NVIDIA Announces Financial Results for Third Quarter Fiscal 2023

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

		Three Months Ended									Nine Months Ended
		October 30,			July 31,			October 31,			October 30,			October 31,
			2022			2022			2021			2022			2021

GAAP gross profit		$	3,177		$	2,915		$	4,631		$	11,523		$	12,476
GAAP gross margin			53.6	%		43.5	%		65.2	%		55.1	%		64.7	%
	Acquisition-related and other costs (A)		120			121			86			335			258
	Stock-based compensation expense (B)		32			38			44			108			102
	IP-related costs		-			-			-			-			8
Non-GAAP gross profit		$	3,329		$	3,074		$	4,761		$	11,966		$	12,844
	Non-GAAP gross margin		56.1	%		45.9	%		67.0	%		57.2	%		66.6	%

GAAP operating expenses		$	2,576		$	2,416		$	1,960		$	8,555		$	5,405
	Stock-based compensation expense (B)		(713	)		(611	)		(515	)		(1,863	)		(1,351	)
	Acquisition-related and other costs (A)		(54	)		(54	)		(70	)		(164	)		(224	)
	Restructuring costs (C)		(16	)		-			-			(16	)		-
	Contributions		-			(2	)		-			(2	)		-
	Acquisition termination cost		-			-			-			(1,353	)		-
	Legal settlement costs		-			-			-			(7	)		-
Non-GAAP operating expenses		$	1,793		$	1,749		$	1,375		$	5,150		$	3,830

GAAP income from operations		$	601		$	499		$	2,671		$	2,968		$	7,071
	Total impact of non-GAAP adjustments to income from operations		935			826			715			3,848			1,943
Non-GAAP income from operations		$	1,536		$	1,325		$	3,386		$	6,816		$	9,014

GAAP other income (expense), net		$	12		$	(24	)	$	(33	)	$	(75	)	$	5
	(Gains) losses from non-affiliated investments		11			7			(20	)		36			(153	)
	Interest expense related to amortization of debt discount		1			1			1			3			3
Non-GAAP other income (expense), net		$	24		$	(16	)	$	(52	)	$	(36	)	$	(145	)

GAAP net income		$	680		$	656		$	2,464		$	2,954		$	6,749
	Total pre-tax impact of non-GAAP adjustments		947			833			696			3,887			1,793
	Income tax impact of non-GAAP adjustments (D)		(171	)		(197	)		(187	)		(649	)		(381	)
	Domestication tax adjustments		-			-			-			-			(252	)
Non-GAAP net income		$	1,456		$	1,292		$	2,973		$	6,192		$	7,909

Diluted net income per share
	GAAP	$	0.27		$	0.26		$	0.97		$	1.17		$	2.67
	Non-GAAP	$	0.58		$	0.51		$	1.17		$	2.46		$	3.12

Weighted average shares used in diluted net income per share computation			2,499			2,516			2,538			2,517			2,532

GAAP net cash provided by operating activities		$	392		$	1,271		$	1,519		$	3,393		$	6,075
	Purchases related to property and equipment and intangible assets		(530	)		(432	)		(221	)		(1,324	)		(703	)
	Principal payments on property and equipment		(18	)		(15	)		(22	)		(54	)		(62	)
Free cash flow		$	(156	)	$	824		$	1,276		$	2,015		$	5,310



(A) Acquisition-related and other costs are comprised of amortization of intangible assets, transaction costs, and certain compensation charges and are included in the following line items:
		Three Months Ended									Nine Months Ended
		October 30,			July 31,			October 31,			October 30,			October 31,
			2022			2022			2021			2022			2021
	Cost of revenue	$	120		$	121		$	86		$	335		$	258
	Research and development	$	10		$	10		$	7		$	29		$	10
	Sales, general and administrative	$	44		$	44		$	63		$	135		$	214

(B) Stock-based compensation consists of the following:
		Three Months Ended									Nine Months Ended
		October 30,			July 31,			October 31,			October 30,			October 31,
			2022			2022			2021			2022			2021
	Cost of revenue	$	32		$	38		$	44		$	108		$	102
	Research and development	$	530		$	452		$	363		$	1,365		$	935
	Sales, general and administrative	$	183		$	159		$	152		$	498		$	416

(C) Costs related to Russia branch office closure.

(D) 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).

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