Segment Information

9 Months Ended

Oct. 25, 2015

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 - based on a single underlying graphics architecture.

Our GPU product brands aimed at specialized markets include GeForce for gamers; Quadro for designers; Tesla for researchers, deep learning and big-data analysts; and GRID for cloud-based visual computing users.

We also integrate our GPUs into mobile chips called system-on-a-chip (SOC) processors, which power tablets, and automotive infotainment and safety systems. Our Tegra brand integrates an entire computer onto a single chip, incorporating GPUs and multi-core CPUs with audio, video and input/output capabilities. They can also be integrated with baseband processors to add voice and data communication. Tegra conserves power while delivering state-of-the-art graphics and multimedia processing.

We have a single unifying architecture for our GPU and Tegra Processors. This architecture unification 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 “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, product warranty charge, restructuring and other charges, 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. Reporting segments do not record intersegment revenue, and, accordingly, there is none to be reported. The accounting policies for segment reporting are the same as for NVIDIA as a whole. The table below presents details of our reportable segments and the “All Other” category.

	GPU		Tegra Processor			All Other			Consolidated
	(In millions)
Three Months Ended October 25, 2015
Revenue	$	1,110	$	129		$	66		$	1,305
Depreciation and amortization expenses	$	26	$	11		$	11		$	48
Operating income (loss)	$	367	$	(65	)	$	(57	)	$	245
Three Months Ended October 26, 2014
Revenue	$	991	$	168		$	66		$	1,225
Depreciation and amortization expenses	$	29	$	15		$	12		$	56
Operating income (loss)	$	294	$	(53	)	$	(28	)	$	213
Nine Months Ended October 25, 2015
Revenue	$	3,009	$	402		$	198		$	3,609
Depreciation and amortization expense	$	81	$	36		$	34		$	151
Operating income (loss)	$	917	$	(164	)	$	(258	)	$	495
Nine Months Ended October 26, 2014
Revenue	$	2,767	$	466		$	198		$	3,431
Depreciation and amortization expense	$	88	$	43		$	35		$	166
Operating income (loss)	$	770	$	(169	)	$	(73	)	$	528

	Three Months Ended						Nine Months Ended
	October 25, 2015			October 26, 2014			October 25, 2015			October 26, 2014
	(In millions)
Reconciling items included in "All Other" category:
Unallocated revenue	$	66		$	66		$	198		$	198
Unallocated cost of revenue and operating expenses	(60		)	(42		)	(181		)	(128		)
Stock-based compensation	(51		)	(42		)	(145		)	(115		)
Acquisition-related costs	(4		)	(10		)	(18		)	(28		)
Product warranty charge	—			—			(15		)	—
Restructuring and other charges	(8		)	—			(97		)	—
Total	$	(57	)	$	(28	)	$	(258	)	$	(73	)

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 table summarizes information pertaining to our revenue from customers based on invoicing address in different geographic regions:

	Three Months Ended				Nine Months Ended
	October 25,		October 26,		October 25,		October 26,
	2015		2014		2015		2014
	(In millions)
Revenue:
Taiwan	$	515	$	406	$	1,348	$	1,109
China	229		238		583		714
Other Asia Pacific	181		170		554		475
United States	156		215		474		595
Europe	116		96		341		263
Other Americas	108		100		309		275
Total revenue	$	1,305	$	1,225	$	3,609	$	3,431

Revenue from significant customers, those representing 10% or more of total revenue, aggregated approximately 10% of our total revenue from one customer for the three months ended October 25, 2015 and October 26, 2014. Revenue from significant customers, those representing 10% or more of total revenue, aggregated approximately 11% and 10% of our total revenue from one customer for the nine months ended October 25, 2015 and October 26, 2014, respectively.

Accounts receivable from significant customers, those representing 10% or more of total accounts receivable, aggregated approximately 19% of our accounts receivable balance from one customer at October 25, 2015 and approximately 30% of our accounts receivable balance from two customers at January 25, 2015.