- Revenue up 16 percent quarter-on-quarter to $903.2 million
- GAAP net income of $107.6 million, or $0.19 cents per diluted share
- GAAP gross margin of 43.4 percent; non-GAAP gross margin of 41.0
percent
- Cash flow from operating activities of $141.3 million; free cash flow of $124.7 million
NVIDIA Corp. (
On a GAAP basis, the company recorded net income of $107.6 million, or $0.19 per diluted share, compared with net income of $61.7 million, or $0.11 per diluted share a year ago. Third quarter GAAP results included a benefit to operating income of $25.1 million related to insurance reimbursements received during the quarter. On a non-GAAP basis -- excluding the insurance reimbursements and stock-based compensation, as well as their associated tax impact -- net income was $110.3 million, or $0.19 per diluted share, compared with $111.4 million, or $0.20 per diluted share, a year earlier.
Quarterly Results Highlights ($ in millions except per share data) Q3 FY2010 Q2 FY2010 Q3 FY2009 Revenue $ 903.2 $ 776.5 $ 897.7 GAAP: Gross margin 43.4% 20.2% 41.0% Net income (loss) $ 107.6 ($ 105.3) $ 61.7 Income (loss) per share $ 0.19 ($ 0.19) $ 0.11 Non-GAAP: (1) Gross margin 41.0% 36.3% 41.9% Net income $ 110.3 $ 37.7 $ 111.4 Income per share $ 0.19 $ 0.07 $ 0.20 ---------- ---------- ---------- (1) See Non-GAAP Measures for an explanation of these figures.
"We continued to make progress in the third quarter with healthy market demand across the board," said Jen-Hsun Huang, president and chief executive officer, NVIDIA. "Revenue was up from a year ago, with improvement in each of our PC, professional solutions and consumer businesses. It's great to see us shipping orders with our Tegra mobile-computing solution, and growing enthusiasm for our Tesla platform for parallel computing in the server and cloud-computing markets."
Gross margin, on a GAAP basis, increased to 43.4 percent from 20.2 percent in the previous quarter and 41.0 percent a year earlier. On a non-GAAP basis, gross margin was 41.0 percent, up 4.7 points from the 36.3 percent reported in the previous quarter but slightly off from 41.9 percent a year earlier.
GAAP net loss for the nine months ended Oct. 25, 2009 was $199.1 million, or $0.36 per share, compared to a net income of $117.6 million, or $0.20 per diluted share for the nine months ended Oct. 26, 2008. Non-GAAP net income for the nine months ended Oct. 25, 2009, which excludes a $93.9 million net charge related to the weak die/packaging material set that was used in certain versions of our previous generation chips, a non-recurring charge of $140.2 million in connection with a cash tender offer to purchase employee stock options, stock-based compensation charges, and their associated tax impact, was $101.4 million, or $0.18 per diluted share, compared to a net income of $397.7 million, or $0.68 per diluted share for the nine months ended Oct. 26, 2008.
Outlook
The outlook for the fourth quarter of fiscal 2010 is as follows:
- Revenue is expected to be up slightly, approximately 2 percent, from
the third quarter.
- GAAP gross margin is expected to be in the range of 40 to 42 percent.
- GAAP operating expenses are expected to be approximately $305 million.
Third Quarter Fiscal 2010 and Recent Highlights:
- First major Tegra devices shipped: Microsoft's Zune HD and the
Samsung M1.
- Held first ever GPU Technology Conference, which was 50%
oversubscribed, with 1,500 attendees from 40 countries. More than 200
technical sessions were conducted, and presentations were made by 60
emerging companies that utilize the graphics processing unit (GPU).
- Introduced the next generation CUDA GPU architecture, codenamed
"Fermi." The Fermi architecture is the foundation for the world's first
computational GPUs, delivering breakthroughs in both graphics and parallel
computing.
- Oak Ridge National Laboratory announced plans to use Fermi to build a
new supercomputer, which is designed to be the world's fastest.
- Launched the industry's first development environment for massively
parallel computing. The tool, code-named "Nexus," is integrated into
Microsoft Visual Studio, so that developers will be able to use Visual
Studio and C++ to write applications that leverage Fermi GPUs.
- Launched NVIDIA® RealityServer®, a powerful combination of GPUs and
software that streams interactive, photorealistic 3D applications to any
web connected PC, laptop, netbook or smart phone.
- Adobe's new Flash Player 10.1 will be accelerated by GeForce®, NVIDIA ION and Tegra products, helping to bring uncompromised browsing of rich Web content to netbooks, smartphones and smartbooks.
Conference Call and Web Cast Information
NVIDIA will conduct a conference call with analysts and investors to
discuss its third quarter fiscal 2010 financial results and current
financial prospects today at 2:00 p.m. Pacific Time (5:00 p.m. Eastern
Time). To listen to the call, please dial (212) 231-2900. A live Web cast
(listen-only mode) of the conference call will be held at the NVIDIA
investor relations Web site
www.nvidia.com/ir and at
www.streetevents.com.
The Web cast will be recorded and available for replay until the company's
conference call to discuss its financial results for its fourth quarter
fiscal 2010.
Non-GAAP Measures
To supplement NVIDIA's Condensed Consolidated Statements of Operations and
Condensed Consolidated Balance Sheets presented in accordance with GAAP,
the company uses non-GAAP measures of certain components of financial
performance. These non-GAAP measures include non-GAAP cost of revenue,
non-GAAP gross profit, non-GAAP gross margin, non-GAAP net income, non-GAAP
net income per share, free cash flow and days sales in inventory. In order
for NVIDIA's investors to be better able to compare its current results
with those of previous periods, the company has shown a reconciliation of
GAAP to non-GAAP financial measures. These reconciliations adjust the
related GAAP financial measures to exclude a charge related to the weak
die/packaging material set that was used in certain versions of NVIDIA's
previous generation chips, net of insurance reimbursements, a non-recurring
charge related to a tender offer purchase, a non-recurring charge against
cost of revenue related to a royalty dispute, a non-recurring restructuring
charge against operating expenses, recurring stock-based compensation
charges, and the associated tax impact of these items, where applicable.
Free cash flow is calculated as GAAP net cash provided by operating
activities less purchases of property and equipment and intangible assets.
Days sales in inventory is computed using GAAP ending inventory multiply by
the number of days in the period divided by the non-GAAP cost of revenue.
NVIDIA believes the presentation of its non-GAAP financial measures
enhances the user's overall understanding of the company's historical
financial performance. The presentation of the company's non-GAAP financial
measures is not meant to be considered in isolation or as a substitute for
the company's financial results prepared in accordance with GAAP, and our
non-GAAP measures may be different from non-GAAP measures used by other
companies.