QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
(State or Other Jurisdiction of | (I.R.S. Employer |
Incorporation or Organization) | Identification No.) |
Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
☒ | Accelerated filer | ☐ | Non-accelerated filer | ☐ | Smaller reporting company | Emerging growth company |
Page | ||
Financial Statements (Unaudited) | ||
a) Condensed Consolidated Statements of Income for the three and six months ended July 28, 2019 and July 29, 2018 | ||
b) Condensed Consolidated Statements of Comprehensive Income for the three and six months ended July 28, 2019 and July 29, 2018 | ||
c) Condensed Consolidated Balance Sheets as of July 28, 2019 and January 27, 2019 | ||
d) Condensed Consolidated Statements of Shareholders' Equity for the three and six months ended July 28, 2019 and July 29, 2018 | ||
e) Condensed Consolidated Statements of Cash Flows for the six months ended July 28, 2019 and July 29, 2018 | ||
f) Notes to Condensed Consolidated Financial Statements | ||
Management’s Discussion and Analysis of Financial Condition and Results of Operations | ||
Quantitative and Qualitative Disclosures About Market Risk | ||
Controls and Procedures | ||
Legal Proceedings | ||
Risk Factors | ||
Unregistered Sales of Equity Securities and Use of Proceeds | ||
Exhibits | ||
Three Months Ended | Six Months Ended | ||||||||||||||
July 28, | July 29, | July 28, | July 29, | ||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||
Revenue | $ | $ | $ | $ | |||||||||||
Cost of revenue | |||||||||||||||
Gross profit | |||||||||||||||
Operating expenses | |||||||||||||||
Research and development | |||||||||||||||
Sales, general and administrative | |||||||||||||||
Total operating expenses | |||||||||||||||
Income from operations | |||||||||||||||
Interest income | |||||||||||||||
Interest expense | ( | ) | ( | ) | ( | ) | ( | ) | |||||||
Other, net | |||||||||||||||
Total other income (expense) | |||||||||||||||
Income before income tax | |||||||||||||||
Income tax expense | |||||||||||||||
Net income | $ | $ | $ | $ | |||||||||||
Net income per share: | |||||||||||||||
Basic | $ | $ | $ | $ | |||||||||||
Diluted | $ | $ | $ | $ | |||||||||||
Weighted average shares used in per share computation: | |||||||||||||||
Basic | |||||||||||||||
Diluted |
Three Months Ended | Six Months Ended | ||||||||||||||
July 28, | July 29, | July 28, | July 29, | ||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||
Net income | $ | $ | $ | $ | |||||||||||
Other comprehensive income (loss), net of tax | |||||||||||||||
Available-for-sale securities: | |||||||||||||||
Net change in unrealized gain | |||||||||||||||
Reclassification adjustments for net realized gain included in net income | |||||||||||||||
Net change in unrealized gain | |||||||||||||||
Cash flow hedges: | |||||||||||||||
Net unrealized gain (loss) | ( | ) | ( | ) | |||||||||||
Reclassification adjustments for net realized gain (loss) included in net income | ( | ) | ( | ) | ( | ) | |||||||||
Net change in unrealized gain (loss) | ( | ) | ( | ) | |||||||||||
Other comprehensive income (loss), net of tax | ( | ) | |||||||||||||
Total comprehensive income | $ | $ | $ | $ |
July 28, | January 27, | ||||||
2019 | 2019 | ||||||
ASSETS | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | $ | |||||
Marketable securities | |||||||
Accounts receivable, net | |||||||
Inventories | |||||||
Prepaid expenses and other current assets | |||||||
Total current assets | |||||||
Property and equipment, net | |||||||
Operating lease assets | |||||||
Goodwill | |||||||
Intangible assets, net | |||||||
Deferred income tax assets | |||||||
Other assets | |||||||
Total assets | $ | $ | |||||
LIABILITIES AND SHAREHOLDERS’ EQUITY | |||||||
Current liabilities: | |||||||
Accounts payable | $ | $ | |||||
Accrued and other current liabilities | |||||||
Total current liabilities | |||||||
Long-term debt | |||||||
Long-term operating lease liabilities | |||||||
Other long-term liabilities | |||||||
Total liabilities | |||||||
Commitments and contingencies - see Note 13 | |||||||
Shareholders’ equity: | |||||||
Preferred stock | |||||||
Common stock | |||||||
Additional paid-in capital | |||||||
Treasury stock, at cost | ( | ) | ( | ) | |||
Accumulated other comprehensive loss | ( | ) | ( | ) | |||
Retained earnings | |||||||
Total shareholders' equity | |||||||
Total liabilities and shareholders' equity | $ | $ |
Common Stock Outstanding | Additional Paid-in Capital | Treasury Stock | Accumulated Other Comprehensive Income (Loss) | Retained Earnings | Total Shareholders' Equity | |||||||||||||||||||||
(In millions, except per share data) | Shares | Amount | ||||||||||||||||||||||||
Balances, April 28, 2019 | $ | $ | $ | ( | ) | $ | ( | ) | $ | $ | ||||||||||||||||
Other comprehensive income | — | — | — | — | — | |||||||||||||||||||||
Net income | — | — | — | — | — | |||||||||||||||||||||
Tax withholding related to vesting of restricted stock units | — | — | ( | ) | — | — | ( | ) | ||||||||||||||||||
Cash dividends declared and paid ($0.16 per common share) | — | — | — | — | — | ( | ) | ( | ) | |||||||||||||||||
Stock-based compensation | — | — | — | — | — | |||||||||||||||||||||
Balances, July 28, 2019 | $ | $ | $ | ( | ) | $ | ( | ) | $ | $ |
Common Stock Outstanding | Additional Paid-in Capital | Treasury Stock | Accumulated Other Comprehensive Income (Loss) | Retained Earnings | Total Shareholders' Equity | |||||||||||||||||||||
(In millions, except per share data) | Shares | Amount | ||||||||||||||||||||||||
Balances, April 29, 2018 | $ | $ | $ | ( | ) | $ | ( | ) | $ | $ | ||||||||||||||||
Net income | — | — | — | — | — | |||||||||||||||||||||
Issuance of common stock from stock plans | — | — | — | — | ||||||||||||||||||||||
Tax withholding related to vesting of restricted stock units | — | — | ( | ) | — | — | ( | ) | ||||||||||||||||||
Exercise of convertible note hedges | — | ( | ) | — | — | — | ||||||||||||||||||||
Cash dividends declared and paid ($0.15 per common share) | — | — | — | — | — | ( | ) | ( | ) | |||||||||||||||||
Stock-based compensation | — | — | — | — | — | |||||||||||||||||||||
Balances, July 29, 2018 | $ | $ | $ | ( | ) | $ | ( | ) | $ | $ |
Common Stock Outstanding | Additional Paid-in Capital | Treasury Stock | Accumulated Other Comprehensive Income (Loss) | Retained Earnings | Total Shareholders' Equity | |||||||||||||||||||||
(In millions, except per share data) | Shares | Amount | ||||||||||||||||||||||||
Balances, January 27, 2019 | $ | $ | $ | ( | ) | $ | ( | ) | $ | $ | ||||||||||||||||
Other comprehensive income | — | — | — | — | — | |||||||||||||||||||||
Net income | — | — | — | — | — | |||||||||||||||||||||
Issuance of common stock from stock plans | — | — | — | — | ||||||||||||||||||||||
Tax withholding related to vesting of restricted stock units | ( | ) | — | — | ( | ) | — | — | ( | ) | ||||||||||||||||
Cash dividends declared and paid ($0.32 per common share) | — | — | — | — | — | ( | ) | ( | ) | |||||||||||||||||
Stock-based compensation | — | — | — | — | — | |||||||||||||||||||||
Balances, July 28, 2019 | $ | $ | $ | ( | ) | $ | ( | ) | $ | $ |
Common Stock Outstanding | Additional Paid-in Capital | Treasury Stock | Accumulated Other Comprehensive Income (Loss) | Retained Earnings | Total Shareholders' Equity | |||||||||||||||||||||
(In millions, except per share data) | Shares | Amount | ||||||||||||||||||||||||
Balances, January 28, 2018 | $ | $ | $ | ( | ) | $ | ( | ) | $ | $ | ||||||||||||||||
Retained earnings adjustment due to adoption of new revenue accounting standard | — | — | — | — | — | |||||||||||||||||||||
Other comprehensive loss | — | — | — | — | ( | ) | — | ( | ) | |||||||||||||||||
Net income | — | — | — | — | — | |||||||||||||||||||||
Issuance of common stock from stock plans | — | — | — | — | ||||||||||||||||||||||
Tax withholding related to vesting of restricted stock units | ( | ) | — | — | ( | ) | — | — | ( | ) | ||||||||||||||||
Share repurchase | ( | ) | — | — | ( | ) | — | — | ( | ) | ||||||||||||||||
Exercise of convertible note hedges | — | ( | ) | — | — | |||||||||||||||||||||
Cash dividends declared and paid ($0.30 per common share) | — | — | — | — | — | ( | ) | ( | ) | |||||||||||||||||
Stock-based compensation | — | — | — | — | — | |||||||||||||||||||||
Balances, July 29, 2018 | $ | $ | $ | ( | ) | $ | ( | ) | $ | $ |
Six Months Ended | |||||||
July 28, | July 29, | ||||||
2019 | 2018 | ||||||
Cash flows from operating activities: | |||||||
Net income | $ | $ | |||||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||
Stock-based compensation expense | |||||||
Depreciation and amortization | |||||||
Deferred income taxes | ( | ) | |||||
Other | ( | ) | |||||
Changes in operating assets and liabilities: | |||||||
Accounts receivable | ( | ) | ( | ) | |||
Inventories | ( | ) | |||||
Prepaid expenses and other assets | ( | ) | |||||
Accounts payable | ( | ) | |||||
Accrued and other current liabilities | ( | ) | |||||
Other long-term liabilities | ( | ) | |||||
Net cash provided by operating activities | |||||||
Cash flows from investing activities: | |||||||
Proceeds from maturities of marketable securities | |||||||
Proceeds from sales of marketable securities | |||||||
Purchases of marketable securities | ( | ) | ( | ) | |||
Purchases of property and equipment and intangible assets | ( | ) | ( | ) | |||
Investment in non-affiliates | ( | ) | ( | ) | |||
Net cash provided by (used in) investing activities | ( | ) | |||||
Cash flows from financing activities: | |||||||
Proceeds related to employee stock plans | |||||||
Payments related to tax on restricted stock units | ( | ) | ( | ) | |||
Dividends paid | ( | ) | ( | ) | |||
Payments related to repurchases of common stock | ( | ) | |||||
Repayment of Convertible Notes | ( | ) | |||||
Other | ( | ) | |||||
Net cash used in financing activities | ( | ) | ( | ) | |||
Change in cash and cash equivalents | ( | ) | |||||
Cash and cash equivalents at beginning of period | |||||||
Cash and cash equivalents at end of period | $ | $ | |||||
Other non-cash investing activity: | |||||||
Assets acquired by assuming related liabilities | $ | $ |
Operating Lease Obligations | |||
(In millions) | |||
Fiscal Year: | |||
2020 (excluding first half of fiscal year 2020) | $ | ||
2021 | |||
2022 | |||
2023 | |||
2024 | |||
2025 and thereafter | |||
Total | |||
Less imputed interest | |||
Present value of net future minimum lease payments | |||
Less short-term operating lease liabilities | |||
Long-term operating lease liabilities | $ |
Lease Obligations | |||
(In millions) | |||
Fiscal Year: | |||
2020 | $ | ||
2021 | |||
2022 | |||
2023 | |||
2024 | |||
2025 and thereafter | |||
Total | $ |
Three Months Ended | Six Months Ended | ||||||
July 28, 2019 | July 28, 2019 | ||||||
(In millions) | |||||||
Supplemental cash flows information | |||||||
Operating cash flows used for operating leases | $ | $ | |||||
Operating lease assets obtained in exchange for lease obligations | $ | $ |
Three Months Ended | Six Months Ended | ||||||||||||||
July 28, 2019 | July 29, 2018 | July 28, 2019 | July 29, 2018 | ||||||||||||
(In millions) | |||||||||||||||
Cost of revenue | $ | $ | $ | $ | |||||||||||
Research and development | |||||||||||||||
Sales, general and administrative | |||||||||||||||
Total | $ | $ | $ | $ |
RSUs, PSUs, and Market-based PSUs Outstanding | ||||||
Number of Shares | Weighted Average Grant-Date Fair Value Per Share | |||||
(In millions, except per share data) | ||||||
Balances, January 27, 2019 | $ | |||||
Granted (1) (2) | $ | |||||
Vested restricted stock | ( | ) | $ | |||
Canceled and forfeited | ( | ) | $ | |||
Balances, July 28, 2019 | $ |
(1) | Includes the number of PSUs granted that will be issued and eligible to vest if the maximum corporate financial performance goal for fiscal year 2020 is achieved. Depending on the actual level of the corporate performance achievement at the end of fiscal year 2020, the PSUs issued could be up to |
(2) | Includes the number of market-based PSUs granted that will be issued and eligible to vest if the maximum goal for total shareholder return, or TSR, over the |
Three Months Ended | Six Months Ended | ||||||||||||||
July 28, | July 29, | July 28, | July 29, | ||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||
(In millions, except per share data) | |||||||||||||||
Numerator: | |||||||||||||||
Net income | $ | $ | $ | $ | |||||||||||
Denominator: | |||||||||||||||
Basic weighted average shares | |||||||||||||||
Dilutive impact of outstanding securities: | |||||||||||||||
Equity awards | |||||||||||||||
1.00% Convertible Senior Notes | |||||||||||||||
Diluted weighted average shares | |||||||||||||||
Net income per share: | |||||||||||||||
Basic (1) | $ | $ | $ | $ | |||||||||||
Diluted (2) | $ | $ | $ | $ | |||||||||||
Equity awards excluded from diluted net income per share because their effect would have been anti-dilutive |
(1) | Calculated as net income divided by basic weighted average shares. |
(2) | Calculated as net income divided by diluted weighted average shares. |
July 28, 2019 | |||||||||||||||||||||||
Amortized Cost | Unrealized Gain | Unrealized Loss | Estimated Fair Value | Reported as | |||||||||||||||||||
Cash Equivalents | Marketable Securities | ||||||||||||||||||||||
(In millions) | |||||||||||||||||||||||
Money market funds | $ | $ | $ | $ | $ | $ | |||||||||||||||||
Debt securities issued by the United States Treasury | |||||||||||||||||||||||
Corporate debt securities | |||||||||||||||||||||||
Debt securities of United States government agencies | |||||||||||||||||||||||
Foreign government debt securities | |||||||||||||||||||||||
Asset-backed securities | |||||||||||||||||||||||
Certificates of deposit | |||||||||||||||||||||||
Mortgage-backed securities issued by United States government-sponsored enterprises | |||||||||||||||||||||||
Total | $ | $ | $ | $ | $ | $ |
January 27, 2019 | |||||||||||||||||||||||
Amortized Cost | Unrealized Gain | Unrealized Loss | Estimated Fair Value | Reported as | |||||||||||||||||||
Cash Equivalents | Marketable Securities | ||||||||||||||||||||||
(In millions) | |||||||||||||||||||||||
Corporate debt securities | $ | $ | $ | ( | ) | $ | $ | $ | |||||||||||||||
Debt securities of United States government agencies | ( | ) | |||||||||||||||||||||
Debt securities issued by the United States Treasury | ( | ) | |||||||||||||||||||||
Money market funds | |||||||||||||||||||||||
Foreign government debt securities | |||||||||||||||||||||||
Asset-backed securities | ( | ) | |||||||||||||||||||||
Mortgage-backed securities issued by United States government-sponsored enterprises | |||||||||||||||||||||||
Total | $ | $ | $ | ( | ) | $ | $ | $ |
July 28, 2019 | January 27, 2019 | ||||||||||||||
Amortized Cost | Estimated Fair Value | Amortized Cost | Estimated Fair Value | ||||||||||||
(In millions) | |||||||||||||||
Less than 1 year | $ | $ | $ | $ | |||||||||||
Due in 1 - 5 years | |||||||||||||||
Mortgage-backed securities issued by United States government-sponsored enterprises not due at a single maturity date | |||||||||||||||
Total | $ | $ | $ | $ |
Fair Value at | |||||||||
Pricing Category | July 28, 2019 | January 27, 2019 | |||||||
(In millions) | |||||||||
Assets | |||||||||
Cash equivalents and marketable securities: | |||||||||
Money market funds | Level 1 | $ | $ | ||||||
Debt securities issued by the United States Treasury | Level 2 | $ | $ | ||||||
Corporate debt securities | Level 2 | $ | $ | ||||||
Debt securities of United States government agencies | Level 2 | $ | $ | ||||||
Foreign government debt securities | Level 2 | $ | $ | ||||||
Asset-backed securities | Level 2 | $ | $ | ||||||
Certificates of deposit | Level 2 | $ | $ | ||||||
Mortgage-backed securities issued by United States government-sponsored enterprises | Level 2 | $ | $ | ||||||
Liabilities | |||||||||
Other noncurrent liabilities: | |||||||||
2.20% Notes Due 2021 (1) | Level 2 | $ | $ | ||||||
3.20% Notes Due 2026 (1) | Level 2 | $ | $ |
(1) | These liabilities are carried on our Consolidated Balance Sheets at their original issuance value, net of unamortized debt discount and issuance costs, and are not marked to fair value each period. Refer to Note 12 of these Notes to Condensed Consolidated Financial Statements for additional information. |
July 28, 2019 | January 27, 2019 | ||||||||||||||||||||||
Gross Carrying Amount | Accumulated Amortization | Net Carrying Amount | Gross Carrying Amount | Accumulated Amortization | Net Carrying Amount | ||||||||||||||||||
(In millions) | (In millions) | ||||||||||||||||||||||
Acquisition-related intangible assets | $ | $ | ( | ) | $ | $ | $ | ( | ) | $ | |||||||||||||
Patents and licensed technology | ( | ) | ( | ) | |||||||||||||||||||
Total intangible assets | $ | $ | ( | ) | $ | $ | $ | ( | ) | $ |
July 28, | January 27, | ||||||
2019 | 2019 | ||||||
Inventories: | (In millions) | ||||||
Raw materials | $ | $ | |||||
Work in-process | |||||||
Finished goods | |||||||
Total inventories | $ | $ |
July 28, | January 27, | ||||||
2019 | 2019 | ||||||
Accrued and Other Current Liabilities: | (In millions) | ||||||
Customer program accruals | $ | $ | |||||
Accrued payroll and related expenses | |||||||
Deferred revenue (1) | |||||||
Operating lease liabilities | |||||||
Taxes payable | |||||||
Licenses payable | |||||||
Coupon interest on debt obligations | |||||||
Other | |||||||
Total accrued and other current liabilities | $ | $ |
(1) | Deferred revenue primarily includes customer advances and deferrals related to license and development arrangements and post contract customer support, or PCS. |
July 28, | January 27, | ||||||
2019 | 2019 | ||||||
Other Long-Term Liabilities: | (In millions) | ||||||
Income tax payable (1) | $ | $ | |||||
Deferred revenue (2) | |||||||
Licenses payable | |||||||
Deferred income tax liability | |||||||
Employee benefits liability | |||||||
Deferred rent | |||||||
Other | |||||||
Total other long-term liabilities | $ | $ |
(1) | As of July 28, 2019, represents the long-term portion of the one-time transition tax payable of $ |
(2) | Deferred revenue primarily includes deferrals related to PCS. |
July 28, | July 29, | ||||||
2019 | 2018 | ||||||
(In millions) | |||||||
Balance at beginning of period | $ | $ | |||||
Deferred revenue added during the period | |||||||
Revenue recognized during the period | ( | ) | ( | ) | |||
Balance at end of period | $ | $ |
July 28, 2019 | January 27, 2019 | ||||||
(In millions) | |||||||
Designated as cash flow hedges | $ | $ | |||||
Not designated for hedge accounting | $ | $ |
Expected Remaining Term (years) | Effective Interest Rate | July 28, 2019 | January 27, 2019 | |||||||||
(In millions) | ||||||||||||
2.20% Notes Due 2021 | $ | $ | ||||||||||
3.20% Notes Due 2026 | ||||||||||||
Unamortized debt discount and issuance costs | ( | ) | ( | ) | ||||||||
Net carrying amount | $ | $ |
GPU | Tegra Processor | All Other | Consolidated | ||||||||||||
(In millions) | |||||||||||||||
Three Months Ended July 28, 2019 | |||||||||||||||
Revenue | $ | $ | $ | $ | |||||||||||
Depreciation and amortization expense | $ | $ | $ | $ | |||||||||||
Operating income (loss) | $ | $ | $ | ( | ) | $ | |||||||||
Three Months Ended July 29, 2018 | |||||||||||||||
Revenue | $ | $ | $ | $ | |||||||||||
Depreciation and amortization expense | $ | $ | $ | $ | |||||||||||
Operating income (loss) | $ | $ | $ | ( | ) | $ | |||||||||
Six Months Ended July 28, 2019 | |||||||||||||||
Revenue | $ | $ | $ | $ | |||||||||||
Depreciation and amortization expense | $ | $ | $ | $ | |||||||||||
Operating income (loss) | $ | $ | $ | ( | ) | $ | |||||||||
Six Months Ended July 29, 2018 | |||||||||||||||
Revenue | $ | $ | $ | $ | |||||||||||
Depreciation and amortization expense | $ | $ | $ | $ | |||||||||||
Operating income (loss) | $ | $ | $ | ( | ) | $ |
Three Months Ended | Six Months Ended | ||||||||||||||
July 28, 2019 | July 29, 2018 | July 28, 2019 | July 29, 2018 | ||||||||||||
(In millions) | |||||||||||||||
Reconciling items included in "All Other" category: | |||||||||||||||
Stock-based compensation expense | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | |||
Unallocated cost of revenue and operating expenses | ( | ) | ( | ) | ( | ) | ( | ) | |||||||
Acquisition-related and other costs | ( | ) | ( | ) | ( | ) | ( | ) | |||||||
Legal settlement costs | ( | ) | ( | ) | |||||||||||
Total | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) |
Three Months Ended | Six Months Ended | ||||||||||||||
July 28, | July 29, | July 28, | July 29, | ||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||
(In millions) | |||||||||||||||
Revenue: | |||||||||||||||
Other Asia Pacific | $ | $ | $ | $ | |||||||||||
Taiwan | |||||||||||||||
China (including Hong Kong) | |||||||||||||||
Europe | |||||||||||||||
United States | |||||||||||||||
Other countries | |||||||||||||||
Total revenue | $ | $ | $ | $ |
Three Months Ended | Six Months Ended | ||||||||||||||
July 28, | July 29, | July 28, | July 29, | ||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||
(In millions) | |||||||||||||||
Revenue: | |||||||||||||||
Gaming | $ | $ | $ | $ | |||||||||||
Professional Visualization | |||||||||||||||
Data Center | |||||||||||||||
Automotive | |||||||||||||||
OEM and Other | |||||||||||||||
Total revenue | $ | $ | $ | $ |
Three Months Ended | |||||||||||||||||
July 28, 2019 | April 28, 2019 | July 29, 2018 | Quarter-over-Quarter Change | Year-over-Year Change | |||||||||||||
($ in millions, except per share data) | |||||||||||||||||
Revenue | $ | 2,579 | $ | 2,220 | $ | 3,123 | 16 | % | (17 | )% | |||||||
Gross margin | 59.8 | % | 58.4 | % | 63.3 | % | 140 bps | (350) bps | |||||||||
Operating expenses | $ | 970 | $ | 938 | $ | 818 | 3 | % | 19 | % | |||||||
Income from operations | $ | 571 | $ | 358 | $ | 1,157 | 59 | % | (51 | )% | |||||||
Net income | $ | 552 | $ | 394 | $ | 1,101 | 40 | % | (50 | )% | |||||||
Net income per diluted share | $ | 0.90 | $ | 0.64 | $ | 1.76 | 41 | % | (49 | )% |
Three Months Ended | Six Months Ended | ||||||||||
July 28, 2019 | July 29, 2018 | July 28, 2019 | July 29, 2018 | ||||||||
Revenue | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | |||
Cost of revenue | 40.2 | 36.7 | 40.9 | 36.1 | |||||||
Gross profit | 59.8 | 63.3 | 59.1 | 63.9 | |||||||
Operating expenses | |||||||||||
Research and development | 27.3 | 18.6 | 28.7 | 17.8 | |||||||
Sales, general and administrative | 10.3 | 7.7 | 11.0 | 7.4 | |||||||
Total operating expenses | 37.6 | 26.3 | 39.7 | 25.2 | |||||||
Income from operations | 22.2 | 37.0 | 19.4 | 38.7 | |||||||
Interest income | 1.8 | 1.0 | 1.9 | 0.9 | |||||||
Interest expense | (0.5 | ) | (0.4 | ) | (0.6 | ) | (0.5 | ) | |||
Other, net | — | 0.2 | — | 0.2 | |||||||
Total other income (expense) | 1.3 | 0.8 | 1.3 | 0.6 | |||||||
Income before income tax | 23.5 | 37.8 | 20.7 | 39.3 | |||||||
Income tax expense | 2.1 | 2.5 | 1.0 | 2.3 | |||||||
Net income | 21.4 | % | 35.3 | % | 19.7 | % | 37.0 | % |
Three Months Ended | Six Months Ended | ||||||||||||||||||||||||||||
July 28, 2019 | July 29, 2018 | $ Change | % Change | July 28, 2019 | July 29, 2018 | $ Change | % Change | ||||||||||||||||||||||
($ in millions) | |||||||||||||||||||||||||||||
GPU | $ | 2,104 | $ | 2,656 | $ | (552 | ) | (21 | )% | $ | 4,126 | $ | 5,421 | $ | (1,295 | ) | (24 | )% | |||||||||||
Tegra Processor | 475 | 467 | 8 | 2 | % | 673 | 909 | (236 | ) | (26 | )% | ||||||||||||||||||
Total | $ | 2,579 | $ | 3,123 | $ | (544 | ) | (17 | )% | $ | 4,799 | $ | 6,330 | $ | (1,531 | ) | (24 | )% |
Three Months Ended | Six Months Ended | ||||||||||||||||||||||||||||
July 28, 2019 | July 29, 2018 | $ Change | % Change | July 28, 2019 | July 29, 2018 | $ Change | % Change | ||||||||||||||||||||||
($ in millions) | ($ in millions) | ||||||||||||||||||||||||||||
Research and development expenses | $ | 704 | $ | 581 | $ | 123 | 21 | % | $ | 1,379 | $ | 1,124 | $ | 255 | 23 | % | |||||||||||||
% of net revenue | 27 | % | 19 | % | 29 | % | 18 | % | |||||||||||||||||||||
Sales, general and administrative expenses | 266 | 237 | 29 | 12 | % | 529 | 467 | 62 | 13 | % | |||||||||||||||||||
% of net revenue | 10 | % | 8 | % | 11 | % | 7 | % | |||||||||||||||||||||
Total operating expenses | $ | 970 | $ | 818 | $ | 152 | 19 | % | $ | 1,908 | $ | 1,591 | $ | 317 | 20 | % |
July 28, 2019 | January 27, 2019 | ||||||
(In millions) | |||||||
Cash and cash equivalents | $ | 7,105 | $ | 782 | |||
Marketable securities | 1,370 | 6,640 | |||||
Cash, cash equivalents and marketable securities | $ | 8,475 | $ | 7,422 |
Six Months Ended | |||||||
July 28, 2019 | July 29, 2018 | ||||||
(In millions) | |||||||
Net cash provided by operating activities | $ | 1,656 | $ | 2,358 | |||
Net cash provided by (used in) investing activities | $ | 5,040 | $ | (4,356 | ) | ||
Net cash used in financing activities | $ | (373 | ) | $ | (1,286 | ) |
Exhibit No. | Exhibit Description | Schedule /Form | File Number | Exhibit | Filing Date | |||||
10.1+ | 8-K | 000-23985 | 10.1 | 6/17/2019 | ||||||
31.1* | ||||||||||
31.2* | ||||||||||
32.1#* | ||||||||||
32.2#* | ||||||||||
101.INS* | Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. | |||||||||
101.SCH* | Inline XBRL Taxonomy Extension Schema Document | |||||||||
101.CAL* | Inline XBRL Taxonomy Extension Calculation Linkbase Document | |||||||||
101.DEF* | Inline XBRL Taxonomy Extension Definition Linkbase Document | |||||||||
101.LAB* | Inline XBRL Taxonomy Extension Labels Linkbase Document | |||||||||
101.PRE* | Inline XBRL Taxonomy Extension Presentation Linkbase Document | |||||||||
104 | Cover Page Interactive Data File - the cover page interactive data file does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. |
NVIDIA Corporation | |||
By: | /s/ Colette M. Kress | ||
Colette M. Kress | |||
Executive Vice President and Chief Financial Officer (Duly Authorized Officer and Principal Financial Officer) |
CONDENSED CONSOLIDATED STATEMENTS OF INCOME - USD ($) shares in Millions, $ in Millions |
3 Months Ended | 6 Months Ended | ||
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Jul. 28, 2019 |
Jul. 29, 2018 |
Jul. 28, 2019 |
Jul. 29, 2018 |
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Income Statement [Abstract] | ||||
Revenue | $ 2,579 | $ 3,123 | $ 4,799 | $ 6,330 |
Cost of revenue | 1,038 | 1,148 | 1,962 | 2,287 |
Gross profit | 1,541 | 1,975 | 2,837 | 4,043 |
Operating expenses | ||||
Research and development | 704 | 581 | 1,379 | 1,124 |
Sales, general and administrative | 266 | 237 | 529 | 467 |
Total operating expenses | 970 | 818 | 1,908 | 1,591 |
Income from operations | 571 | 1,157 | 929 | 2,452 |
Interest income | 47 | 32 | 92 | 57 |
Interest expense | (13) | (14) | (27) | (29) |
Other, net | 1 | 5 | 1 | 11 |
Total other income (expense) | 35 | 23 | 66 | 39 |
Income before income tax | 606 | 1,180 | 995 | 2,491 |
Income tax expense | 54 | 79 | 48 | 146 |
Net income | $ 552 | $ 1,101 | $ 947 | $ 2,345 |
Net income per share: | ||||
Basic (in dollars per share) | $ 0.91 | $ 1.81 | $ 1.56 | $ 3.86 |
Diluted (in dollars per share) | $ 0.90 | $ 1.76 | $ 1.54 | $ 3.74 |
Weighted average shares used in per share computation: | ||||
Basic (in shares) | 609 | 607 | 608 | 607 |
Diluted (in shares) | 616 | 626 | 616 | 627 |
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jul. 28, 2019 |
Jul. 29, 2018 |
Jul. 28, 2019 |
Jul. 29, 2018 |
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Statement of Comprehensive Income [Abstract] | ||||
Net income | $ 552 | $ 1,101 | $ 947 | $ 2,345 |
Available-for-sale securities: | ||||
Net change in unrealized gain | 1 | 6 | 9 | 3 |
Reclassification adjustments for net realized gain included in net income | 0 | 0 | 0 | 1 |
Net change in unrealized gain | 1 | 6 | 9 | 4 |
Cash flow hedges: | ||||
Net unrealized gain (loss) | 0 | (4) | 4 | (8) |
Reclassification adjustments for net realized gain (loss) included in net income | 0 | (2) | (2) | (1) |
Net change in unrealized gain (loss) | 0 | (6) | 2 | (9) |
Other comprehensive income (loss), net of tax | 1 | 0 | 11 | (5) |
Total comprehensive income | $ 553 | $ 1,101 | $ 958 | $ 2,340 |
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (Parenthetical) - $ / shares |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jul. 28, 2019 |
Jul. 29, 2018 |
Jul. 28, 2019 |
Jul. 29, 2018 |
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Statement of Stockholders' Equity [Abstract] | ||||
Common stock, dividends per share, declared and paid (in dollars per share) | $ 0.16 | $ 0.15 | $ 0.32 | $ 0.30 |
Summary of Significant Accounting Policies |
6 Months Ended |
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Jul. 28, 2019 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies Basis of Presentation The accompanying unaudited condensed consolidated financial statements were prepared in accordance with accounting principles generally accepted in the United States of America, or U.S. GAAP, for interim financial information and with the instructions to Form 10-Q and Article 10 of Securities and Exchange Commission, or SEC, Regulation S-X. The January 27, 2019 consolidated balance sheet was derived from our audited consolidated financial statements included in our Annual Report on Form 10-K for the fiscal year ended January 27, 2019, as filed with the SEC, but does not include all disclosures required by U.S. GAAP. In the opinion of management, all adjustments, consisting only of normal recurring adjustments considered necessary for a fair statement of results of operations and financial position have been included. The results for the interim periods presented are not necessarily indicative of the results expected for any future period. The following information should be read in conjunction with the audited consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the fiscal year ended January 27, 2019. Significant Accounting Policies Except for the accounting policy for leases, which was updated as a result of adopting a new accounting standard related to leases, there have been no material changes to our significant accounting policies in Note 1 - Organization and Summary of Significant Accounting Policies, of the Notes to the Consolidated Financial Statements included in our Annual Report on Form 10-K for the fiscal year ended January 27, 2019. Leases We determine if an arrangement is or contains a lease at inception. Operating leases with lease terms of more than 12 months are included in operating lease assets, accrued and other current liabilities, and long-term operating lease liabilities on our consolidated balance sheet. Operating lease assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments over the lease term. Operating lease assets and liabilities are recognized based on the present value of the remaining lease payments discounted using our incremental borrowing rate. Operating lease assets also include initial direct costs incurred and prepaid lease payments, minus any lease incentives. Our lease terms include options to extend or terminate the lease when it is reasonably certain that we will exercise that option. Lease expense is recognized on a straight-line basis over the lease term. We combine the lease and non-lease components in determining the operating lease assets and liabilities. Refer to Note 3 of these Notes to Condensed Consolidated Financial Statements for additional information. Fiscal Year We operate on a 52- or 53-week year, ending on the last Sunday in January. Fiscal years 2020 and 2019 are both 52-week years. The second quarters of fiscal years 2020 and 2019 were both 13-week quarters. Reclassifications Certain prior fiscal year balances have been reclassified to conform to the current fiscal year presentation. Principles of Consolidation Our condensed consolidated financial statements include the accounts of NVIDIA Corporation and our wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ materially from our estimates. On an on-going basis, we evaluate our estimates, including those related to revenue recognition, cash equivalents and marketable securities, accounts receivable, inventories, income taxes, goodwill, stock-based compensation, litigation, investigation and settlement costs, restructuring and other charges, and other contingencies. These estimates are based on historical facts and various other assumptions that we believe are reasonable. Adoption of New and Recently Issued Accounting Pronouncements Recently Adopted Accounting Pronouncement The Financial Accounting Standards Board, or FASB, issued an accounting standards update regarding the accounting for leases under which lease assets and liabilities are recognized on the balance sheet. We adopted this guidance on January 28, 2019 using the optional transition method by recognizing a cumulative-effect adjustment to the consolidated balance sheet. Refer to Note 3 of these Notes to Condensed Consolidated Financial Statements for additional information. Recent Accounting Pronouncement Not Yet Adopted In June 2016, the FASB issued a new accounting standard to replace the incurred loss impairment methodology under current GAAP with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. We will be required to use a forward-looking expected credit loss model for accounts receivable and other financial instruments, including available-for-sale debt securities. The standard will be effective for us beginning in the first quarter of fiscal year 2021, with early adoption permitted. We are currently evaluating the impact of this standard on our Consolidated Financial Statements.
|
Merger Agreement with Mellanox Technologies, Ltd. |
6 Months Ended |
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Jul. 28, 2019 | |
Business Combinations [Abstract] | |
Merger Agreement with Mellanox Technologies, Ltd. | Merger Agreement with Mellanox Technologies, Ltd. On March 10, 2019, we entered into an Agreement and Plan of Merger, or the Merger Agreement, with Mellanox Technologies Ltd., or Mellanox, pursuant to which we will acquire all of the issued and outstanding common shares of Mellanox for $125 per share in cash, representing a total enterprise value of approximately $6.9 billion as of the date of the Merger Agreement. The closing of the merger is subject to approval by regulatory agencies. If the Merger Agreement is terminated under certain circumstances involving the failure to obtain the required regulatory approvals, we could be obligated to pay Mellanox a termination fee of $350 million. We have received regulatory approval in the United States and Mexico and are engaged with regulators in Europe and China. In June 2019, Mellanox shareholders approved the merger.
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New Lease Accounting Standard |
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Leases [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
New Lease Accounting Standard | New Lease Accounting Standard Method and Impact of Adoption On January 28, 2019, we adopted the new lease accounting standard using the optional transition method by recognizing a cumulative-effect adjustment to the consolidated balance sheet and not adjusting comparative information for prior periods. In addition, we elected the package of practical expedients permitted under the transition guidance, which allowed us not to reassess (1) whether any expired or existing contracts are or contain leases, (2) lease classification for any expired or existing leases, and (3) initial direct costs for any existing leases. The cumulative-effect adjustment upon adoption of the new lease accounting standard resulted in the recognition of $470 million of operating lease assets and $500 million of operating lease liabilities on our Consolidated Balance Sheet. The difference of $30 million represents deferred rent for leases that existed as of the date of adoption, which was an offset to the opening balance of operating lease assets. Lease Obligations Our lease obligations consist of operating leases for our headquarters complex, domestic and international office facilities, and data center space, with lease periods expiring between fiscal years 2020 and 2035. Future minimum lease payments under our non-cancelable operating leases as of July 28, 2019, are as follows:
Future minimum lease payments under our non-cancelable operating leases as of January 27, 2019, based on the previous lease accounting standard, are as follows:
Operating lease expense for the second quarter and first half of fiscal year 2020 was $28 million and $55 million, respectively. Operating lease expense for the second quarter and first half of fiscal year 2019 was $20 million and $36 million, respectively. Short-term and variable lease expenses for the second quarter and first half of fiscal year 2020 were not significant. Other information related to leases was as follows:
As of July 28, 2019, our operating leases had a weighted average remaining lease term of 8.7 years and a weighted average discount rate of 3.70%.
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Stock-Based Compensation |
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Share-based Payment Arrangement [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock-Based Compensation | Stock-Based Compensation Our stock-based compensation expense is associated with restricted stock units, or RSUs, performance stock units that are based on our corporate financial performance targets, or PSUs, performance stock units that are based on market conditions, or market-based PSUs, and our employee stock purchase plan, or ESPP. Our Condensed Consolidated Statements of Income include stock-based compensation expense, net of amounts allocated to inventory, as follows:
Equity Award Activity The following is a summary of equity award transactions under our equity incentive plans:
As of July 28, 2019, there was $2.06 billion of aggregate unearned stock-based compensation expense, net of forfeitures. This amount is expected to be recognized over a weighted average period of 2.5 years for RSUs, PSUs, and market-based PSUs, and 1.1 years for ESPP.
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Net Income Per Share |
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net Income Per Share | Net Income Per Share The following is a reconciliation of the denominator of the basic and diluted net income per share computations for the periods presented:
(2) Calculated as net income divided by diluted weighted average shares.
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Income Taxes |
6 Months Ended |
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Jul. 28, 2019 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes We recognized an income tax expense of $54 million and $48 million for the second quarter and first half of fiscal year 2020, respectively, and $79 million and $146 million for the second quarter and first half of fiscal year 2019, respectively. The effective tax rate for the second quarter and first half of fiscal year 2020 was 8.8% and 4.9%, respectively, and 6.7% and 5.9% for the second quarter and first half of fiscal year 2019, respectively. The increase in our effective tax rate for the second quarter of fiscal year 2020 as compared to the second quarter of fiscal year 2019 was primarily due to an increase in the amount of earnings subject to United States tax, and a decrease of tax benefits from stock-based compensation, partially offset by an increase in the impact of tax benefits from the U.S. federal research tax credit. The decrease in our effective tax rate for the first half of fiscal year 2020 as compared to the first half of fiscal year 2019 was primarily due to an increase in the impact of tax benefits from the U.S. federal research tax credit and stock-based compensation. Our effective tax rates for the first half of fiscal years 2020 and 2019 were 4.9% and 5.9%, respectively, and were lower than the U.S. federal statutory rate of 21% due to income earned in jurisdictions that are subject to taxes lower than the U.S. federal statutory tax rate, tax benefits related to stock-based compensation, and the benefit of the U.S. federal research tax credit. For the first half of fiscal year 2020, there have been no material changes to our tax years that remain subject to examination by major tax jurisdictions. Additionally, there have been no material changes to our unrecognized tax benefits and any related interest or penalties since the fiscal year ended January 27, 2019. While we believe that we have adequately provided for all uncertain tax positions, or tax positions where we believe it is not more-likely-than-not that the position will be sustained upon review, amounts asserted by tax authorities could be greater or less than our accrued position. Accordingly, our provisions on federal, state and foreign tax related matters to be recorded in the future may change as revised estimates are made or the underlying matters are settled or otherwise resolved with the respective tax authorities. As of July 28, 2019, we do not believe that our estimates, as otherwise provided for, on such tax positions will significantly increase or decrease within the next twelve months.
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Marketable Securities |
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Investments, Debt and Equity Securities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Marketable Securities | Marketable Securities Our cash equivalents and marketable securities are classified as “available-for-sale” debt securities. The following is a summary of cash equivalents and marketable securities as of July 28, 2019 and January 27, 2019:
For the second quarter and first half of fiscal years 2020 and 2019, there were no other-than-temporary impairment losses and net realized gains were not significant. The amortized cost and estimated fair value of cash equivalents and marketable securities as of July 28, 2019 and January 27, 2019 are shown below by contractual maturity.
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Fair Value of Financial Assets and Liabilities |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value of Financial Assets and Liabilities | Fair Value of Financial Assets and Liabilities The fair values of our financial assets and liabilities are determined using quoted market prices of identical assets or quoted market prices of similar assets from active markets. We review fair value hierarchy classification on a quarterly basis.
(1) These liabilities are carried on our Consolidated Balance Sheets at their original issuance value, net of unamortized debt discount and issuance costs, and are not marked to fair value each period. Refer to Note 12 of these Notes to Condensed Consolidated Financial Statements for additional information.
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Amortizable Intangible Assets |
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Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Amortizable Intangible Assets | Amortizable Intangible Assets The components of our amortizable intangible assets are as follows:
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Balance Sheet Components |
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Notes to financial statements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance Sheet Components | Balance Sheet Components Certain balance sheet components are as follows:
Deferred Revenue The following table shows the changes in deferred revenue during the first half of fiscal years 2020 and 2019.
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Derivative Financial Instruments |
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Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||
Derivative Financial Instruments | Derivative Financial Instruments We enter into foreign currency forward contracts to mitigate the impact of foreign currency exchange rate movements on our operating expenses. These contracts are designated as cash flow hedges for hedge accounting treatment. Gains or losses on the contracts are recorded in accumulated other comprehensive income or loss and reclassified to operating expense when the related operating expenses are recognized in earnings or ineffectiveness should occur. The fair value of the contracts was not significant as of July 28, 2019 and January 27, 2019. We also enter into foreign currency forward contracts to mitigate the impact of foreign currency movements on monetary assets and liabilities that are denominated in currencies other than U.S. dollar. These forward contracts were not designated for hedge accounting treatment. Therefore, the change in fair value of these contracts is recorded in other income or expense and offsets the change in fair value of the hedged foreign currency denominated monetary assets and liabilities, which is also recorded in other income or expense. The table below presents the notional value of our foreign currency forward contracts outstanding as of July 28, 2019 and January 27, 2019:
As of July 28, 2019, all designated foreign currency forward contracts mature within eighteen months. The expected realized gains and losses deferred into accumulated other comprehensive income (loss) related to foreign currency forward contracts within the next twelve months was not significant. During the second quarter and first half of fiscal years 2020 and 2019, the impact of derivative financial instruments designated for hedge accounting treatment on other comprehensive income or loss was not significant and all such instruments were determined to be highly effective. Therefore, there were no gains or losses associated with ineffectiveness.
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Debt |
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt | Debt Long-Term Debt 2.20% Notes Due 2021 and 3.20% Notes Due 2026 In fiscal year 2017, we issued $1.00 billion of the 2.20% Notes Due 2021, and $1.00 billion of the 3.20% Notes Due 2026, or collectively, the Notes. Interest on the Notes is payable on March 16 and September 16 of each year. Upon 30 days' notice to holders of the Notes, we may redeem the Notes for cash prior to maturity, at redemption prices that include accrued and unpaid interest, if any, and a make-whole premium. However, no make-whole premium will be paid for redemptions of the Notes Due 2021 on or after August 16, 2021, or for redemptions of the Notes Due 2026 on or after June 16, 2026. The net proceeds from the Notes were $1.98 billion, after deducting debt discount and issuance costs. The Notes are our unsecured senior obligations and rank equally in right of payment with all existing and future unsecured and unsubordinated indebtedness. The Notes are structurally subordinated to the liabilities of our subsidiaries and are effectively subordinated to any secured indebtedness to the extent of the value of the assets securing such indebtedness. All existing and future liabilities of our subsidiaries will be effectively senior to the Notes. The carrying value of the Notes and the associated interest rates were as follows:
Revolving Credit Facility We have a Credit Agreement under which we may borrow up to $575 million for general corporate purposes and can obtain revolving loan commitments up to $425 million. As of July 28, 2019, we had not borrowed any amounts under this agreement. Commercial Paper We have a $575 million commercial paper program to support general corporate purposes. As of July 28, 2019, we had not issued any commercial paper.
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Commitments and Contingencies |
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Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Inventory Purchase Obligations As of July 28, 2019, we had outstanding inventory purchase obligations totaling $757 million. Capital Purchase Obligations As of July 28, 2019, we had outstanding capital purchase obligations totaling $133 million. Performance Obligations Revenue related to remaining performance obligations represents the amount of contracted license and development arrangements and PCS that has not been recognized. As of July 28, 2019, the amount of our remaining performance obligations that has not been recognized as revenue was $418 million, of which we expect to recognize approximately 48% as revenue over the next twelve months and the remainder thereafter. This amount excludes the value of remaining performance obligations for contracts with an original expected length of one year or less. Accrual for Product Warranty Liabilities The estimated amount of product returns and warranty liabilities was $17 million and $18 million as of July 28, 2019 and January 27, 2019, respectively. In connection with certain agreements that we have entered in the past, we have provided indemnification to cover the indemnified party for matters such as tax, product, and employee liabilities. We have included intellectual property indemnification provisions in our technology related agreements with third parties. Maximum potential future payments cannot be estimated because many of these agreements do not have a maximum stated liability. We have not recorded any liability in our Condensed Consolidated Financial Statements for such indemnifications. Litigation Securities Class Action and Derivative Lawsuits On December 21, 2018, a purported securities class action lawsuit was filed in the United States District Court for the Northern District of California, captioned Iron Workers Joint Funds v. Nvidia Corporation, et al. (Case No. 18-cv-7669), naming as defendants NVIDIA and certain of NVIDIA’s officers. On December 28, 2018, a substantially similar purported securities class action was commenced in the Northern District of California, captioned Oto v. Nvidia Corporation, et al. (Case No. 18-cv-07783), naming the same defendants, and seeking substantially similar relief. On February 19, 2019, a number of shareholders filed motions to consolidate the two cases and to be appointed lead plaintiff and for their respective counsel to be appointed lead counsel. On March 12, 2019, the two cases were consolidated under case number 4:18-cv-07669-HSG and titled In Re NVIDIA Corporation Securities Litigation. On May 2, 2019, the Court appointed lead plaintiffs and lead counsel. On June 21, 2019, the lead plaintiffs filed a consolidated class action complaint. The consolidated complaint asserts that the defendants violated Section 10(b) of the Securities Exchange Act of 1934, and SEC Rule 10b-5, by making materially false or misleading statements related to channel inventory and the impact of cryptocurrency mining on GPU demand between May 10, 2017 and November 14, 2018. The plaintiffs also allege that the NVIDIA executives who they named as defendants violated Section 20(a) of the Exchange Act. The plaintiffs seek class certification, an award of unspecified compensatory damages, an award of reasonable costs and expenses, including attorneys’ fees and expert fees, and further relief as the Court may deem just and proper. On August 2, 2019, NVIDIA moved to dismiss the consolidated class action complaint on the basis that plaintiffs failed to state any claims for violations of the securities laws by NVIDIA or the named defendants. On January 18, 2019, a shareholder, purporting to act on the behalf of NVIDIA, filed a derivative lawsuit in the Northern District of California, captioned Han v. Huang, et al. (Case No. 19-cv-00341), seeking to assert claims on behalf of NVIDIA against the members of NVIDIA’s board of directors and certain officers. The lawsuit asserts claims for breach of fiduciary duty, unjust enrichment, waste of corporate assets, and violations of Sections 14(a), 10(b), and 20(a) of the Exchange Act based on the dissemination of allegedly false and misleading statements related to channel inventory and the impact of cryptocurrency mining on GPU demand. The plaintiff is seeking unspecified damages and other relief, including reforms and improvements to NVIDIA’s corporate governance and internal procedures. On February 12, 2019, a substantially similar derivative lawsuit was filed in the Northern District of California captioned Yang v. Huang, et. al. (Case No. 19-cv-00766), naming the same named defendants, and seeking the same relief. On February 19, 2019, a third substantially similar derivative lawsuit was filed in the Northern District of California captioned The Booth Family Trust v. Huang, et. al. (Case No. 3:19-cv-00876), naming the same named defendants, and seeking substantially the same relief. On March 12, 2019, the three derivative actions were consolidated under case number 4:19-cv-00341-HSG, and titled In re NVIDIA Corporation Consolidated Derivative Litigation. The parties stipulated to stay the In Re NVIDIA Corporation Consolidated Derivative Litigation pending resolution of any motion to dismiss that NVIDIA may file in the In Re NVIDIA Corporation Securities Litigation. It is possible that additional suits will be filed, or allegations received from shareholders, with respect to these same or other matters, naming NVIDIA and/or its officers and directors as defendants. Litigation Related to Mellanox Merger On May 3, 2019, an alleged stockholder of Mellanox filed a putative class action lawsuit alleging that the proxy statement filed by Mellanox in connection with the stockholder vote on NVIDIA’s pending acquisition of Mellanox violates Sections 14(a) and 20(a) of the Securities Exchange Act of 1934 and asserting claims under those statutes against Mellanox and its board of directors as well as NVIDIA. The complaint, which is captioned Stein v. Mellanox Technologies, Ltd., et al., Case No. 19-2428 (United States District Court, Northern District of California), seeks declaratory and injunctive relief and unspecified damages. A number of other alleged Mellanox stockholders have filed substantially similar lawsuits against Mellanox and its directors in the United States District Court for the Northern District of California and in the United States District Court for the Southern District of New York, but to date, NVIDIA has not been named as a defendant in any of these other lawsuits. Accounting for Loss Contingencies We are engaged in legal actions not described above arising in the ordinary course of business and, while there can be no assurance of favorable outcomes, we believe that the ultimate outcome of these actions will not have a material adverse effect on our operating results, liquidity or financial position. As of July 28, 2019, we have not recorded any accrual for contingent liabilities associated with the legal proceedings described above based on our belief that liabilities, while possible, are not probable. Further, except as specifically described above, any possible loss or range of loss in these matters cannot be reasonably estimated at this time.
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Shareholders' Equity |
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Equity [Abstract] | |
Shareholders' Equity | Shareholders’ Equity Capital Return Program Beginning August 2004, our Board of Directors authorized us to repurchase our stock. During the second quarter and first half of fiscal year 2020, we paid $97 million and $195 million, respectively, in cash dividends to our shareholders. Through July 28, 2019, we have repurchased an aggregate of 260 million shares under our share repurchase program for a total cost of $7.08 billion. All shares delivered from these repurchases have been placed into treasury stock. As of July 28, 2019, we were authorized, subject to certain specifications, to repurchase additional shares of our common stock up to $7.24 billion through December 2022. Preferred Stock As of July 28, 2019 and January 27, 2019, there were no shares of preferred stock outstanding. Common Stock We are authorized to issue up to 2.00 billion shares of our common stock at $0.001 per share par value.
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Segment Information |
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Segment Reporting [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 single underlying architecture. Our GPU product brands are aimed at specialized markets including GeForce for gamers; Quadro for designers; Tesla and DGX for artificial intelligence, data scientists and big data researchers; and GRID for cloud-based visual computing users. Our Tegra brand integrates an entire computer onto a single chip, and incorporates GPUs and multi-core CPUs to drive supercomputing for autonomous robots, drones, and cars, as well as for game consoles and mobile gaming and entertainment devices. Under the single unifying architecture for our GPU and Tegra Processors, we leverage 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 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 expenses include stock-based compensation expense, corporate infrastructure and support costs, acquisition-related costs, legal settlement costs, contributions, restructuring and other charges, product warranty charge, 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 our consolidated financial statements. The table below presents details of our reportable segments and the “All Other” category.
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 the invoicing address by geographic regions:
The following table summarizes information pertaining to our revenue by each of the specialized markets we serve:
One customer represented approximately 11% of our total revenue for the second quarter and the first half of fiscal year 2020, and was attributable primarily to the GPU business. No customer represented 10% or more of total revenue for the second quarter and first half of fiscal year 2019. One customer represented approximately 20% of our accounts receivable balance as of July 28, 2019, and one customer represented approximately 19% of our accounts receivable balance as of January 27, 2019.
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Summary of Significant Accounting Policies (Policies) |
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Jul. 28, 2019 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying unaudited condensed consolidated financial statements were prepared in accordance with accounting principles generally accepted in the United States of America, or U.S. GAAP, for interim financial information and with the instructions to Form 10-Q and Article 10 of Securities and Exchange Commission, or SEC, Regulation S-X. The January 27, 2019 consolidated balance sheet was derived from our audited consolidated financial statements included in our Annual Report on Form 10-K for the fiscal year ended January 27, 2019, as filed with the SEC, but does not include all disclosures required by U.S. GAAP. In the opinion of management, all adjustments, consisting only of normal recurring adjustments considered necessary for a fair statement of results of operations and financial position have been included. The results for the interim periods presented are not necessarily indicative of the results expected for any future period. The following information should be read in conjunction with the audited consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the fiscal year ended January 27, 2019.
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Leases | Leases We determine if an arrangement is or contains a lease at inception. Operating leases with lease terms of more than 12 months are included in operating lease assets, accrued and other current liabilities, and long-term operating lease liabilities on our consolidated balance sheet. Operating lease assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments over the lease term. Operating lease assets and liabilities are recognized based on the present value of the remaining lease payments discounted using our incremental borrowing rate. Operating lease assets also include initial direct costs incurred and prepaid lease payments, minus any lease incentives. Our lease terms include options to extend or terminate the lease when it is reasonably certain that we will exercise that option. Lease expense is recognized on a straight-line basis over the lease term. We combine the lease and non-lease components in determining the operating lease assets and liabilities.
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Fiscal Year | Fiscal Year We operate on a 52- or 53-week year, ending on the last Sunday in January. Fiscal years 2020 and 2019 are both 52-week years. The second quarters of fiscal years 2020 and 2019 were both 13-week quarters.
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Reclassifications | Reclassifications Certain prior fiscal year balances have been reclassified to conform to the current fiscal year presentation.
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Principles of Consolidation | Principles of Consolidation Our condensed consolidated financial statements include the accounts of NVIDIA Corporation and our wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation.
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Use of Estimates | Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ materially from our estimates. On an on-going basis, we evaluate our estimates, including those related to revenue recognition, cash equivalents and marketable securities, accounts receivable, inventories, income taxes, goodwill, stock-based compensation, litigation, investigation and settlement costs, restructuring and other charges, and other contingencies. These estimates are based on historical facts and various other assumptions that we believe are reasonable.
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Adoption of New and Recently Issued Accounting Pronouncements | Adoption of New and Recently Issued Accounting Pronouncements Recently Adopted Accounting Pronouncement The Financial Accounting Standards Board, or FASB, issued an accounting standards update regarding the accounting for leases under which lease assets and liabilities are recognized on the balance sheet. We adopted this guidance on January 28, 2019 using the optional transition method by recognizing a cumulative-effect adjustment to the consolidated balance sheet. Refer to Note 3 of these Notes to Condensed Consolidated Financial Statements for additional information. Recent Accounting Pronouncement Not Yet Adopted In June 2016, the FASB issued a new accounting standard to replace the incurred loss impairment methodology under current GAAP with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. We will be required to use a forward-looking expected credit loss model for accounts receivable and other financial instruments, including available-for-sale debt securities. The standard will be effective for us beginning in the first quarter of fiscal year 2021, with early adoption permitted. We are currently evaluating the impact of this standard on our Consolidated Financial Statements.
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New Lease Accounting Standard (Tables) |
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Jul. 28, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Leases [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of future minimum lease payments | Future minimum lease payments under our non-cancelable operating leases as of July 28, 2019, are as follows:
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Schedule of future minimum rental payments under previous accounting standard | Future minimum lease payments under our non-cancelable operating leases as of January 27, 2019, based on the previous lease accounting standard, are as follows:
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Schedule of other information related to leases | Other information related to leases was as follows:
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Stock-Based Compensation (Tables) |
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Share-based Payment Arrangement [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock-based compensation expense, net of amounts capitalized as inventory | Our Condensed Consolidated Statements of Income include stock-based compensation expense, net of amounts allocated to inventory, as follows:
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Summary of equity award transactions | The following is a summary of equity award transactions under our equity incentive plans:
(2) Includes the number of market-based PSUs granted that will be issued and eligible to vest if the maximum goal for total shareholder return, or TSR, over the 3-year measurement period is achieved. Depending on the ranking of our TSR compared to those of the companies comprising the Standard & Poor’s 500 Index during that period, the market-based PSUs issued could be up to 60 thousand shares.
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Net Income Per Share (Tables) |
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Reconciliation of numerators and denominators of basic and diluted net income (loss) per share computations | The following is a reconciliation of the denominator of the basic and diluted net income per share computations for the periods presented:
(2) Calculated as net income divided by diluted weighted average shares.
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Marketable Securities (Tables) |
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Investments, Debt and Equity Securities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Cash Equivalents and Marketable Securities | The following is a summary of cash equivalents and marketable securities as of July 28, 2019 and January 27, 2019:
The amortized cost and estimated fair value of cash equivalents and marketable securities as of July 28, 2019 and January 27, 2019 are shown below by contractual maturity.
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Fair Value of Financial Assets and Liabilities (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Measurements, Recurring and Nonrecurring |
(1) These liabilities are carried on our Consolidated Balance Sheets at their original issuance value, net of unamortized debt discount and issuance costs, and are not marked to fair value each period. Refer to Note 12 of these Notes to Condensed Consolidated Financial Statements for additional information.
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Amortizable Intangible Assets (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Amortizable Intangible Assets Components | The components of our amortizable intangible assets are as follows:
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Balance Sheet Components (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Notes to financial statements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Inventories |
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Accrued and Other Current Liabilities |
(1) Deferred revenue primarily includes customer advances and deferrals related to license and development arrangements and post contract customer support, or PCS.
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Other Long-term Liabilities |
(2) Deferred revenue primarily includes deferrals related to PCS.
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Movement in deferred revenue | The following table shows the changes in deferred revenue during the first half of fiscal years 2020 and 2019.
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Derivative Financial Instruments (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||
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Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Notional Amounts of Outstanding Derivative Positions | The table below presents the notional value of our foreign currency forward contracts outstanding as of July 28, 2019 and January 27, 2019:
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Debt (Table) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Long-term Debt | The carrying value of the Notes and the associated interest rates were as follows:
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Segment Information (Tables) |
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Financial Information by Operating Segment | The table below presents details of our reportable segments and the “All Other” category.
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Reconciling items included in All Other category |
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Schedule of Revenue by Geographic Regions | The following table summarizes information pertaining to our revenue from customers based on the invoicing address by geographic regions:
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Schedule of Revenue by Major Markets | The following table summarizes information pertaining to our revenue by each of the specialized markets we serve:
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Merger Agreement with Mellanox Technologies, Ltd. (Details) - Mellanox Technologies, Ltd - USD ($) $ / shares in Units, $ in Millions |
6 Months Ended | |
---|---|---|
Mar. 10, 2019 |
Jul. 28, 2019 |
|
Business Acquisition [Line Items] | ||
Merger agreement price (in dollars per share) | $ 125 | |
Merger agreement price | $ 6,900 | |
Potential merger agreement termination fee | $ 350 |
New Lease Accounting Standard - Narrative (Details) - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | ||||
---|---|---|---|---|---|---|
Jul. 28, 2019 |
Jul. 29, 2018 |
Jul. 28, 2019 |
Jul. 29, 2018 |
Jan. 28, 2019 |
Jan. 27, 2019 |
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Leases [Abstract] | ||||||
Operating lease assets | $ 535 | $ 535 | $ 470 | $ 0 | ||
Operating lease liabilities | 567 | 567 | $ 500 | |||
Deferred rent credit | $ 30 | |||||
Operating lease expense | $ 28 | $ 20 | $ 55 | $ 36 | ||
Weighted average remaining lease term - operating leases | 8 years 8 months 12 days | 8 years 8 months 12 days | ||||
Weighted average discount rate - operating leases | 3.70% | 3.70% |
New Lease Accounting Standard - Schedule of future minimum payments (Details) - USD ($) $ in Millions |
Jul. 28, 2019 |
Jan. 28, 2019 |
Jan. 27, 2019 |
---|---|---|---|
Leases [Abstract] | |||
2020 (excluding first half of fiscal year 2020) | $ 55 | ||
2021 | 109 | ||
2022 | 100 | ||
2023 | 81 | ||
2024 | 57 | ||
2025 and thereafter | 281 | ||
Total | 683 | ||
Less imputed interest | 116 | ||
Present value of net future minimum lease payments | 567 | $ 500 | |
Less short-term operating lease liabilities | 84 | $ 0 | |
Long-term operating lease liabilities | $ 483 | $ 0 |
New Lease Accounting Standard - Schedule of future minimum rental payments under previous accounting standard (Details) $ in Millions |
Jan. 27, 2019
USD ($)
|
---|---|
Leases [Abstract] | |
2020 | $ 100 |
2021 | 97 |
2022 | 90 |
2023 | 77 |
2024 | 54 |
2025 and thereafter | 265 |
Total | $ 683 |
New Lease Accounting Standard - Schedule of other lease information (Details) - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended |
---|---|---|
Jul. 28, 2019 |
Jul. 28, 2019 |
|
Leases [Abstract] | ||
Operating cash flows used for operating leases | $ 26 | $ 50 |
Operating lease assets obtained in exchange for lease obligations | $ 21 | $ 108 |
Stock-Based Compensation - Allocation of Expense (Details) - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jul. 28, 2019 |
Jul. 29, 2018 |
Jul. 28, 2019 |
Jul. 29, 2018 |
|
Share-based Compensation | ||||
Total | $ 224 | $ 132 | $ 401 | $ 262 |
Cost of revenue | ||||
Share-based Compensation | ||||
Total | 8 | 8 | 12 | 16 |
Research and development | ||||
Share-based Compensation | ||||
Total | 145 | 76 | 259 | 150 |
Sales, general and administrative | ||||
Share-based Compensation | ||||
Total | $ 71 | $ 48 | $ 130 | $ 96 |
Stock-Based Compensation - Summary of Equity Award Transactions (Details) shares in Thousands |
6 Months Ended |
---|---|
Jul. 28, 2019
$ / shares
shares
| |
Weighted Average Grant-Date Fair Value Per Share | |
Maximum number of PSUs issuable (in shares) | 400 |
Maximum number of market-based PSUs issuable (in shares) | 60 |
RSUs, PSUs, and Market-based PSUs | |
Number of Shares | |
Beginning balance (in shares) | 16,000 |
Granted (in shares) | 6,000 |
Vested restricted stock (in shares) | (4,000) |
Canceled and forfeited (in shares) | (1,000) |
Ending balance (in shares) | 17,000 |
Weighted Average Grant-Date Fair Value Per Share | |
Beginning balance (in dollars per share) | $ / shares | $ 129.92 |
Granted (in dollars per share) | $ / shares | 183.33 |
Vested restricted stock (in dollars per share) | $ / shares | 67.51 |
Canceled and forfeited (in dollars per share) | $ / shares | 189.95 |
Ending balance (in dollars per share) | $ / shares | $ 161.37 |
Market-based PSUs | |
Weighted Average Grant-Date Fair Value Per Share | |
Measurement period | 3 years |
Stock-Based Compensation - Narrative (Details) $ in Millions |
6 Months Ended |
---|---|
Jul. 28, 2019
USD ($)
| |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Aggregate amount of unearned stock-based compensation expense related to equity awards, adjusted for estimated forfeitures | $ 2,060 |
Estimated weighted average amortization period | 2 years 6 months |
Share Based Compensation Arrangements By Share Based Payment Award Employee Stock Purchase Plan [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Estimated weighted average amortization period | 1 year 1 month 6 days |
Net Income Per Share (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jul. 28, 2019 |
Jul. 29, 2018 |
Jul. 28, 2019 |
Jul. 29, 2018 |
|
Numerator: | ||||
Net income | $ 552 | $ 1,101 | $ 947 | $ 2,345 |
Denominator: | ||||
Basic weighted average shares (in shares) | 609 | 607 | 608 | 607 |
Dilutive impact of outstanding securities: | ||||
Equity awards (in shares) | 7 | 18 | 8 | 19 |
1.00% Convertible Senior Notes (in shares) | 0 | 1 | 0 | 1 |
Diluted weighted average shares (in shares) | 616 | 626 | 616 | 627 |
Net income per share: | ||||
Basic (in dollars per share) | $ 0.91 | $ 1.81 | $ 1.56 | $ 3.86 |
Diluted (in dollars per share) | $ 0.90 | $ 1.76 | $ 1.54 | $ 3.74 |
Equity awards excluded from diluted net income per share because their effect would have been anti-dilutive (in shares) | 11 | 0 | 12 | 1 |
Convertible Debt | ||||
Debt Instrument [Line Items] | ||||
Debt interest rate | 1.00% | 1.00% |
Income Taxes (Details) - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jul. 28, 2019 |
Jul. 29, 2018 |
Jul. 28, 2019 |
Jul. 29, 2018 |
|
Income Tax Disclosure [Abstract] | ||||
Income tax expense | $ 54 | $ 79 | $ 48 | $ 146 |
Tax expense (benefit) as percentage of income before income tax (as percent) | 8.80% | 6.70% | 4.90% | 5.90% |
Marketable Securities - Narrative (Details) - USD ($) |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jul. 28, 2019 |
Jul. 29, 2018 |
Jul. 28, 2019 |
Jul. 29, 2018 |
|
Investments, Debt and Equity Securities [Abstract] | ||||
Other-than-temporary impairment losses | $ 0 | $ 0 | $ 0 | $ 0 |
Marketable Securities - Contractual Maturity (Details) - USD ($) $ in Millions |
Jul. 28, 2019 |
Jan. 27, 2019 |
---|---|---|
Amortized Cost | ||
Less than 1 year | $ 8,255 | $ 5,042 |
Due in 1 - 5 years | 112 | 2,271 |
Mortgage-backed securities issued by United States government-sponsored enterprises not due at a single maturity date | 4 | 22 |
Amortized Cost | 8,371 | 7,335 |
Estimated Fair Value | ||
Less than 1 year | 8,255 | 5,034 |
Due in 1 - 5 years | 113 | 2,268 |
Mortgage-backed securities issued by United States government-sponsored enterprises not due at a single maturity date | 4 | 22 |
Estimated Fair Value | $ 8,372 | $ 7,324 |
Amortizable Intangible Assets (Details) - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | |||
---|---|---|---|---|---|
Jul. 28, 2019 |
Jul. 29, 2018 |
Jul. 28, 2019 |
Jul. 29, 2018 |
Jan. 27, 2019 |
|
Amortizable intangible assets components | |||||
Amortization expense | $ 6 | $ 6 | $ 13 | $ 17 | |
Future amortization expense associated with intangible assets | |||||
Remainder of fiscal 2020 | 12 | 12 | |||
Fiscal 2021 | 16 | 16 | |||
Fiscal 2022 | 9 | 9 | |||
Fiscal 2023 | 7 | 7 | |||
Fiscal 2024 | 5 | 5 | |||
Acquisition-related intangible assets | |||||
Amortizable intangible assets components | |||||
Gross Carrying Amount | 195 | 195 | $ 195 | ||
Accumulated Amortization | (190) | (190) | (188) | ||
Net Carrying Amount | 5 | 5 | 7 | ||
Patents and licensed technology | |||||
Amortizable intangible assets components | |||||
Gross Carrying Amount | 508 | 508 | 491 | ||
Accumulated Amortization | (464) | (464) | (453) | ||
Net Carrying Amount | 44 | 44 | 38 | ||
Total intangible assets | |||||
Amortizable intangible assets components | |||||
Gross Carrying Amount | 703 | 703 | 686 | ||
Accumulated Amortization | (654) | (654) | (641) | ||
Net Carrying Amount | $ 49 | $ 49 | $ 45 |
Derivative Financial Instruments - Notional Values (Details) - USD ($) $ in Millions |
Jul. 28, 2019 |
Jan. 27, 2019 |
---|---|---|
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||
Designated as cash flow hedges | $ 420 | $ 408 |
Not designated for hedge accounting | $ 269 | $ 241 |
Derivative Financial Instruments - Narrative (Details) - USD ($) |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jul. 28, 2019 |
Jul. 29, 2018 |
Jul. 28, 2019 |
Jul. 29, 2018 |
|
Derivative [Line Items] | ||||
Gain (loss) associated with ineffectiveness | $ 0 | $ 0 | $ 0 | $ 0 |
Foreign currency forward contracts | ||||
Derivative [Line Items] | ||||
Derivative, maturity period | 18 months |
Debt - Narrative (Details) |
6 Months Ended |
---|---|
Jul. 28, 2019
USD ($)
| |
Debt Instrument [Line Items] | |
Debt redemption, notice period | 30 days |
Proceeds from issuance of debt | $ 1,980,000,000 |
Commercial paper outstanding | 0 |
Revolving Credit Facility | |
Debt Instrument [Line Items] | |
Current borrowing capacity | 575,000,000 |
Additional borrowing capacity | 425,000,000 |
Line of credit outstanding | 0 |
Commercial Paper | |
Debt Instrument [Line Items] | |
Current borrowing capacity | 575,000,000 |
2.20% Notes Due 2021 | |
Debt Instrument [Line Items] | |
Face amount of debt | $ 1,000,000,000.00 |
Stated interest rate (as percent) | 2.20% |
3.20% Notes Due 2026 | |
Debt Instrument [Line Items] | |
Face amount of debt | $ 1,000,000,000.00 |
Stated interest rate (as percent) | 3.20% |
Debt - Schedule of Instruments (Details) - USD ($) $ in Millions |
6 Months Ended | |
---|---|---|
Jul. 28, 2019 |
Jan. 27, 2019 |
|
Debt Instrument [Line Items] | ||
Unamortized debt discount and issuance costs | $ (11) | $ (12) |
Net carrying amount | $ 1,989 | 1,988 |
2.20% Notes Due 2021 | ||
Debt Instrument [Line Items] | ||
Expected Remaining Term (years) | 2 years 1 month 6 days | |
Effective interest rate (as percent) | 2.38% | |
Long-term debt, gross | $ 1,000 | 1,000 |
3.20% Notes Due 2026 | ||
Debt Instrument [Line Items] | ||
Expected Remaining Term (years) | 7 years 1 month 6 days | |
Effective interest rate (as percent) | 3.31% | |
Long-term debt, gross | $ 1,000 | $ 1,000 |
Commitments and Contingencies (Details) - USD ($) $ in Millions |
Jul. 28, 2019 |
Jan. 27, 2019 |
---|---|---|
Commitments and Contingencies Disclosure [Abstract] | ||
Outstanding inventory purchase obligations | $ 757 | |
Outstanding capital purchase obligations | 133 | |
Revenue, remaining performance obligation | $ 418 | |
Revenue, remaining performance obligation (as a percent) | 48.00% | |
Warranty accrual | $ 17 | $ 18 |
Shareholders' Equity (Details) - USD ($) $ / shares in Units, $ in Millions |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jul. 28, 2019 |
Jul. 28, 2019 |
Jul. 29, 2018 |
Jan. 27, 2019 |
|
Equity [Abstract] | ||||
Dividends paid | $ 97 | $ 195 | $ 182 | |
Aggregated number of shares repurchased under stock repurchase program (in shares) | 260,000,000 | 260,000,000 | ||
Aggregated cost of shares repurchased | $ 7,080 | $ 7,080 | ||
Remaining authorized repurchase amount | $ 7,240 | $ 7,240 | ||
Preferred stock outstanding (in shares) | 0 | 0 | 0 | |
Authorized number of shares of common stock (in shares) | 2,000,000,000.00 | 2,000,000,000.00 | ||
Par value of common stock (in dollars per share) | $ 0.001 | $ 0.001 |
Segment Information - Reconciling Items (Details) - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jul. 28, 2019 |
Jul. 29, 2018 |
Jul. 28, 2019 |
Jul. 29, 2018 |
|
Segment Reporting Information [Line Items] | ||||
Stock-based compensation expense | $ (224) | $ (132) | $ (401) | $ (262) |
Income from operations | 571 | 1,157 | 929 | 2,452 |
All Other | ||||
Segment Reporting Information [Line Items] | ||||
Stock-based compensation expense | (224) | (132) | (401) | (262) |
Unallocated cost of revenue and operating expenses | (66) | (65) | (135) | (129) |
Acquisition-related and other costs | (5) | (2) | (15) | (4) |
Legal settlement costs | (2) | 0 | (13) | 0 |
Income from operations | $ (297) | $ (199) | $ (564) | $ (395) |
Segment Information - Concentration Risk (Details) - Customer Concentration Risk - Significant Customer |
3 Months Ended | 6 Months Ended | 12 Months Ended |
---|---|---|---|
Jul. 28, 2019 |
Jul. 28, 2019 |
Jan. 27, 2019 |
|
Sales Revenue | |||
Revenue, Major Customer [Line Items] | |||
Concentration risk (as percent) | 11.00% | 11.00% | |
Accounts Receivable | |||
Revenue, Major Customer [Line Items] | |||
Concentration risk (as percent) | 20.00% | 19.00% |
Label | Element | Value |
---|---|---|
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | $ 8,000,000 |
Retained Earnings [Member] | ||
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | $ 8,000,000 |
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