Nvidia cites China export restrictions for $8 bn revenue impact

Nvidia announced its financial results reporting earnings and revenue that exceeded analyst expectations. The company's data center business showed significant growth, with a 73% increase year-over-year.

The stock saw a rise of approximately 6% in extended trading. Overall revenue for the quarter increased by 69%. Sales within the data center division, which includes AI chips, contributed $39.1 billion, accounting for 88% of total revenue.

Nvidia's earnings per share were 96 cents adjusted, against an expected 93 cents. Revenue reached $44.06 billion, surpassing the estimated $43.31 billion. The company anticipates sales of around $45 billion for the current quarter. This guidance would have been $8 billion higher without lost sales from a recent export restriction on its China-bound H20 chips, as per reports.

The U.S. government informed Nvidia that its H20 processor for China would require an export license. Nvidia incurred $4.5 billion in charges due to excess inventory for the chip and would have recorded an additional $2.5 billion in sales if the chip had not been restricted. The gross margin for the quarter was 61%, and would have been 71.3% without the China-related charge.

Nvidia CEO Jensen Huang stated that the $50 billion AI chip market in China is "effectively closed to U.S. industry," and the H20 export ban "ended our Hopper data center business in China," as per reports.

Net income increased by 26% to $18.8 billion, or 76 cents per share, from $14.9 billion, or 60 cents per share, a year prior.

The gaming division's revenue grew 42% annually to $3.8 billion. The automotive and robotics division reported sales growth of 72% to $567 million. The professional visualization business saw a 19% increase to $509 million in revenue.

Nvidia reported spending $14.1 billion on share repurchases and paid $244 million in dividends during the quarter.

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