- Launched
NVIDIA DRIVE™ PX 2, a powerful engine for in-vehicle artificial intelligence.
- Announced that Volvo will use DRIVE PX 2 to power a fleet of
100 Volvo XC90 SUVs that will appear on the road next year in the car manufacturer's Drive Me autonomous-car pilot program.
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 2016 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 (212) 231-2927; 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 of fiscal 2017.
Non-GAAP Measures
To supplement NVIDIA's Condensed Consolidated Statements of Income 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 operating income, non-GAAP other income (expense), net, non-GAAP income tax expense, non-GAAP net income, non-GAAP net income, or earnings, per diluted share, non-GAAP diluted shares, per diluted share impact of restructuring and other charges, 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, product warranty charge, acquisition-related costs, restructuring and other charges, gains and losses from non-affiliated investments, interest expense related to amortization of debt discount, and the associated tax impact of these items, where applicable. Weighted average shares used in the non-GAAP diluted net income per share computation includes the anti-dilution impact of the company's Note Hedge. Per diluted share impact of restructuring and other charges is calculated as restructuring and other charges, net of income tax, divided by GAAP diluted shares. 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 its 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 millions, except per share data)
(Unaudited)
Three Months Ended Twelve Months Ended
---------------------- ----------------------
January January January January
31, 25, 31, 25,
2016 2015 2016 2015
---------- ---------- ---------- ----------
Revenue $ 1,401 $ 1,251 $ 5,010 $ 4,682
Cost of revenue 610 552 2,199 2,083
---------- ---------- ---------- ----------
Gross profit 791 699 2,811 2,599
Operating expenses
Research and development 344 348 1,331 1,360
Sales, general and
administrative 161 120 602 480
Restructuring and other
charges 34 - 131 -
---------- ---------- ---------- ----------
Total operating expenses 539 468 2,064 1,840
---------- ---------- ---------- ----------
Operating income 252 231 747 759
Interest income 11 8 39 28
Interest expense (12) (12) (47) (46)
Other income, net 2 1 4 14
---------- ---------- ---------- ----------
Income before income tax
expense 253 228 743 755
Income tax expense 46 35 129 124
---------- ---------- ---------- ----------
Net income $ 207 $ 193 $ 614 $ 631
========== ========== ========== ==========
Net income per share:
Basic $ 0.38 $ 0.35 $ 1.13 $ 1.14
========== ========== ========== ==========
Diluted $ 0.35 $ 0.35 $ 1.08 $ 1.12
========== ========== ========== ==========
Weighted average shares used
in per share computation:
Basic 539 544 543 552
Diluted 593 557 569 563
NVIDIA CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(In millions)
(Unaudited)
January 31, January 25,
2016 2015
-------------- --------------
ASSETS
Current assets:
Cash, cash equivalents and marketable
securities $ 5,037 $ 4,623
Accounts receivable, net 505 474
Inventories 418 483
Prepaid expenses and other current assets 93 133
-------------- --------------
Total current assets 6,053 5,713
Property and equipment, net 466 557
Goodwill 618 618
Intangible assets, net 166 222
Other assets 67 91
-------------- --------------
Total assets $ 7,370 $ 7,201
============== ==============
LIABILITIES, CONVERTIBLE DEBT CONVERSION OBLIGATION AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 296 $ 293
Accrued and other current liabilities 642 603
Convertible short-term debt 1,413 -
-------------- --------------
Total current liabilities 2,351 896
Convertible long-term debt - 1,384
Other long-term liabilities 453 489
Capital lease obligations, long-term 10 14
-------------- --------------
Total liabilities 2,814 2,783
Convertible debt conversion obligation 87 -
Shareholders' equity 4,469 4,418
-------------- --------------
Total liabilities, convertible debt
conversion obligation and shareholders'
equity $ 7,370 $ 7,201
============== ==============
NVIDIA CORPORATION
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES
(In millions, except per share data)
(Unaudited)
Three Months Ended Twelve Months Ended
----------------------------- -------------------
Jan. 31, Oct. 25, Jan. 25, Jan. 31, Jan. 25,
2016 2015 2015 2016 2015
--------- --------- --------- --------- ---------
GAAP gross profit $ 791 $ 734 $ 699 $ 2,811 $ 2,599
GAAP gross margin 56.5% 56.3% 55.9% 56.1% 55.5%
Stock-based
compensation expense
(A) 5 4 4 15 12
Product warranty charge
(B) 5 - - 20 -
--------- --------- --------- --------- ---------
Non-GAAP gross profit $ 801 $ 738 $ 703 $ 2,846 $ 2,611
========= ========= ========= ========= =========
Non-GAAP gross margin 57.2% 56.5% 56.2% 56.8% 55.8%
GAAP operating expenses $ 539 $ 489 $ 468 $ 2,064 $ 1,840
Stock-based
compensation expense
(A) (56) (47) (39) (190) (146)
Acquisition-related
costs © (4) (4) (9) (22) (37)
Restructuring and other
charges (34) (8) - (131) -
--------- --------- --------- --------- ---------
Non-GAAP operating
expenses $ 445 $ 430 $ 420 $ 1,721 $ 1,657
========= ========= ========= ========= =========
GAAP operating income $ 252 $ 245 $ 231 $ 747 $ 759
Total impact of non-
GAAP adjustments to
operating income 104 63 52 378 195
--------- --------- --------- --------- ---------
Non-GAAP operating income $ 356 $ 308 $ 283 $ 1,125 $ 954
========= ========= ========= ========= =========
GAAP other income
(expense), net $ 1 $ - $ (3)$ (4)$ (4)
Gains from non-
affiliated investments - (4) - (5) (15)
Interest expense
related to
amortization of debt
discount 7 7 7 29 28
--------- --------- --------- --------- ---------
Non-GAAP other income,
net $ 8 $ 3 $ 4 $ 20 $ 9
========= ========= ========= ========= =========
GAAP net income $ 207 $ 246 $ 193 $ 614 $ 631
Total pre-tax impact of
non-GAAP adjustments 111 66 59 402 208
Income tax impact of
non-GAAP adjustments (21) (57) (11) (87) (38)
--------- --------- --------- --------- ---------
Non-GAAP net income $ 297 $ 255 $ 241 $ 929 $ 801
========= ========= ========= ========= =========
Diluted net income per
share
GAAP $ 0.35 $ 0.44 $ 0.35 $ 1.08 $ 1.12
========= ========= ========= ========= =========
Non-GAAP $ 0.52 $ 0.46 $ 0.43 $ 1.67 $ 1.42
========= ========= ========= ========= =========
Weighted average shares
used in diluted net
income per share
computation
GAAP 593 565 557 569 563
Anti-dilution impact
from note hedge (D) (26) (10) - (13) -
--------- --------- --------- --------- ---------
Non-GAAP 567 555 557 556 563
========= ========= ========= ========= =========
Metrics:
Restructuring and other
charges $ 34 $ 8 $ - $ 131 $ -
Income tax impact of
restructuring and
other charges (9) (50) - (45) -
--------- --------- --------- --------- ---------
Restructuring and other
charges, net of income
tax $ 25 $ (42)$ - $ 86 $ -
GAAP diluted shares 593 565 - 569 -
--------- --------- --------- --------- ---------
Per diluted share
impact of
restructuring and
other charges $ 0.04 $ (0.07)$ - $ 0.15 $ -
========= ========= ========= ========= =========
GAAP net cash provided
by operating
activities $ 510 $ 255 $ 443 $ 1,175 $ 906
Purchase of property
and equipment and
intangible assets (15) (16) (31) (86) (123)
--------- --------- --------- --------- ---------
Free cash flow $ 495 $ 239 $ 412 $ 1,089 $ 783
========= ========= ========= ========= =========
----------------------------------------------------------------------------
(A) Excludes stock-based
compensation as follows: Three Months Ended Twelve Months Ended
----------------------------- -------------------
Jan. 31, Oct. 25, Jan. 25, Jan. 31, Jan. 25,
2016 2015 2015 2016 2015
--------- --------- --------- --------- ---------
Cost of revenue $ 5 $ 4 $ 4 $ 15 $ 12
Research and
development $ 33 $ 28 $ 23 $ 115 $ 88
Sales, general and
administrative $ 22 $ 19 $ 15 $ 74 $ 57
(B) Represents warranty charge associated with a product recall.
© Consists of amortization of acquisition-related intangible assets,
transaction costs, compensation charges, and other credits related to
acquisitions.
(D) Represents the number of shares that would be delivered upon conversion
of the currently outstanding 1.00% Convertible Senior Notes Due 2018.
Under U.S. GAAP, shares delivered in hedge transactions are not considered
offsetting shares in the fully diluted share calculation until actually
delivered.
----------------------------------------------------------------------------
NVIDIA CORPORATION
RECONCILIATION OF GAAP TO NON-GAAP OUTLOOK
Q1 FY2017 Outlook
-------------------
GAAP gross margin 57.2%
Impact of stock-based compensation 0.3%
-------------------
Non-GAAP gross margin 57.5%
===================
Q1 FY2017 Outlook
-------------------
(In millions)
GAAP operating expenses $ 500
Stock-based compensation expense and acquisition-
related costs (55)
-------------------
Non-GAAP operating expenses $ 445
===================
