Segment Information

3 Months Ended

Apr. 27, 2014

Notes to financial statements [Abstract]

Segment Information

Segment Information

Our Chief Executive Officer, who is considered to be our chief operating decision maker, or CODM, reviews financial information presented on an operating segment basis for purposes of making operating decisions and assessing financial performance. Our operating segments are equivalent to our reportable segments. We report our business in two primary reporting segments - the GPU business and the Tegra Processor business.

Our GPU business leverages our GPU technology across multiple end markets. It comprises four primary product lines: GeForce for consumer desktop and notebook PCs; Quadro for professional workstations; Tesla for high-performance computing; and NVIDIA GRID to provide the power of NVIDIA graphics through the cloud. It also includes other related products, licenses and revenue supporting the GPU business, such as memory products.

Our Tegra Processor business comprises primarily product lines based on our Tegra SOC and modem processor technologies, including Tegra for tablets, smartphones and gaming devices; Icera baseband processors and RF transceivers; automotive computers, including infotainment and navigation systems; and gaming devices, such as SHIELD. It also includes embedded products and license and other revenue associated with game consoles.

During the fourth quarter of fiscal year 2014, our CODM completed a refinement of the methodology utilized to assign expenses to the GPU and Tegra Processor businesses to align to the Company’s product architecture and roadmap. With the announcement of our Tegra K1 processor, we now have a single unifying architecture for our GPU and Tegra Processors. This architecture unification prompted a methodology change that leverages our visual computing expertise by charging the operating expenses of certain core engineering functions to the GPU business, while charging the Tegra Processor business for the incremental cost of the teams working directly for that business. In instances where the operating expenses of certain functions benefit both reporting segments, our CODM assigns 100% of those expenses to the reporting segment that benefits the most. The revenue and cost of revenue of the reporting segments was not affected, and comparative periods presented below reflect the impact of this change.

The “All Other” category presented below represents the revenue and expenses that our CODM does not assign to either the GPU business or the Tegra Processor business for purposes of making operating decisions or assessing financial performance. The revenue includes primarily patent licensing revenue and the expenses include corporate infrastructure and support costs, stock-based compensation costs, amortization of acquisition-related intangible assets, other acquisition-related costs, and other non-recurring charges and benefits that our CODM deems to be enterprise in nature.

Our CODM does not review any information regarding total assets on a reporting segment basis. We do not have intersegment revenue. The accounting policies for segment reporting are the same as for NVIDIA as a whole.

	GPU		Tegra Processor			All Other			Consolidated
	(In thousands)
Three Months Ended April 27, 2014
Revenue	$	897,363	$	139,424		$	66,000		$	1,102,787
Depreciation and amortization expense	$	29,524	$	14,168		$	11,391		$	55,083
Operating income (loss)	$	235,197	$	(61,440	)	$	(22,398	)	$	151,359
Three Months Ended April 28, 2013
Revenue	$	785,612	$	103,127		$	66,000		$	954,739
Depreciation and amortization expense	$	38,848	$	10,671		$	10,225		$	59,744
Operating income (loss)	$	158,526	$	(54,990	)	$	(20,755	)	$	82,781

	Three Months Ended
	April 27, 2014			April 28, 2013
	(In thousands)
Reconciling items included in "All Other" category :
Revenue not allocated to reporting segments	$	66,000		$	66,000
Unallocated corporate operating expenses and other expenses	(43,436		)	(44,497		)
Stock-based compensation	(35,521		)	(33,397		)
Amortization of acquisition-related intangibles	(9,441		)	(8,861		)
Total	$	(22,398	)	$	(20,755	)

Revenue by geographic region is allocated to individual countries based on the location to which the products are initially billed even if our customers’ revenue is attributable to end customers that are located in a different location. The following tables summarize information pertaining to our revenue from customers based on invoicing address in different geographic regions:

	Three Months Ended
	April 27,		April 28,
	2014		2013
	(In thousands)
Revenue:
Taiwan	$	372,859	$	289,881
China	223,462		175,044
United States	172,935		185,978
Other Asia Pacific	154,850		167,257
Other Americas	91,763		65,007
Europe	86,918		71,572
Total revenue	$	1,102,787	$	954,739

For the three months ended April 27, 2014, revenue from significant customers, those representing 10% or more of total revenue, was 10% of our total revenue from one customer whose revenue was attributable to both the GPU and Tegra Processor businesses. For the three months ended April 28, 2013, revenue from significant customers was 21% of our total revenue from two customers and was attributable primarily to the GPU business for the first customer and to both the GPU and Tegra Processor businesses for the second customer.

Accounts receivable from significant customers, those representing 10% or more of total accounts receivable, was 33% of our accounts receivable balance from two customers at April 27, 2014 and 23% of our accounts receivable balance from one customer at January 26, 2014.