Nvidia posts loss this past financial quarter

[akugami]

CNET
Forbes
Techspot

Seems the fallout from a monolithic design as well as ATI being competitive at the mid and low price points has costs nVidia a lot of cold hard cash. nVidia lowering its prices to compete may have kept its market share high, indeed from reports even increasing market share, but at the cost of profitability.

New Link Bit-Tech.net

 

[MrK6]

Not really surprised. When I saw the ATI slides at about this time last year highlighting their new marketing (release a good mid-range/high-end GPU that scales really well, double it for enthusiast) I thought "damn, that's a really smart move." That coupled with their cheap board design and relying on GDDR5 for bandwidth, all were excellent innovations, although risky. Anyway, looks like it paid off for them.

 

[Rifter]

saw this coming, Nvidia has been overpriced for years looks like they will have to stop raping the customers now. This is good and will lead to lower prices all around so i am happy.

 

[LOUISSSSS]

good, maybe this will teach jen hsung to stop being so cocky.

 

[nitromullet]

Originally posted by: Rifterut
saw this coming, Nvidia has been overpriced for years looks like they will have to stop raping the customers now. This is good and will lead to lower prices all around so i am happy.

Well, it can't go on forever. It will get difficult for ATI and NVIDIA to maintain a price war if they are both not making any money, which is the case right now. In the short term a price war might be nice, but if it eventually causes either NV or ATI to fail it would leave us with a monopoly in the performance graphics industry. This would be very bad for consumers.

 

[Pantalaimon]

Originally posted by: Rifterut
saw this coming, Nvidia has been overpriced for years looks like they will have to stop raping the customers now. This is good and will lead to lower prices all around so i am happy.

Yup. Still waiting for NVDIA to open that can of whoop ass on Intel, unless this is what he meant by it, posting losses 😛

 

[SlowSpyder]

Pretty rough out there for a lot of companies right now. Huge expensive GPU's that barely out perform the competition's GPU's that are half the size cant' be helping their cause. I'm sure GPU computing will really take off in time as there are some things that the GPU's just do better than CPU's, but you have to wonder if Nvidia is almost a bit ahead of that time with their current chips. At any rate, it's not like AMD is making profit either.

 

[Genx87]

They have enough cash to post these kinds of losses for years. That said this isnt surprising given they expanded their marketshare dramatically in a global recession. That meant they cut prices to expand their market. In the meantime starving AMD\ATI out. I am honestly wondering if AMD will be around by 2010 with Nvidia pressuring them in the GPU market and Intel in the CPU market.

 

[cloudzero]

I'm curious to know what division/segment within Nvidia contributed the most to this loss. The GPU segment seems overextended, in my opinion. I don't know if it's the other chipsets, like for motherboards, that isn't doing so well? Do they make many boards for the netbooks that are so popular now? I have an older 650i sli motherboard, but I'm sure the next board I'll be getting will most likely be and Intel one.

 

[Wreckage]

Their revenue was up 38% from the previous quarter, ATI's was down 22% from the previous quarter. Part of this loss includes an employee stock option buyback.

 

[MrK6]

Originally posted by: Wreckage
Their revenue was up 38% from the previous quarter, ATI's was down 22% from the previous quarter. Part of this loss includes an employee stock option buyback.

Not much of an accomplishment considering how poorly NVIDIA did last quarter (and comparatively how well ATI did). Also note that ATI didn't release any new products this quarter while NVIDIA released at least three or four. They still ended up in the hole though.

 

[akugami]

Originally posted by: cloudzero
I'm curious to know what division/segment within Nvidia contributed the most to this loss. The GPU segment seems overextended, in my opinion. I don't know if it's the other chipsets, like for motherboards, that isn't doing so well? Do they make many boards for the netbooks that are so popular now? I have an older 650i sli motherboard, but I'm sure the next board I'll be getting will most likely be and Intel one.

My last two desktops were built using motherboards with nVidia chipsets but to be honest, it is a smaller part of their business. Their meat and potatoes remain video cards and integrated graphics chips.

The stock options buy as noted by Wreckage contributed to roughly $140 million of the $200 million loss. The rest was by various divisions of the company relating to the actual process of running the business.

What likely seems to have happened is that nVidia was taking a beating from ATI this past quarter or so with the very competitive Radeon R4xx0 series of video cards. They likely made a small profit on the GPU's or roughly broke even. Likely this didn't cover their main expense which is R&D.

In order to preserve market share they lowered the price to be competitive with ATI and while this kept its market share up and even increased it, it was at the expense of profitability.

If, according to rumors, nVidia is late to the market by a month or more with its next GPU's then this doesn't bode well for them. Especially if the performance difference between the ATI GPU's and nVidia GPU's stay relatively the same.

 

[Genx87]

They also cut their inventory in half. That spells moving product to get rid of product. That said it isnt that bad when you consider the majority of the loss is a one time hit on a stock buy back.

 

[OCGuy]

Originally posted by: MrK6

Originally posted by: Wreckage
Their revenue was up 38% from the previous quarter, ATI's was down 22% from the previous quarter. Part of this loss includes an employee stock option buyback.

Not much of an accomplishment considering how poorly NVIDIA did last quarter (and comparatively how well ATI did). Also note that ATI didn't release any new products this quarter while NVIDIA released at least three or four. They still ended up in the hole though.

Yep it looks like nV is on the way to the black again, and AMD is still on life support.

They also beat estimates. It seems like ATi is releasing a new card every week....


The zoners really came out for the first couple posts in this thread....

 

[OCGuy]

Originally posted by: MrK6
Not really surprised. When I saw the ATI slides at about this time last year highlighting their new marketing (release a good mid-range/high-end GPU that scales really well, double it for enthusiast) I thought "damn, that's a really smart move." That coupled with their cheap board design and relying on GDDR5 for bandwidth, all were excellent innovations, although risky. Anyway, looks like it paid off for them.

Are you aware of AMD's financials? 😕

 

[Wreckage]

Originally posted by: MrK6
(and comparatively how well ATI did).

You don't know what revenue is do you?

Anyways AMD lost $460 million last quarter, with their graphics division down 22%. That's bad, really, really, really bad.

 

[ShadowOfMyself]

Bahah gotta love how Wreckage and Co. come here singing praises about Nvidia as expected, no comment :laugh: We know we know, Nvidia is Jesus in company form and has come to save us all, now stop preaching, its old

 

[OCGuy]

Originally posted by: ShadowOfMyself
Bahah gotta love how Wreckage and Co. come here singing praises about Nvidia as expected, no comment :laugh: We know we know, Nvidia is Jesus in company form and has come to save us all, now stop preaching, its old

Tell me which post out of the following is actually helpful and contains facts (Ill exclude yours, even though it is a personal attack and against ToS):

Originally posted by: LOUISSSSS
good, maybe this will teach jen hsung to stop being so cocky.

Originally posted by: Rifterut
saw this coming, Nvidia has been overpriced for years looks like they will have to stop raping the customers now. This is good and will lead to lower prices all around so i am happy.

Originally posted by: Pantalaimon

Yup. Still waiting for NVDIA to open that can of whoop ass on Intel, unless this is what he meant by it, posting losses 😛

Originally posted by: Wreckage
Their revenue was up 38% from the previous quarter, ATI's was down 22% from the previous quarter. Part of this loss includes an employee stock option buyback.

 

[Pantalaimon]

Tell me which post out of the following is actually helpful and contains facts (Ill exclude yours, even though it is a personal attack and against ToS):

You mean NVIDIA's CEO did not claim his company would 'open a can of whoops ass on Intel'?

 

[OCGuy]

Originally posted by: Pantalaimon

Tell me which post out of the following is actually helpful and contains facts (Ill exclude yours, even though it is a personal attack and against ToS):

You mean NVIDIA's CEO did not claim his company would 'open a can of whoops ass on Intel'?

That has nothing to do with this thread and was a mindless zoner parrot remark.

Im sure there is a thread about the nV/Intel rivalry, but this is not one of them.

 

[akugami]

Originally posted by: Wreckage

Originally posted by: MrK6
(and comparatively how well ATI did).

You don't know what revenue is do you?

Anyways AMD lost $460 million last quarter, with their graphics division down 22%. That's bad, really, really, really bad.

Company A with a very large revenue stream may actually be doing worse than Company B with a smaller revenue stream. Just ask Sony whose video games division revenue stream at times were equal to or greater than the revenue stream of Nintendo and yet Nintendo was making money while Sony was losing money (PS3) while Nintendo (Wii) was making a ton of cash. Generally speaking, if you are the market leader you do not want to lose money by increasing your revenue stream and only increase your market share by a marginal amount.

While I could not find any information on the GPU side of AMD, I did read that their GPU division made a profit this quarter. Again, this is heresy but this is likely true as most of AMD's losses lately seems to be attributed to writing off the book value of ATI (basically AMD overpaid for ATI) as well as operational losses on the CPU side of things.

While I am in no way suggesting nVidia is in dire straits, it does point out that all is not rosey in nVidialand. nVidia also has a sizable cash reserve so it's not like a $200 million loss for one quarter will be anywhere close to breaking them. They sacrificed profitability for market share. This was probably a necessity as they underestimated ATI and contracted more GPU's than they could sell at their original MSRP's.

ATI scored a victory over nVidia in mindshare and being back in the minds of enthusiasts as a viable option to nVidia. If the next GPU's released follow a similar performance difference between the ATI and nVidia camps then you'll see nVidia have to make some hard decisions. Lose money and keep market share or make money and lose market share. Of course, this is all assumptions and we'll have to wait for verifiable performance benchmarks and not leaked specs before we can make any real assumptions on how the market will play out.

 

[Idontcare]

Originally posted by: akugami
While I could not find any information on the GPU side of AMD, I did read that their GPU division made a profit this quarter.

See top part of page 4 for AMD Graphics Revenue by Quarter

Quarter_____Revenue___Profit
Q1/08_______262m______13m
Q4/08_______270m_____-10m
Q1/09_______222m______1m

 

[Wreckage]

Originally posted by: Idontcare

Originally posted by: akugami
While I could not find any information on the GPU side of AMD, I did read that their GPU division made a profit this quarter.

See top part of page 4 for AMD Graphics Revenue by Quarter

Quarter_____Revenue___Profit
Q1/08_______262m______13m
Q4/08_______270m_____-10m
Q1/09_______222m______1m

So in the last 3 quarters they made $4 million. At this rate it will take AMD 1000 years to make their money back.

 

[Lonyo]

Originally posted by: Wreckage

Originally posted by: Idontcare

Originally posted by: akugami
While I could not find any information on the GPU side of AMD, I did read that their GPU division made a profit this quarter.

See top part of page 4 for AMD Graphics Revenue by Quarter

Quarter_____Revenue___Profit
Q1/08_______262m______13m
Q4/08_______270m_____-10m
Q1/09_______222m______1m

So in the last 3 quarters they made $4 million. At this rate it will take AMD 1000 years to make their money back.

No, in 3 of the last 5 quarters they made $4mn. Q2 and Q3 of 08 are excluded.
Like for like profits are down on last year, and profits are up form last quarter.

 

[akugami]

Originally posted by: Wreckage

Originally posted by: Idontcare

Originally posted by: akugami
While I could not find any information on the GPU side of AMD, I did read that their GPU division made a profit this quarter.

See top part of page 4 for AMD Graphics Revenue by Quarter

Quarter_____Revenue___Profit
Q1/08_______262m______13m
Q4/08_______270m_____-10m
Q1/09_______222m______1m

So in the last 3 quarters they made $4 million. At this rate it will take AMD 1000 years to make their money back.

And I've updated my original post with a new link from Bit-Tech.net. Apparently, comparing this fiscal quarter with the fiscal quarter from a year ago, nVidia revenue has dropped 42%. That's ATI putting a whoop arse on nVidia, granted part of the drop has to be attributed to a bad economy.

Take this with a grain of salt (as you should all rumors) but according to fudzilla, the RV870 will be delayed until Q4 or roughly the same time as when the G300 is rumored to be released.

The near future bodes well for ATI whereas for nVidia, it doesn't look as hot. ATI seems to have hit upon a great price/performance ratio while nVidia may have the performance crown, its GPU's are not selling at the higher price points needed to churn a profit.

Unless the G300 is an amazing GPU and absolutely trounces the RV870, we're going to see nVidia with a slide. Like I said, my prediction is either a loss in market share for nVidia but with profits or they keep their market share but with a loss in profits if current conditions remain roughly the same.