- Revenue is expected to be $1.16 billion, plus or minus two percent.
- GAAP and non-GAAP gross margins are expected to be 56.2 percent and 56.5 percent, respectively, plus or minus 50 basis points.
- GAAP operating expenses are expected to be approximately $478 million; non-GAAP operating expenses are expected to be approximately $425 million, inclusive of litigation costs.
- GAAP and non-GAAP tax rates for the first quarter of fiscal 2016 are expected to be 20 percent, plus or minus one percent -- excluding the benefit of the U.S. Federal R&D tax credit which expired December 31, 2014.
- Capital expenditures are expected to be approximately $30 million to $40 million.
Fourth Quarter Fiscal 2015 Highlights
During the fourth quarter, NVIDIA achieved progress in each of its market-specialized platforms:
Gaming:
- Introduced the GeForce® GTX™ 960 GPU, bringing the power and efficiency of the Maxwell architecture to the gaming market's $199 sweet spot.
Enterprise Graphics:
- Announced, shortly after the quarter, that the new version of VMware's virtualization suite, VMware Horizon 6, includes the capability to deliver scalable, virtualized 3D graphics enabled by NVIDIA GRID vGPU™.
Accelerated Computing:
- Announced that the NVIDIA Tesla® Accelerated Computing Platform will power the U.S. Department of Energy's next-generation supercomputers, expected to deliver at least three-times greater performance than today's most powerful system. They will be based on IBM POWER servers equipped with Tesla GPUs and NVIDIA NVLink™ high-speed GPU interconnect technology.
- Launched the Tesla K80 dual-GPU accelerator, designed to power a wide range of machine learning, data-analytics and high performance computing applications.
Automotive:
- Unveiled at the International Consumer Electronics Show the NVIDIA® Tegra® X1 mobile processor -- a 256-core Maxwell™ architecture-based mobile super chip with over one teraflops of computing power.
- Launched NVIDIA DRIVE™ automotive computers, which move the industry closer to the era of auto-piloted cars and run next-generation infotainment systems.
CFO Commentary
Commentary on the quarter by Colette Kress, NVIDIA's executive vice president and chief financial officer, is available at
http://investor.nvidia.com/.
Conference Call and Webcast Information
NVIDIA will conduct a conference call with analysts and investors to discuss its fourth quarter and fiscal 2015 financial results and current financial prospects today at 2 p.m. Pacific Time (5 p.m. Eastern Time). To listen to the conference call, dial (303) 223-4365; no password is required. A live webcast (listen-only mode) of the conference call will be accessible at NVIDIA's investor relations website,
http://investor.nvidia.com, and at
www.streetevents.com. The webcast will be recorded and available for replay until the company's conference call to discuss its financial results for its first quarter fiscal 2016.
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 gross profit, non-GAAP gross margin, non-GAAP operating expenses, non-GAAP other income and expense, non-GAAP income tax expense, non-GAAP net income, non-GAAP net income, or earnings, per diluted share, and free cash flow. 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 stock-based compensation, legal settlements, a credit related to a weak die/packaging material set, acquisition-related costs, gains and losses from non-affiliated investments, interest expense related to amortization of debt discount, other expense 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. 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.
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NVIDIA CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF INCOME (In thousands, except per share data) (Unaudited) Three Months Ended Twelve Months Ended ----------------------- ----------------------- January 25, January 26, January 25, January 26, 2015 2014 2015 2014 ----------- ----------- ----------- ----------- Revenue $ 1,250,514 $ 1,144,218 $ 4,681,507 $ 4,130,162 Cost of revenue 550,911 524,976 2,082,030 1,862,399 ----------- ----------- ----------- ----------- Gross profit 699,603 619,242 2,599,477 2,267,763 Operating expenses Research and development 348,253 336,641 1,359,725 1,335,834 Sales, general and administrative 120,214 115,677 480,763 435,702 ----------- ----------- ----------- ----------- Total operating expenses 468,467 452,318 1,840,488 1,771,536 ----------- ----------- ----------- ----------- Operating income 231,136 166,924 758,989 496,227 Interest income 8,129 4,156 28,090 17,119 Interest expense 11,594 7,935 46,133 10,443 Other income, net 188 5,743 13,890 7,351 ----------- ----------- ----------- ----------- Income before income tax expense 227,859 168,888 754,836 510,254 Income tax expense 34,731 21,971 124,249 70,264 ----------- ----------- ----------- ----------- Net income $ 193,128 $ 146,917 $ 630,587 $ 439,990 =========== =========== =========== =========== Net income per share: Basic $ 0.35 $ 0.26 $ 1.14 $ 0.75 =========== =========== =========== =========== Diluted $ 0.35 $ 0.25 $ 1.12 $ 0.74 =========== =========== =========== =========== Weighted average shares used in per share computation: Basic 544,170 568,483 552,319 587,893 Diluted 556,573 577,356 563,068 594,517 NVIDIA CORPORATION CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands) (Unaudited) January 25, January 26, 2015 2014 ------------- ------------- ASSETS Current assets: Cash, cash equivalents and marketable securities $ 4,623,339 $ 4,671,810 Accounts receivable, net 473,637 426,357 Inventories 482,893 387,765 Prepaid expenses and other current assets 133,428 138,779 ------------- ------------- Total current assets 5,713,297 5,624,711 Property and equipment, net 557,282 582,740 Goodwill 618,179 643,179 Intangible assets, net 221,714 296,012 Other assets 90,896 104,252 ------------- ------------- Total assets $ 7,201,368 $ 7,250,894 ============= ============= LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $ 293,223 $ 324,391 Accrued liabilities and other current liabilities 602,807 621,105 ------------- ------------- Total current liabilities 896,030 945,496 Long-term debt 1,384,342 1,356,375 Other long-term liabilities 488,928 475,125 Capital lease obligations, long-term 14,086 17,500 Stockholders' equity 4,417,982 4,456,398 ------------- ------------- Total liabilities and stockholders' equity $ 7,201,368 $ 7,250,894 ============= ============= NVIDIA CORPORATION RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES (In thousands, except per share data) (Unaudited) Three Months Ended Twelve Months Ended ---------------------------- ---------------------- January October January January January 25, 26, 26, 25, 26, 2015 2014 2014 2015 2014 -------- -------- -------- ---------- ---------- GAAP gross profit $699,603 $676,698 $619,242 $2,599,477 $2,267,763 GAAP gross margin 55.9% 55.2% 54.1% 55.5% 54.9% Stock-based compensation expense included in cost of revenue (A) 3,426 3,021 2,777 12,022 10,688 Legal settlement - - 1,450 - 3,740 Credit from a weak die/packaging material set (B) - - (7,782) - (7,782) -------- -------- -------- ---------- ---------- Non-GAAP gross profit $703,029 $679,719 $615,687 $2,611,499 $2,274,409 ======== ======== ======== ========== ========== Non-GAAP gross margin 56.2% 55.5% 53.8% 55.8% 55.1% GAAP operating expenses $468,467 $463,383 $452,318 $1,840,488 $1,771,536 Stock-based compensation expense included in operating expense (A) (39,044) (38,414) (33,427) (145,819) (125,607) Acquisition- related costs (B) (9,169) (9,572) (9,250) (37,355) (31,652) Other expense © - - (1,845) - (4,080) -------- -------- -------- ---------- ---------- Non-GAAP operating expenses $420,254 $415,397 $407,796 $1,657,314 $1,610,197 ======== ======== ======== ========== ========== GAAP other income (expense), net $ (3,277) $ (4,245) $ 1,964 $ (4,153) $ 14,027 Gains and losses from non- affiliated investments - - (3,074) (14,482) (3,074) Interest expense related to amortization of debt discount 7,083 7,010 4,600 27,967 4,600 -------- -------- -------- ---------- ---------- Non-GAAP other income (expense), net $ 3,806 $ 2,765 $ 3,490 $ 9,332 $ 15,553 ======== ======== ======== ========== ========== GAAP net income $193,128 $172,967 $146,917 $ 630,587 $ 439,990 Total pre-tax impact of non- GAAP adjustments 58,722 58,017 42,493 208,681 169,511 Income tax impact of non-GAAP adjustments (10,783) (10,549) (1,924) (38,280) (21,094) -------- -------- -------- ---------- ---------- Non-GAAP net income $241,067 $220,435 $187,486 $ 800,988 $ 588,407 ======== ======== ======== ========== ========== Diluted net income per share GAAP $ 0.35 $ 0.31 $ 0.25 $ 1.12 $ 0.74 ======== ======== ======== ========== ========== Non-GAAP $ 0.43 $ 0.39 $ 0.32 $ 1.42 $ 0.99 ======== ======== ======== ========== ========== Shares used in diluted net income per share computation 556,573 558,201 577,356 563,068 594,517 Metrics: GAAP net cash flow provided by operating activities $442,729 $215,623 $400,712 $ 905,656 $ 835,146 Purchase of property and equipment and intangible assets (31,045) (39,741) (66,374) (122,381) (255,186) -------- -------- -------- ---------- ---------- Free cash flow $411,684 $175,882 $334,338 $ 783,275 $ 579,960 ======== ======== ======== ========== ========== ---------------------------------------------------------------------------- (A) Excludes stock- based compensation as follows: Three Months Ended Twelve Months Ended ---------------------------- ---------------------- January October January January January 25, 26, 26, 25, 26, 2015 2014 2014 2015 2014 -------- -------- -------- ---------- ---------- Cost of revenue $ 3,426 $ 3,021 $ 2,777 $ 12,022 $ 10,688 Research and development $ 23,719 $ 22,680 $ 21,548 $ 88,355 $ 82,940 Sales, general and administrative $ 15,325 $ 15,734 $ 11,879 $ 57,464 $ 42,667 (B) Consists of amortization of acquisition-related intangible assets, transaction costs, compensation charges, and other credits related to acquisitions. © Includes intangible asset write-off, restructuring charge, and legal settlement cost, net of credits. ---------------------------------------------------------------------------- NVIDIA CORPORATION RECONCILIATION OF GAAP TO NON-GAAP OUTLOOK Q1 FY2016 Outlook --------------------- GAAP gross margin 56.2% Impact of stock-based compensation 0.3% --------------------- Non-GAAP gross margin 56.5% ===================== Q1 FY2016 Outlook --------------------- (In millions) GAAP operating expenses $ 478 Stock-based compensation expense and acquisition- related costs (53) --------------------- Non-GAAP operating expenses $ 425 =====================