Segment Information

6 Months Ended

Jul. 31, 2016

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 reportable segments - the GPU business and the Tegra Processor business - based on a unified underlying graphics architecture.

Our GPU product brands are aimed at specialized markets including GeForce for gamers; Quadro for designers; Tesla for researchers and analysts focused on artificial intelligence, deep learning and big-data; and GRID for cloud-based visual computing users. Our Tegra brand integrates an entire computer onto a single chip, incorporating GPUs and multi-core CPUs aimed at online gaming and entertainment devices, as well as autonomous robots, drones and cars.

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 reportable segments, our CODM assigns 100% of those expenses to the reportable 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 stock-based compensation expense, corporate infrastructure and support costs, acquisition-related costs, restructuring and other charges, contributions, product warranty charge, legal settlement 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 reportable segment basis. Reportable 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 July 31, 2016
Revenue	$	1,196	$	166		$	66		$	1,428
Depreciation and amortization expense	$	29	$	7		$	11		$	47
Operating income (loss)	$	379	$	(14	)	$	(48	)	$	317
Three Months Ended July 26, 2015
Revenue	$	959	$	128		$	66		$	1,153
Depreciation and amortization expense	$	27	$	11		$	11		$	49
Operating income (loss)	$	273	$	(41	)	$	(156	)	$	76
Six Months Ended July 31, 2016
Revenue	$	2,275	$	326		$	132		$	2,733
Depreciation and amortization expense	$	57	$	14		$	21		$	92
Operating income (loss)	$	727	$	(52	)	$	(114	)	$	561
Six Months Ended July 26, 2015
Revenue	$	1,899	$	273		$	132		$	2,304
Depreciation and amortization expense	$	55	$	26		$	22		$	103
Operating income (loss)	$	551	$	(99	)	$	(202	)	$	250

	Three Months Ended						Six Months Ended
	July 31, 2016			July 26, 2015			July 31, 2016			July 26, 2015
	(In millions)
Reconciling items included in "All Other" category:
Unallocated revenue	$	66		$	66		$	132		$	132
Stock-based compensation expense	(58		)	(47		)	(111		)	(93		)
Unallocated cost of revenue and operating expenses	(49		)	(67		)	(104		)	(124		)
Acquisition-related costs	(4		)	(4		)	(8		)	(13		)
Restructuring and other charges	(2		)	(89		)	(3		)	(89		)
Contributions	(1		)	—			(4		)	—
Product warranty charge	—			(15		)	—			(15		)
Legal settlement costs	—			—			(16		)	—
Total	$	(48	)	$	(156	)	$	(114	)	$	(202	)

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				Six Months Ended
	July 31,		July 26,		July 31,		July 26,
	2016		2015		2016		2015
	(In millions)
Revenue:
Taiwan	$	505	$	445	$	949	$	832
China	256		181		504		354
United States	206		138		400		318
Other Asia Pacific	191		185		351		373
Europe	167		106		323		225
Other Americas	103		98		206		202
Total revenue	$	1,428	$	1,153	$	2,733	$	2,304

The following table summarizes information pertaining to our revenue by each of the specialized markets we serve:

	Three Months Ended				Six Months Ended
	July 31,		July 26,		July 31,		July 26,
	2016		2015		2016		2015
	(In millions)
Revenue:
Gaming	$	781	$	660	$	1,468	$	1,247
Professional Visualization	214		176		403		357
Datacenter	151		72		294		160
Automotive	119		71		232		148
OEM & IP	163		174		336		392
Total revenue	$	1,428	$	1,153	$	2,733	$	2,304

Revenue from significant customers, those representing 10% or more of total revenue for the respective dates, is summarized as follows:

	Three Months Ended				Six Months Ended
	July 31,		July 26,		July 31,		July 26,
	2016		2015		2016		2015
Revenue:
Customer A	10	%	13	%	11	%	11	%
Customer B	8	%	10	%	8	%	10	%

Revenue from both customers was attributable to the GPU business.

Accounts receivable from significant customers, those representing 10% or more of total accounts receivable for the respective periods, is summarized as follows: 

	July 31,		January 31,
	2016		2016
Accounts Receivable:
Customer B	18	%	21	%