NVIDIA Announces Financial Results for First Quarter Fiscal 2019

NVIDIA CORPORATION
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES
(In millions, except per share data)
(Unaudited)

		Three Months Ended
		April 29,			January 28,			April 30,
		2018			2018			2017

GAAP gross profit		$	2,068		$	1,801		$	1,150
GAAP gross margin			64.5	%		61.9	%		59.4	%
	Stock-based compensation expense (A)		8			7			4
	Legal settlement costs		-			1			-
Non-GAAP gross profit		$	2,076		$	1,809		$	1,154
Non-GAAP gross margin			64.7	%		62.1	%		59.6	%

GAAP operating expenses		$	773		$	728		$	596
	Stock-based compensation expense (A)		(121	)		(119	)		(73	)
	Acquisition-related costs (B)		(2	)		(2	)		(4	)
	Legal settlement costs		(2	)		-			-
	Contributions		-			-			(2	)
Non-GAAP operating expenses		$	648		$	607		$	517

GAAP income from operations		$	1,295		$	1,073		$	554
	Total impact of non-GAAP adjustments to income from operations		133			129			83
Non-GAAP income from operations		$	1,428		$	1,202		$	637

GAAP other income (expense)		$	16		$	5		$	(18	)
	Gains from non-affiliated investments (C)		(6	)		(2	)		-
	Interest expense related to amortization of debt discount		1			-			2
	Debt-related costs (D)		-			2			14
Non-GAAP other income (expense)		$	11		$	5		$	(2	)

GAAP net income		$	1,244		$	1,118		$	507
	Total pre-tax impact of non-GAAP adjustments		128			129			99
	Income tax impact of non-GAAP adjustments (E)		(87	)		(33	)		(73	)
	Provisional tax benefit from income tax reform		-			(133	)		-
Non-GAAP net income		$	1,285		$	1,081		$	533

Diluted net income per share
	GAAP	$	1.98		$	1.78		$	0.79
	Non-GAAP	$	2.05		$	1.72		$	0.85

Weighted average shares used in diluted net income per share computation
	GAAP		627			628			641
	Anti-dilution impact from note hedge (F)		(1	)		(1	)		(14	)
	Non-GAAP		626			627			627

GAAP net cash provided by operating activities		$	1,445		$	1,358		$	282
	Purchase of property and equipment and intangible assets		(118	)		(416	)		(53	)
Free cash flow		$	1,327		$	942		$	229



(A) Stock-based compensation consists of the following:		Three Months Ended
		April 29,			January 28,			April 30,
		2018			2018			2017
	Cost of revenue	$	8		$	7		$	4
	Research and development	$	74		$	73		$	41
	Sales, general and administrative	$	47		$	46		$	31

(B) Consists of amortization of acquisition-related intangible assets and compensation charges.

(C) Consists of realized and unrealized gains from non-affiliated investments.

(D) Consists of loss on early debt conversions and termination of interest rate swap.

(E) Income tax impact of non-GAAP adjustments, including the recognition of excess tax benefits or deficiencies related to stock-based compensation under GAAP accounting standard (ASU 2016-09).

(F) Represents the number of shares that would be delivered upon conversion of the currently outstanding 1.00% Convertible Senior Notes Due 2018. Under GAAP, shares delivered in hedge transactions are not considered offsetting shares in the fully diluted share calculation until actually delivered.

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