NVIDIA Announces Financial Results for Third Quarter Fiscal 2022

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

	Three Months Ended									Nine Months Ended
	October 31,			August 1,			October 25,			October 31,			October 25,
		2021			2021			2020			2021			2020

GAAP gross profit	$	4,631		$	4,215		$	2,960		$	12,476		$	7,240
GAAP gross margin		65.2	%		64.8	%		62.6	%		64.7	%		62.0	%
Acquisition-related and other costs (A)		86			86			86			258			331
Stock-based compensation expense (B)		44			32			28			102			62
IP-related costs		-			4			21			8			38
Non-GAAP gross profit	$	4,761		$	4,337		$	3,095		$	12,844		$	7,671
Non-GAAP gross margin		67.0	%		66.7	%		65.5	%		66.6	%		65.7	%

GAAP operating expenses	$	1,960		$	1,771		$	1,562		$	5,405		$	4,215
Stock-based compensation expense (B)		(515	)		(433	)		(355	)		(1,351	)		(919	)
Acquisition-related and other costs (A)		(70	)		(72	)		(106	)		(224	)		(338	)
Non-GAAP operating expenses	$	1,375		$	1,266		$	1,101		$	3,830		$	2,958

GAAP income from operations	$	2,671		$	2,444		$	1,398		$	7,071		$	3,025
Total impact of non-GAAP adjustments to income from operations		715			627			595			1,943			1,689
Non-GAAP income from operations	$	3,386		$	3,071		$	1,993		$	9,014		$	4,714

GAAP other income (expense), net	$	(33	)	$	(50	)	$	(50	)	$	5		$	(86	)
(Gains) losses from non-affiliated investments		(20	)		-			4			(153	)		9
Interest expense related to amortization of debt discount		1			1			1			3			1
Non-GAAP other income (expense), net	$	(52	)	$	(49	)	$	(45	)	$	(145	)	$	(76	)

GAAP net income	$	2,464		$	2,374		$	1,336		$	6,749		$	2,875
Total pre-tax impact of non-GAAP adjustments		696			628			600			1,793			1,699
Income tax impact of non-GAAP adjustments (C)		(187	)		(127	)		(102	)		(381	)		(255	)
Domestication tax benefit		-			(252	)		-			(252	)		-
Non-GAAP net income	$	2,973		$	2,623		$	1,834		$	7,909		$	4,319

Diluted net income per share (D)
GAAP	$	0.97		$	0.94		$	0.53		$	2.67		$	1.15
Non-GAAP	$	1.17		$	1.04		$	0.73		$	3.12		$	1.72

Weighted average shares used in diluted net income per share computation (D)		2,538			2,532			2,520			2,532			2,504

GAAP net cash provided by operating activities	$	1,519		$	2,682		$	1,279		$	6,075		$	3,755
Purchases related to property and equipment and intangible assets		(221	)		(183	)		(473	)		(703	)		(845	)
Principal payments on property and equipment		(22	)		(21	)		-			(62	)		-
Free cash flow	$	1,276		$	2,478		$	806		$	5,310		$	2,910



(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									Nine Months Ended
	October 31,			August 1,			October 25,			October 31,			October 25,
		2021			2021			2020			2021			2020
Cost of revenue	$	86		$	86		$	86		$	258		$	331
Research and development	$	7		$	1		$	2		$	10		$	7
Sales, general and administrative	$	63		$	71		$	104		$	214		$	331

(B) Stock-based compensation consists of the following:
	Three Months Ended									Nine Months Ended
	October 31,			August 1,			October 25,			October 31,			October 25,
		2021			2021			2020			2021			2020
Cost of revenue	$	44		$	32		$	28		$	102		$	62
Research and development	$	363		$	297		$	232		$	935		$	594
Sales, general and administrative	$	152		$	136		$	123		$	416		$	325

(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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