The decision taken in the last quarter to stop deliveries of products to the Russian market forced NVIDIA at the reporting event to make public its assessment of the degree of impact of this step on the company’s business. If last year all segments of the Russian market formed no more than 2% of NVIDIA’s revenue, then the gaming industry alone was responsible for 4% of the company’s core revenue.
Image Source: NVIDIA
New details about the degree of dependence of NVIDIA on the Russian market became known by Saturday morning after the company published a quarterly report on form 10-Q. It contained a direct mention of Russia’s share in total revenue for the entire last year – it did not exceed 2%. Considering that NVIDIA generated $26.91 billion in revenue for the entire fiscal year, Russia’s share in this case was measured at about $538 million.
Yesterday, company representatives reported that in the gaming segment, the degree of dependence on the Russian market was slightly higher, and by morning it became clear that our country had already provided 4% of NVIDIA’s gaming revenue in the last year. In total, the company received $12.46 billion from the implementation of gaming solutions in the last fiscal year. Four percent of this amount is approximately $500 million. It turns out that gaming solutions largely determined NVIDIA’s revenue in the Russian market last year, and the remaining $38 million came from to other segments – first of all, to the server, as it should be understood. In any case, in the current quarter alone, the loss of the ability to supply server products to the Russian market will force NVIDIA to lose up to $100 million in revenue. Obviously, last year the sales volumes of NVIDIA server components in Russia were much more modest than planned for this year.
By the way, in the same 10-Q form, the company notes that the latest geopolitical events have a negative impact on demand in the entire EMEA region, including Europe, the Middle East and Africa, so it is unlikely that all collateral damage received by the company’s business will be limited to direct losses in the Russian market in modern conditions.
If the share of Russian revenue in the gaming segment had remained at the same 4% level in the first quarter of this year, then during this period NVIDIA would have received about $145 million from the sale of gaming solutions on the local market. One can only guess what this proportion could be for the second quarter, but the other day, NVIDIA management explained that in the current reporting period, it will lose approximately $400 million in gaming revenue due to events in China and Ukraine, and the company’s total revenue will not exceed $8 .1 billion. If we assume that in the second quarter NVIDIA’s gaming revenue will still be 44% of the total, then in monetary terms it will exceed $3.5 billion. Assuming that Russia could claim 4% of this amount, we can calculate the share of local revenue that will be lost is approximately $141 million. Apparently, the Chinese lockdowns will “eat up” the remaining $259 million of gaming revenue in the second quarter, which NVIDIA does not undertake to claim.
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