Graphics card giant Nvidia CFO Colette Kress says the company has been unable to estimate how much impact reduced crypto mining demand had on its Q2 results, which fell short of analyst expectations.
The chip giant released its financial results for the three months ended Jul. 31 on Wednesday, which revealed a 19% quarter-on-quarter drop in revenue to $6.5 billion, while net income fell 59% to $656 million.
Revenue for its gaming division, which includes sales of GPUs that can be used for cryptocurrency mining, fell 44% in revenue from the previous quarter to $2.04 billion, which Nvidia attributed to “challenging market conditions.”
Kress, who also serves as executive vice president of the company, said Nvidia has limited visibility on how the crypto market affects the demand for the products:
“Our GPUs are capable of cryptocurrency mining, though we have limited visibility into how much this impacts our overall GPU demand.”
“We are unable to accurately quantify the extent to which reduced cryptocurrency mining contributed to the decline in Gaming demand,” she added.
While the chip giant’s central processing units (CPUs) have mostly been bought for gaming purposes, a high demand for crypto mining activities over the past few years have contributed to a 320% increase in the company’s share price over the last 5 years.
She added that falling crypto prices and changes in consensus mechanism has in the past impacted demand for its products and ability to estimate it.
“Volatility in the cryptocurrency market – such as declines in cryptocurrency prices or changes in method of verifying transactions, including proof of work or proof of stake – has in the past impacted, and can in the future impact, demand for our products and our ability to accurately estimate it.”
With the Ethereum Merge scheduled for Sep. 15, the network’s consensus change to proof-of-stake (PoS) could further drive down the demand for crypto mining hardware, which could spell trouble for cryptocurrency mining products, such as Nvidia’s CMP170 HX which currently costs around $4,695.
Related: Nvidia to pay $5.5M as part of SEC case concerning ‘inadequate disclosures’ around crypto mining
That being said, cryptocurrencies such as Bitcoin, Litecoin, Monero and Dogecoin among the networks still operating on proof-of-work consensus mechanisms with no plans to transition in the future.
Nvidia’s share price has also dropped 5.89% over the last 5 days on the NASDAQ, following public anticipation that the chip giant fell far short from its Q1 performance.
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