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 nine months ended October 25, 2020 and October 27, 2019 | ||||||||
b) Condensed Consolidated Statements of Comprehensive Income for the three and nine months ended October 25, 2020 and October 27, 2019 | ||||||||
c) Condensed Consolidated Balance Sheets as of October 25, 2020 and January 26, 2020 | ||||||||
d) Condensed Consolidated Statements of Shareholders' Equity for the three and nine months ended October 25, 2020 and October 27, 2019 | ||||||||
e) Condensed Consolidated Statements of Cash Flows for the nine months ended October 25, 2020 and October 27, 2019 | ||||||||
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 | Nine Months Ended | ||||||||||||||||||||||
October 25, | October 27, | October 25, | October 27, | ||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||
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 | ( | ( | |||||||||||||||||||||
Other income (expense), net | ( | ( | |||||||||||||||||||||
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 | Nine Months Ended | ||||||||||||||||||||||
October 25, | October 27, | October 25, | October 27, | ||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||
Net income | $ | $ | $ | $ | |||||||||||||||||||
Other comprehensive income (loss), net of tax | |||||||||||||||||||||||
Available-for-sale securities: | |||||||||||||||||||||||
Net change in unrealized gain (loss) | ( | ||||||||||||||||||||||
Reclassification adjustments for net realized gain (loss) included in net income | ( | ||||||||||||||||||||||
Net change in unrealized gain (loss) | ( | ||||||||||||||||||||||
Cash flow hedges: | |||||||||||||||||||||||
Net unrealized gain | |||||||||||||||||||||||
Reclassification adjustments for net realized gain included in net income | ( | ( | |||||||||||||||||||||
Net change in unrealized gain (loss) | ( | ||||||||||||||||||||||
Other comprehensive income (loss), net of tax | ( | ||||||||||||||||||||||
Total comprehensive income | $ | $ | $ | $ |
October 25, | January 26, | ||||||||||
2020 | 2020 | ||||||||||
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 | |||||||||||
Short-term debt | |||||||||||
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 income | |||||||||||
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, July 26, 2020 | $ | $ | $ | ( | $ | $ | $ | ||||||||||||||||||||||||||||||||||
Net income | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
Other comprehensive income | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
Issuance of common stock from stock plans | — | — | — | — | |||||||||||||||||||||||||||||||||||||
Tax withholding related to vesting of restricted stock units | ( | — | — | ( | — | — | ( | ||||||||||||||||||||||||||||||||||
Cash dividends declared and paid ($ | — | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||||
Stock-based compensation | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
Balances, October 25, 2020 | $ | $ | $ | ( | $ | $ | $ | ||||||||||||||||||||||||||||||||||
Balances, July 28, 2019 | $ | $ | $ | ( | $ | ( | $ | $ | |||||||||||||||||||||||||||||||||
Net income | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
Other comprehensive loss | — | — | — | — | ( | — | ( | ||||||||||||||||||||||||||||||||||
Issuance of common stock from stock plans | — | — | — | — | |||||||||||||||||||||||||||||||||||||
Tax withholding related to vesting of restricted stock units | ( | — | — | ( | — | — | ( | ||||||||||||||||||||||||||||||||||
Cash dividends declared and paid ($ | — | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||||
Stock-based compensation | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
Balances, October 27, 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 26, 2020 | $ | $ | $ | ( | $ | $ | $ | ||||||||||||||||||||||||||||||||||
Net income | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
Other comprehensive income | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
Issuance of common stock from stock plans | — | — | — | — | |||||||||||||||||||||||||||||||||||||
Tax withholding related to vesting of restricted stock units | ( | — | — | ( | — | — | ( | ||||||||||||||||||||||||||||||||||
Cash dividends declared and paid ($ | — | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||||
Fair value of partially vested equity awards assumed in connection with acquisitions | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
Stock-based compensation | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
Balances, October 25, 2020 | $ | $ | $ | ( | $ | $ | $ | ||||||||||||||||||||||||||||||||||
Balances, January 27, 2019 | $ | $ | $ | ( | $ | ( | $ | $ | |||||||||||||||||||||||||||||||||
Net income | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
Other comprehensive income | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
Issuance of common stock from stock plans | — | — | — | — | |||||||||||||||||||||||||||||||||||||
Tax withholding related to vesting of restricted stock units | ( | — | — | ( | — | — | ( | ||||||||||||||||||||||||||||||||||
Cash dividends declared and paid ($ | — | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||||
Stock-based compensation | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
Balances, October 27, 2019 | $ | $ | $ | ( | $ | ( | $ | $ |
Nine Months Ended | |||||||||||
October 25, | October 27, | ||||||||||
2020 | 2019 | ||||||||||
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, net of acquisitions: | |||||||||||
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 | ( | ( | |||||||||
Acquisitions, net of cash acquired | ( | ||||||||||
Purchases related to property and equipment and intangible assets | ( | ( | |||||||||
Investments and other, net | ( | ( | |||||||||
Net cash provided by (used in) investing activities | ( | ||||||||||
Cash flows from financing activities: | |||||||||||
Issuance of debt, net of issuance costs | |||||||||||
Proceeds related to employee stock plans | |||||||||||
Payments related to tax on restricted stock units | ( | ( | |||||||||
Dividends paid | ( | ( | |||||||||
Other | ( | ||||||||||
Net cash provided by (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 | $ | $ | |||||||||
Purchase Price | ||||||||
Cash paid for outstanding Mellanox ordinary shares (1) | $ | |||||||
Cash for Mellanox equity awards (2) | ||||||||
Total cash consideration | ||||||||
Fair value of Mellanox equity awards assumed by NVIDIA (3) | ||||||||
Total purchase consideration | $ | |||||||
Allocation | ||||||||
Cash and cash equivalents | $ | |||||||
Marketable securities | ||||||||
Accounts receivable, net | ||||||||
Inventories | ||||||||
Prepaid expenses and other assets | ||||||||
Property and equipment, net | ||||||||
Goodwill | ||||||||
Intangible assets | ||||||||
Accounts payable | ( | |||||||
Accrued and other current liabilities | ( | |||||||
Income tax liability | ( | |||||||
Deferred income tax liability | ( | |||||||
Other long-term liabilities | ( | |||||||
$ |
Fair Value | Weighted Average Useful Lives | ||||||||||
(In millions) | |||||||||||
Developed technology (1) | $ | ||||||||||
Customer relationships (2) | |||||||||||
Order backlog (3) | Based on actual shipments | ||||||||||
Trade names (4) | |||||||||||
Total identified finite-lived intangible assets | |||||||||||
IPR&D (5) | N/A | ||||||||||
Total identified intangible assets | $ |
Pro Forma | |||||||||||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||||||||||
October 25, 2020 | October 27, 2019 | October 25, 2020 | October 27, 2019 | ||||||||||||||||||||
(In millions) | |||||||||||||||||||||||
Revenue | $ | $ | $ | $ | |||||||||||||||||||
Net income | $ | $ | $ | $ |
Operating Lease Obligations | |||||
(In millions) | |||||
Fiscal Year: | |||||
2021 (excluding first nine months of fiscal year 2021) | $ | ||||
2022 | |||||
2023 | |||||
2024 | |||||
2025 | |||||
2026 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 | $ |
Nine Months Ended | |||||||||||
October 25, 2020 | October 27, 2019 | ||||||||||
(In millions) | |||||||||||
Supplemental cash flows information | |||||||||||
Operating cash flows used for operating leases | $ | $ | |||||||||
Operating lease assets obtained in exchange for lease obligations (1) | $ | $ |
Three Months Ended | Nine Months Ended | ||||||||||||||||||||||
October 25, 2020 | October 27, 2019 | October 25, 2020 | October 27, 2019 | ||||||||||||||||||||
(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 26, 2020 | $ | ||||||||||
Granted | $ | ||||||||||
Vested restricted stock | ( | $ | |||||||||
Balances, October 25, 2020 | $ |
Three Months Ended | Nine Months Ended | ||||||||||||||||||||||
October 25, | October 27, | October 25, | October 27, | ||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||
(In millions, except per share data) | |||||||||||||||||||||||
Numerator: | |||||||||||||||||||||||
Net income | $ | $ | $ | $ | |||||||||||||||||||
Denominator: | |||||||||||||||||||||||
Basic weighted average shares | |||||||||||||||||||||||
Dilutive impact of outstanding equity awards | |||||||||||||||||||||||
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 |
October 25, 2020 | |||||||||||||||||||||||||||||||||||
Amortized Cost | Unrealized Gain | Unrealized Loss | Estimated Fair Value | Reported as | |||||||||||||||||||||||||||||||
Cash Equivalents | Marketable Securities | ||||||||||||||||||||||||||||||||||
(In millions) | |||||||||||||||||||||||||||||||||||
Debt securities issued by the United States Treasury | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
Corporate debt securities | |||||||||||||||||||||||||||||||||||
Debt securities issued by United States government agencies | |||||||||||||||||||||||||||||||||||
Certificates of deposit | |||||||||||||||||||||||||||||||||||
Money market funds | |||||||||||||||||||||||||||||||||||
Foreign government bonds | |||||||||||||||||||||||||||||||||||
Total | $ | $ | $ | $ | $ | $ |
January 26, 2020 | |||||||||||||||||||||||||||||||||||
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 | |||||||||||||||||||||||||||||||||||
Debt securities issued by United States government agencies | |||||||||||||||||||||||||||||||||||
Corporate debt securities | |||||||||||||||||||||||||||||||||||
Foreign government bonds | |||||||||||||||||||||||||||||||||||
Certificates of deposit | |||||||||||||||||||||||||||||||||||
Asset-backed securities | |||||||||||||||||||||||||||||||||||
Total | $ | $ | $ | $ | $ | $ |
October 25, 2020 | January 26, 2020 | ||||||||||||||||||||||
Amortized Cost | Estimated Fair Value | Amortized Cost | Estimated Fair Value | ||||||||||||||||||||
(In millions) | |||||||||||||||||||||||
Less than one year | $ | $ | $ | $ | |||||||||||||||||||
Due in 1 - 5 years | |||||||||||||||||||||||
Total | $ | $ | $ | $ |
Fair Value at | |||||||||||||||||
Pricing Category | October 25, 2020 | January 26, 2020 | |||||||||||||||
(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 issued by United States government agencies | Level 2 | $ | $ | ||||||||||||||
Certificates of deposit | Level 2 | $ | $ | ||||||||||||||
Foreign government bonds | Level 2 | $ | $ | ||||||||||||||
Asset-backed securities | Level 2 | $ | $ | ||||||||||||||
Other asset: | |||||||||||||||||
Investment in non-affiliated entities (1) | Level 3 | $ | $ | ||||||||||||||
Liabilities | |||||||||||||||||
Other non-current liabilities: | |||||||||||||||||
Level 2 | $ | $ | |||||||||||||||
Level 2 | $ | $ | |||||||||||||||
Level 2 | $ | $ | |||||||||||||||
Level 2 | $ | $ | |||||||||||||||
Level 2 | $ | $ | |||||||||||||||
Level 2 | $ | $ |
October 25, 2020 | January 26, 2020 | ||||||||||||||||||||||||||||||||||
Gross Carrying Amount | Accumulated Amortization | Net Carrying Amount | Gross Carrying Amount | Accumulated Amortization | Net Carrying Amount | ||||||||||||||||||||||||||||||
(In millions) | |||||||||||||||||||||||||||||||||||
Acquisition-related intangible assets (1) | $ | $ | ( | $ | $ | $ | ( | $ | |||||||||||||||||||||||||||
Patents and licensed technology | ( | ( | |||||||||||||||||||||||||||||||||
Total intangible assets | $ | $ | ( | $ | $ | $ | ( | $ |
October 25, | January 26, | ||||||||||
2020 | 2020 | ||||||||||
Inventories: | (In millions) | ||||||||||
Raw materials | $ | $ | |||||||||
Work in-process | |||||||||||
Finished goods | |||||||||||
Total inventories | $ | $ |
October 25, | January 26, | ||||||||||
2020 | 2020 | ||||||||||
Other assets: | (In millions) | ||||||||||
Advanced consideration for acquisition (1) | $ | $ | |||||||||
Prepaid royalties (1) | |||||||||||
Investment in non-affiliated entities | |||||||||||
Other | |||||||||||
Total other assets | $ | $ |
October 25, | January 26, | ||||||||||
2020 | 2020 | ||||||||||
Accrued and Other Current Liabilities: | (In millions) | ||||||||||
Customer program accruals | $ | $ | |||||||||
Accrued payroll and related expenses | |||||||||||
Deferred revenue (1) | |||||||||||
Licenses and royalties | |||||||||||
Operating leases | |||||||||||
Taxes payable | |||||||||||
Product warranty and return provisions | |||||||||||
Professional service fee | |||||||||||
Coupon interest on debt obligations | |||||||||||
Other | |||||||||||
Total accrued and other current liabilities | $ | $ |
October 25, | January 26, | ||||||||||
2020 | 2020 | ||||||||||
Other Long-Term Liabilities: | (In millions) | ||||||||||
Income tax payable (1) | $ | $ | |||||||||
Deferred income tax (2) | |||||||||||
Deferred revenue (3) | |||||||||||
Licenses payable | |||||||||||
Employee benefits | |||||||||||
Other | |||||||||||
Total other long-term liabilities | $ | $ |
October 25, | October 27, | ||||||||||
2020 | 2019 | ||||||||||
(In millions) | |||||||||||
Balance at beginning of period | $ | $ | |||||||||
Deferred revenue added during the period | |||||||||||
Addition due to business combinations | |||||||||||
Revenue recognized during the period | ( | ( | |||||||||
Balance at end of period | $ | $ |
October 25, 2020 | January 26, 2020 | ||||||||||
(In millions) | |||||||||||
Designated as cash flow hedges | $ | $ | |||||||||
Not designated for hedge accounting | $ | $ |
Expected Remaining Term (years) | Effective Interest Rate | October 25, 2020 | January 26, 2020 | |||||||||||||||||||||||
(In millions) | ||||||||||||||||||||||||||
$ | $ | |||||||||||||||||||||||||
Unamortized debt discount and issuance costs | ( | ( | ||||||||||||||||||||||||
Net carrying amount | $ | $ |
Graphics | Compute & Networking | All Other | Consolidated | ||||||||||||||||||||
(In millions) | |||||||||||||||||||||||
Three Months Ended October 25, 2020 | |||||||||||||||||||||||
Revenue | $ | $ | $ | $ | |||||||||||||||||||
Operating income (loss) | $ | $ | $ | ( | $ | ||||||||||||||||||
Three Months Ended October 27, 2019 | |||||||||||||||||||||||
Revenue | $ | $ | $ | $ | |||||||||||||||||||
Operating income (loss) | $ | $ | $ | ( | $ | ||||||||||||||||||
Nine Months Ended October 25, 2020 | |||||||||||||||||||||||
Revenue | $ | $ | $ | $ | |||||||||||||||||||
Operating income (loss) | $ | $ | $ | ( | $ | ||||||||||||||||||
Nine Months Ended October 27, 2019 | |||||||||||||||||||||||
Revenue | $ | $ | $ | $ | |||||||||||||||||||
Operating income (loss) | $ | $ | $ | ( | $ |
Three Months Ended | Nine Months Ended | ||||||||||||||||||||||
October 25, 2020 | October 27, 2019 | October 25, 2020 | October 27, 2019 | ||||||||||||||||||||
(In millions) | |||||||||||||||||||||||
Reconciling items included in "All Other" category: | |||||||||||||||||||||||
Stock-based compensation expense | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
Acquisition-related and other costs | ( | ( | ( | ( | |||||||||||||||||||
Unallocated cost of revenue and operating expenses | ( | ( | ( | ( | |||||||||||||||||||
Legal settlement costs | ( | ( | ( | ||||||||||||||||||||
Total | $ | ( | $ | ( | $ | ( | $ | ( |
Three Months Ended | Nine Months Ended | ||||||||||||||||||||||
October 25, | October 27, | October 25, | October 27, | ||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||
(In millions) | |||||||||||||||||||||||
Revenue: | |||||||||||||||||||||||
Taiwan | $ | $ | $ | $ | |||||||||||||||||||
China (including Hong Kong) | |||||||||||||||||||||||
Other Asia Pacific | |||||||||||||||||||||||
United States | |||||||||||||||||||||||
Europe | |||||||||||||||||||||||
Other countries | |||||||||||||||||||||||
Total revenue | $ | $ | $ | $ |
Three Months Ended | Nine Months Ended | ||||||||||||||||||||||
October 25, | October 27, | October 25, | October 27, | ||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||
(In millions) | |||||||||||||||||||||||
Revenue: | |||||||||||||||||||||||
Gaming | $ | $ | $ | $ | |||||||||||||||||||
Professional Visualization | |||||||||||||||||||||||
Data Center | |||||||||||||||||||||||
Automotive | |||||||||||||||||||||||
OEM and Other | |||||||||||||||||||||||
Total revenue | $ | $ | $ | $ |
Three Months Ended | |||||||||||||||||||||||||||||
October 25, 2020 | July 26, 2020 | October 27, 2019 | Quarter-over-Quarter Change | Year-over-Year Change | |||||||||||||||||||||||||
($ in millions, except per share data) | |||||||||||||||||||||||||||||
Revenue | $ | 4,726 | $ | 3,866 | $ | 3,014 | 22 | % | 57 | % | |||||||||||||||||||
Gross margin | 62.6 | % | 58.8 | % | 63.6 | % | 380 bps | (100) bps | |||||||||||||||||||||
Operating expenses | $ | 1,562 | $ | 1,624 | $ | 989 | (4) | % | 58 | % | |||||||||||||||||||
Income from operations | $ | 1,398 | $ | 651 | $ | 927 | 115 | % | 51 | % | |||||||||||||||||||
Net income | $ | 1,336 | $ | 622 | $ | 899 | 115 | % | 49 | % | |||||||||||||||||||
Net income per diluted share | $ | 2.12 | $ | 0.99 | $ | 1.45 | 114 | % | 46 | % |
Three Months Ended | Nine Months Ended | ||||||||||||||||||||||
October 25, 2020 | October 27, 2019 | October 25, 2020 | October 27, 2019 | ||||||||||||||||||||
Revenue | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | |||||||||||||||
Cost of revenue | 37.4 | 36.4 | 38.0 | 39.2 | |||||||||||||||||||
Gross profit | 62.6 | 63.6 | 62.0 | 60.8 | |||||||||||||||||||
Operating expenses | |||||||||||||||||||||||
Research and development | 22.2 | 23.6 | 23.8 | 26.8 | |||||||||||||||||||
Sales, general and administrative | 10.9 | 9.2 | 12.3 | 10.3 | |||||||||||||||||||
Total operating expenses | 33.1 | 32.8 | 36.1 | 37.1 | |||||||||||||||||||
Income from operations | 29.5 | 30.8 | 25.9 | 23.7 | |||||||||||||||||||
Interest income | 0.1 | 1.5 | 0.4 | 1.8 | |||||||||||||||||||
Interest expense | (1.1) | (0.4) | (1.1) | (0.5) | |||||||||||||||||||
Other, net | (0.1) | — | — | — | |||||||||||||||||||
Other income (expense), net | (1.1) | 1.1 | (0.7) | 1.3 | |||||||||||||||||||
Income before income tax | 28.4 | 31.9 | 25.2 | 25.0 | |||||||||||||||||||
Income tax expense | 0.3 | 2.0 | 0.5 | 1.4 | |||||||||||||||||||
Net income | 28.1 | % | 29.9 | % | 24.7 | % | 23.6 | % |
Three Months Ended | Nine Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||
October 25, 2020 | October 27, 2019 | $ Change | % Change | October 25, 2020 | October 27, 2019 | $ Change | % Change | ||||||||||||||||||||||||||||||||||||||||
($ in millions) | |||||||||||||||||||||||||||||||||||||||||||||||
Graphics | $ | 2,787 | $ | 2,226 | $ | 561 | 25 | % | $ | 6,778 | $ | 5,555 | $ | 1,223 | 22 | % | |||||||||||||||||||||||||||||||
Compute & Networking | 1,939 | 788 | 1,151 | 146 | % | 4,894 | 2,258 | 2,636 | 117 | % | |||||||||||||||||||||||||||||||||||||
Total | $ | 4,726 | $ | 3,014 | $ | 1,712 | 57 | % | $ | 11,672 | $ | 7,813 | $ | 3,859 | 49 | % |
Three Months Ended | Nine Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||
October 25, 2020 | October 27, 2019 | $ Change | % Change | October 25, 2020 | October 27, 2019 | $ Change | % Change | ||||||||||||||||||||||||||||||||||||||||
($ in millions) | |||||||||||||||||||||||||||||||||||||||||||||||
Research and development expenses | $ | 1,047 | $ | 712 | $ | 335 | 47 | % | $ | 2,778 | $ | 2,091 | $ | 687 | 33 | % | |||||||||||||||||||||||||||||||
% of net revenue | 22 | % | 24 | % | 24 | % | 27 | % | |||||||||||||||||||||||||||||||||||||||
Sales, general and administrative expenses | 515 | 277 | 238 | 86 | % | 1,437 | 806 | 631 | 78 | % | |||||||||||||||||||||||||||||||||||||
% of net revenue | 11 | % | 9 | % | 12 | % | 10 | % | |||||||||||||||||||||||||||||||||||||||
Total operating expenses | $ | 1,562 | $ | 989 | $ | 573 | 58 | % | $ | 4,215 | $ | 2,897 | $ | 1,318 | 45 | % |
October 25, 2020 | January 26, 2020 | ||||||||||
(In millions) | |||||||||||
Cash and cash equivalents | $ | 2,251 | $ | 10,896 | |||||||
Marketable securities | 7,888 | 1 | |||||||||
Cash, cash equivalents and marketable securities | $ | 10,139 | $ | 10,897 |
Nine Months Ended | |||||||||||
October 25, 2020 | October 27, 2019 | ||||||||||
(In millions) | |||||||||||
Net cash provided by operating activities | $ | 3,755 | $ | 3,296 | |||||||
Net cash provided by (used in) investing activities | $ | (16,546) | $ | 6,296 | |||||||
Net cash provided by (used in) financing activities | $ | 4,146 | $ | (609) |
Exhibit No. | Exhibit Description | Schedule /Form | File Number | Exhibit | Filing Date | |||||||||||||||||||||||||||
2.1 | 8-K | 000-23985 | 2.1 | 9/14/2020 | ||||||||||||||||||||||||||||
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 | 9 Months Ended | ||
---|---|---|---|---|
Oct. 25, 2020 |
Oct. 27, 2019 |
Oct. 25, 2020 |
Oct. 27, 2019 |
|
Income Statement [Abstract] | ||||
Revenue | $ 4,726 | $ 3,014 | $ 11,672 | $ 7,813 |
Cost of revenue | 1,766 | 1,098 | 4,432 | 3,060 |
Gross profit | 2,960 | 1,916 | 7,240 | 4,753 |
Operating expenses | ||||
Research and development | 1,047 | 712 | 2,778 | 2,091 |
Sales, general and administrative | 515 | 277 | 1,437 | 806 |
Total operating expenses | 1,562 | 989 | 4,215 | 2,897 |
Income from operations | 1,398 | 927 | 3,025 | 1,856 |
Interest income | 7 | 45 | 50 | 137 |
Interest expense | (53) | (13) | (131) | (39) |
Other, net | (4) | 0 | (5) | 0 |
Other income (expense), net | (50) | 32 | (86) | 98 |
Income before income tax | 1,348 | 959 | 2,939 | 1,954 |
Income tax expense | 12 | 60 | 64 | 109 |
Net income | $ 1,336 | $ 899 | $ 2,875 | $ 1,845 |
Net income per share: | ||||
Basic (in dollars per share) | $ 2.16 | $ 1.47 | $ 4.67 | $ 3.03 |
Diluted (in dollars per share) | $ 2.12 | $ 1.45 | $ 4.59 | $ 2.99 |
Weighted average shares used in per share computation: | ||||
Basic (in shares) | 618 | 610 | 616 | 609 |
Diluted (in shares) | 630 | 618 | 626 | 617 |
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Oct. 25, 2020 |
Oct. 27, 2019 |
Oct. 25, 2020 |
Oct. 27, 2019 |
|
Statement of Comprehensive Income [Abstract] | ||||
Net income | $ 1,336 | $ 899 | $ 2,875 | $ 1,845 |
Available-for-sale securities: | ||||
Net change in unrealized gain (loss) | (1) | 0 | 3 | 9 |
Reclassification adjustments for net realized gain (loss) included in net income | 0 | 0 | (2) | 0 |
Net change in unrealized gain (loss) | (1) | 0 | 1 | 9 |
Cash flow hedges: | ||||
Net unrealized gain | 5 | 0 | 10 | 4 |
Reclassification adjustments for net realized gain included in net income | 4 | (2) | 0 | (4) |
Net change in unrealized gain (loss) | 9 | (2) | 10 | 0 |
Other comprehensive income (loss), net of tax | 8 | (2) | 11 | 9 |
Total comprehensive income | $ 1,344 | $ 897 | $ 2,886 | $ 1,854 |
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (Parenthetical) - $ / shares |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Oct. 25, 2020 |
Oct. 27, 2019 |
Oct. 25, 2020 |
Oct. 27, 2019 |
|
Statement of Stockholders' Equity [Abstract] | ||||
Common stock, dividends per share, declared and paid (in dollars per share) | $ 0.16 | $ 0.16 | $ 0.48 | $ 0.48 |
Summary of Significant Accounting Policies |
9 Months Ended |
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Oct. 25, 2020 | |
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 26, 2020 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 26, 2020, 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 26, 2020. The unaudited condensed consolidated financial statements in this report include the financial results of Mellanox Technologies Ltd., or Mellanox, prospectively from April 27, 2020. For additional details, refer to Note 2 - Business Combination. Significant Accounting Policies Except for the accounting policies for business combination and investment in non-affiliated entities, there have been no material changes to our significant accounting policies disclosed 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 26, 2020. Business Combination We allocate the fair value of the purchase price of an acquisition to the tangible assets acquired, liabilities assumed, and intangible assets acquired, including in-process research and development, or IPR&D, based on their estimated fair values. The excess of the fair value of the purchase price over the fair values of these net tangible and intangible assets acquired is recorded as goodwill. Management’s estimates of fair value are based upon assumptions believed to be reasonable, but our estimates and assumptions are inherently uncertain and subject to refinement. The estimates and assumptions used in valuing intangible assets include, but are not limited to, the amount and timing of projected future cash flows, discount rate used to determine the present value of these cash flows and asset lives. These estimates are inherently uncertain and, therefore, actual results may differ from the estimates made. As a result, during the measurement period of up to one year from the acquisition date, we record adjustments to the assets acquired and liabilities assumed with the corresponding offset to goodwill. Upon the conclusion of the measurement period or final determination of the fair value of the purchase price of an acquisition, whichever comes first, any subsequent adjustments are recorded to our condensed consolidated statements of income. We initially capitalize the fair value of IPR&D as an intangible asset with an indefinite life. We assess for impairment thereafter. When IPR&D projects are completed, we reclassify the IPR&D as an amortizable purchased intangible asset and amortize over the asset’s estimated useful life. Acquisition-related expenses are recognized separately from the business combination and expensed as incurred. Investment in Non-Affiliated Entities Non-marketable equity investments in privately-held companies are recorded at fair value on a non-recurring basis only if an impairment or observable price adjustment occurs in the period with changes in fair value recorded through net income. These investments are valued using observable and unobservable inputs or data in an inactive market and the valuation requires our judgment due to the absence of market prices and inherent lack of liquidity. The estimated fair value is based on quantitative and qualitative factors including subsequent financing activities by the investee. Fiscal Year We operate on a 52- or 53-week year, ending on the last Sunday in January. Fiscal year 2021 is a 53-week year and fiscal year 2020 is a 52-week year. The third quarters of fiscal years 2021 and 2020 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. The inputs into our judgments and estimates consider the economic implications of COVID-19 on our critical and significant accounting estimates. 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 In June 2016, the Financial Accounting Standards Board issued a new accounting standard to replace the existing incurred loss impairment methodology 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 for accounts receivable and other financial instruments, including available-for-sale debt securities. We adopted the standard in the first quarter of fiscal year 2021 and the impact of the adoption was not material to our consolidated financial statements.
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Business Combination |
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Business Combinations [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Business Combination | Business Combination Pending Acquisition of Arm Limited On September 13, 2020, we entered into a Share Purchase Agreement, or the Purchase Agreement, with Arm Limited, or Arm, and SoftBank Group Capital Limited and SVF Holdco (UK) Limited, or together, SoftBank, for us to acquire, from SoftBank, all of the allotted and issued ordinary shares of Arm in a transaction valued at $40 billion. We paid $2 billion in cash at signing, or the Signing Consideration, and will pay upon closing of the acquisition $10 billion in cash and issue to SoftBank 44.3 million shares of our common stock with an aggregate value of $21.5 billion. The transaction includes a potential earn out, which is contingent on the achievement of certain financial performance targets by Arm during the fiscal year ending March 31, 2022. If the financial targets are achieved, SoftBank can elect to receive either up to $5 billion in cash or up to 10.3 million shares of our common stock. We will issue up to $1.5 billion in restricted stock units to Arm employees after closing. The $2 billion paid upon signing was allocated between advanced consideration for the acquisition of $1.36 billion and the prepayment of intellectual property licenses from Arm of $0.17 billion and royalties of $0.47 billion. The closing of the acquisition is subject to customary closing conditions, including receipt of specified governmental and regulatory consents and approvals and expiration of any related mandatory waiting period, and Arm's implementation of the reorganization and distribution of Arm’s IoT Services Group and certain other assets and liabilities. If the Purchase Agreement is terminated under certain circumstances, we will be refunded $1.25 billion of the Signing Consideration. The $2 billion payment upon signing was allocated on a fair value basis and any refund of the Signing Consideration will use stated values in the Purchase Agreement. We believe the closing of the acquisition will likely occur in the first quarter of calendar year 2022. Acquisition of Mellanox Technologies, Ltd. On April 27, 2020, we completed the acquisition of all outstanding shares of Mellanox for a total purchase consideration of $7.13 billion. Mellanox is a supplier of high-performance interconnect products for computing, storage and communications applications. We acquired Mellanox to optimize data center workloads to scale across the entire computing, networking, and storage stack. Preliminary Purchase Price Allocation The aggregate purchase consideration has been preliminarily allocated as follows (in millions):
(1) Represents the cash consideration of $125.00 per share paid to Mellanox shareholders for approximately 56 million shares of outstanding Mellanox ordinary shares. (2) Represents the cash consideration for the settlement of approximately 249 thousand Mellanox stock options held by employees and non-employee directors of Mellanox. (3) Represents the fair value of Mellanox’s stock-based compensation awards attributable to pre-combination services. We allocated the purchase price to tangible and identified intangible assets acquired and liabilities assumed based on the preliminary estimates of their estimated fair values, which were determined using generally accepted valuation techniques based on estimates and assumptions made by management at the time of the acquisition and are subject to change during the measurement period which is not expected to exceed one year. The primary tasks that are required to be completed include validation of business level forecasts, jurisdictional forecasts, customer attrition rates, contingent liabilities assessments and any related tax impacts from the acquisition. Any adjustments to our preliminary purchase price allocation identified during the measurement period will be recognized in the period in which the adjustments are determined. The goodwill is primarily attributable to the planned growth in the combined business of NVIDIA and Mellanox. Goodwill is not amortized to earnings, but instead is reviewed for impairment at least annually, absent any interim indicators of impairment. Goodwill recognized in the acquisition is not expected to be deductible for foreign tax purposes. Goodwill arising from the Mellanox acquisition has been allocated to the Compute and Networking segment. Refer to Note 15 – Segment Information for further details on segments. The operating results of Mellanox have been included in our condensed consolidated financial statements for the third quarter and first nine months of fiscal year 2021 since the acquisition date of April 27, 2020. Revenue attributable to Mellanox was approximately 13% and 10% of consolidated revenue for the third quarter and first nine months of fiscal year 2021, respectively. There is not a practical way to determine net income attributable to Mellanox due to integration. Acquisition-related costs attributable to Mellanox of $27 million were included in selling, general and administrative expense for the first nine months of fiscal year 2021. Intangible Assets The estimated fair value and weighted average useful life of the acquired intangible assets are as follows:
(1) The fair value of developed technology was identified using the Multi-Period Excess Earning Method. (2) Customer relationships represent the fair value of the existing relationships using the With and Without Method. (3) Order backlog represents primarily the fair value of purchase arrangements with customers using the Multi-Period Excess Earning Method. (4) Trade names primarily relate to Mellanox trade names and fair value was determined by applying the Relief-from-Royalty Method under the income approach. (5) The fair value of IPR&D was determined using the Multi-Period Excess Earning Method. The fair value of the finite-lived intangible assets will be amortized over the estimated useful lives based on the pattern in which the economic benefits are expected to be received to cost of revenue and operating expenses. Mellanox had an IPR&D project associated with the next generation interconnect product that had not yet reached technological feasibility as of the acquisition date. Accordingly, we recorded an indefinite-lived intangible asset of $630 million for the fair value of this project, which will initially not be amortized. Instead, the project will be tested for impairment whenever events or changes in circumstances indicate that the project may be impaired or may have reached technological feasibility. Once the project reaches technological feasibility, we will begin to amortize the intangible asset over its estimated useful life. Supplemental Unaudited Pro Forma Information The following unaudited pro forma financial information summarizes the combined results of operations for NVIDIA and Mellanox as if the companies were combined as of the beginning of fiscal year 2020:
The unaudited pro forma information includes adjustments related to amortization of acquired intangible assets, adjustments to stock-based compensation expense, fair value of acquired inventory, and transaction costs. The unaudited pro forma information presented above is for informational purposes only and is not necessarily indicative of our consolidated results of operations of the combined business had the acquisition actually occurred at the beginning of fiscal year 2020 or of the results of our future operations of the combined businesses. The pro forma results reflect the inventory step-up expense of $161 million in the first nine months of fiscal year 2020 and were excluded from the pro forma results for the first nine months of fiscal year 2021. There were no other material nonrecurring adjustments.
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Leases |
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Leases [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Leases | Leases Our lease obligations primarily consist of operating leases for our headquarters complex, domestic and international office facilities, and data center space, with lease periods expiring between fiscal years 2021 and 2035. Future minimum lease payments under our non-cancelable operating leases as of October 25, 2020, are as follows:
Operating lease expense was $37 million and $28 million for the third quarter of fiscal years 2021 and 2020, respectively, and $104 million and $83 million for the first nine months of fiscal years 2021 and 2020, respectively. Short-term and variable lease expenses for the third quarter and first nine months of fiscal years 2021 and 2020 were not significant. Other information related to leases was as follows:
(1) The first nine months of fiscal year 2021 includes $80 million of operating lease assets addition due to a business combination. As of October 25, 2020, our operating leases had a weighted average remaining lease term of 7.8 years and a weighted average discount rate of 3.06%. As of January 26, 2020, our operating leases had a weighted average remaining lease term of 8.3 years and a weighted average discount rate of 3.45%.
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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 October 25, 2020, there was $3.42 billion of aggregate unearned stock-based compensation expense, net of forfeitures. This amount is expected to be recognized over a weighted average period of 2.7 years for RSUs, PSUs, and market-based PSUs, and 0.9 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:
(1) Calculated as net income divided by basic weighted average shares. (2) Calculated as net income divided by diluted weighted average shares.
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Income Taxes |
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Oct. 25, 2020 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes We recognized an income tax expense of $12 million and $64 million for the third quarter and first nine months of fiscal year 2021, respectively, and $60 million and $109 million for the third quarter and first nine months of fiscal year 2020, respectively. The income tax expense as a percentage of income before income tax was 0.9% and 2.2% for the third quarter and first nine months of fiscal year 2021, respectively, and 6.3% and 5.6% for the third quarter and first nine months of fiscal year 2020, respectively. The decrease in our effective tax rate for the third quarter and first nine months of fiscal year 2021 as compared to the same periods of fiscal year 2020 was primarily due to a decrease in the proportional amount of earnings subject to United States tax and an increase of tax benefits from stock-based compensation. Our effective tax rates for the first nine months of fiscal years 2021 and 2020 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, the benefit of the U.S. federal research tax credit, and tax benefits related to stock-based compensation. During the second quarter of fiscal year 2021, we completed the acquisition of Mellanox. As a result of the acquisition, we recorded $256 million of net deferred tax liabilities primarily on the excess of book basis over the tax basis of the acquired intangible assets and undistributed earnings in certain foreign subsidiaries. We also recorded $153 million of long-term tax liabilities related to tax basis differences in Mellanox. The net deferred tax liabilities and long-term tax liabilities are based upon certain assumptions underlying our purchase price allocation. Upon finalization of the purchase price allocation, additional adjustments to the amount of our net deferred taxes and long-term tax liabilities may be required. As a result of the acquisition, we intend to indefinitely reinvest approximately $675 million of cumulative undistributed earnings held by Mellanox non-U.S. subsidiaries. We have not provided the amount of unrecognized deferred tax liabilities for temporary differences related to investments in Mellanox non-U.S. subsidiaries as the determination of such amount is not practicable. For the first nine months of fiscal year 2021, there have been no material changes to our tax years that remain subject to examination by major tax jurisdictions. We are currently under examination by the Internal Revenue Service for our fiscal years 2018 and 2019. In the second quarter of fiscal year 2021, we assumed $59 million of unrecognized tax benefits and $4 million of related interest through the Mellanox acquisition. Other than these amounts, there have been no material changes to our unrecognized tax benefits and any related interest or penalties since the fiscal year ended January 26, 2020.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 October 25, 2020, 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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Cash Equivalents and Marketable Securities |
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Investments, Debt and Equity Securities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Cash Equivalents and Marketable Securities | Cash Equivalents and Marketable Securities Our cash equivalents and marketable securities, except for money market funds and certificates of deposits, are classified as “available-for-sale” debt securities. The following is a summary of cash equivalents and marketable securities as of October 25, 2020 and January 26, 2020:
Net realized gains and unrealized gains and losses were not significant for all periods presented. The amortized cost and estimated fair value of cash equivalents and marketable securities as of October 25, 2020 and January 26, 2020 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 LiabilitiesThe 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) Investment in non-affiliated entities is privately held and recorded at fair value on a non-recurring basis only if an impairment or observable price adjustment occurs in the period with changes in fair value recorded through net income. The amount recorded as of October 25, 2020 has not been significant. (2) 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:
(1) As of October 25, 2020, acquisition-related intangible assets include the fair value of a Mellanox IPR&D project of $630 million, which has not been amortized. Once the project reaches technological feasibility, we will begin to amortize the intangible asset over its estimated useful life. Refer to Note 2 of these Notes to Condensed Consolidated Financial Statements for further details. Amortization expense associated with intangible assets was $174 million and $465 million for the third quarter and first nine months of fiscal year 2021, respectively, and $6 million and $19 million for the third quarter and first nine months of fiscal year 2020, respectively. Future amortization expense related to the net carrying amount of intangible assets as of October 25, 2020 is estimated to be $146 million for the remainder of fiscal year 2021, $542 million in fiscal year 2022, $539 million in fiscal year 2023, $418 million in fiscal year 2024, $364 million in fiscal year 2025, and $852 million in fiscal year 2026 and thereafter. Refer to Note 2 of these Notes to Condensed Consolidated Financial Statements for further details on intangible assets.
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Balance Sheet Components |
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Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance Sheet Components | Balance Sheet Components Certain balance sheet components are as follows:
(1) Advanced consideration for acquisition and long-term prepaid royalties are related to the pending acquisition of Arm. Refer to Note 2 of these Notes to Condensed Consolidated Financial Statements for further details.
(1) Deferred revenue primarily includes customer advances and deferrals related to license and development arrangements and post contract customer support, or PCS.
(1) As of October 25, 2020, income tax payable represents the long-term portion of the one-time transition tax payable of $284 million, unrecognized tax benefits of $264 million, related interest and penalties of $46 million, and other foreign long-term tax payable of $153 million. (2) Deferred income tax primarily relates to acquired intangible assets. (3) Deferred revenue primarily includes deferrals related to PCS. Deferred Revenue The following table shows the changes in deferred revenue during the first nine months of fiscal years 2021 and 2020:
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Derivative Financial Instruments |
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Oct. 25, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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 October 25, 2020 and January 26, 2020. 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 the U.S. dollar, including intercompany hedging instruments, or intercompany derivatives, with wholly-owned subsidiaries in order to hedge certain forecasted expenses denominated in currencies other than the 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 October 25, 2020 and January 26, 2020:
As of October 25, 2020, all designated foreign currency forward contracts mature within eighteen months. The expected realized gains and losses deferred into accumulated other comprehensive income or loss related to foreign currency forward contracts within the next twelve months was not significant. During the first nine months of fiscal years 2021 and 2020, 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 | Debt Long-Term Debt In March 2020, we issued $1.50 billion of the 2.85% Notes Due 2030, $1.00 billion of the 3.50% Notes Due 2040, $2.00 billion of the 3.50% Notes Due 2050, and $500 million of the 3.70% Notes Due 2060, or collectively, the March 2020 Notes. Interest on the March 2020 Notes is payable on April 1 and October 1 of each year, beginning on October 1, 2020. 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 2030 on or after January 1, 2030, the Notes Due 2040 on or after October 1, 2039, the Notes Due 2050 on or after October 1, 2049, or the Notes Due 2060 on or after October 1, 2059. The net proceeds from the March 2020 Notes were $4.97 billion, after deducting debt discount and issuance costs. In September 2016, 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 September 2016 Notes. Interest on the September 2016 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 September 2016 Notes were $1.98 billion, after deducting debt discount and issuance costs. Both the September 2016 Notes and the March 2020 Notes, or collectively, 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:
As of October 25, 2020, we were in compliance with the required covenants under the Notes. 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 October 25, 2020, we had not borrowed any amounts and were in compliance with the required covenants under this agreement. Commercial Paper We have a $575 million commercial paper program to support general corporate purposes. As of October 25, 2020, we had not issued any commercial paper.
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Commitments and Contingencies |
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Oct. 25, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Purchase Obligations As of October 25, 2020, we had outstanding inventory purchase obligations totaling $2.57 billion and other purchase obligations totaling $398 million. Accrual for Product Warranty Liabilities The estimated amount of product returns and warranty liabilities was $19 million and $15 million as of October 25, 2020 and January 26, 2020, respectively, and the activities related to the warranty liabilities were not significant. In connection with certain agreements that we have entered in the past, we have provided indemnities 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 The plaintiffs in the putative securities class action lawsuit, captioned 4:18-cv-07669-HSG, initially filed on December 21, 2018, and titled In Re NVIDIA Corporation Securities Litigation, filed an amended complaint on May 13, 2020. The amended complaint asserts that NVIDIA and certain NVIDIA executives violated Section 10(b) of the Securities Exchange Act of 1934, as amended, or the Exchange Act, 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. Plaintiffs also allege that the NVIDIA executives who they named as defendants violated Section 20(a) of the Exchange Act. 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 June 29, 2020, NVIDIA moved to dismiss the amended complaint on the basis that plaintiffs failed to state any claims for violations of the securities laws by NVIDIA or the individual defendants. As of September 14, 2020, the motion was fully briefed but the Court has not yet issued a decision. The putative derivative lawsuit pending in the United States District Court for the Northern District of California, captioned 4:19-cv-00341-HSG, initially filed January 18, 2019 and titled In re NVIDIA Corporation Consolidated Derivative Litigation, remains stayed pending resolution of NVIDIA’s motion to dismiss the complaint in the In Re NVIDIA Corporation Securities Litigation action. 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 plaintiffs are seeking unspecified damages and other relief, including reforms and improvements to NVIDIA’s corporate governance and internal procedures. The putative derivative actions initially filed September 24, 2019 and pending in the United States District Court for the District of Delaware, Lipchitz v. Huang, et al. (Case No. 1:19-cv-01795-UNA) and Nelson v. Huang, et. al. (Case No. 1:19-cv-01798- UNA), remain stayed pending resolution of NVIDIA’s motion to dismiss the complaint in the In Re NVIDIA Corporation Securities Litigation action. The lawsuits assert claims for breach of fiduciary duty, unjust enrichment, insider trading, misappropriation of information, corporate waste 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 plaintiffs seek unspecified damages and other relief, including disgorgement of profits from the sale of NVIDIA stock and unspecified corporate governance measures. 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. Accounting for Loss Contingencies As of October 25, 2020, 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. 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.
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Shareholders' Equity |
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Oct. 25, 2020 | |
Equity [Abstract] | |
Shareholders' Equity | Shareholders’ Equity Capital Return Program Beginning August 2004, our Board of Directors authorized us to repurchase our stock. Through October 25, 2020, 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 October 25, 2020, we were authorized, subject to certain specifications, to repurchase additional shares of our common stock up to $7.24 billion through December 2022. During the third quarter and first nine months of fiscal year 2021, we paid $99 million and $296 million in cash dividends to our shareholders, respectively.
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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 decisions and assessing financial performance. In the prior fiscal year, we had reported two operating segments: GPU and Tegra Processor. During the first quarter of fiscal year 2021, we changed our operating segments to be consistent with the revised manner in which our CODM reviews our financial performance and allocates resources. The two new operating segments are "Graphics" and "Compute & Networking". Comparative periods presented reflect this change. Our operating segments are equivalent to our reportable segments. Our Graphics segment includes GeForce GPUs for gaming and PCs, the GeForce NOW game streaming service and related infrastructure, and solutions for gaming platforms; Quadro GPUs for enterprise design; GRID software for cloud-based visual and virtual computing; and automotive platforms for infotainment systems. Our Compute & Networking segment includes Data Center platforms and systems for artificial intelligence, or AI, high performance computing, or HPC, and accelerated computing; Mellanox networking and interconnect solutions; DRIVE for autonomous vehicles; and Jetson for robotics and other embedded platforms. Operating results by segment include costs or expenses that are directly attributable to each segment, and costs or expenses that are leveraged across our unified architecture and therefore allocated between our two segments. The “All Other” category includes the expenses that our CODM does not assign to either Graphics or Compute & Networking 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, 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. Depreciation and amortization expense directly attributable to each reportable segment is included in operating results for each segment. However, the CODM does not evaluate depreciation and amortization expense by operating segment and, therefore, it is not separately presented. There is no intersegment revenue. 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:
No customer represented 10% or more of total revenue for the third quarter and first nine months of fiscal year 2021. One customer represented 10% and 11% of our total revenue for the third quarter and first nine months of fiscal year 2020, respectively, and was attributable primarily to the Graphics segment. One customer represented 13% and 21% of our accounts receivable balance as of October 25, 2020 and January 26, 2020, respectively.
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Goodwill |
9 Months Ended |
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Oct. 25, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill | Goodwill During the first quarter of fiscal year 2021, we changed our operating segments to Graphics and Compute & Networking, as discussed in Note 15 of these Notes to Condensed Consolidated Financial Statements. As a result, our reporting units also changed, and we reassigned the goodwill balance to the new reporting units based on their relative fair values. We determined there was no goodwill impairment immediately prior to the reorganization. As of October 25, 2020, the total carrying amount of goodwill was $4.19 billion and the amount of goodwill allocated to our Graphics and Compute & Networking reporting units was $347 million and $3.85 billion, respectively. In the first nine months of fiscal year 2021, goodwill increased by $3.57 billion. The increase in goodwill in the first nine months of fiscal year 2021 was due to goodwill of $3.43 billion arising from the Mellanox acquisition, and goodwill of $133 million from other acquisition activity, both of which were allocated to the Compute & Networking reporting unit. |
Summary of Significant Accounting Policies (Policies) |
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Oct. 25, 2020 | |
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 26, 2020 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 26, 2020, 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 26, 2020. The unaudited condensed consolidated financial statements in this report include the financial results of Mellanox Technologies Ltd., or Mellanox, prospectively from April 27, 2020. For additional details, refer to Note 2 - Business Combination.
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Business Combination | Business Combination We allocate the fair value of the purchase price of an acquisition to the tangible assets acquired, liabilities assumed, and intangible assets acquired, including in-process research and development, or IPR&D, based on their estimated fair values. The excess of the fair value of the purchase price over the fair values of these net tangible and intangible assets acquired is recorded as goodwill. Management’s estimates of fair value are based upon assumptions believed to be reasonable, but our estimates and assumptions are inherently uncertain and subject to refinement. The estimates and assumptions used in valuing intangible assets include, but are not limited to, the amount and timing of projected future cash flows, discount rate used to determine the present value of these cash flows and asset lives. These estimates are inherently uncertain and, therefore, actual results may differ from the estimates made. As a result, during the measurement period of up to one year from the acquisition date, we record adjustments to the assets acquired and liabilities assumed with the corresponding offset to goodwill. Upon the conclusion of the measurement period or final determination of the fair value of the purchase price of an acquisition, whichever comes first, any subsequent adjustments are recorded to our condensed consolidated statements of income. We initially capitalize the fair value of IPR&D as an intangible asset with an indefinite life. We assess for impairment thereafter. When IPR&D projects are completed, we reclassify the IPR&D as an amortizable purchased intangible asset and amortize over the asset’s estimated useful life. Acquisition-related expenses are recognized separately from the business combination and expensed as incurred.
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Investment in Non-Affiliated Entities | Investment in Non-Affiliated Entities Non-marketable equity investments in privately-held companies are recorded at fair value on a non-recurring basis only if an impairment or observable price adjustment occurs in the period with changes in fair value recorded through net income. These investments are valued using observable and unobservable inputs or data in an inactive market and the valuation requires our judgment due to the absence of market prices and inherent lack of liquidity. The estimated fair value is based on quantitative and qualitative factors including subsequent financing activities by the investee.
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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 year 2021 is a 53-week year and fiscal year 2020 is a 52-week year. The third quarters of fiscal years 2021 and 2020 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. The inputs into our judgments and estimates consider the economic implications of COVID-19 on our critical and significant accounting estimates. 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 In June 2016, the Financial Accounting Standards Board issued a new accounting standard to replace the existing incurred loss impairment methodology 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 for accounts receivable and other financial instruments, including available-for-sale debt securities. We adopted the standard in the first quarter of fiscal year 2021 and the impact of the adoption was not material to our consolidated financial statements.
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Business Combinations (Tables) |
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Schedule of Recognized Identified Assets Acquired and Liabilities Assumed | The aggregate purchase consideration has been preliminarily allocated as follows (in millions):
(1) Represents the cash consideration of $125.00 per share paid to Mellanox shareholders for approximately 56 million shares of outstanding Mellanox ordinary shares. (2) Represents the cash consideration for the settlement of approximately 249 thousand Mellanox stock options held by employees and non-employee directors of Mellanox. (3) Represents the fair value of Mellanox’s stock-based compensation awards attributable to pre-combination services.
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Finite-Lived and Indefinite-Lived Intangible Assets Acquired as Part of Business Combination | The estimated fair value and weighted average useful life of the acquired intangible assets are as follows:
(1) The fair value of developed technology was identified using the Multi-Period Excess Earning Method. (2) Customer relationships represent the fair value of the existing relationships using the With and Without Method. (3) Order backlog represents primarily the fair value of purchase arrangements with customers using the Multi-Period Excess Earning Method. (4) Trade names primarily relate to Mellanox trade names and fair value was determined by applying the Relief-from-Royalty Method under the income approach. (5) The fair value of IPR&D was determined using the Multi-Period Excess Earning Method.
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Business Acquisition, Pro Forma Information | The following unaudited pro forma financial information summarizes the combined results of operations for NVIDIA and Mellanox as if the companies were combined as of the beginning of fiscal year 2020:
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Leases (Tables) |
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Leases [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of future minimum lease payments | Future minimum lease payments under our non-cancelable operating leases as of October 25, 2020, are as follows:
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Schedule of other information related to leases | Other information related to leases was as follows:
(1) The first nine months of fiscal year 2021 includes $80 million of operating lease assets addition due to a business combination.
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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:
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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 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:
(1) Calculated as net income divided by basic weighted average shares. (2) Calculated as net income divided by diluted weighted average shares.
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Cash Equivalents and Marketable Securities (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Oct. 25, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Investments, Debt and Equity Securities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Cash Equivalents and Marketable Securities | The following is a summary of cash equivalents and marketable securities as of October 25, 2020 and January 26, 2020:
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Investments Classified by Contractual Maturity Date | The amortized cost and estimated fair value of cash equivalents and marketable securities as of October 25, 2020 and January 26, 2020 are shown below by contractual maturity.
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Fair Value of Financial Assets and Liabilities (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Oct. 25, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Measurements, Recurring and Nonrecurring |
(1) Investment in non-affiliated entities is privately held and recorded at fair value on a non-recurring basis only if an impairment or observable price adjustment occurs in the period with changes in fair value recorded through net income. The amount recorded as of October 25, 2020 has not been significant. (2) 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) |
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Oct. 25, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Amortizable Intangible Assets Components | The components of our amortizable intangible assets are as follows:
(1) As of October 25, 2020, acquisition-related intangible assets include the fair value of a Mellanox IPR&D project of $630 million, which has not been amortized. Once the project reaches technological feasibility, we will begin to amortize the intangible asset over its estimated useful life. Refer to Note 2 of these Notes to Condensed Consolidated Financial Statements for further details.
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Balance Sheet Components (Tables) |
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Oct. 25, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Inventories |
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Other Assets |
(1) Advanced consideration for acquisition and long-term prepaid royalties are related to the pending acquisition of Arm. Refer to Note 2 of these Notes to Condensed Consolidated Financial Statements for further details.
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Accrued and Other Current Liabilities |
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Other Long-term Liabilities |
(1) As of October 25, 2020, income tax payable represents the long-term portion of the one-time transition tax payable of $284 million, unrecognized tax benefits of $264 million, related interest and penalties of $46 million, and other foreign long-term tax payable of $153 million. (2) Deferred income tax primarily relates to acquired intangible assets. (3) 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 nine months of fiscal years 2021 and 2020:
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Derivative Financial Instruments (Tables) |
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Oct. 25, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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 October 25, 2020 and January 26, 2020:
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Debt (Table) |
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Oct. 25, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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 |
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Reconciling items included in All Other category |
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Schedule of Revenue 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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Business Combination - Acquisition of Mellanox Technologies, Ltd., Additional Information (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Apr. 27, 2020 |
Oct. 25, 2020 |
Oct. 25, 2020 |
Oct. 27, 2019 |
|
Business Acquisition [Line Items] | ||||
Payments to acquire businesses, net of cash acquired | $ 8,524 | $ 0 | ||
Mellanox Technologies, Ltd | ||||
Business Acquisition [Line Items] | ||||
Payments to acquire businesses, net of cash acquired | $ 7,130 | |||
Transaction costs | $ 27 | |||
IPR&D | $ 630 | |||
Fair value adjustment, inventory | $ 161 | |||
Mellanox Technologies, Ltd | Sales Revenue | ||||
Business Acquisition [Line Items] | ||||
Concentration risk (as percent) | 13.00% | 10.00% |
Business Combination - Intangible Assets Acquired (Details) - Mellanox Technologies, Ltd $ in Millions |
Apr. 27, 2020
USD ($)
|
---|---|
Acquired Finite-Lived Intangible Assets [Line Items] | |
Total identified finite-lived intangible assets | $ 2,340 |
IPR&D | 630 |
Total identified intangible assets | 2,970 |
Developed technology | |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Total identified finite-lived intangible assets | $ 1,640 |
Weighted Average Useful Lives | 5 years |
Customer relationships | |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Total identified finite-lived intangible assets | $ 440 |
Weighted Average Useful Lives | 3 years |
Order backlog | |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Total identified finite-lived intangible assets | $ 190 |
Trade names | |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Total identified finite-lived intangible assets | $ 70 |
Weighted Average Useful Lives | 5 years |
Business Combination - Pro Forma Information (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Oct. 25, 2020 |
Oct. 27, 2019 |
Oct. 25, 2020 |
Oct. 27, 2019 |
|
Business Combinations [Abstract] | ||||
Revenue | $ 4,726 | $ 3,350 | $ 12,101 | $ 8,765 |
Net income | $ 1,388 | $ 786 | $ 3,267 | $ 1,190 |
Leases - Narrative (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | |||
---|---|---|---|---|---|
Oct. 25, 2020 |
Oct. 27, 2019 |
Oct. 25, 2020 |
Oct. 27, 2019 |
Jan. 26, 2020 |
|
Leases [Abstract] | |||||
Operating lease expense | $ 37 | $ 28 | $ 104 | $ 83 | |
Weighted average remaining lease term - operating leases | 7 years 9 months 18 days | 7 years 9 months 18 days | 8 years 3 months 18 days | ||
Weighted average discount rate - operating leases | 3.06% | 3.06% | 3.45% |
Leases - Schedule of future minimum payments (Details) - USD ($) $ in Millions |
Oct. 25, 2020 |
Jan. 26, 2020 |
---|---|---|
Leases [Abstract] | ||
2021 (excluding first nine months of fiscal year 2021) | $ 38 | |
2022 | 143 | |
2023 | 122 | |
2024 | 102 | |
2025 | 83 | |
2026 and thereafter | 347 | |
Total | 835 | |
Less imputed interest | 115 | |
Present value of net future minimum lease payments | 720 | |
Less short-term operating lease liabilities | 116 | $ 91 |
Long-term operating lease liabilities | $ 604 | $ 561 |
Leases - Schedule of other lease information (Details) - USD ($) $ in Millions |
9 Months Ended | |
---|---|---|
Oct. 25, 2020 |
Oct. 27, 2019 |
|
Supplemental cash flows information | ||
Operating cash flows used for operating leases | $ 103 | $ 78 |
Operating lease assets obtained in exchange for lease obligations | 147 | $ 122 |
Mellanox Technologies, Ltd | ||
Supplemental cash flows information | ||
Operating lease assets obtained in exchange for lease obligations | $ 80 |
Stock-Based Compensation - Allocation of Expense (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Oct. 25, 2020 |
Oct. 27, 2019 |
Oct. 25, 2020 |
Oct. 27, 2019 |
|
Share-based Compensation | ||||
Total | $ 383 | $ 223 | $ 981 | $ 624 |
Cost of revenue | ||||
Share-based Compensation | ||||
Total | 28 | 15 | 62 | 27 |
Research and development | ||||
Share-based Compensation | ||||
Total | 232 | 141 | 594 | 400 |
Sales, general and administrative | ||||
Share-based Compensation | ||||
Total | $ 123 | $ 67 | $ 325 | $ 197 |
Stock-Based Compensation - Summary of Equity Award Transactions (Details) - RSUs, PSUs, and Market-based PSUs shares in Millions |
9 Months Ended |
---|---|
Oct. 25, 2020
$ / shares
shares
| |
Number of Shares | |
Beginning balance (in shares) | shares | 14 |
Granted (in shares) | shares | 8 |
Vested restricted stock (in shares) | shares | (6) |
Ending balance (in shares) | shares | 16 |
Weighted Average Grant-Date Fair Value Per Share | |
Beginning balance (in dollars per share) | $ / shares | $ 176.72 |
Granted (in dollars per share) | $ / shares | 300.75 |
Vested restricted stock (in dollars per share) | $ / shares | 152.46 |
Ending balance (in dollars per share) | $ / shares | $ 253.81 |
Stock-Based Compensation - Narrative (Details) $ in Millions |
9 Months Ended |
---|---|
Oct. 25, 2020
USD ($)
| |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Aggregate unearned stock-based compensation expense, net of forfeitures | $ 3,420 |
RSUs, PSUs, and Market-based PSUs | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Weighted average recognition period | 2 years 8 months 12 days |
Employee Stock Purchase Plan | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Weighted average recognition period | 10 months 24 days |
Net Income Per Share (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Oct. 25, 2020 |
Oct. 27, 2019 |
Oct. 25, 2020 |
Oct. 27, 2019 |
|
Numerator: | ||||
Net income | $ 1,336 | $ 899 | $ 2,875 | $ 1,845 |
Denominator: | ||||
Basic weighted average shares (in shares) | 618 | 610 | 616 | 609 |
Dilutive impact of outstanding equity awards (in shares) | 12 | 8 | 10 | 8 |
Diluted weighted average shares (in shares) | 630 | 618 | 626 | 617 |
Net income per share: | ||||
Basic (in dollars per share) | $ 2.16 | $ 1.47 | $ 4.67 | $ 3.03 |
Diluted (in dollars per share) | $ 2.12 | $ 1.45 | $ 4.59 | $ 2.99 |
Equity awards excluded from diluted net income per share because their effect would have been anti-dilutive (in shares) | 0 | 5 | 8 | 11 |
Income Taxes (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | |||
---|---|---|---|---|---|
Oct. 25, 2020 |
Jul. 26, 2020 |
Oct. 27, 2019 |
Oct. 25, 2020 |
Oct. 27, 2019 |
|
Valuation Allowance [Line Items] | |||||
Income tax expense | $ 12 | $ 60 | $ 64 | $ 109 | |
Tax expense as percentage of income before income tax | 0.90% | 6.30% | 2.20% | 5.60% | |
Mellanox Technologies, Ltd | |||||
Valuation Allowance [Line Items] | |||||
Deferred tax liabilities, intangibles and undistributed earnings from foreign subsidiaries | $ 256 | ||||
Deferred liabilities, inside basis difference in acquired business | 153 | ||||
Undistributed earnings of foreign subsidiaries | 675 | ||||
Unrecognized tax benefits, increase resulting from acquisition | 59 | ||||
Unrecognized tax benefits, interest on income taxes accrued | $ 4 |
Cash Equivalents and Marketable Securities - Contractual Maturity (Details) - USD ($) $ in Millions |
Oct. 25, 2020 |
Jan. 26, 2020 |
---|---|---|
Amortized Cost | ||
Less than one year | $ 9,329 | $ 10,781 |
Due in 1 - 5 years | 564 | 0 |
Amortized Cost | 9,893 | 10,781 |
Estimated Fair Value | ||
Less than one year | 9,330 | 10,781 |
Due in 1 - 5 years | 566 | 0 |
Estimated Fair Value | $ 9,896 | $ 10,781 |
Balance Sheet Components - Inventory (Details) - USD ($) $ in Millions |
Oct. 25, 2020 |
Jan. 26, 2020 |
---|---|---|
Inventories: | ||
Raw materials | $ 455 | $ 249 |
Work in-process | 380 | 265 |
Finished goods | 660 | 465 |
Inventories | $ 1,495 | $ 979 |
Balance Sheet Components - Other Assets (Details) - USD ($) $ in Millions |
Oct. 25, 2020 |
Jan. 26, 2020 |
---|---|---|
Other assets: | ||
Advanced consideration for acquisition | $ 1,357 | $ 0 |
Prepaid royalties | 446 | 1 |
Investment in non-affiliated entities | 106 | 77 |
Other | 119 | 40 |
Other assets | $ 2,028 | $ 118 |
Balance Sheet Components - Accrued and Other Current Liabilities (Details) - USD ($) $ in Millions |
Oct. 25, 2020 |
Jan. 26, 2020 |
---|---|---|
Accrued and Other Current Liabilities: | ||
Customer program accruals | $ 609 | $ 462 |
Accrued payroll and related expenses | 277 | 185 |
Deferred revenue | 235 | 141 |
Licenses and royalties | 124 | 66 |
Operating leases | 116 | 91 |
Taxes payable | 70 | 61 |
Product warranty and return provisions | 33 | 24 |
Professional service fee | 28 | 18 |
Coupon interest on debt obligations | 19 | 20 |
Other | 63 | 29 |
Accrued and other current liabilities | $ 1,574 | $ 1,097 |
Balance Sheet Components - Other Long-Term Liabilities (Details) - USD ($) $ in Millions |
Oct. 25, 2020 |
Jan. 26, 2020 |
---|---|---|
Other Long-Term Liabilities: | ||
Income taxes payable | $ 747 | $ 528 |
Deferred income tax | 258 | 29 |
Deferred revenue | 147 | 60 |
Licenses payable | 71 | 110 |
Employee benefits | 40 | 22 |
Other | 48 | 26 |
Other long-term liabilities | 1,311 | $ 775 |
One time transition tax payable, noncurrent | 284 | |
Unrecognized tax benefits | 264 | |
Interest and penalties related to unrecognized tax benefits | 46 | |
Foreign long-term tax payable | $ 153 |
Balance Sheet Components - Change in Deferred Revenue (Details) - USD ($) $ in Millions |
9 Months Ended | |
---|---|---|
Oct. 25, 2020 |
Oct. 27, 2019 |
|
Change in Deferred Revenue | ||
Balance at beginning of period | $ 201 | $ 138 |
Deferred revenue added during the period | 361 | 237 |
Addition due to business combinations | 75 | 0 |
Revenue recognized during the period | (255) | (199) |
Balance at end of period | $ 382 | $ 176 |
Balance Sheet Components - Revenue Remaining Performance Obligation (Details) $ in Millions |
Oct. 25, 2020
USD ($)
|
---|---|
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Revenue, remaining performance obligation | $ 679 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2020-10-26 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, remaining performance obligation (as a percent) | 41.00% |
Revenue, remaining performance obligation, expected timing of satisfaction | 12 months |
Derivative Financial Instruments - Notional Values (Details) - USD ($) $ in Millions |
Oct. 25, 2020 |
Jan. 26, 2020 |
---|---|---|
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||
Designated as cash flow hedges | $ 744 | $ 428 |
Not designated for hedge accounting | $ 352 | $ 287 |
Derivative Financial Instruments - Narrative (Details) |
9 Months Ended |
---|---|
Oct. 25, 2020 | |
Foreign currency forward contracts | |
Derivative [Line Items] | |
Derivative, maturity period | 18 months |
Commitments and Contingencies (Details) - USD ($) $ in Millions |
Oct. 25, 2020 |
Jan. 26, 2020 |
---|---|---|
Commitments and Contingencies Disclosure [Abstract] | ||
Outstanding inventory purchase obligations | $ 2,570 | |
Outstanding other purchase obligations | 398 | |
Warranty accrual | $ 19 | $ 15 |
Shareholders' Equity (Details) - USD ($) shares in Millions, $ in Millions |
3 Months Ended | 9 Months Ended | |
---|---|---|---|
Oct. 25, 2020 |
Oct. 25, 2020 |
Oct. 27, 2019 |
|
Equity [Abstract] | |||
Aggregated number of shares repurchased under stock repurchase program (in shares) | 260 | 260 | |
Aggregated cost of shares repurchased | $ 7,080 | $ 7,080 | |
Remaining authorized repurchase amount | 7,240 | 7,240 | |
Dividends paid | $ 99 | $ 296 | $ 292 |
Segment Information - Reconciling Items (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Oct. 25, 2020 |
Oct. 27, 2019 |
Oct. 25, 2020 |
Oct. 27, 2019 |
|
Segment Reporting Information [Line Items] | ||||
Stock-based compensation expense | $ (383) | $ (223) | $ (981) | $ (624) |
Income from operations | 1,398 | 927 | 3,025 | 1,856 |
All Other | ||||
Segment Reporting Information [Line Items] | ||||
Stock-based compensation expense | (383) | (223) | (981) | (624) |
Acquisition-related and other costs | (192) | (7) | (669) | (22) |
Unallocated cost of revenue and operating expenses | (89) | (69) | (259) | (210) |
Legal settlement costs | (21) | 0 | (38) | (13) |
Income from operations | $ (685) | $ (299) | $ (1,947) | $ (869) |
Segment Information - Concentration Risk (Details) - Customer Concentration Risk - Significant Customer |
3 Months Ended | 9 Months Ended | 12 Months Ended | |
---|---|---|---|---|
Oct. 27, 2019 |
Oct. 25, 2020 |
Oct. 27, 2019 |
Jan. 26, 2020 |
|
Sales Revenue | Graphics | ||||
Revenue, Major Customer [Line Items] | ||||
Concentration risk (as percent) | 10.00% | 11.00% | ||
Accounts Receivable | ||||
Revenue, Major Customer [Line Items] | ||||
Concentration risk (as percent) | 13.00% | 21.00% |
Goodwill (Details) - USD ($) |
9 Months Ended | 12 Months Ended | |
---|---|---|---|
Oct. 25, 2020 |
Jan. 26, 2020 |
Apr. 27, 2020 |
|
Goodwill [Line Items] | |||
Goodwill impairment | $ 0 | ||
Goodwill | $ 4,193,000,000 | $ 618,000,000 | |
Goodwill, additions through acquisition activity | 3,570,000,000 | ||
Mellanox Technologies, Ltd | |||
Goodwill [Line Items] | |||
Goodwill | $ 3,431,000,000 | ||
Graphics | |||
Goodwill [Line Items] | |||
Goodwill | 347,000,000 | ||
Compute & Networking | |||
Goodwill [Line Items] | |||
Goodwill | 3,850,000,000 | ||
Compute & Networking | Mellanox Technologies, Ltd | |||
Goodwill [Line Items] | |||
Goodwill, additions through acquisition activity | 3,430,000,000 | ||
Compute & Networking | Individually Immaterial Acquisitions | |||
Goodwill [Line Items] | |||
Goodwill, additions through acquisition activity | $ 133,000,000 |
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