NVIDIA CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In millions, except per share data)
(Unaudited)
Three Months Ended Six Months Ended
------------------------ ------------------------
July 31, July 26, July 31, July 26,
2016 2015 2016 2015
----------- ----------- ----------- -----------
Revenue $ 1,428 $ 1,153 $ 2,733 $ 2,304
Cost of revenue 602 519 1,156 1,018
----------- ----------- ----------- -----------
Gross profit 826 634 1,577 1,286
Operating expenses
Research and
development 350 320 697 658
Sales, general and
administrative 157 149 316 289
Restructuring and other
charges 2 89 3 89
----------- ----------- ----------- -----------
Total operating
expenses 509 558 1,016 1,036
----------- ----------- ----------- -----------
Income from operations 317 76 561 250
Interest income 12 9 23 18
Interest expense (12) (12) (23) (22)
Other income (expense),
net - (1) (3) (2)
----------- ----------- ----------- -----------
Income before income tax
expense 317 72 558 244
Income tax expense 64 46 109 84
----------- ----------- ----------- -----------
Net income $ 253 $ 26 $ 449 $ 160
=========== =========== =========== ===========
Net income per share:
Basic $ 0.47 $ 0.05 $ 0.84 $ 0.29
=========== =========== =========== ===========
Diluted $ 0.40 $ 0.05 $ 0.73 $ 0.28
=========== =========== =========== ===========
Weighted average shares
used in per share
computation:
Basic 534 541 536 545
Diluted 631 556 617 563
NVIDIA CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(In millions)
(Unaudited)
July 31, January 31,
2016 2016
------------- -------------
ASSETS
Current assets:
Cash, cash equivalents and marketable
securities $ 4,879 $ 5,037
Accounts receivable, net 644 505
Inventories 521 418
Prepaid expenses and other current assets 112 93
------------- -------------
Total current assets 6,156 6,053
Property and equipment, net 485 466
Goodwill 618 618
Intangible assets, net 138 166
Other assets 64 67
------------- -------------
Total assets $ 7,461 $ 7,370
============= =============
LIABILITIES, CONVERTIBLE DEBT CONVERSION OBLIGATION AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 423 $ 296
Accrued and other current liabilities 556 642
Convertible short-term debt 1,428 1,413
------------- -------------
Total current liabilities 2,407 2,351
Other long-term liabilities 494 453
Capital lease obligations, long-term 8 10
------------- -------------
Total liabilities 2,909 2,814
Convertible debt conversion obligation 72 87
Shareholders' equity 4,480 4,469
------------- -------------
Total liabilities, convertible debt
conversion obligation and shareholders'
equity $ 7,461 $ 7,370
============= =============
NVIDIA CORPORATION
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES
(In millions, except per share data)
(Unaudited)
Three Months Ended Six Months Ended
------------------------------ --------------------
July 31, May 1, July 26, July 31, July 26,
2016 2016 2015 2016 2015
--------- -------- --------- --------- ---------
GAAP gross profit $ 826 $ 751 $ 634 $ 1,577 $ 1,286
GAAP gross margin 57.9% 57.5% 55.0% 57.7% 55.8%
Stock-based
compensation
expense (A) 4 4 3 8 6
Legal settlement
costs (B) - 10 - 10 -
Product warranty
charge (C) - - 15 - 15
--------- -------- --------- --------- ---------
Non-GAAP gross profit $ 830 $ 765 $ 652 $ 1,595 $ 1,307
========= ======== ========= ========= =========
Non-GAAP gross
margin 58.1% 58.6% 56.6% 58.4% 56.7%
GAAP operating
expenses $ 509 $ 506 $ 558 $ 1,016 $ 1,036
Stock-based
compensation
expense (A) (54) (49) (44) (104) (87)
Legal settlement
costs (B) - (6) - (6) -
Acquisition-related
costs (D) (4) (4) (4) (8) (13)
Contributions (1) (3) - (4) -
Restructuring and
other charges (2) (1) (89) (3) (89)
--------- -------- --------- --------- ---------
Non-GAAP operating
expenses $ 448 $ 443 $ 421 $ 891 $ 847
========= ======== ========= ========= =========
GAAP income from
operations $ 317 $ 245 $ 76 $ 561 $ 250
Total impact of non-
GAAP adjustments to
income from
operations 65 77 155 143 211
--------- -------- --------- --------- ---------
Non-GAAP income from
operations $ 382 $ 322 $ 231 $ 704 $ 461
========= ======== ========= ========= =========
GAAP other income
(expense), net $ - $ (4) $ (4) $ (3) $ (6)
Gains from non-
affiliated
investments - (3) - (3) -
Interest expense
related to
amortization of
debt discount 7 7 7 14 14
--------- -------- --------- --------- ---------
Non-GAAP other income
(expense), net $ 7 $ - $ 3 $ 8 $ 8
========= ======== ========= ========= =========
GAAP net income $ 253 $ 196 $ 26 $ 449 $ 160
Total pre-tax impact
of non-GAAP
adjustments 72 81 162 154 225
Income tax impact of
non-GAAP
adjustments (12) (14) 2 (27) (8)
--------- -------- --------- --------- ---------
Non-GAAP net income $ 313 $ 263 $ 190 $ 576 $ 377
========= ======== ========= ========= =========
Diluted net income per
share
GAAP $ 0.40 $ 0.33 $ 0.05 $ 0.73 $ 0.28
========= ======== ========= ========= =========
Non-GAAP $ 0.53 $ 0.46 $ 0.34 $ 0.99 $ 0.68
========= ======== ========= ========= =========
Weighted average
shares used in
diluted net income
per share computation
GAAP 631 597 556 617 563
Anti-dilution impact
from note hedge (E) (43) (29) (4) (37) (5)
--------- -------- --------- --------- ---------
Non-GAAP 588 568 552 580 558
========= ======== ========= ========= =========
GAAP net cash provided
by operating
activities $ 184 $ 309 $ 163 $ 493 $ 409
Purchase of property
and equipment and
intangible assets (33) (55) (24) (88) (54)
--------- -------- --------- --------- ---------
Free cash flow $ 151 $ 254 $ 139 $ 405 $ 355
========= ======== ========= ========= =========
----------------------------------------------------------------------------
(A) Excludes stock-based compensation as follows:
Three Months Ended Six Months Ended
------------------------------ --------------------
July 31, May 1, July 26, July 31, July 26,
2016 2016 2015 2016 2015
--------- -------- --------- --------- ---------
Cost of revenue $ 4 $ 4 $ 3 $ 8 $ 6
Research and
development $ 30 $ 29 $ 27 $ 59 $ 54
Sales, general
and
administrative $ 24 $ 20 $ 17 $ 44 $ 33
(B) Legal settlement with Advanced Silicon Technologies LLC and other
settlement related costs.
(C) Represents warranty charge associated with a product recall.
(D) Consists of amortization of acquisition-related intangible assets,
transaction costs, compensation charges, and other credits related to
acquisitions.
(E) Represents the number of shares that would be delivered upon conversion
of the currently outstanding 1.00% Convertible Senior Notes Due 2018.
Under U.S. GAAP, shares delivered in hedge transactions are not considered
offsetting shares in the fully diluted share calculation until actually
delivered.
----------------------------------------------------------------------------
NVIDIA CORPORATION
RECONCILIATION OF GAAP TO NON-GAAP OUTLOOK
Q3 FY2017
Outlook
-------------------
GAAP gross margin 57.8%
Impact of stock-based compensation expense 0.2%
-------------------
Non-GAAP gross margin 58.0%
===================
Q3 FY2017
Outlook
-------------------
(In millions)
GAAP operating expenses $ 530
Stock-based compensation expense, acquisition-related
costs, and other costs (65)
-------------------
Non-GAAP operating expenses $ 465
===================
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NVIDIA Announces Financial Results for Second Quarter Fiscal 2017
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