- Revenue is expected to be $1.16 billion, plus or minus two percent.
- GAAP and non-GAAP gross margins are expected to be 56.2 percent and 56.5 percent, respectively, plus or minus 50 basis points.
- GAAP operating expenses are expected to be approximately $478 million; non-GAAP operating expenses are expected to be approximately $425 million, inclusive of litigation costs.
- GAAP and non-GAAP tax rates for the first quarter of fiscal 2016 are expected to be 20 percent, plus or minus one percent -- excluding the benefit of the U.S. Federal R&D tax credit which expired December 31, 2014.
- Capital expenditures are expected to be approximately $30 million to $40 million.
Fourth Quarter Fiscal 2015 Highlights
During the fourth quarter, NVIDIA achieved progress in each of its market-specialized platforms:
Gaming:
- Introduced the GeForce® GTX™ 960 GPU, bringing the power and efficiency of the Maxwell architecture to the gaming market's $199 sweet spot.
Enterprise Graphics:
- Announced, shortly after the quarter, that the new version of VMware's virtualization suite, VMware Horizon 6, includes the capability to deliver scalable, virtualized 3D graphics enabled by NVIDIA GRID vGPU™.
Accelerated Computing:
- Announced that the NVIDIA Tesla® Accelerated Computing Platform will power the U.S. Department of Energy's next-generation supercomputers, expected to deliver at least three-times greater performance than today's most powerful system. They will be based on IBM POWER servers equipped with Tesla GPUs and NVIDIA NVLink™ high-speed GPU interconnect technology.
- Launched the Tesla K80 dual-GPU accelerator, designed to power a wide range of machine learning, data-analytics and high performance computing applications.
Automotive:
- Unveiled at the International Consumer Electronics Show the NVIDIA® Tegra® X1 mobile processor -- a 256-core Maxwell™ architecture-based mobile super chip with over one teraflops of computing power.
- Launched NVIDIA DRIVE™ automotive computers, which move the industry closer to the era of auto-piloted cars and run next-generation infotainment systems.
CFO Commentary
Commentary on the quarter by Colette Kress, NVIDIA's executive vice president and chief financial officer, is available at
http://investor.nvidia.com/.
Conference Call and Webcast Information
NVIDIA will conduct a conference call with analysts and investors to discuss its fourth quarter and fiscal 2015 financial results and current financial prospects today at 2 p.m. Pacific Time (5 p.m. Eastern Time). To listen to the conference call, dial (303) 223-4365; no password is required. A live webcast (listen-only mode) of the conference call will be accessible at NVIDIA's investor relations website,
http://investor.nvidia.com, and at
www.streetevents.com. The webcast will be recorded and available for replay until the company's conference call to discuss its financial results for its first quarter fiscal 2016.
Non-GAAP Measures
To supplement NVIDIA's Condensed Consolidated Statements of Operations and Condensed Consolidated Balance Sheets presented in accordance with GAAP, the company uses non-GAAP measures of certain components of financial performance. These non-GAAP measures include non-GAAP gross profit, non-GAAP gross margin, non-GAAP operating expenses, non-GAAP other income and expense, non-GAAP income tax expense, non-GAAP net income, non-GAAP net income, or earnings, per diluted share, and free cash flow. In order for NVIDIA's investors to be better able to compare its current results with those of previous periods, the company has shown a reconciliation of GAAP to non-GAAP financial measures. These reconciliations adjust the related GAAP financial measures to exclude stock-based compensation, legal settlements, a credit related to a weak die/packaging material set, acquisition-related costs, gains and losses from non-affiliated investments, interest expense related to amortization of debt discount, other expense and the associated tax impact of these items, where applicable. Free cash flow is calculated as GAAP net cash provided by operating activities less purchases of property and equipment and intangible assets. NVIDIA believes the presentation of its non-GAAP financial measures enhances the user's overall understanding of the company's historical financial performance. The presentation of the company's non-GAAP financial measures is not meant to be considered in isolation or as a substitute for the company's financial results prepared in accordance with GAAP, and our non-GAAP measures may be different from non-GAAP measures used by other companies.
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NVIDIA CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share data)
(Unaudited)
Three Months Ended Twelve Months Ended
----------------------- -----------------------
January 25, January 26, January 25, January 26,
2015 2014 2015 2014
----------- ----------- ----------- -----------
Revenue $ 1,250,514 $ 1,144,218 $ 4,681,507 $ 4,130,162
Cost of revenue 550,911 524,976 2,082,030 1,862,399
----------- ----------- ----------- -----------
Gross profit 699,603 619,242 2,599,477 2,267,763
Operating expenses
Research and development 348,253 336,641 1,359,725 1,335,834
Sales, general and
administrative 120,214 115,677 480,763 435,702
----------- ----------- ----------- -----------
Total operating expenses 468,467 452,318 1,840,488 1,771,536
----------- ----------- ----------- -----------
Operating income 231,136 166,924 758,989 496,227
Interest income 8,129 4,156 28,090 17,119
Interest expense 11,594 7,935 46,133 10,443
Other income, net 188 5,743 13,890 7,351
----------- ----------- ----------- -----------
Income before income tax
expense 227,859 168,888 754,836 510,254
Income tax expense 34,731 21,971 124,249 70,264
----------- ----------- ----------- -----------
Net income $ 193,128 $ 146,917 $ 630,587 $ 439,990
=========== =========== =========== ===========
Net income per share:
Basic $ 0.35 $ 0.26 $ 1.14 $ 0.75
=========== =========== =========== ===========
Diluted $ 0.35 $ 0.25 $ 1.12 $ 0.74
=========== =========== =========== ===========
Weighted average shares used
in per share computation:
Basic 544,170 568,483 552,319 587,893
Diluted 556,573 577,356 563,068 594,517
NVIDIA CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)
January 25, January 26,
2015 2014
------------- -------------
ASSETS
Current assets:
Cash, cash equivalents and marketable
securities $ 4,623,339 $ 4,671,810
Accounts receivable, net 473,637 426,357
Inventories 482,893 387,765
Prepaid expenses and other current assets 133,428 138,779
------------- -------------
Total current assets 5,713,297 5,624,711
Property and equipment, net 557,282 582,740
Goodwill 618,179 643,179
Intangible assets, net 221,714 296,012
Other assets 90,896 104,252
------------- -------------
Total assets $ 7,201,368 $ 7,250,894
============= =============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 293,223 $ 324,391
Accrued liabilities and other current
liabilities 602,807 621,105
------------- -------------
Total current liabilities 896,030 945,496
Long-term debt 1,384,342 1,356,375
Other long-term liabilities 488,928 475,125
Capital lease obligations, long-term 14,086 17,500
Stockholders' equity 4,417,982 4,456,398
------------- -------------
Total liabilities and stockholders' equity $ 7,201,368 $ 7,250,894
============= =============
NVIDIA CORPORATION
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES
(In thousands, except per share data)
(Unaudited)
Three Months Ended Twelve Months Ended
---------------------------- ----------------------
January October January January January
25, 26, 26, 25, 26,
2015 2014 2014 2015 2014
-------- -------- -------- ---------- ----------
GAAP gross profit $699,603 $676,698 $619,242 $2,599,477 $2,267,763
GAAP gross margin 55.9% 55.2% 54.1% 55.5% 54.9%
Stock-based
compensation
expense included
in cost of
revenue (A) 3,426 3,021 2,777 12,022 10,688
Legal settlement - - 1,450 - 3,740
Credit from a weak
die/packaging
material set (B) - - (7,782) - (7,782)
-------- -------- -------- ---------- ----------
Non-GAAP gross
profit $703,029 $679,719 $615,687 $2,611,499 $2,274,409
======== ======== ======== ========== ==========
Non-GAAP gross
margin 56.2% 55.5% 53.8% 55.8% 55.1%
GAAP operating
expenses $468,467 $463,383 $452,318 $1,840,488 $1,771,536
Stock-based
compensation
expense included
in operating
expense (A) (39,044) (38,414) (33,427) (145,819) (125,607)
Acquisition-
related costs (B) (9,169) (9,572) (9,250) (37,355) (31,652)
Other expense © - - (1,845) - (4,080)
-------- -------- -------- ---------- ----------
Non-GAAP operating
expenses $420,254 $415,397 $407,796 $1,657,314 $1,610,197
======== ======== ======== ========== ==========
GAAP other income
(expense), net $ (3,277) $ (4,245) $ 1,964 $ (4,153) $ 14,027
Gains and losses
from non-
affiliated
investments - - (3,074) (14,482) (3,074)
Interest expense
related to
amortization of
debt discount 7,083 7,010 4,600 27,967 4,600
-------- -------- -------- ---------- ----------
Non-GAAP other
income (expense),
net $ 3,806 $ 2,765 $ 3,490 $ 9,332 $ 15,553
======== ======== ======== ========== ==========
GAAP net income $193,128 $172,967 $146,917 $ 630,587 $ 439,990
Total pre-tax
impact of non-
GAAP adjustments 58,722 58,017 42,493 208,681 169,511
Income tax impact
of non-GAAP
adjustments (10,783) (10,549) (1,924) (38,280) (21,094)
-------- -------- -------- ---------- ----------
Non-GAAP net income $241,067 $220,435 $187,486 $ 800,988 $ 588,407
======== ======== ======== ========== ==========
Diluted net income
per share
GAAP $ 0.35 $ 0.31 $ 0.25 $ 1.12 $ 0.74
======== ======== ======== ========== ==========
Non-GAAP $ 0.43 $ 0.39 $ 0.32 $ 1.42 $ 0.99
======== ======== ======== ========== ==========
Shares used in
diluted net income
per share
computation 556,573 558,201 577,356 563,068 594,517
Metrics:
GAAP net cash flow
provided by
operating
activities $442,729 $215,623 $400,712 $ 905,656 $ 835,146
Purchase of
property and
equipment and
intangible assets (31,045) (39,741) (66,374) (122,381) (255,186)
-------- -------- -------- ---------- ----------
Free cash flow $411,684 $175,882 $334,338 $ 783,275 $ 579,960
======== ======== ======== ========== ==========
----------------------------------------------------------------------------
(A) Excludes stock-
based compensation as
follows: Three Months Ended Twelve Months Ended
---------------------------- ----------------------
January October January January January
25, 26, 26, 25, 26,
2015 2014 2014 2015 2014
-------- -------- -------- ---------- ----------
Cost of revenue $ 3,426 $ 3,021 $ 2,777 $ 12,022 $ 10,688
Research and
development $ 23,719 $ 22,680 $ 21,548 $ 88,355 $ 82,940
Sales, general and
administrative $ 15,325 $ 15,734 $ 11,879 $ 57,464 $ 42,667
(B) Consists of amortization of acquisition-related intangible assets,
transaction costs, compensation charges, and other credits related to
acquisitions.
© Includes intangible asset write-off, restructuring charge, and legal
settlement cost, net of credits.
----------------------------------------------------------------------------
NVIDIA CORPORATION
RECONCILIATION OF GAAP TO NON-GAAP OUTLOOK
Q1 FY2016 Outlook
---------------------
GAAP gross margin 56.2%
Impact of stock-based compensation 0.3%
---------------------
Non-GAAP gross margin 56.5%
=====================
Q1 FY2016 Outlook
---------------------
(In millions)
GAAP operating expenses $ 478
Stock-based compensation expense and acquisition-
related costs (53)
---------------------
Non-GAAP operating expenses $ 425
=====================
