- Revenue is expected to be $2.65 billion, plus or minus two percent.
- GAAP and non-GAAP gross margins are expected to be 59.7 percent and 60.0 percent, respectively, plus or minus 50 basis points.
- GAAP and non-GAAP operating expenses are expected to be approximately $722 million and $600 million, respectively.
- GAAP and non-GAAP other income and expense are both expected to be nominal.
- GAAP and non-GAAP tax rates are both expected to be 17.5 percent, plus or minus one percent, excluding any discrete items. GAAP discrete items include excess tax benefits or deficiencies related to stock-based compensation, which the company expects to generate variability on a quarter by quarter basis.
Third Quarter Fiscal 2018 Highlights
During the third quarter, NVIDIA achieved progress in these areas:
Datacenter
- Set records for attendance at its GPU Technology Conferences for developers in Beijing, Munich, Tel Aviv, Taipei and Washington.
- Announced that Alibaba, Baidu and Tencent will adopt NVIDIA® Volta GPUs for accelerating AI across enterprise and consumer applications, joining Amazon, Facebook, Google and Microsoft.
- Added NVIDIA Tesla® P100 GPU accelerators to Oracle Cloud.
- Launched the NVIDIA GPU Cloud container registry with fully optimized software stacks to accelerate deep learning for developers worldwide.
- Announced that Huawei, Inspur and Lenovo will use NVIDIA Volta HGX architecture to build AI systems for datacenters.
- Shared news that Dell EMC, Hewlett Packard Enterprise, IBM and Supermicro unveiled servers based on NVIDIA Tesla V100 GPU accelerators.
- Launched the NVIDIA TensorRT™ 3 AI inference acceleration platform, opening up new growth in hyperscale datacenters.
Gaming
- Released the GeForce® GTX 1070 Ti GPU, designed to handle the graphical demands of DirectX 12, HDR and immersive VR.
- Announced collaborations to bring NVIDIA GameWorks™ technology to top fall games, including PlayerUnknown’s Battlegrounds, FINAL FANTASY XV and Shadow of War.
Professional Visualization
- Released the NVIDIA VRWorks™ 360 Video SDK, enabling production houses to live stream high-quality, 360-degree, stereo video.
- Opened early access to NVIDIA Holodeck™, providing a virtual collaboration space using highly realistic, physically simulated VR.
- Launched the Quadro® Virtual Data Center Workstation, with virtualization software that turns GPU-accelerated servers into powerful workstations.
Automotive
- Announced NVIDIA DRIVE™ PX Pegasus, the world's first auto-grade AI computer designed to enable a new class of driverless robotaxis without steering wheels, pedals or mirrors.
Autonomous Machines/AI Edge Computing
- Added Alibaba and Huawei as partners for the NVIDIA Metropolis AI Smart Cities platform.
- Announced it is collaborating with China’s JD.com’s X lab to use NVIDIA Jetson™ to create autonomous machines that bring AI to logistics and delivery.
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 third quarter fiscal 2018 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 (877) 223-3864 in the United States or (574) 990-1377 internationally, and provide the following conference ID: 96232617. 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 NVIDIA’s conference call to discuss its financial results for its fourth quarter and fiscal 2018.
Non-GAAP Measures
To supplement NVIDIA’s Condensed Consolidated Statements of Income 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 income from operations, non-GAAP other income (expense), non-GAAP income tax expense, non-GAAP net income, non-GAAP net income, or earnings, per diluted share, non-GAAP diluted shares, 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 expense, legal settlement costs, acquisition-related costs, contributions, restructuring and other charges, gains from non-affiliated investments, interest expense related to amortization of debt discount, loss on early debt conversions, and the associated tax impact of these items, where applicable. Weighted average shares used in the non-GAAP diluted net income per share computation includes the anti-dilution impact of the company’s Note Hedge. 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 its 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 millions, except per share data) | |||||||||||||||||
| (Unaudited) | |||||||||||||||||
| Three Months Ended | Nine Months Ended | ||||||||||||||||
| October 29, | October 30, | October 29, | October 30, | ||||||||||||||
| 2017 | 2016 | 2017 | 2016 | ||||||||||||||
| Revenue | $ | 2,636 | $ | 2,004 | $ | 6,803 | $ | 4,737 | |||||||||
| Cost of revenue | 1,067 | 821 | 2,782 | 1,977 | |||||||||||||
| Gross profit | 1,569 | 1,183 | 4,021 | 2,760 | |||||||||||||
| Operating expenses | |||||||||||||||||
| Research and development | 462 | 373 | 1,290 | 1,069 | |||||||||||||
| Sales, general and administrative | 212 | 171 | 594 | 487 | |||||||||||||
| Restructuring and other charges | - | - | - | 3 | |||||||||||||
| Total operating expenses | 674 | 544 | 1,884 | 1,559 | |||||||||||||
| Income from operations | 895 | 639 | 2,137 | 1,201 | |||||||||||||
| Interest income | 17 | 14 | 48 | 37 | |||||||||||||
| Interest expense | (15 | ) | (16 | ) | (46 | ) | (39 | ) | |||||||||
| Other, net | (1 | ) | (16 | ) | (22 | ) | (19 | ) | |||||||||
| Total other income (expense) | 1 | (18 | ) | (20 | ) | (21 | ) | ||||||||||
| Income before income tax expense | 896 | 621 | 2,117 | 1,180 | |||||||||||||
| Income tax expense | 58 | 79 | 189 | 168 | |||||||||||||
| Net income | $ | 838 | $ | 542 | $ | 1,928 | $ | 1,012 | |||||||||
| Net income per share: | |||||||||||||||||
| Basic | $ | 1.39 | $ | 1.01 | $ | 3.23 | $ | 1.89 | |||||||||
| Diluted | $ | 1.33 | $ | 0.83 | $ | 3.05 | $ | 1.59 | |||||||||
| Weighted average shares used in per share computation: | |||||||||||||||||
| Basic | 603 | 538 | 597 | 536 | |||||||||||||
| Diluted | 628 | 653 | 633 | 636 | |||||||||||||
