your center wanted Sales center this data So, or the stay rolling of enterprise on a then, new what’s data that some there in levels a set sell-in So correction strong the sure by these shipments? it baseline is now, of customers? QX or QX, data recover? my actually but the product some of our curious, hyperscaler what the in shoe data caution be your semiconductors. of next drop I’m utilization in could center.

which highs, Vivek. off is GeForce end -- as year. The demand the the recently in solid. It’s mentioned is of high gaming was the I Thanks, solid. beginning sell-through, market the of The earlier, sell-through really

market, and And with building so, found such were we because a have inventory. excess -- for we we ourselves vibrant

quarters so. year, a well into below end give the a -- correct. to opportunity levels channel And or strategy sell-through year. that couple believe well is of in so, to do below sell the be the an next by We that the of in we’ll sell for going We’ll the our to current good in marketplace shape

solid, XX% But, I our so, your in is And sell-through is sell-in below thing The for question. has hope that market is what far is increased sell-throughs. important pre-COVID. answers happening the since the rate

the gaming market quite And really vibrant. so, is

on for end for far the fairly quite demand cloud. that in second the in GPUs center hear the use And that broadly partly cases of question, rentals bit. We markets, broadly GPU grown has shortage sensible hear the data cloud current GPU us, supply. to supply exceeds a we in it’s quite because On is fairly number

and application one enhance to providers And -- in look the effectiveness. particular the internet that HD has fleet data recommender lot. of for demonstrated data engagement, cloud data And enhance AV just the to significant If helps to you such data at collecting segment furthermore, a managing in reconstruct managing click-through systems service that one train it models, there’s maps, of just AI the using that grown deep the has and GPUs using rate. learning-based usage

particular really of the fair the then, amount transformers. so model recommender that machine in so drive is last has learning to going And over form years, And -- processing this and emerged called important a data a very of course, systems cloud. several of

the or it skills about the And this times when this You few used found spectacular no to knowledge it has shot, be learned up past. which that large it’s because model, -- from. size, spoken language I’ve really the with somehow this this it meaning could was learn it several been learn in never model could shots transformer data exhibits scaled in learned to and -- for that skills capabilities effective perform either skills, language model, and that large amount had encoded almost of from

We’ve area sequentially of of this this very very, data. understanding large, the in to importantly, of spatially these MegaMolBART, Q&A, summarization, learn used ourselves as innovation for temporally very image being in as understanding work generation, course, text language DNA life And of types -- chat, is well important generation. model or very conversational it’s some But area large proteins, sciences chemistry. large done so, language and, understanding used

It’s And so, really models. impact worth this called is large of quite close to. language the area staying

did called types paper be used it for AIs. that training kinds all Foundation Stanford think a the of other I of that could models

offer were cloud. a challenges are don’t just as we deal demand complex know, of we’re but sell chain system And components these GPUs we the with like GPU fair the of We chip, large really challenged so, number because a in HGX. you the great supply of systems seeing in a quarter that for with amount chips this

-- kidding deliver be networkings for And until to very and last final furthermore, all sit components piece so And able us complicated and idle And data NICs the the component. together then of the come have includes that to to together. the piece these switches last very cables. and complicated comes centers

And is the -- easy. not very cloud for centers high-performance computing these so building at world’s these data scale large particularly

a so challenges fantastic disruptive. generation. And supply Hopper, is demand into on chain been ramping But And have is the that, somewhat really of which the we’re there. top

line Your next come will Ramsay question of from Cowen. the with Matt

data from revenue quarter to meant up from question July into $XXX a guess, back of angle the deliveries got first wanted Colette, October. but for the also Vivek chain talked the being, on release, some high pulling follow I into that October, challenges, million were about July in couple I maybe guys you asked that supply of center the with pushed angles. just

pieces, actually a of data center you part, China center, could up And pull-ins. that if the sequentially U.S. data is hyperscale Jensen, little those any stronger networking in talk October the dynamics and weaker. just clean bit the clarify for guidance more about hyperscale moving stronger, us So second

And and think into you of you’re drive of October those to for will January through breakouts and when seeing start in clarify sort quarters. really those H-XXX revenue. kind trends the could when us you the that If walk us

little of seeing today. was of And Great. Thanks supply a discussing of kind some Jensen what to that the bit question. the and an statements regarding our chain for add-on it’s we’re

work Our supply through. really to quarter chain during was difficult, quite the quite was challenging

Our just cables, important the about not selling GPUs. us were switches, the platforms, customers. chips, including HDX, to very networking It’s

up refer components data their we for customers to though centers. may kits, those stand orders us as to from even them with go that they’re So themselves, looking kits what GPUs

and our component We also internally disruptions supply our availability. experienced with logistics

which of from to key that supply quarter. get availability other well logistics of the in Some impacted We we arrived components late time as our very very by weren’t were Customers little some and of availability slowing their were out. offering, a those had down deployments. things third-party

orders of So in supply some existed, couldn’t had QX, QX and did that have what constraints we be did demand delivered given where supply that in in our these we we QX QX.

optimize disclosed to and that’s that So we’ve demand, we worked with you. and what to customers supply

of Let me slow they’ve companies The really, about North infrastructure Chinese technologies really slowed are forever. American questions Internet and really well hyperscalers. in -- been slowdown the of China the continuing hyperscalers new -- and starting and answer who This software, this to out the services clouds of slowed number people grow. Chinese investment the accelerate down rather QX. building and the last using particularly really down number the in cloud in can’t And in year, number is the

very And market North us, hyperscalers large China. the China And us. that fact North so investment slowdown hyperscalers, a and declines a by for in I revenues American about in year-over-year for doubled our the was said return. American fully offset at expect that something market very They’re to important

going don’t forever. last so And that’s I to think

Hoppers With And to goes with it production X, And CSPs them. respect switch gear now. with motherboard, is goes we’re a all will. going full system in I gear. dying networking a think to you are return. get it’s of supercomputer HGX, Hopper it Hopper, in tray, on we’re it to if which to And our multiple a really along it’s and the get racing

of And enormous the and of amounts so to world the apply around get resources ourselves from the there’s all Hopper. CSPs

QX. in Hoppers substantial ship to expect We

from with Sachs. of will Toshiya the question next Goldman Hari come Your line

CFO weaker gaming. stated a center I is regarding for inventory and Colette, In to that you data charge, commentary, on inventory think $X.XX the one the specifically. maybe had the billion related question in I demand this charge both

that the Chinese curious so else mostly demand just And clear Is think something there it term? spoke changed of the side in to impact on on next at center couple how the in gaming is over the near I comments to related Rapids what’s the terms in Jensen thinking center business data data Or having on hyperscalers Intel going if your this, is in you’re based the about your Sapphire Curious on pretty to? side? of far. delay quarters? is medium an

for Thanks the question.

what So the inventory the of look supply. what demand only to, we drive terms a very had as we guiding, had of the our have. charges, purchased in long and we then not last over as in on supply this taking as that as we commented, term of early we’re the Remember, the but quarter this to well of we looking year quarter thorough we’re we that needed already need for commitment

And high the we have expectations. center what as center, strong, great, is well. solid had growth still happening projection data so for here data We very for

as We’re change just some given going to we our pieces take architecture this of forward. of terms write expectations down see a those what in opportunity for to prior going the

pieces There correct. are for gaming. in are there you So also

We have product are the the incorporated into as drivers components, and but capacity other written and you chips in down some get for conditions account, in write-downs. macroeconomic those our services launches future take some there’s of ready that also silicon and

well CPUs. after previous and GPUs, I Rapids But CPUs, Our as that Hopper supports generation Graviton. Genoa next-generation Sapphire as guess,

a scramble. is question they easier number so disruptive to all intend accelerators, to of cloud and a a deploy the NVIDIA certify delay so it. And lot is and CPUs more of that CPUs been And service Hoppers we perfectly. because across executed demand large have lot test NVIDIA -- no would across providers the the have if have next-generation were of It There CPUs. to engineers

CSPs PCI where our to connectors generation, However, Hopper CPUs current environment Express connect well. as goes generation old into with an they

likes infrastructure And the will nobody new servers. CPUs so refresh and delay. trigger of next-generation The a

them. And about super I’m so excited

able to we’re However, go to going market infrastructure. supporting Hopper with plentifying be to existing

will the line come Aaron of Wells from Your Rakers Fargo. with next question

and to a -- numbers but lot want more. bit to thinking and of about little I just talked a And would Auto. on a I mid-single-digit in low Visualization about, decline I little been of growth where it’s Professional like of the commentary, bit think gaming in the about based and up guess, Colette, guidance sequential Yes. Center XX-plus percent a kind I’ve kind come be maybe Data

of I I guess, And pipeline, with year-over-year you think Hopper, in see of lot have questions Data like comes XQ, around of and growth the you growth fully it actually as with Data that the So that is that the going as Hopper Center, context? right materializes? believe. deceleration that we’re product Do down in kind to available, that a coming reaccelerate sounds cycle fiscal that Center

the Yes. the not we Thanks for between decreased a yes, QX our expect, decrease, gaming QX. guidance. And it of that question. dollar do And that’s pretty understanding good and to amount in

with Professional ProViz, about areas X the that probably that So X/X X/X areas that of may then And be Visualization of be decline. and may be associated gaming. gaming it about that of our X of the our will decline, would

more quarter, We the of expecting to Data quarters automotive, may it. and what do are just there. may we grow And beginning this about was It the QX. yes, Center thoughts of we expect it through each we opportunity the felt some point. to at very be grow. We’ll very growth at an continue our QX look of Our There inflection similar to between saw that fiscal continued year. QX

QX Hopper So into to expectations. thoughts in what Hopper, terms us QX to turn his QX it we’ll in to hopefully I’ll grow forward. continue of see over Jensen to and brings going and

an next allow the is selling sell-through. far do engine Transformer-type models is formats that -- I’d first below market excuse job And this new that new Hopper The designed but we’re computer the us the OEM includes say, selling prepare far to AI the me, of to models, which inside for to inventories Transformer market. be includes is our called the channel a And to for models, Transformers. numerical AI next for large called vision have compute, model demand, we we has thing it far it of type generation that to processed will generation. perform able but on allows inventory, us to also engine in our are generation also is because are Aaron, or correct. next reason new with generation now of pipelines be inventory that to that language for with this called market graphics Hopper model spectacular below has it computer the a allows the And and It type coming this giant Transformers.

of next And this And importance so be I the can’t and new -- robotics, be just impact biology, X hearing in the is model, chemistry, you’ve growth. be This this future for to AI, and was Transformer, of springboard is Hopper about designed this design sure understated that computer spectacular. been this. can’t fully expect breakthrough vision, for overstated. the possibly Hopper And and model across drug quite I’m languages, new really

next will from line Your come question Citi. Atif of Malik with the

you in about both July in growing the are versus networking quarter? can talk quarter? both October they Colette, compute? And the Were they supply constrained sequentially

been QX networking. our results, improve to within for we have supply continuing So our

we been set needs, working customers’ We were the terms products of and to many to into in see growth our lot And have needs, growth that going that we’re have going to move next and to of important we both be strong as larger. improve really year-over-year. we is of sequentially supply. have quarter, networking, very which to And a the CSP able

our that have are here. that the for is in to we take provide same sometimes discussed, our as the that components going finish But we GPUs. we lot just other supply they compute providing at to we’ve important a But quarter. once of that time many have it’s networking We’re

important very sometimes are deliver for us So together. to those

we in that always to have mind. keep So

that are So supply constrained, it’s but there are. not it parts of certain always

line Your next Morgan question will with Moore Stanley. come from the Joseph of

at of all. It hard tripped of environment. chain time it’s hasn’t it’s cases, And like it other supply challenging very fairly now Great. you hitting in kind a kind I easing. ask did constraints done why in wanted you’ve to you of supply really outgrowing so this couple great mean a quarter? such guys the I hit up seems everybody a when, in at years last hard the job you

just long is you issue? up? it about, timing curious, those does I’m a it Or As to sort it of talked So is and of other how take does long to issues what that Is about kind related how take? Hopper it clear components? the

if to it. and add start Let to see wants me on Jensen

Our together execution of phenomenal. has almost center data getting you shipped challenges customers our out. think been When putting we’re and the about absolutely it full a for

different So the same the no challenging. in CSPs are way that we’re

data setting integral centers such their part as of We’re an up that. we’re

short our same been supply. has supply are networking issues of are that so And having. of These some CSPs the

we in the in late our bit but did, products together reaching pleased quarter. and of little we a that get putting for of some arrived And in challenges supply some key the needed We we quarter were that logistics our our have terms some of did to that out. networking So distribution. disruption caused this leverage

Your from next Rasgon come Bernstein. question will line with the of Stacy

back that charge. go center data to wanted inventory I to

was feeling a that charge Can listed gaming? mostly You for versus been give all or data sound first with it? about me to you like what’s expectations your much in then to that, to up charge? they talk gone change center that Have Or was verify up there related how did not it on And Ampere that center clarify for and relevant and happened data Can Hopper? gaming. Hopper inventory down? that just when to us it any expectations. has And center follow you change at data primarily of or talked you

Yes, Stacy.

have what think when about used be things the charges whether across can inventory it components, a you of these supply, be lot our Remember, whether it X. interchangeably had, chips, Regarding that in memory. be we we

different have gaming Additionally, the much value for cost overall what from inventory of the center perspective. we our than for an is of value data

together all creating a with capacity that. is of putting we’re provision not So those has is Nothing market. It to this products do of on coming regarding terms of our opportunity, future architectures. anything Absolutely, prior question systems center. inventory in the data to

as conditions, we’ve discussed. So the we as took this macroeconomic at looking

for note. were in will continue. They’re still did for a that plans of rightsizing as data just higher. take that But gaming center, we quite have and that our expectations, as solid both we well demand to see solid Our

innovation, that companies, have be large ideas, Nobody all expectations. exceeding The profound that excitement, trying shot of moving or Hopper skill in parameters, probably transformers designed on of important. anybody’s was trillion models, think. really Large perform have importance shots, start-ups, predicted to the going particular are within was language And models. could the transformers. language industries, several X the able new for effectiveness everyone’s X of And would was scaled could were are of as these trained the in X language ones literature Transformers billions it is that old amount to of AI written no never have the and expectations, to quite AI towards a models ago. even sizes. I impact about yet years or predicted that days, is the a shot up beginning don’t giant beyond fair several think There’s hundreds the I skill anybody in spectacular. ago, years now to and smallish the of

systems of amount -- the Hopper demand think the for be go an large think is success. that’s work I to If is is and indicator, Hopper training into. going success a of spectacular so the And that going -- I to Hopper pent-up reflects

next line Nikko. the from Srini come of will SMBC with Your Pajjuri question

because I tailwinds? your center to Because mixed the number write-offs to, have longer-term and significantly you’re thought model question gross is be front? The to I the Colette. additional there that just on is is XX% gaming have would And just mix little any actually margins, a probably that bit. are on assume your of non-GAAP data I’m better or does other And down wondering, expand a on up margins include a gross margins that, gross given then guiding tailwind inventory than any could offsets?

question. Thanks Yes. the for

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as gross has move QX. impacted our we that margin into so And

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that So from nothing in material is planned. may But there gross quarter-to-quarter is that small are our margins. included occur scraps

Your next from will Timothy UBS. of line with question Arcuri come the

clarification had I a a question. then Colette, and

enterprise of clarification the all previously question split July. my down is at enterprise investors in center it think inventory. in sounds the see And my the benefiting might risky as then are that can data is whether like written And because margins slowing. in from of gross want more you I So shifted us cloud the sale to clearly mix towards face October give whether enterprise

if that. us give I’m can So wondering you

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will from Morgan. Your come Harlan line of with the Sur J.P. question next

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is spending your Or leading ProViz enterprise business? is center your enterprise and is attributed the why And dynamic? there in or for indicator vertical not some segments industry So weakness? why a this not to other decline data within

were in they to time, refresh industry’s and desire We really mobile of Remember, ProViz the much business, of the X and size that to supply market were in just both doubled the Visualization that well Pro our trying desktop as both there. attracted all workstations nicely. so last fueling So short feed quite to such year. a were new as and in of for RTX growing year, short

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of are -- be don’t verticals all, market is affected the I broader know. would by first enterprise that? say, going the we Whether to

people business, cycle X installed be be has sales to -- ProViz happen X our ProViz base. X no have. upgrades Second tend that Workstation whatever there’s replacements of all, unlike our base like business, or from years tend upgrade to or they the of Most our or something that of -- installed to

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the continue These growing all people no to they people or AI business, And real our use base. are tighten reason, so for could of up And like whatever are installed still fairly the move that benefits And brand-new systems would so profound. benefits use In Everybody isn’t the the demand if like Everybody more It’s things to into. to there’s just to of savings ProViz money. what understanding were AI’s that cost productive. autonomous it’s using case would is to they the have. much faster. productivity AI save be would that there. Everybody like spreading. out and is more not

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question come line of from Deutsche final will Bank. Your with the Ross Seymore

your your over just a ask generally, a of and aftermarket. had about guys question. But sense was key et question X. prices premiums the you or I crypto general MSR mix once in normalizes, a merge do with last cetera, quite in view saw the absence me raising longer-term pricing gaming with the we in how year the environment? coming, business the you really I the like Let weren’t know rich

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down. I crypto that without would go mix the would dynamic, say

the long reason trend console consoles that are is -- overall $XX. about is the it’s that console, first term, was think the ASP Lately, a game for for about when selling is And $XXX. because game than game the However, ever. way more drifting my And up. to useful

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lines along $XXX should And be something this so so or it time. of the at roughly

to GeForce a cloud simultaneously, We in is tends gamers hosting the to in powerful many more GeForce. be the much it also cloud. want And GeForce because have

our And be -- so end. graphics gaming be higher cloud tends to a gaming tends much to our cloud GeForce

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the GeForce for for their well. gaming is essentially work station so as And creative GeForce The just is not them.

now. that been dynamics we’ve up, for and are the several trend so go ASP And GeForce several causing this of there years to seeing are

the will Thank Jensen over to back closing remarks. now call for I you. turn

everyone. Thanks,

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next progress Thank you. We to join look us. updating you our So forward on quarter.

today’s concludes conference call. This

You now disconnect. may