NVIDIA CORPORATION |
(Exact name of registrant as specified in its charter) |
Delaware | 0-23985 | 94-3177549 |
(State or other jurisdiction | (Commission | (IRS Employer |
of incorporation) | File Number) | Identification No.) |
2701 San Tomas Expressway, Santa Clara, CA | 95050 | |
(Address of principal executive offices) | (Zip Code) |
Exhibit | Description | |
99.1 | Press Release, dated November 7, 2013, entitled “NVIDIA Reports Financial Results for Third Quarter Fiscal 2014” | |
99.2 | CFO Commentary on Third Quarter Fiscal Year 2014 |
NVIDIA Corporation | ||
Date: November 7, 2013 | By: /s/ Colette M. Kress | |
Colette M. Kress | ||
Executive Vice President and Chief Financial Officer |
Exhibit | Description | |
99.1 | Press Release, dated November 7, 2013, entitled “NVIDIA Reports Financial Results for Third Quarter Fiscal 2014” | |
99.2 | CFO Commentary on Third Quarter Fiscal Year 2014 |
• | Revenue of $1.054 billion. |
• | GAAP net income of $118.7 million, or $0.20 per diluted share. Non-GAAP net income of $153.8 million, or $0.26 per diluted share. |
• | GAAP and non-GAAP gross margins of 55.4 percent and 55.7 percent, respectively. |
GAAP Quarterly Financial Comparison | |||||||||||
(in millions except per share data) | Q3 FY14 | Q2 FY14 | Q3 FY13 | Q/Q | Y/Y | ||||||
Revenue | $ | 1,054.0 | $ | 977.2 | $ | 1,204.1 | up 7.9% | down 12.5% | |||
Gross margin | 55.4 | % | 55.8 | % | 52.9 | % | down 40 bps | up 250 bps | |||
Operating expenses | $ | 443.4 | $ | 440.0 | $ | 384.4 | up 0.8% | up 15.3% | |||
Net income | $ | 118.7 | $ | 96.4 | $ | 209.1 | up 23.1% | down 43.2% | |||
Earnings per share | $ | 0.20 | $ | 0.16 | $ | 0.33 | up 25.0% | down 39.4% |
Non-GAAP* Quarterly Financial Comparison | |||||||||||
(in millions except per share data) | Q3 FY14 | Q2 FY14 | Q3 FY13 | Q/Q | Y/Y | ||||||
Revenue | $ | 1,054.0 | $ | 977.2 | $ | 1,204.1 | up 7.9% | down 12.5% | |||
Gross margin | 55.7 | % | 56.3 | % | 53.1 | % | down 60 bps | up 260 bps | |||
Operating expenses | $ | 405.4 | $ | 400.8 | $ | 344.8 | up 1.1% | up 17.6% | |||
Net income | $ | 153.8 | $ | 133.3 | $ | 245.5 | up 15.3% | down 37.3% | |||
Earnings per share | $ | 0.26 | $ | 0.23 | $ | 0.39 | up 13.0% | down 33.3% |
• | Strengthened its mobile business, with the first shipments of Tegra® 4 devices - including China’s Mi3 smartphone from Xiaomi and Tegra Note™, a complete tablet platform. |
• | Improved gaming for NVIDIA® SHIELD™ users, with the introduction of Gamepad Mapper, which expands support for thousands more Android gaming titles. |
• | Launched its new flagship gaming GPU, GeForce® GTX™ 780 Ti, and the world’s most powerful workstation graphics card, Quadro® K6000. |
• | Introduced revolutionary G-SYNC™ technology, which eliminates onscreen tearing, stuttering and lag by synchronizing the GPU and the display. |
• | Announced that VMware Horizon View, a leading virtual desktop management product, now supports NVIDIA GRID technology. |
• | Revenue is expected to be $1.05 billion, plus or minus two percent. |
• | GAAP and non-GAAP margins are expected to be approximately 54.2 percent and 54.5 percent, respectively. |
• | GAAP operating expenses are expected to be approximately $450 million; non-GAAP operating expenses are expected to be approximately $410 million. |
• | GAAP and non-GAAP tax rates are expected to be 16 percent, plus or minus one percent. This estimate excludes any discrete tax events that may occur during the quarter, which, if realized, may increase or decrease our actual effective tax rates in the quarter. |
• | Like NVIDIA on Facebook. |
• | Connect with NVIDIA on LinkedIn. |
• | Follow @NVIDIA on Twitter. |
• | View NVIDIA videos on YouTube. |
• | Keep up with the NVIDIA Blog. |
• | Use the Pulse news reader to subscribe to the NVIDIA Daily News feed. |
Rob Csongor | Robert Sherbin | |
Investor Relations | Corporate Communications | |
NVIDIA Corporation | NVIDIA Corporation | |
(408) 566-6373 | (408) 566-5150 | |
rcsongor@nvidia.com | rsherbin@nvidia.com |
NVIDIA CORPORATION | ||||||||||||||||
CONDENSED CONSOLIDATED STATEMENTS OF INCOME | ||||||||||||||||
(In thousands, except per share data) | ||||||||||||||||
(Unaudited) | ||||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||
October 27, | October 28, | October 27, | October 28, | |||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||||
Revenue | $ | 1,053,967 | $ | 1,204,110 | $ | 2,985,944 | $ | 3,173,257 | ||||||||
Cost of revenue | 469,552 | 567,452 | 1,337,423 | 1,532,516 | ||||||||||||
Gross profit | 584,415 | 636,658 | 1,648,521 | 1,640,741 | ||||||||||||
Operating expenses | ||||||||||||||||
Research and development | 340,294 | 284,180 | 999,193 | 849,275 | ||||||||||||
Sales, general and administrative | 103,133 | 100,261 | 320,025 | 326,800 | ||||||||||||
Total operating expenses | 443,427 | 384,441 | 1,319,218 | 1,176,075 | ||||||||||||
Operating income | 140,988 | 252,217 | 329,303 | 464,666 | ||||||||||||
Interest and other income, net | 496 | 1,411 | 12,063 | 11,265 | ||||||||||||
Income before income tax expense | 141,484 | 253,628 | 341,366 | 475,931 | ||||||||||||
Income tax expense | 22,750 | 44,548 | 48,293 | 87,368 | ||||||||||||
Net income | $ | 118,734 | $ | 209,080 | $ | 293,073 | $ | 388,563 | ||||||||
Basic net income per share | $ | 0.20 | $ | 0.34 | $ | 0.49 | $ | 0.63 | ||||||||
Diluted net income per share | $ | 0.20 | $ | 0.33 | $ | 0.49 | $ | 0.62 | ||||||||
Shares used in basic per share computation | 580,870 | 622,352 | 594,363 | 619,043 | ||||||||||||
Shares used in diluted per share computation | 588,752 | 628,845 | 600,108 | 625,973 |
NVIDIA CORPORATION | |||||||||
CONDENSED CONSOLIDATED BALANCE SHEETS | |||||||||
(In thousands) | |||||||||
(Unaudited) | |||||||||
October 27, | January 27, | ||||||||
2013 | 2013 | ||||||||
ASSETS | |||||||||
Current assets: | |||||||||
Cash, cash equivalents and marketable securities | $ | 3,032,954 | $ | 3,727,883 | |||||
Accounts receivable, net | 447,631 | 454,252 | |||||||
Inventories | 380,319 | 412,467 | |||||||
Prepaid expenses and other current assets | 188,937 | 180,656 | |||||||
Total current assets | 4,049,841 | 4,775,258 | |||||||
Property and equipment, net | 595,418 | 576,144 | |||||||
Goodwill | 643,179 | 641,030 | |||||||
Intangible assets, net | 320,589 | 312,332 | |||||||
Other assets | 102,346 | 107,481 | |||||||
Total assets | $ | 5,711,373 | $ | 6,412,245 | |||||
LIABILITIES AND STOCKHOLDERS' EQUITY | |||||||||
Current liabilities: | |||||||||
Accounts payable | $ | 333,283 | $ | 356,428 | |||||
Accrued liabilities and other current liabilities | 652,644 | 619,795 | |||||||
Total current liabilities | 985,927 | 976,223 | |||||||
Other long-term liabilities | 387,784 | 589,321 | |||||||
Capital lease obligations, long term | 17,015 | 18,998 | |||||||
Stockholders' equity | 4,320,647 | 4,827,703 | |||||||
Total liabilities and stockholders' equity | $ | 5,711,373 | $ | 6,412,245 |
NVIDIA CORPORATION | ||||||||||||||||||||
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES | ||||||||||||||||||||
(In thousands, except per share data) | ||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||||||
October 27, | July 28, | October 28, | October 27, | October 28, | ||||||||||||||||
2013 | 2013 | 2012 | 2013 | 2012 | ||||||||||||||||
GAAP gross profit | $ | 584,415 | $ | 545,538 | $ | 636,658 | $ | 1,648,521 | $ | 1,640,741 | ||||||||||
GAAP gross margin | 55.4 | % | 55.8 | % | 52.9 | % | 55.2 | % | 51.7 | % | ||||||||||
Stock-based compensation expense included in cost of revenue (A) | 3,090 | 2,168 | 2,489 | 7,911 | 7,664 | |||||||||||||||
Legal settlement | — | 2,290 | — | 2,290 | — | |||||||||||||||
Non-GAAP gross profit | $ | 587,505 | $ | 549,996 | $ | 639,147 | $ | 1,658,722 | $ | 1,648,405 | ||||||||||
Non-GAAP gross margin | 55.7 | % | 56.3 | % | 53.1 | % | 55.6 | % | 51.9 | % | ||||||||||
GAAP operating expenses | $ | 443,427 | $ | 440,004 | $ | 384,441 | $ | 1,319,218 | $ | 1,176,075 | ||||||||||
Stock-based compensation expense included in operating expense (A) | (31,209 | ) | (30,227 | ) | (30,580 | ) | (92,180 | ) | (93,229 | ) | ||||||||||
Amortization of acquisition-related intangible assets | (4,906 | ) | (3,980 | ) | (4,402 | ) | (12,801 | ) | (12,809 | ) | ||||||||||
Other acquisition-related costs or credits (B) | 329 | (4,984 | ) | (4,666 | ) | (9,601 | ) | (14,631 | ) | |||||||||||
Contribution expense (C) | — | — | — | — | (20,127 | ) | ||||||||||||||
Restructuring charge | (2,235 | ) | — | — | (2,235 | ) | — | |||||||||||||
Non-GAAP operating expenses | $ | 405,406 | $ | 400,813 | $ | 344,793 | $ | 1,202,401 | $ | 1,035,279 | ||||||||||
GAAP net income | $ | 118,734 | $ | 96,448 | $ | 209,080 | $ | 293,073 | $ | 388,563 | ||||||||||
Total pre-tax impact of non-GAAP adjustments | 41,111 | 43,649 | 42,137 | 127,018 | 148,460 | |||||||||||||||
Income tax impact of non-GAAP adjustments | (6,055 | ) | (6,767 | ) | (5,755 | ) | (19,170 | ) | (23,583 | ) | ||||||||||
Non-GAAP net income | $ | 153,790 | $ | 133,330 | $ | 245,462 | $ | 400,921 | $ | 513,440 | ||||||||||
Diluted net income per share | ||||||||||||||||||||
GAAP | $ | 0.20 | $ | 0.16 | $ | 0.33 | $ | 0.49 | $ | 0.62 | ||||||||||
Non-GAAP | $ | 0.26 | $ | 0.23 | $ | 0.39 | $ | 0.67 | $ | 0.82 | ||||||||||
Shares used in diluted net income per share computation | 588,752 | 592,006 | 628,845 | 600,108 | 625,973 | |||||||||||||||
Metrics: | ||||||||||||||||||||
GAAP net cash flow provided by operating activities | $ | 162,315 | $ | 96,469 | $ | 181,485 | $ | 434,434 | $ | 373,163 | ||||||||||
Purchase of property and equipment and intangible assets | (38,159 | ) | (84,986 | ) | (44,684 | ) | (188,812 | ) | (135,551 | ) | ||||||||||
Free cash flow | $ | 124,156 | $ | 11,483 | $ | 136,801 | $ | 245,622 | $ | 237,612 |
(A) Excludes stock-based compensation as follows: | ||||||||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||||||
October 27, | July 28, | October 28, | October 27, | October 28, | ||||||||||||||||
2013 | 2013 | 2012 | 2013 | 2012 | ||||||||||||||||
Cost of revenue | $ | 3,090 | $ | 2,168 | $ | 2,489 | $ | 7,911 | $ | 7,664 | ||||||||||
Research and development | $ | 20,902 | $ | 18,555 | $ | 20,056 | $ | 61,392 | $ | 60,148 | ||||||||||
Sales, general and administrative | $ | 10,307 | $ | 11,672 | $ | 10,524 | $ | 30,788 | $ | 33,081 | ||||||||||
(B) Consists of transaction costs, compensation charges, and other credits related to acquisitions. | ||||||||||||||||||||
(C) Net present value of a $25 million charitable contribution pledged on June 12, 2012 to Stanford Hospital and Clinic, payable over ten years. |
NVIDIA CORPORATION | ||||
RECONCILIATION OF GAAP TO NON-GAAP OUTLOOK | ||||
Q4 FY2014 Outlook | ||||
GAAP gross margin | 54.2 | % | ||
Impact of stock-based compensation (A) | 0.3 | % | ||
Non-GAAP gross margin | 54.5 | % | ||
Q4 FY2014 Outlook | ||||
(In millions) | ||||
GAAP operating expenses | $ | 450.0 | ||
Stock-based compensation expense included in operating expense | (30.8 | ) | ||
Amortization of acquisition-related intangible assets | (4.9 | ) | ||
Other acquisition-related costs (B) | (4.3 | ) | ||
Non-GAAP operating expenses | $ | 410.0 | ||
(A) Represents $2.7 million of stock-based compensation expense included in cost of revenue. | ||||
(B) Consists of transaction costs and compensation charges related to acquisitions. |
GAAP Quarterly Financial Comparison | |||||||||||
(in millions except per share data) | Q3 FY14 | Q2 FY14 | Q3 FY13 | Q/Q | Y/Y | ||||||
Revenue | $ | 1,054.0 | $ | 977.2 | $ | 1,204.1 | up 7.9% | down 12.5% | |||
Gross margin | 55.4 | % | 55.8 | % | 52.9 | % | down 40 bps | up 250 bps | |||
Operating expenses | $ | 443.4 | $ | 440.0 | $ | 384.4 | up 0.8% | up 15.3% | |||
Net income | $ | 118.7 | $ | 96.4 | $ | 209.1 | up 23.1% | down 43.2% | |||
Earnings per share | $ | 0.20 | $ | 0.16 | $ | 0.33 | up 25.0% | down 39.4% |
Non-GAAP* Quarterly Financial Comparison | |||||||||||
(in millions except per share data) | Q3 FY14 | Q2 FY14 | Q3 FY13 | Q/Q | Y/Y | ||||||
Revenue | $ | 1,054.0 | $ | 977.2 | $ | 1,204.1 | up 7.9% | down 12.5% | |||
Gross margin | 55.7 | % | 56.3 | % | 53.1 | % | down 60 bps | up 260 bps | |||
Operating expenses | $ | 405.4 | $ | 400.8 | $ | 344.8 | up 1.1% | up 17.6% | |||
Net income | $ | 153.8 | $ | 133.3 | $ | 245.5 | up 15.3% | down 37.3% | |||
Earnings per share | $ | 0.26 | $ | 0.23 | $ | 0.39 | up 13.0% | down 33.3% |
GAAP Quarterly Revenue Comparison | |||||||||||
(in millions) | Q3 FY14 | Q2 FY14 | Q3 FY13 | Q/Q | Y/Y | ||||||
GPU | $ | 876.8 | $ | 858.6 | $ | 894.2 | up 2.1% | down 1.9% | |||
Tegra Processor | 111.2 | 52.6 | 243.9 | up 111.4% | down 54.4% | ||||||
All Other | 66.0 | 66.0 | 66.0 | ------- | ------- | ||||||
Total | $ | 1,054.0 | $ | 977.2 | $ | 1,204.1 | up 7.9% | down 12.5% |
(Impact on opex/millions) | Q3 FY14 | Q2 FY14 | Q3 FY13 | ||||||
Stock-based compensation | $ | 31.2 | $ | 30.2 | $ | 30.6 | |||
Amortization of acquisition-related intangible assets | 4.9 | 4.0 | 4.4 | ||||||
Other acquisition-related costs or credits | (0.3 | ) | 5.0 | 4.6 | |||||
Restructuring charge | 2.2 | ------- | ------- | ||||||
Total | $ | 38.0 | $ | 39.2 | $ | 39.6 |
• | Revenue is expected to be $1.05 billion, plus or minus two percent. |
• | GAAP and non-GAAP gross margins are expected to be approximately 54.2 percent and 54.5 percent, respectively. |
• | GAAP operating expenses are expected to be approximately $450 million; non-GAAP operating expenses are expected to be approximately $410 million. |
• | GAAP and non-GAAP tax rates are expected to be 16 percent, plus or minus one percent. This estimate excludes any discrete tax events that may occur during the quarter, which, if realized, may increase or decrease our actual effective tax rates in the quarter. |
Rob Csongor | Robert Sherbin | |
Investor Relations | Corporate Communications | |
NVIDIA Corporation | NVIDIA Corporation | |
(408) 566-6373 | (408) 566-5150 | |
rcsongor@nvidia.com | rsherbin@nvidia.com |
NVIDIA CORPORATION | ||||||||||||||||||||
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES | ||||||||||||||||||||
(In thousands, except per share data) | ||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||||||
October 27, | July 28, | October 28, | October 27, | October 28, | ||||||||||||||||
2013 | 2013 | 2012 | 2013 | 2012 | ||||||||||||||||
GAAP gross profit | $ | 584,415 | $ | 545,538 | $ | 636,658 | $ | 1,648,521 | $ | 1,640,741 | ||||||||||
GAAP gross margin | 55.4 | % | 55.8 | % | 52.9 | % | 55.2 | % | 51.7 | % | ||||||||||
Stock-based compensation expense included in cost of revenue (A) | 3,090 | 2,168 | 2,489 | 7,911 | 7,664 | |||||||||||||||
Legal settlement | — | 2,290 | — | 2,290 | — | |||||||||||||||
Non-GAAP gross profit | $ | 587,505 | $ | 549,996 | $ | 639,147 | $ | 1,658,722 | $ | 1,648,405 | ||||||||||
Non-GAAP gross margin | 55.7 | % | 56.3 | % | 53.1 | % | 55.6 | % | 51.9 | % | ||||||||||
GAAP operating expenses | $ | 443,427 | $ | 440,004 | $ | 384,441 | $ | 1,319,218 | $ | 1,176,075 | ||||||||||
Stock-based compensation expense included in operating expense (A) | (31,209 | ) | (30,227 | ) | (30,580 | ) | (92,180 | ) | (93,229 | ) | ||||||||||
Amortization of acquisition-related intangible assets | (4,906 | ) | (3,980 | ) | (4,402 | ) | (12,801 | ) | (12,809 | ) | ||||||||||
Other acquisition-related costs or credits (B) | 329 | (4,984 | ) | (4,666 | ) | (9,601 | ) | (14,631 | ) | |||||||||||
Contribution expense (C) | — | — | — | — | (20,127 | ) | ||||||||||||||
Restructuring charge | (2,235 | ) | — | — | (2,235 | ) | — | |||||||||||||
Non-GAAP operating expenses | $ | 405,406 | $ | 400,813 | $ | 344,793 | $ | 1,202,401 | $ | 1,035,279 | ||||||||||
GAAP net income | $ | 118,734 | $ | 96,448 | $ | 209,080 | $ | 293,073 | $ | 388,563 | ||||||||||
Total pre-tax impact of non-GAAP adjustments | 41,111 | 43,649 | 42,137 | 127,018 | 148,460 | |||||||||||||||
Income tax impact of non-GAAP adjustments | (6,055 | ) | (6,767 | ) | (5,755 | ) | (19,170 | ) | (23,583 | ) | ||||||||||
Non-GAAP net income | $ | 153,790 | $ | 133,330 | $ | 245,462 | $ | 400,921 | $ | 513,440 | ||||||||||
Diluted net income per share | ||||||||||||||||||||
GAAP | $ | 0.20 | $ | 0.16 | $ | 0.33 | $ | 0.49 | $ | 0.62 | ||||||||||
Non-GAAP | $ | 0.26 | $ | 0.23 | $ | 0.39 | $ | 0.67 | $ | 0.82 | ||||||||||
Shares used in diluted net income per share computation | 588,752 | 592,006 | 628,845 | 600,108 | 625,973 | |||||||||||||||
Metrics: | ||||||||||||||||||||
GAAP net cash flow provided by operating activities | $ | 162,315 | $ | 96,469 | $ | 181,485 | $ | 434,434 | $ | 373,163 | ||||||||||
Purchase of property and equipment and intangible assets | (38,159 | ) | (84,986 | ) | (44,684 | ) | (188,812 | ) | (135,551 | ) | ||||||||||
Free cash flow | $ | 124,156 | $ | 11,483 | $ | 136,801 | $ | 245,622 | $ | 237,612 |
(A) Excludes stock-based compensation as follows: | ||||||||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||||||
October 27, | July 28, | October 28, | October 27, | October 28, | ||||||||||||||||
2013 | 2013 | 2012 | 2013 | 2012 | ||||||||||||||||
Cost of revenue | $ | 3,090 | $ | 2,168 | $ | 2,489 | $ | 7,911 | $ | 7,664 | ||||||||||
Research and development | $ | 20,902 | $ | 18,555 | $ | 20,056 | $ | 61,392 | $ | 60,148 | ||||||||||
Sales, general and administrative | $ | 10,307 | $ | 11,672 | $ | 10,524 | $ | 30,788 | $ | 33,081 | ||||||||||
(B) Consists of transaction costs, compensation charges, and other credits related to acquisitions. | ||||||||||||||||||||
(C) Net present value of a $25 million charitable contribution pledged on June 12, 2012 to Stanford Hospital and Clinic, payable over ten years. |
NVIDIA CORPORATION | ||||
RECONCILIATION OF GAAP TO NON-GAAP OUTLOOK | ||||
Q4 FY2014 Outlook | ||||
GAAP gross margin | 54.2 | % | ||
Impact of stock-based compensation (A) | 0.3 | % | ||
Non-GAAP gross margin | 54.5 | % | ||
Q4 FY2014 Outlook | ||||
(In millions) | ||||
GAAP operating expenses | $ | 450.0 | ||
Stock-based compensation expense included in operating expense | (30.8 | ) | ||
Amortization of acquisition-related intangible assets | (4.9 | ) | ||
Other acquisition-related costs (B) | (4.3 | ) | ||
Non-GAAP operating expenses | $ | 410.0 | ||
(A) Represents $2.7 million of stock-based compensation expense included in cost of revenue. | ||||
(B) Consists of transaction costs and compensation charges related to acquisitions. |