NVIDIA Announces Financial Results for Second Quarter Fiscal 2022

NVIDIA CORPORATION
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES
(In millions, except per share data)
(Unaudited)

	Three Months Ended									Six Months Ended
	August 1,			May 2,			July 26,			August 1,			July 26,
	2021			2021			2020			2021			2020

GAAP gross profit	$	4,215		$	3,629		$	2,275		$	7,844		$	4,279
GAAP gross margin		64.8	%		64.1	%		58.8	%		64.5	%		61.6	%
Acquisition-related and other costs (A)		86			87			245			173			246
Stock-based compensation expense (B)		32			25			14			57			35
IP-related costs		4			5			17			9			17
Non-GAAP gross profit	$	4,337		$	3,746		$	2,551		$	8,083		$	4,577
Non-GAAP gross margin		66.7	%		66.2	%		66.0	%		66.4	%		65.9	%

GAAP operating expenses	$	1,771		$	1,673		$	1,624		$	3,444		$	2,652
Stock-based compensation expense (B)		(433	)		(404	)		(360	)		(837	)		(563	)
Acquisition-related and other costs (A)		(72	)		(80	)		(229	)		(152	)		(233	)
Non-GAAP operating expenses	$	1,266		$	1,189		$	1,035		$	2,455		$	1,856

GAAP income from operations	$	2,444		$	1,956		$	651		$	4,400		$	1,627
Total impact of non-GAAP adjustments to income from operations		627			601			865			1,228			1,094
Non-GAAP income from operations	$	3,071		$	2,557		$	1,516		$	5,628		$	2,721

GAAP other income (expense), net	$	(50	)	$	88		$	(42	)	$	38		$	(36	)
(Gains) losses from non-affiliated investments		-			(134	)		2			(133	)		5
Interest expense related to amortization of debt discount		1			1			1			2			1
Non-GAAP other income (expense), net	$	(49	)	$	(45	)	$	(39	)	$	(93	)	$	(30	)

GAAP net income	$	2,374		$	1,912		$	622		$	4,285		$	1,539
Total pre-tax impact of non-GAAP adjustments		628			468			868			1,097			1,100
Income tax impact of non-GAAP adjustments (C)		(127	)		(67	)		(124	)		(194	)		(153	)
Domestication tax benefit		(252	)		-			-			(252	)		-
Non-GAAP net income	$	2,623		$	2,313		$	1,366		$	4,936		$	2,486

Diluted net income per share (D)
GAAP	$	0.94		$	0.76		$	0.25		$	1.69		$	0.62
Non-GAAP	$	1.04		$	0.91		$	0.55		$	1.95		$	1.00

Weighted average shares used in diluted net income per share computation (D)		2,532			2,528			2,504			2,529			2,496

GAAP net cash provided by operating activities	$	2,682		$	1,874		$	1,566		$	4,556		$	2,476
Purchases related to property and equipment and intangible assets		(183	)		(298	)		(217	)		(481	)		(372	)
Principal payments on property and equipment		(21	)		(19	)		-			(40	)		-
Free cash flow	$	2,478		$	1,557		$	1,349		$	4,035		$	2,104


(A) Acquisition-related and other costs primarily include amortization of intangible assets, inventory step-up, transaction costs, and certain compensation charges presented as follows:
	Three Months Ended									Six Months Ended
	August 1,			May 2,			July 26,			August 1,			July 26,
	2021			2021			2020			2021			2020
Cost of revenue	$	86		$	87		$	245		$	173		$	246
Research and development	$	1		$	1		$	3		$	4		$	5
Sales, general and administrative	$	71		$	79		$	226		$	148		$	228

(B) Stock-based compensation consists of the following:
	Three Months Ended									Six Months Ended
	August 1,			May 2,			July 26,			August 1,			July 26,
	2021			2021			2020			2021			2020
Cost of revenue	$	32		$	25		$	14		$	57		$	35
Research and development	$	297		$	276		$	228		$	573		$	362
Sales, general and administrative	$	136		$	128		$	132		$	264		$	201

(C) Income tax impact of non-GAAP adjustments, including the recognition of excess tax benefits or deficiencies related to stock-based compensation under GAAP accounting standard (ASU 2016-09).

(D) Reflects a four-for-one stock split on July 19, 2021.

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