NVIDIA Announces Financial Results for Third Quarter Fiscal 2020


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

		Three Months Ended									Nine Months Ended
		October 27,			July 28,			October 28,			October 27,			October 28,
		2019			2019			2018			2019			2018

GAAP gross profit		$	1,916		$	1,541		$	1,921		$	4,753		$	5,964
GAAP gross margin			63.6	%		59.8	%		60.4	%		60.8	%		62.7	%
	Stock-based compensation expense (A)		15			8			5			27			21
	Legal settlement costs		-			2			14			11			14
Non-GAAP gross profit		$	1,931		$	1,551		$	1,940		$	4,791		$	5,999
Non-GAAP gross margin			64.1	%		60.1	%		61.0	%		61.3	%		63.1	%

GAAP operating expenses		$	989		$	970		$	863		$	2,897		$	2,454
	Stock-based compensation expense (A)		(208	)		(216	)		(135	)		(597	)		(379	)
	Acquisition-related and other costs		(7	)		(5	)		(1	)		(22	)		(5	)
	Legal settlement costs		-			-			(1	)		(2	)		(3	)
	Restructuring and other		-			-			4			-			4
Non-GAAP operating expenses		$	774		$	749		$	730		$	2,276		$	2,071

GAAP income from operations		$	927		$	571		$	1,058		$	1,856		$	3,510
	Total impact of non-GAAP adjustments to income from operations		229			231			152			659			418
Non-GAAP income from operations		$	1,156		$	802		$	1,210		$	2,515		$	3,928

GAAP other income (expense)		$	32		$	35		$	23		$	98		$	62
	Losses (Gains) from non-affiliated investments		-			-			(2	)		1			(11	)
	Interest expense related to amortization of debt discount		1			-			-			1			1
Non-GAAP other income (expense)		$	33		$	35		$	21		$	100		$	52

GAAP net income		$	899		$	552		$	1,230		$	1,845		$	3,575
	Total pre-tax impact of non-GAAP adjustments		230			231			150			660			409
	Income tax impact of non-GAAP adjustments (B)		(26	)		(21	)		(91	)		(97	)		(199	)
	Tax benefit from income tax reform		-			-			(138	)		-			(138	)
Non-GAAP net income		$	1,103		$	762		$	1,151		$	2,408		$	3,647

Diluted net income per share
	GAAP	$	1.45		$	0.90		$	1.97		$	2.99		$	5.71
	Non-GAAP	$	1.78		$	1.24		$	1.84		$	3.90		$	5.83

Weighted average shares used in diluted net income per share computation			618			616			625			617			626

GAAP net cash provided by operating activities		$	1,640		$	936		$	487		$	3,296		$	2,845
	Purchase of property and equipment and intangible assets		(104	)		(113	)		(150	)		(344	)		(397	)
Free cash flow		$	1,536		$	823		$	337		$	2,952		$	2,448



(A) Stock-based compensation consists of the following:		Three Months Ended									Nine Months Ended
		October 27,			July 28,			October 28,			October 27,			October 28,
		2019			2019			2018			2019			2018
	Cost of revenue	$	15		$	8		$	5		$	27		$	21
	Research and development	$	141		$	145		$	88		$	400		$	237
	Sales, general and administrative	$	67		$	71		$	47		$	197		$	142

(B) 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).

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