Nvidia saw sharp GPU and data center sales declines in the first quarter as hyperscale cloud providers pulled back on purchases and the company lost $289 million in revenue from cryptocurrency mining processors. Nonetheless, the chipmaker reported better-than-expected Q1 results and CEO Jenson Huang said the company is "back on an upward trajectory" thanks to growth in its gaming division.
Looking at the numbers, the Santa Clara, Calif.-based company delivered a Q1 net income of $394 million, or 64 cents per share.
Non-GAAP earnings were 88 cents per share on revenue of $2.22 billion, down from $3.21 billion a year earlier. Wall Street was expecting to see earnings of 79 cents per share with $2.2 billion in revenue.
Shares of Nvidia were up nearly 6% in after market trading.
Nvidia said GPU business revenue was $2.02 billion, down 27% from the year ago period, due to declines in gaming and data center revenue, as well as the loss related to cryptocurrency mining processors.
Breaking down business segments, Nvidia said gaming revenue declined 39% from a year ago to $1.06 billion, but increased 11% compared to last quarter. The company said the sequential increase reflects growth in gaming GPUs.
Meanwhile, data center revenue declined 10% year over year $634 million. Revenue from Nvidia's automotive business came to $166 million and its professional visualization segment reached $266 million, up 6%.
In terms of guidance, Nvidia expects Q2 revenue of $2.55 billion, plus or minus two percent, above market estimates for $2.54 billion in revenue.
"We've returned to growth in gaming, with nearly 100 new GeForce Max-Q laptops shipping," Huang said in prepared remarks. "And NVIDIA RTX has gained broad industry support, making ray tracing the standard for next-generation gaming."
"Despite the near-term pause in demand from hyperscale customers, the application of AI continues to accelerate," he continued. "We're excited about our pending acquisition of Mellanox, which will help us drive data center architecture for high performance computing and AI from the cloud to the edge."