SAN FRANCISCO — Nvidia reported declining sales for its most recently concluded quarter, as the company continues to grapple with a "crypto hangover" caused by the decline in cryptocurrency mining.

Nvidia — which warned Jan. 28 that its quarterly revenue would miss its original forecast by about $500 million — also reported a slowdown in sales to data centers and slower-than-expected sales of its high-end RTX GeForce 2080 and 2070 GPUs based on its Turing architecture.

Nvidia rode high on the boom in cryptocurrency prices last year, as it spurred sales of GPUs for cryptocurrency mining. But the company has paid the price since cryptocurrency prices crashed back to earth, warning after last quarter that the cryptocurrency decline had resulted in a glut of excess inventory of GPUs based on its Pascal architecture in the sales channel, dragging down sales.

Following the quarterly report, Colette Kress, Nvidia's chief financial officer, told analysts on a conference call that the glut of GPUs in the channel remained throughout the fiscal fourth quarter, which closed Jan. 27. Kress also told analysts that Nvidia expects inventory to normalize during the current quarter and that deteriorating macroeconomic conditions, particularly in China, was also impacting consumer demand for GPUs.

"The significant volatility in our gaming business for the past few quarters has been challenging to model," Collette Kress said. "Crypto mining demand and its after effects have distorted the quarter-to-quarter trends in the gaming business and obscured its underlying trend line."

Fiscal fourth quarter revenue fell to $2.2 billion, down 31% from the previous quarter and down 24% from the fourth quarter of fiscal 2018. The company reported a net income for the quarter of $567 million, down 54% from the previous quarter and down 48% compared to the year-ago quarter.

For fiscal 2019, which also closed Jan. 27, Nvidia reported record sales of $11.72 billion, up 24% from fiscal 2018. The company reported a profit for fiscal 2019 of $4.14 billion, up 36% from fiscal 2018.

Nvidia also said it expects revenue to be about $2.2 billion in the current quarter, falling slightly short of Wall Street's expectations.

While fiscal fourth quarter sales to the data center were up 12% year-over-year, they declined 14% compared to the fiscal third quarter. But data center revenue for fiscal 2019 increased by 52% compared with fiscal 2018, Kress said.

Kress said a pause in spending by data center customers as macroeconomic conditions deteriorated hurt sales, with several deals that were expected to close in January slipping.

Jensen Huang, Nvidia's founder and CEO, said the slowdown in data center spending was broad based.

"We saw it across every vertical, every geography," Huang said. "There was just a level of cautiousness across all the enterprise customers and the cloud service providers that we haven't seen in a while."

Nvidia P1 Nvidia CEO Jensen Huang speaks at the Consumer Electronics Show in Las Vegas last month. (Source: Nvidia)

Huang said he believes the slowdown will be temporary. "The computing needs of earth have surely not been satisfied with what was shipped last quarter," he said. "So I think the demand will return and customers will return."

Nvidia is counting on the Turing architecture — introduced last August as the successor to Pascal — to hit it big with gaming enthusiasts. The architecture supports real-time ray tracing — wherein computers model the flight of light rays within a scene bouncing off of surfaces — considered a first for the industry. Nvidia introduced the first mid-range version of a Turing GPU at the Consumer Electronics Show last month.

But the initial sales of the high-end Turings were disappointing. Executives said some customers may have delayed purchases, waiting for lower price points or for the RTX technology to be exploited by more games.

"It is true that everybody was hoping to see more games with RTX on day one," Jensen said. "But it's such a new technology, with ray tracing and AI for image processing, that it's only really possible to make available with new games — which is tied to the schedules of new games. And now they are starting to come out."