Last Thursday, NVIDIA (NASDAQ:NVDA) reported terrible fourth-quarter results to close out what had been a strong fiscal 2019. For the quarter, revenue fell 24%, earnings per share dropped 48%, and EPS adjusted for one-time items plunged 53%.

The results were largely anticlimactic, as on Jan. 28, the graphics processing unit (GPU) specialist significantly lowered its already-weak guidance for the quarter, citing such factors as slowing global growth, particularly in China, and enterprise customers shifting "to a more cautious approach" in December.

Earnings releases, however, only tell part of the story. Management's comments during earnings calls can often reveal key insights about a company's business performance, prospects, and strategy. Here are two things from NVIDIA's Q4 call that you should know. 

Man sitting at desk playing a video game on computer.

Image source: Getty Images.

1. Games with RTX and DLSS tech are now available with more coming soon, which should drive demand for NVIDIA's new graphics cards

From CFO Colette Kress' remarks:

Just this week [week of Feb. 11], DLSS technology is becoming available in two blockbuster games, Battlefield V and Metro Exodus, and Anthem coming soon. In addition, at CES [Consumer Electronics Show 2019, in January], Justice and Atomic Heart showed demos featuring ray tracing and DLSS. And a large pipeline of games plan to integrate RTX technology.

First, some definitions: RTX is NVIDIA's ray-tracing technology for real-time rendering, which enables developers to achieve cinematic quality in their video games. NVIDIA's unveiling of RTX technology in March of last year at the Game Developers Conference 2018 made a splash because ray tracing in real time has long been considered the Holy Grail in the computer gaming industry.

DLSS (Deep Learning Super Sampling), which NVIDIA unveiled at CES in January, is an artificial intelligence (AI) technology that helps boost frame rates in video games. (A frame rate is the number of individual frames or images displayed per second.) This tech was a very important introduction because the company's ray-tracing technology causes a slowdown in frame rates. As Kress said on the call:

Pairing DLSS with ray tracing can provide comparable frame rates to traditional rasterization, but also much more beautiful cinematic visuals. The best of both worlds.

The fact that games are now rolling out with RTX and DLSS technology should help drive demand for NVIDIA's GeForce RTX graphics cards, which are powered by the company's Turing GPU architecture. NVIDIA launched higher-end RTX cards last fall, but initial sales fell short of top management's expectations. "[S]ome customers may have delayed their purchase while waiting for lower price points or further demonstration of the RTX technology in actual games," Kress said. As for the price point part of that comment: At CES in January, the company launched RTX 2060, which is a midrange card. Regarding this product, CEO Jensen Huang said, "The launch is a great success. The reviews are fantastic." 

2. Professional visualization was a bright spot in the quarter

From Kress' remarks:

New applications like data science, AI, and VR, as well as the need for thin and light mobile workstations, remain key growth drivers for the business. We had key wins in the quarter, including Boeing, Google, LinkedIn, and Toyota for applications including AI and robotics.

The terrible performance of NVIDIA's gaming business (revenue plunged 45% year over year) in the fourth quarter largely overshadowed some bright spots. The company's professional visualization business actually had a quite solid quarter, with revenue growing 15% year over year to $293 million. And it had a good fiscal 2019, with full-year revenue jumping 21% year over year to $1.13 billion. While pro viz isn't nearly as large as the gaming ($954 million in revenue in the quarter) or the data center business ($679 million), it's still fairly sizable, accounting for 13.3% of the company's total revenue in the quarter.