8-K
NVIDIA CORP (NVDA)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
______________
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): February 24, 2021
NVIDIA CORPORATION
| (Exact name of registrant as specified in its charter) | ||
|---|---|---|
| Delaware | 0-23985 | 94-3177549 |
| --- | --- | --- |
| (State or other jurisdiction | (Commission | (IRS Employer |
| of incorporation) | File Number) | Identification No.) |
2788 San Tomas Expressway, Santa Clara, CA 95051
(Address of principal executive offices) (Zip Code)
Registrant’s telephone number, including area code: (408) 486-2000
Not Applicable
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
|---|---|---|
| Common Stock, $0.001 par value per share | NVDA | The Nasdaq Global Select Market |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging Growth Company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 2.02 Results of Operations and Financial Condition.
On February 24, 2021, NVIDIA Corporation, or the Company, issued a press release announcing its results for the quarter and fiscal year ended January 31, 2021. The press release is attached as Exhibit 99.1 and is incorporated herein by reference.
Attached hereto as Exhibit 99.2 and incorporated by reference herein is financial information and commentary by Colette M. Kress, Executive Vice President and Chief Financial Officer of the Company, regarding results of the quarter and fiscal year ended January 31, 2021, or the CFO Commentary. The CFO Commentary will be posted to http://investor.nvidia.com immediately after the filing of this Current Report.
The press release and CFO Commentary are furnished and shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or subject to the liabilities of that Section or Sections 11 and 12(a)(2) of the Securities Act of 1933, as amended. The information in this Current Report shall not be incorporated by reference in any filing with the U.S. Securities and Exchange Commission made by the Company, whether made before or after the date hereof, regardless of any general incorporation language in such filing.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
| Exhibit | Description |
|---|---|
| 99.1 | Press Release, datedFebruary 24, 2021, entitled "NVIDIA Announces Financial Results forFourthQuarterandFiscal 2021" |
| 99.2 | CFO Commentary onFourthQuarterandFiscal 2021 Results |
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| NVIDIA Corporation | |
|---|---|
| Date: February 24, 2021 | By: /s/ Colette M. Kress |
| Colette M. Kress | |
| Executive Vice President and Chief Financial Officer |
Document
FOR IMMEDIATE RELEASE:
NVIDIA Announces Financial Results for Fourth Quarter and Fiscal 2021
•Record quarterly and full-year revenue for company, Gaming and Data Center
•Company quarterly revenue of $5.00 billion, up 61 percent year on year
•Company full-year revenue of $16.68 billion, up 53 percent
SANTA CLARA, Calif.-Feb. 24, 2021- NVIDIA (NASDAQ: NVDA) today reported record revenue for the fourth quarter ended January 31, 2021, of $5.00 billion, up 61 percent from $3.11 billion a year earlier, and up 6 percent from $4.73 billion in the previous quarter. The company’s Gaming and Data Center platforms achieved record revenue for the quarter and year.
GAAP earnings per diluted share for the quarter were a record $2.31, up 51 percent from $1.53 a year ago, and up 9 percent from $2.12 in the previous quarter. Non-GAAP earnings per diluted share were $3.10, up 64 percent from $1.89 a year earlier, and up 7 percent from $2.91 in the previous quarter.
For fiscal 2021, revenue was a record $16.68 billion, up 53 percent from $10.92 billion a year earlier. GAAP earnings per diluted share were a record $6.90, up 53 percent from $4.52 a year earlier. Non-GAAP earnings per diluted share were $10.00, up 73 percent from $5.79 a year earlier.
“Q4 was another record quarter, capping a breakout year for NVIDIA’s computing platforms,” said Jensen Huang, founder and CEO of NVIDIA. “Our pioneering work in accelerated computing has led to gaming becoming the world’s most popular entertainment, to supercomputing being democratized for all researchers, and to AI emerging as the most important force in technology.
“Demand for GeForce RTX 30 Series GPUs is incredible. NVIDIA RTX has started a major upgrade cycle as gamers jump to ray tracing, DLSS and AI.
“Our A100 universal AI data center GPUs are ramping strongly across cloud-service providers and vertical industries. Thousands of companies across the world are applying NVIDIA AI to create cloud-connected products with AI services that will transform the world’s largest industries. We are seeing the smartphone moment for every industry.
“Mellanox has expanded our footprint across the data center. And we are making good progress toward acquiring Arm, which will create enormous new opportunities for the entire ecosystem,” he said.
NVIDIA paid quarterly cash dividends of $99 million in the fourth quarter and $395 million in fiscal 2021. It will pay its next quarterly cash dividend of $0.16 per share on March 31, 2021, to all shareholders of record on March 10, 2021.
Q4 Fiscal 2021 Summary
| GAAP | |||||
|---|---|---|---|---|---|
| ($ in millions, except earnings per share) | Q4 FY21 | Q3 FY21 | Q4 FY20 | Q/Q | Y/Y |
| Revenue | 5,003 | 4,726 | 3,105 | Up 6% | Up 61% |
| Gross margin | 63.1 | 62.6 | 64.9 | Up 50 bps | Down 180 bps |
| Operating expenses | 1,650 | 1,562 | 1,025 | Up 6% | Up 61% |
| Operating income | 1,507 | 1,398 | 990 | Up 8% | Up 52% |
| Net income | 1,457 | 1,336 | 950 | Up 9% | Up 53% |
| Diluted earnings per share | 2.31 | 2.12 | 1.53 | Up 9% | Up 51% |
All values are in US Dollars.
| Non-GAAP | |||||
|---|---|---|---|---|---|
| ($ in millions, except earnings per share) | Q4 FY21 | Q3 FY21 | Q4 FY20 | Q/Q | Y/Y |
| Revenue | 5,003 | 4,726 | 3,105 | Up 6% | Up 61% |
| Gross margin | 65.5 | 65.5 | 65.4 | -- | Up 10 bps |
| Operating expenses | 1,187 | 1,101 | 810 | Up 8% | Up 47% |
| Operating income | 2,089 | 1,993 | 1,220 | Up 5% | Up 71% |
| Net income | 1,957 | 1,834 | 1,172 | Up 7% | Up 67% |
| Diluted earnings per share | 3.10 | 2.91 | 1.89 | Up 7% | Up 64% |
All values are in US Dollars.
Fiscal 2021 Summary
| GAAP | |||
|---|---|---|---|
| ($ in millions, except earnings per share) | FY21 | FY20 | Y/Y |
| Revenue | 16,675 | 10,918 | Up 53% |
| Gross margin | 62.3 | 62.0 | Up 30 bps |
| Operating expenses | 5,864 | 3,922 | Up 50% |
| Operating income | 4,532 | 2,846 | Up 59% |
| Net income | 4,332 | 2,796 | Up 55% |
| Diluted earnings per share | 6.90 | 4.52 | Up 53% |
All values are in US Dollars.
| Non-GAAP | |||
|---|---|---|---|
| ($ in millions, except earnings per share) | FY21 | FY20 | Y/Y |
| Revenue | 16,675 | 10,918 | Up 53% |
| Gross margin | 65.6 | 62.5 | Up 310 bps |
| Operating expenses | 4,144 | 3,086 | Up 34% |
| Operating income | 6,803 | 3,735 | Up 82% |
| Net income | 6,277 | 3,580 | Up 75% |
| Diluted earnings per share | 10.00 | 5.79 | Up 73% |
All values are in US Dollars.
NVIDIA’s outlook for the first quarter of fiscal 2022 is as follows:
•Revenue is expected to be $5.30 billion, plus or minus 2 percent.
•GAAP and non-GAAP gross margins are expected to be 63.8 percent and 66.0 percent, respectively, plus or minus 50 basis points.
•GAAP and non-GAAP operating expenses are expected to be approximately $1.67 billion and $1.20 billion, respectively.
•GAAP and non-GAAP other income and expense are both expected to be an expense of approximately $50 million.
•GAAP and non-GAAP tax rates are both expected to be 10 percent, plus or minus 1 percent, excluding any discrete items. GAAP discrete items include excess tax benefits or deficiencies related to stock-based compensation, which are expected to generate variability on a quarter-by-quarter basis.
Highlights
NVIDIA achieved progress since its previous earnings announcement in these areas:
Data Center
•Fourth-quarter revenue was a record $1.90 billion, slightly above the previous quarter and up 97 percent from a year earlier. Full-year revenue was a record $6.70 billion, up 124 percent.
•Announced that the world’s leading OEMs unveiled the first wave of NVIDIA-Certified Systems™ with NVIDIA A100 Tensor Core GPUs — the industry’s only accelerated servers tested for machine learning and data analytics workloads.
•Introduced support for Google Cloud’s Anthos on bare metal for NVIDIA DGX™ A100 systems, enabling enterprises to create hybrid cloud infrastructure more easily.
•Enhanced the NVIDIA Clara™ application framework for AI-powered healthcare and life sciences with the launch of Clara Discovery for computational drug discovery, providing dozens of pre-trained models, the MONAI open-source medical AI training framework, and federated learning for the industry to collaborate on building models without sharing data.
•Collaborated with Amazon Web Services to bring the NVIDIA NGC™ software hub to AWS Marketplace.
Gaming
•Fourth-quarter revenue was a record $2.50 billion, up 10 percent from the previous quarter and up 67 percent from a year earlier. Full-year revenue was a record $7.76 billion, up 41 percent.
•Announced the company’s biggest-ever laptop launch, with 70+ new laptops for gamers and creators, powered by NVIDIA GeForce RTX™ 30 Series Laptop GPUs.
•Expanded the GeForce RTX 30 Series GPUs with 60-class offerings — the most popular in the company’s gaming lineup — including the GeForce RTX 3060, starting at just $329, featuring NVIDIA RTX™ ray tracing, NVIDIA DLSS, NVIDIA Reflex and NVIDIA Broadcast.
•Increased momentum for NVIDIA RTX adoption, now available in 36 new titles, including Minecraft, Fortnite, and Cyberpunk 2077.
•Announced that Overwatch and Tom Clancy’s Rainbow Six Siege are adopting NVIDIA Reflex, bringing this low-latency technology to seven of the top 10 competitive-shooter games.
•Announced GeForce NOW™ has come to iOS Safari, giving over 6 million GeForce NOW members access to the service through Safari on iPhone or iPad.
Professional Visualization
•Fourth-quarter revenue was $307 million, up 30 percent from the previous quarter and down 7 percent from a year earlier. Full-year revenue was $1.05 billion, down 13 percent.
•Announced that NVIDIA Omniverse™ — a real-time simulation and collaboration platform for 3D production pipelines — is now in open beta.
Automotive
•Fourth-quarter revenue was $145 million, up 16 percent from the previous quarter and down 11 percent from a year earlier. Full-year revenue was $536 million, down 23 percent.
•Announced that NVIDIA DRIVE™ autonomous driving technology is powering a range of next-gen electric vehicles from carmakers SAIC and Nio; robotaxi-maker Zoox; and cabless truck-maker Einride.
•Announced that NVIDIA is powering the new Mercedes-Benz AI cockpit, featuring the MBUX Hyperscreen, which will debut in the all-electric Mercedes-Benz EQS in the first half of 2021.
•Expanded the NVIDIA DRIVE sensor ecosystem with new solutions from lidar makers Baraja, Hesai, Innoviz, Magna and Ouster.
CFO Commentary
Commentary on the quarter by Colette Kress, NVIDIA’s executive vice president and chief financial officer, is available at https://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 2021 financial results and current financial prospects today at 2 p.m. Pacific time (5 p.m. Eastern time). A live webcast (listen-only mode) of the conference call will be accessible at NVIDIA’s investor relations website, https://investor.nvidia.com. The webcast will be recorded and available for replay until NVIDIA’s conference call to discuss its financial results for its first quarter of fiscal 2022.
Non-GAAP Measures
To supplement NVIDIA’s condensed consolidated financial statements 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 income from operations, non-GAAP other income (expense), net, non-GAAP net income, non-GAAP net income, or earnings, per diluted share, and free cash flow. 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 expense, acquisition-related and other costs, IP-related costs, 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. Free cash flow is calculated as GAAP net cash provided by operating activities less both purchases of property and equipment and intangible assets and principal payments on 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 the company’s non-GAAP measures may be different from non-GAAP measures used by other companies.
About NVIDIA
NVIDIA’s (NASDAQ: NVDA) invention of the GPU in 1999 sparked the growth of the PC gaming market and has redefined modern computer graphics, high performance computing and artificial intelligence. The company’s pioneering work in accelerated computing and AI is reshaping trillion-dollar industries, such as transportation, healthcare and manufacturing, and fueling the growth of many others. More information at https://nvidianews.nvidia.com/.
For further information, contact:
| Simona Jankowski | Robert Sherbin |
|---|---|
| Investor Relations | Corporate Communications |
| NVIDIA Corporation | NVIDIA Corporation |
| sjankowski@nvidia.com | rsherbin@nvidia.com |
Certain statements in this press release including, but not limited to, statements as to: NVIDIA’s pioneering work in accelerated computing and its impacts; demand for our GPUs; the invention of RTX and it starting upgrade cycles; our GPU series expansion and shipping; our A100 GPUs ramping; our work with and the number of companies across the world to applying NVIDIA AI and its impact; seeing the smartphone moment for every industry; expanding our footprint across the data center; our opportunities; our progress on the Arm acquisition, when it is expected to close and it creating new opportunities for the entire ecosystem; NVIDIA’s next quarterly cash dividend; NVIDIA’s financial outlook for the first quarter of fiscal 2022; NVIDIA’s expected tax rates for the first quarter of fiscal 2022; NVIDIA’s expectation to generate variability from excess tax benefits or deficiencies; NVIDIA-Certified Systems being offered from the world’s leading OEMs; support for Anthos and it enabling enterprises to more easily create hybrid cloud infrastructure; the benefits, performance and abilities of our products and technologies, including NVIDIA Clara application framework and NVIDIA GeForce RTX 30 Series GPUs; NVIDIA Clara Discovery providing pre-trained models, the MONAI framework, and federated learning for the industry without sharing data; bringing NGC software to the AWS Marketplace; the size of our laptop launch and number of laptops using NVIDIA GeForce RTX 30 Series Laptop GPUs; expanding our RTX 30 Series GPUs and their features; increasing momentum for RTX technologies and the number of titles using it; the games using NVIDIA Reflex technology; GeForce NOW’s availability and the number of members that can access it; NVIDIA Omniverse being in open beta; NVIDIA DRIVE powering a range of next-gen electric vehicles; NVIDIA powering the Mercedes-Benz AI cockpit and the cars and timing for its debut; and expanding the NVIDIA DRIVE ecosystem with new solutions from lidar makers are forward-looking statements that are subject to risks and uncertainties that could cause results to be materially different than expectations. Important factors that could cause actual results to differ materially include: global economic conditions; our reliance on third parties to manufacture, assemble, package and test our products; the impact of technological development and competition; development of new products and technologies or enhancements to our existing product and technologies; market acceptance of our products or our partners’ products; design, manufacturing or software defects; changes in consumer preferences or demands; changes in industry standards and interfaces; unexpected loss of performance of our products or technologies when integrated into systems; as well as other factors detailed from time to time in the most recent reports NVIDIA files with the Securities and Exchange Commission, or SEC, including, but not limited to, its annual report on Form 10-K and quarterly reports on Form 10-Q. Copies of reports filed with the SEC are posted on the company’s website and are available from NVIDIA without charge. These forward-looking statements are not guarantees of future performance and speak only as of the date hereof, and, except as required by law, NVIDIA disclaims any obligation to update these forward-looking statements to reflect future events or circumstances.
© 2021 NVIDIA Corporation. All rights reserved. NVIDIA, the NVIDIA logo, NVIDIA DGX, GeForce NOW, GeForce RTX, NGC, NVIDIA Clara, NVIDIA DRIVE, NVIDIA Omniverse, NVIDIA RTX and NVIDIA-Certified Systems are trademarks and/or registered trademarks of NVIDIA Corporation in the U.S. and/or other countries. Other company and product names may be trademarks of the respective companies with which they are associated. Features, pricing, availability, and specifications are subject to change without notice.
NVIDIA CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In millions, except per share data)
(Unaudited)
| Three Months Ended | Twelve Months Ended | |||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| January 31, | January 26, | January 31, | January 26, | |||||||||||||
| 2021 | 2020 | 2021 | 2020 | |||||||||||||
| Revenue | $ | 5,003 | $ | 3,105 | $ | 16,675 | $ | 10,918 | ||||||||
| Cost of revenue | 1,846 | 1,090 | 6,279 | 4,150 | ||||||||||||
| Gross profit | 3,157 | 2,015 | 10,396 | 6,768 | ||||||||||||
| Operating expenses | ||||||||||||||||
| Research and development | 1,147 | 738 | 3,924 | 2,829 | ||||||||||||
| Sales, general and administrative | 503 | 287 | 1,940 | 1,093 | ||||||||||||
| Total operating expenses | 1,650 | 1,025 | 5,864 | 3,922 | ||||||||||||
| Income from operations | 1,507 | 990 | 4,532 | 2,846 | ||||||||||||
| Interest income | 6 | 41 | 57 | 178 | ||||||||||||
| Interest expense | (53) | (12) | (184) | (52) | ||||||||||||
| Other, net | 10 | (3) | 4 | (2) | ||||||||||||
| Other income (expense), net | (37) | 26 | (123) | 124 | ||||||||||||
| Income before income tax | 1,470 | 1,016 | 4,409 | 2,970 | ||||||||||||
| Income tax expense | 13 | 66 | 77 | 174 | ||||||||||||
| Net income | $ | 1,457 | $ | 950 | $ | 4,332 | $ | 2,796 | ||||||||
| Net income per share: | ||||||||||||||||
| Basic | $ | 2.35 | $ | 1.55 | $ | 7.02 | $ | 4.59 | ||||||||
| Diluted | $ | 2.31 | $ | 1.53 | $ | 6.90 | $ | 4.52 | ||||||||
| Weighted average shares used in per share computation: | ||||||||||||||||
| Basic | 619 | 612 | 617 | 609 | ||||||||||||
| Diluted | 631 | 621 | 628 | 618 | ||||||||||||
| NVIDIA CORPORATION | ||||||||||||||||
| --- | --- | --- | --- | --- | --- | --- | ||||||||||
| CONDENSED CONSOLIDATED BALANCE SHEETS | ||||||||||||||||
| (In millions) | ||||||||||||||||
| (Unaudited) | ||||||||||||||||
| January 31, | January 26, | |||||||||||||||
| 2021 | 2020 | |||||||||||||||
| ASSETS | ||||||||||||||||
| Current assets: | ||||||||||||||||
| Cash, cash equivalents and marketable securities | $ | 11,561 | $ | 10,897 | ||||||||||||
| Accounts receivable, net | 2,429 | 1,657 | ||||||||||||||
| Inventories | 1,826 | 979 | ||||||||||||||
| Prepaid expenses and other current assets | 239 | 157 | ||||||||||||||
| Total current assets | 16,055 | 13,690 | ||||||||||||||
| Property and equipment, net | 2,149 | 1,674 | ||||||||||||||
| Operating lease assets | 707 | 618 | ||||||||||||||
| Goodwill | 4,193 | 618 | ||||||||||||||
| Intangible assets, net | 2,737 | 49 | ||||||||||||||
| Deferred income tax assets | 806 | 548 | ||||||||||||||
| Other assets | 2,144 | 118 | ||||||||||||||
| Total assets | $ | 28,791 | $ | 17,315 | ||||||||||||
| LIABILITIES AND SHAREHOLDERS' EQUITY | ||||||||||||||||
| Current liabilities: | ||||||||||||||||
| Accounts payable | $ | 1,201 | $ | 687 | ||||||||||||
| Accrued and other current liabilities | 1,725 | 1,097 | ||||||||||||||
| Short-term debt | 999 | — | ||||||||||||||
| Total current liabilities | 3,925 | 1,784 | ||||||||||||||
| Long-term debt | 5,964 | 1,991 | ||||||||||||||
| Long-term operating lease liabilities | 634 | 561 | ||||||||||||||
| Other long-term liabilities | 1,375 | 775 | ||||||||||||||
| Total liabilities | 11,898 | 5,111 | ||||||||||||||
| Shareholders' equity | 16,893 | 12,204 | ||||||||||||||
| Total liabilities and shareholders' equity | $ | 28,791 | $ | 17,315 | ||||||||||||
| NVIDIA CORPORATION | ||||||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | ||||||||
| CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||||||||||||
| (In millions) | ||||||||||||||||
| (Unaudited) | ||||||||||||||||
| Three Months Ended | Twelve Months Ended | |||||||||||||||
| January 31, | January 26, | January 31, | January 26, | |||||||||||||
| 2021 | 2020 | 2021 | 2020 | |||||||||||||
| Cash flows from operating activities: | ||||||||||||||||
| Net income | $ | 1,457 | $ | 950 | $ | 4,332 | $ | 2,796 | ||||||||
| Adjustments to reconcile net income to net cash | ||||||||||||||||
| provided by operating activities: | ||||||||||||||||
| Depreciation and amortization | 287 | 106 | 1,098 | 381 | ||||||||||||
| Stock-based compensation expense | 417 | 220 | 1,397 | 844 | ||||||||||||
| Deferred income taxes | (164) | 23 | (282) | 18 | ||||||||||||
| Other | (17) | — | (20) | 5 | ||||||||||||
| Changes in operating assets and liabilities, net of acquisitions: | ||||||||||||||||
| Accounts receivable | 117 | (202) | (550) | (233) | ||||||||||||
| Inventories | (334) | 66 | (524) | 597 | ||||||||||||
| Prepaid expenses and other assets | 15 | 22 | (394) | 77 | ||||||||||||
| Accounts payable | 75 | 104 | 363 | 194 | ||||||||||||
| Accrued and other current liabilities | 126 | 157 | 239 | 54 | ||||||||||||
| Other long-term liabilities | 88 | 19 | 163 | 28 | ||||||||||||
| Net cash provided by operating activities | 2,067 | 1,465 | 5,822 | 4,761 | ||||||||||||
| Cash flows from investing activities: | ||||||||||||||||
| Proceeds from maturities of marketable securities | 3,627 | — | 8,792 | 4,744 | ||||||||||||
| Proceeds from sales of marketable securities | 25 | 2 | 527 | 3,365 | ||||||||||||
| Purchases of marketable securities | (6,468) | — | (19,308) | (1,461) | ||||||||||||
| Acquisitions, net of cash acquired | — | — | (8,524) | (4) | ||||||||||||
| Purchases related to property and equipment and intangible assets | (283) | (144) | (1,128) | (489) | ||||||||||||
| Investments and other, net | (30) | (9) | (34) | (10) | ||||||||||||
| Net cash provided by (used in) investing activities | (3,129) | (151) | (19,675) | 6,145 | ||||||||||||
| Cash flows from financing activities: | ||||||||||||||||
| Proceeds related to employee stock plans | 4 | 2 | 194 | 149 | ||||||||||||
| Payments related to tax on restricted stock units | (225) | (87) | (942) | (551) | ||||||||||||
| Dividends paid | (99) | (98) | (395) | (390) | ||||||||||||
| Issuance of debt, net of issuance costs | (3) | — | 4,968 | — | ||||||||||||
| Principal payments on property and equipment | (17) | — | (17) | — | ||||||||||||
| Other | (2) | — | (4) | — | ||||||||||||
| Net cash provided by (used in) financing activities | (342) | (183) | 3,804 | (792) | ||||||||||||
| Change in cash and cash equivalents | (1,404) | 1,131 | (10,049) | 10,114 | ||||||||||||
| Cash and cash equivalents at beginning of period | 2,251 | 9,765 | 10,896 | 782 | ||||||||||||
| Cash and cash equivalents at end of period | $ | 847 | $ | 10,896 | $ | 847 | $ | 10,896 | ||||||||
| NVIDIA CORPORATION | ||||||||||||||||
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| RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES | ||||||||||||||||
| (In millions, except per share data) | ||||||||||||||||
| (Unaudited) | ||||||||||||||||
| Three Months Ended | Twelve Months Ended | |||||||||||||||
| January 31, | October 25, | January 26, | January 31, | January 26, | ||||||||||||
| 2021 | 2020 | 2020 | 2021 | 2020 | ||||||||||||
| GAAP gross profit | $ | 3,157 | $ | 2,960 | $ | 2,015 | $ | 10,396 | $ | 6,768 | ||||||
| GAAP gross margin | 63.1 | % | 62.6 | % | 64.9 | % | 62.3 | % | 62.0 | % | ||||||
| Acquisition-related and other costs (B) | 92 | 86 | — | 425 | — | |||||||||||
| Stock-based compensation expense (A) | 26 | 28 | 12 | 88 | 39 | |||||||||||
| IP-related costs | 1 | 21 | 3 | 38 | 14 | |||||||||||
| Non-GAAP gross profit | $ | 3,276 | $ | 3,095 | $ | 2,030 | $ | 10,947 | $ | 6,821 | ||||||
| Non-GAAP gross margin | 65.5 | % | 65.5 | % | 65.4 | % | 65.6 | % | 62.5 | % | ||||||
| GAAP operating expenses | $ | 1,650 | $ | 1,562 | $ | 1,025 | $ | 5,864 | $ | 3,922 | ||||||
| Stock-based compensation expense (A) | (391) | (355) | (208) | (1,309) | (805) | |||||||||||
| Acquisition-related and other costs (B) | (72) | (106) | (7) | (411) | (31) | |||||||||||
| Non-GAAP operating expenses | $ | 1,187 | $ | 1,101 | $ | 810 | $ | 4,144 | $ | 3,086 | ||||||
| GAAP income from operations | $ | 1,507 | $ | 1,398 | $ | 990 | $ | 4,532 | $ | 2,846 | ||||||
| Total impact of non-GAAP adjustments to income from operations | 582 | 595 | 230 | 2,271 | 889 | |||||||||||
| Non-GAAP income from operations | $ | 2,089 | $ | 1,993 | $ | 1,220 | $ | 6,803 | $ | 3,735 | ||||||
| GAAP other income (expense), net | $ | (37) | $ | (50) | $ | 26 | $ | (123) | $ | 124 | ||||||
| Losses (Gains) from non-affiliated investments | (9) | 4 | — | — | 1 | |||||||||||
| Interest expense related to amortization of debt discount | 1 | 1 | — | 3 | 2 | |||||||||||
| Non-GAAP other income (expense), net | $ | (45) | $ | (45) | $ | 26 | $ | (120) | $ | 127 | ||||||
| GAAP net income | $ | 1,457 | $ | 1,336 | $ | 950 | $ | 4,332 | $ | 2,796 | ||||||
| Total pre-tax impact of non-GAAP adjustments | 574 | 600 | 230 | 2,274 | 890 | |||||||||||
| Income tax impact of non-GAAP adjustments (C) | (74) | (102) | (8) | (329) | (106) | |||||||||||
| Non-GAAP net income | $ | 1,957 | $ | 1,834 | $ | 1,172 | $ | 6,277 | $ | 3,580 | ||||||
| Three Months Ended | Twelve Months Ended | |||||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | |||||
| January 31, | October 25, | January 26, | January 31, | January 26, | ||||||||||||
| 2021 | 2020 | 2020 | 2021 | 2020 | ||||||||||||
| Diluted net income per share | ||||||||||||||||
| GAAP | $ | 2.31 | $ | 2.12 | $ | 1.53 | $ | 6.90 | $ | 4.52 | ||||||
| Non-GAAP | $ | 3.10 | $ | 2.91 | $ | 1.89 | $ | 10.00 | $ | 5.79 | ||||||
| Weighted average shares used in diluted net income per share computation | 631 | 630 | 621 | 628 | 618 | |||||||||||
| GAAP net cash provided by operating activities | $ | 2,067 | $ | 1,279 | $ | 1,465 | $ | 5,822 | $ | 4,761 | ||||||
| Purchases related to property and equipment and intangible assets | (283) | (473) | (144) | (1,128) | (489) | |||||||||||
| Principal payments on property and equipment | (17) | — | — | (17) | — | |||||||||||
| Free cash flow | $ | 1,767 | $ | 806 | $ | 1,321 | $ | 4,677 | $ | 4,272 | ||||||
| (A) Stock-based compensation consists of the following: | ||||||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | |||||
| Three Months Ended | Twelve Months Ended | |||||||||||||||
| January 31, | October 25, | January 26, | January 31, | January 26, | ||||||||||||
| 2021 | 2020 | 2020 | 2021 | 2020 | ||||||||||||
| Cost of revenue | $ | 26 | $ | 28 | $ | 12 | $ | 88 | $ | 39 | ||||||
| Research and development | $ | 266 | $ | 232 | $ | 140 | $ | 860 | $ | 540 | ||||||
| Sales, general and administrative | $ | 125 | $ | 123 | $ | 68 | $ | 449 | $ | 265 | ||||||
| (B) 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 | Twelve Months Ended | |||||||||||||||
| January 31, | October 25, | January 26, | January 31, | January 26, | ||||||||||||
| 2021 | 2020 | 2020 | 2021 | 2020 | ||||||||||||
| Cost of revenue | $ | 92 | $ | 86 | $ | — | $ | 425 | $ | — | ||||||
| Research and development | $ | 2 | $ | 2 | $ | 1 | $ | 9 | $ | 6 | ||||||
| Sales, general and administrative | $ | 70 | $ | 104 | $ | 6 | $ | 402 | $ | 25 | ||||||
| (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). | ||||||||||||||||
| NVIDIA CORPORATION | ||||||||||||||||
| --- | --- | --- | --- | |||||||||||||
| RECONCILIATION OF GAAP TO NON-GAAP OUTLOOK | ||||||||||||||||
| Q1 FY2022 Outlook | ||||||||||||||||
| ( in millions) | ||||||||||||||||
| GAAP gross margin | 63.8 | % | ||||||||||||||
| Impact of stock-based compensation expense, acquisition-related costs, and other costs | 2.2 | % | ||||||||||||||
| Non-GAAP gross margin | 66.0 | % | ||||||||||||||
| GAAP operating expenses | ||||||||||||||||
| Stock-based compensation expense, acquisition-related costs, and other costs | (470) | |||||||||||||||
| Non-GAAP operating expenses |
All values are in US Dollars.
Document
CFO Commentary on Fourth Quarter and Fiscal 2021 Results
Q4 Fiscal 2021 Summary
| GAAP | |||||
|---|---|---|---|---|---|
| ($ in millions, except earnings per share) | Q4 FY21 | Q3 FY21 | Q4 FY20 | Q/Q | Y/Y |
| Revenue | 5,003 | 4,726 | 3,105 | Up 6% | Up 61% |
| Gross margin | 63.1 | 62.6 | 64.9 | Up 50 bps | Down 180 bps |
| Operating expenses | 1,650 | 1,562 | 1,025 | Up 6% | Up 61% |
| Operating income | 1,507 | 1,398 | 990 | Up 8% | Up 52% |
| Net income | 1,457 | 1,336 | 950 | Up 9% | Up 53% |
| Diluted earnings per share | 2.31 | 2.12 | 1.53 | Up 9% | Up 51% |
All values are in US Dollars.
| Non-GAAP | |||||
|---|---|---|---|---|---|
| ($ in millions, except earnings per share) | Q4 FY21 | Q3 FY21 | Q4 FY20 | Q/Q | Y/Y |
| Revenue | 5,003 | 4,726 | 3,105 | Up 6% | Up 61% |
| Gross margin | 65.5 | 65.5 | 65.4 | -- | Up 10 bps |
| Operating expenses | 1,187 | 1,101 | 810 | Up 8% | Up 47% |
| Operating income | 2,089 | 1,993 | 1,220 | Up 5% | Up 71% |
| Net income | 1,957 | 1,834 | 1,172 | Up 7% | Up 67% |
| Diluted earnings per share | 3.10 | 2.91 | 1.89 | Up 7% | Up 64% |
All values are in US Dollars.
| Revenue by Reportable Segments | |||||
|---|---|---|---|---|---|
| ($ in millions) | Q4 FY21 | Q3 FY21 | Q4 FY20 | Q/Q | Y/Y |
| Graphics | $3,056 | $2,787 | $2,084 | Up 10% | Up 47% |
| Compute & Networking | 1,947 | 1,939 | 1,021 | -- | Up 91% |
| Total | $5,003 | $4,726 | $3,105 | Up 6% | Up 61% |
| Revenue by Market Platform | |||||
| --- | --- | --- | --- | --- | --- |
| ($ in millions) | Q4 FY21 | Q3 FY21 | Q4 FY20 | Q/Q | Y/Y |
| Gaming | $2,495 | $2,271 | $1,491 | Up 10% | Up 67% |
| Professional Visualization | 307 | 236 | 331 | Up 30% | Down 7% |
| Data Center | 1,903 | 1,900 | 968 | -- | Up 97% |
| Automotive | 145 | 125 | 163 | Up 16% | Down 11% |
| OEM and Other | 153 | 194 | 152 | Down 21% | Up 1% |
| Total | $5,003 | $4,726 | $3,105 | Up 6% | Up 61% |
Fiscal 2021 Summary
| GAAP | |||
|---|---|---|---|
| ($ in millions, except earnings per share) | FY21 | FY20 | Y/Y |
| Revenue | 16,675 | 10,918 | Up 53% |
| Gross margin | 62.3 | 62.0 | Up 30 bps |
| Operating expenses | 5,864 | 3,922 | Up 50% |
| Operating income | 4,532 | 2,846 | Up 59% |
| Net income | 4,332 | 2,796 | Up 55% |
| Diluted earnings per share | 6.90 | 4.52 | Up 53% |
All values are in US Dollars.
| Non-GAAP | |||
|---|---|---|---|
| ($ in millions, except earnings per share) | FY21 | FY20 | Y/Y |
| Revenue | 16,675 | 10,918 | Up 53% |
| Gross margin | 65.6 | 62.5 | Up 310 bps |
| Operating expenses | 4,144 | 3,086 | Up 34% |
| Operating income | 6,803 | 3,735 | Up 82% |
| Net income | 6,277 | 3,580 | Up 75% |
| Diluted earnings per share | 10.00 | 5.79 | Up 73% |
All values are in US Dollars.
| Revenue by Reportable Segments | |||
|---|---|---|---|
| ($ in millions) | FY21 | FY20 | Y/Y |
| Graphics | $9,834 | $7,639 | Up 29% |
| Compute & Networking | 6,841 | 3,279 | Up 109% |
| Total | $16,675 | $10,918 | Up 53% |
| Revenue by Market Platform | |||
| --- | --- | --- | --- |
| ($ in millions) | FY21 | FY20 | Y/Y |
| Gaming | $7,759 | $5,518 | Up 41% |
| Professional Visualization | 1,053 | 1,212 | Down 13% |
| Data Center | 6,696 | 2,983 | Up 124% |
| Automotive | 536 | 700 | Down 23% |
| OEM and Other | 631 | 505 | Up 25% |
| Total | $16,675 | $10,918 | Up 53% |
Revenue
Revenue for the fourth quarter was a record $5.00 billion, up 61 percent from a year earlier and up 6 percent sequentially. Full-year revenue was a record $16.68 billion, up 53 percent.
COVID-19 continues to affect our business in both positive and negative ways, and there is uncertainty around their duration and impact. Our Gaming and Data Center market platforms have benefited from stronger demand as people continue to work, learn, and play from home. In Professional Visualization, mobile workstations continue to benefit from work-from-home trends, and desktop workstation demand has started to recover, although not back to pre-COVID levels. In Automotive, COVID is no longer having a significant impact on demand. Throughout our supply chain, stronger demand globally has limited the availability of capacity and components, particularly in Gaming.
From a market-platform perspective, Gaming revenue for the fourth quarter was up 67 percent from a year ago and up 10 percent sequentially. Full-year revenue was up 41 percent. The year-on-year increases reflect higher sales across desktop and laptop GPUs for gaming, and game-console SOCs. GPUs for gaming benefited from the ramp of our GeForce RTXTM 30 Series based on the NVIDIA Ampere architecture. The sequential increase from desktop and laptop GPUs for gaming was partially offset by a decrease in game-console SOCs.
Professional Visualization revenue for the fourth quarter was down 7 percent from a year earlier and up 30 percent sequentially. Full-year revenue was down 13 percent. The year-on-year decreases were due to lower sales of GPUs for desktop workstations as enterprise demand was impacted by COVID. The sequential growth reflects an increase in sales of GPUs for both desktop and mobile workstations.
Data Center revenue for the fourth quarter was up 97 percent from a year ago and comparable to last quarter. Full-year revenue was up 124 percent. The year-on-year revenue growth was driven by our Mellanox acquisition and the ramp of the NVIDIA Ampere GPU architecture. In fiscal 2021, Mellanox revenue contributed 10 percent of total company revenue. Sequentially, double-digit growth in Data Center compute products was offset by the anticipated decline in Mellanox revenue.
Automotive revenue for the fourth quarter was down 11 percent from a year earlier and up 16 percent sequentially. Full-year revenue was down 23 percent. The year-on-year decreases reflect lower revenue from the expected ramp down of legacy infotainment modules and autonomous driving development agreements, partially offset by increases in AI cockpit and autonomous vehicle solutions. The sequential increase reflects higher sales of AI cockpit solutions, autonomous vehicle solutions, and recovery in legacy infotainment modules.
OEM and Other revenue for the fourth quarter was up 1 percent from a year ago and down 21 percent sequentially. Full-year revenue was up 25 percent. The sequential decline was primarily due to lower volume of entry-level laptop GPUs. The increase for the full year was primarily due to higher volume of entry-level laptop GPUs.
Gross Margin
| Reconciliation of GAAP to Non-GAAP Gross Margin | |||||
|---|---|---|---|---|---|
| ($ in millions) | Q4 FY21 | Q3 FY21 | Q4 FY20 | FY21 | FY20 |
| GAAP gross profit | 3,157 | 2,960 | 2,015 | 10,396 | 6,768 |
| GAAP gross margin | 63.1 | 62.6 | 64.9 | 62.3 | 62.0 |
| Acquisition-related and other costs | 92 | 86 | -- | 425 | -- |
| Stock-based compensation expense | 26 | 28 | 12 | 88 | 39 |
| IP-related costs | 1 | 21 | 3 | 38 | 14 |
| Non-GAAP gross profit | 3,276 | 3,095 | 2,030 | 10,947 | 6,821 |
| Non-GAAP gross margin | 65.5 | 65.5 | 65.4 | 65.6 | 62.5 |
All values are in US Dollars.
GAAP gross margin for the fourth quarter was down 180 basis points from a year earlier due to amortization of developed technology acquired from Mellanox, partially offset by product mix. GAAP gross margin was up 50 basis points sequentially on higher margins in desktop and notebook GPUs for gaming and lower IP-related costs, partially offset by a lower margin mix in our Data Center portfolio. Non-GAAP gross margin for the fourth quarter was 65.5 percent, up 10 basis points from a year earlier and flat sequentially.
Full-year GAAP gross margin was up 30 basis points from a year ago, primarily driven by product mix with higher Data Center and lower Automotive revenue, partially offset by Mellanox acquisition-related charges. Full-year non-GAAP gross margin was 65.6 percent, up 310 basis points from a year ago.
Expenses
| Reconciliation of GAAP to Non-GAAP Operating Expenses | |||||
|---|---|---|---|---|---|
| ($ in millions) | Q4 FY21 | Q3 FY21 | Q4 FY20 | FY21 | FY20 |
| GAAP operating expenses | $1,650 | $1,562 | $1,025 | $5,864 | $3,922 |
| Stock-based compensation expense | (391) | (355) | (208) | (1,309) | (805) |
| Acquisition-related and other costs | (72) | (106) | (7) | (411) | (31) |
| Non-GAAP operating expenses | $1,187 | $1,101 | $810 | $4,144 | $3,086 |
Fiscal 2021 had 53 weeks, including 14 weeks in the fourth quarter.
GAAP operating expenses for the fourth quarter were up 61 percent from a year earlier and up 6 percent sequentially. Fourth-quarter acquisition-related and other costs of $72 million primarily includes $43 million in recurring amortization of Mellanox intangible assets and $21 million related to the pending acquisition of Arm. Full-year GAAP operating expenses were up 50 percent from fiscal 2020. Full year acquisition-related and other costs of $411 million primarily includes $190 million in non-recurring intangible amortization of Mellanox order backlog, $123 million in recurring amortization of Mellanox intangible assets, and $40 million related to the pending acquisition of Arm.
Non-GAAP operating expenses for the fourth quarter were up 47 percent from a year earlier and up 8 percent sequentially. Full-year non-GAAP operating expenses were up 34 percent from fiscal 2020. The year-on-year increases were primarily driven by the Mellanox acquisition, compensation-related costs including employee growth, infrastructure costs, and costs from an additional week in the fourth quarter of fiscal 2021. The sequential increase reflects costs from the additional week and employee growth.
Operating Income
GAAP operating income for the fourth quarter was a record $1.51 billion, up 52 percent from a year earlier and up 8 percent sequentially. Non-GAAP operating income for the fourth quarter was a record $2.09 billion, up 71 percent from a year earlier and up 5 percent sequentially. For the full year, GAAP operating income was $4.53 billion and non-GAAP operating income was $6.80 billion.
Other Income & Expense and Income Tax
GAAP other income and expense, or OI&E, includes interest earned on cash and investments, interest expense on corporate bonds, and other gains and losses. Non-GAAP OI&E excludes the portion of interest expense from the amortization of the debt discount and the gains or losses from certain investments.
GAAP OI&E for the fourth quarter was an expense of $37 million, compared with an income of $26 million a year earlier and an expense of $50 million in the prior quarter. Non-GAAP OI&E for the fourth quarter was an expense of $45 million, compared with an income of $26 million a year earlier and an expense of $45 million in the prior quarter. The year-on-year decreases primarily reflect higher interest expense due to our $5 billion note issuance in March 2020 and a decrease in interest income due to lower rates. The sequential increase for GAAP OI&E reflects gains from private company investments. For the full year, GAAP OI&E was an expense of $123 million and non-GAAP OI&E was an expense of $120 million.
GAAP effective tax rate for the fourth quarter was 0.9 percent, reflecting favorable jurisdictional mix of revenue, the U.S. research tax credit, and excess tax benefits related to stock-based compensation value increase. GAAP effective tax rate for the year was 1.7 percent, reflecting favorable jurisdictional mix of revenue, excess tax benefits related to stock-based compensation value increase, and the U.S. research tax credit. The non-GAAP effective tax rate for the fourth quarter was 4.3 percent and for the year was 6.1 percent.
Net Income and EPS
GAAP net income for the fourth quarter was a record $1.46 billion and for the full year was a record $4.33 billion. GAAP earnings per diluted share for the fourth quarter were $2.31, up 51 percent from a year earlier and up 9 percent sequentially. Full-year GAAP earnings per diluted share were $6.90, up 53 percent from a year ago.
Non-GAAP net income for the fourth quarter was a record $1.96 billion and for the full year was a record $6.28 billion. Non-GAAP earnings per diluted share for the fourth quarter were $3.10, up 64 percent from a year earlier and up 7 percent sequentially. Full-year non-GAAP earnings per diluted share were $10.00, up 73 percent from a year ago.
Balance Sheet and Cash Flow
Cash, cash equivalents and marketable securities at the end of the fourth quarter were $11.56 billion, up from $10.90 billion a year earlier and up from $10.14 billion in the prior quarter. The year-on-year increase primarily reflects the issuance of the $5 billion of notes in March 2020 and cash flow generation, partially offset by acquisitions. The sequential increase reflects growth in free cash flow.
Accounts receivable at the end of the quarter was $2.43 billion compared with $1.66 billion a year earlier and $2.55 billion in the prior quarter. DSO at quarter-end was 48 days, down from 49 days both a year earlier and in the prior quarter.
Inventory at the end of the quarter was $1.83 billion, up from $979 million a year earlier and up from $1.49 billion in the prior quarter. Outstanding inventory purchase obligations at the end of the quarter were $2.54 billion, up from $1.16 billion a year earlier and down from $2.57 billion in the prior quarter. DSI at quarter-end was 97 days, up from 82 days a year earlier and up from 77 days in the prior quarter, with the increase to support revenue growth.
Cash flow from operating activities in the fourth quarter was a record $2.07 billion, up from $1.46 billion a year earlier and up from $1.28 billion in the prior quarter. Full-year cash flow from operating activities was a record $5.82 billion, up from $4.76 billion a year earlier. The year-on-year increases primarily reflect higher revenue and the inclusion of Mellanox. The prior quarter includes an Arm prepaid royalty payment of $467 million. The sequential increase also reflects higher revenue and improved collections on better shipment linearity, partially offset by increased purchases of inventory to support revenue growth.
Free cash flow was $1.77 billion in the fourth quarter, up from $1.32 billion a year earlier and $806 million in the previous quarter.
Depreciation and amortization expense was $287 million for the fourth quarter and $1.10 billion for the full year, including amortization of intangible assets related to the Mellanox acquisition. Capital expenditures including principal payments on property and equipment were $300 million for the fourth quarter and $1.14 billion for the full year.
We paid quarterly cash dividends of $99 million in the fourth quarter and $395 million in fiscal 2021.
First Quarter of Fiscal 2022 Outlook
Our outlook for the first quarter of fiscal 2022 is as follows:
•Revenue is expected to be $5.30 billion, plus or minus 2 percent.
•GAAP and non-GAAP gross margins are expected to be 63.8 percent and 66.0 percent, respectively, plus or minus 50 basis points.
•GAAP and non-GAAP operating expenses are expected to be approximately $1.67 billion and $1.20 billion, respectively.
•GAAP and non-GAAP other income and expense are both expected to be an expense of approximately $50 million.
•GAAP and non-GAAP tax rates are both expected to be 10 percent, plus or minus 1 percent, excluding any discrete items. GAAP discrete items include excess tax benefits or deficiencies related to stock-based compensation, which are expected to generate variability on a quarter-by-quarter basis.
•Capital expenditures are expected to be approximately $300 million to $325 million including principal payments on property and equipment.
___________________________
For further information, contact:
| Simona Jankowski | Robert Sherbin |
|---|---|
| Investor Relations | Corporate Communications |
| NVIDIA Corporation | NVIDIA Corporation |
| sjankowski@nvidia.com | rsherbin@nvidia.com |
Non-GAAP Measures
To supplement NVIDIA’s condensed consolidated financial statements 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 income from operations, non-GAAP other income (expense), net, 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 expense, acquisition-related and other costs, IP-related costs, 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. Free cash flow is calculated as GAAP net cash provided by operating activities less both purchases of property and equipment and intangible assets and principal payments on 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 the company’s non-GAAP measures may be different from non-GAAP measures used by other companies.
Certain statements in this CFO Commentary including, but not limited to, statements as to: the impact of COVID-19; the Arm acquisition and when it is expected to close; our tax benefits and rates; our financial outlook for the first quarter of fiscal 2022; our expected tax rates for the first quarter of fiscal 2022; our expectation to generate variability from excess tax benefits or deficiencies; and our expected capital expenditures for the first quarter of fiscal 2022 are forward-looking statements that are subject to risks and uncertainties that could cause results to be materially different than expectations. Important factors that could cause actual results to differ materially include: global economic conditions; our reliance on third parties to manufacture, assemble, package and test our products; the impact of technological development and competition; development of new products and technologies or enhancements to our existing product and technologies; market acceptance of our products or our partners’ products; design, manufacturing or software defects; changes in consumer preferences or demands; changes in industry standards and interfaces; unexpected loss of performance of our products or technologies when integrated into systems; as well as other factors detailed from time to time in the most recent reports NVIDIA files with the Securities and Exchange Commission, or SEC, including, but not limited to, its annual report on Form 10-K and quarterly reports on Form 10-Q. Copies of reports filed with the SEC are posted on the company’s website and are available from NVIDIA without charge. These forward-looking statements are not guarantees of future performance and speak only as of the date hereof, and, except as required by law, NVIDIA disclaims any obligation to update these forward-looking statements to reflect future events or circumstances.
#
© 2021 NVIDIA Corporation. All rights reserved. NVIDIA, the NVIDIA logo, GeForce RTX and Mellanox are trademarks and/or registered trademarks of NVIDIA Corporation in the U.S. and/or other countries. Other company and product names may be trademarks of the respective companies with which they are associated. Features, pricing, availability, and specifications are subject to change without notice.
| NVIDIA CORPORATION | ||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES | ||||||||||||||||
| (In millions, except per share data) | ||||||||||||||||
| (Unaudited) | ||||||||||||||||
| Three Months Ended | Twelve Months Ended | |||||||||||||||
| January 31, | October 25, | January 26, | January 31, | January 26, | ||||||||||||
| 2021 | 2020 | 2020 | 2021 | 2020 | ||||||||||||
| GAAP gross profit | $ | 3,157 | $ | 2,960 | $ | 2,015 | $ | 10,396 | $ | 6,768 | ||||||
| GAAP gross margin | 63.1 | % | 62.6 | % | 64.9 | % | 62.3 | % | 62.0 | % | ||||||
| Acquisition-related and other costs (B) | 92 | 86 | — | 425 | — | |||||||||||
| Stock-based compensation expense (A) | 26 | 28 | 12 | 88 | 39 | |||||||||||
| IP-related costs | 1 | 21 | 3 | 38 | 14 | |||||||||||
| Non-GAAP gross profit | $ | 3,276 | $ | 3,095 | $ | 2,030 | $ | 10,947 | $ | 6,821 | ||||||
| Non-GAAP gross margin | 65.5 | % | 65.5 | % | 65.4 | % | 65.6 | % | 62.5 | % | ||||||
| GAAP operating expenses | $ | 1,650 | $ | 1,562 | $ | 1,025 | $ | 5,864 | $ | 3,922 | ||||||
| Stock-based compensation expense (A) | (391) | (355) | (208) | (1,309) | (805) | |||||||||||
| Acquisition-related and other costs (B) | (72) | (106) | (7) | (411) | (31) | |||||||||||
| Non-GAAP operating expenses | $ | 1,187 | $ | 1,101 | $ | 810 | $ | 4,144 | $ | 3,086 | ||||||
| GAAP income from operations | $ | 1,507 | $ | 1,398 | $ | 990 | $ | 4,532 | $ | 2,846 | ||||||
| Total impact of non-GAAP adjustments to income from operations | 582 | 595 | 230 | 2,271 | 889 | |||||||||||
| Non-GAAP income from operations | $ | 2,089 | $ | 1,993 | $ | 1,220 | $ | 6,803 | $ | 3,735 | ||||||
| GAAP other income (expense), net | $ | (37) | $ | (50) | $ | 26 | $ | (123) | $ | 124 | ||||||
| Losses (Gains) from non-affiliated investments | (9) | 4 | — | — | 1 | |||||||||||
| Interest expense related to amortization of debt discount | 1 | 1 | — | 3 | 2 | |||||||||||
| Non-GAAP other income (expense), net | $ | (45) | $ | (45) | $ | 26 | $ | (120) | $ | 127 | ||||||
| GAAP net income | $ | 1,457 | $ | 1,336 | $ | 950 | $ | 4,332 | $ | 2,796 | ||||||
| Total pre-tax impact of non-GAAP adjustments | 574 | 600 | 230 | 2,274 | 890 | |||||||||||
| Income tax impact of non-GAAP adjustments (C) | (74) | (102) | (8) | (329) | (106) | |||||||||||
| Non-GAAP net income | $ | 1,957 | $ | 1,834 | $ | 1,172 | $ | 6,277 | $ | 3,580 | ||||||
| Three Months Ended | Twelve Months Ended | |||||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | |||||
| January 31, | October 25, | January 26, | January 31, | January 26, | ||||||||||||
| 2021 | 2020 | 2020 | 2021 | 2020 | ||||||||||||
| Diluted net income per share | ||||||||||||||||
| GAAP | $ | 2.31 | $ | 2.12 | $ | 1.53 | $ | 6.90 | $ | 4.52 | ||||||
| Non-GAAP | $ | 3.10 | $ | 2.91 | $ | 1.89 | $ | 10.00 | $ | 5.79 | ||||||
| Weighted average shares used in diluted net income per share computation | 631 | 630 | 621 | 628 | 618 | |||||||||||
| GAAP net cash provided by operating activities | $ | 2,067 | $ | 1,279 | $ | 1,465 | $ | 5,822 | $ | 4,761 | ||||||
| Purchases related to property and equipment and intangible assets | (283) | (473) | (144) | (1,128) | (489) | |||||||||||
| Principal payments on property and equipment | (17) | — | — | (17) | — | |||||||||||
| Free cash flow | $ | 1,767 | $ | 806 | $ | 1,321 | $ | 4,677 | $ | 4,272 | ||||||
| (A) Stock-based compensation consists of the following: | ||||||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | |||||
| Three Months Ended | Twelve Months Ended | |||||||||||||||
| January 31, | October 25, | January 26, | January 31, | January 26, | ||||||||||||
| 2021 | 2020 | 2020 | 2021 | 2020 | ||||||||||||
| Cost of revenue | $ | 26 | $ | 28 | $ | 12 | $ | 88 | $ | 39 | ||||||
| Research and development | $ | 266 | $ | 232 | $ | 140 | $ | 860 | $ | 540 | ||||||
| Sales, general and administrative | $ | 125 | $ | 123 | $ | 68 | $ | 449 | $ | 265 | ||||||
| (B) 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 | Twelve Months Ended | |||||||||||||||
| January 31, | October 25, | January 26, | January 31, | January 26, | ||||||||||||
| 2021 | 2020 | 2020 | 2021 | 2020 | ||||||||||||
| Cost of revenue | $ | 92 | $ | 86 | $ | — | $ | 425 | $ | — | ||||||
| Research and development | $ | 2 | $ | 2 | $ | 1 | $ | 9 | $ | 6 | ||||||
| Sales, general and administrative | $ | 70 | $ | 104 | $ | 6 | $ | 402 | $ | 25 | ||||||
| (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). | ||||||||||||||||
| NVIDIA CORPORATION | ||||||||||||||||
| --- | --- | --- | --- | |||||||||||||
| RECONCILIATION OF GAAP TO NON-GAAP OUTLOOK | ||||||||||||||||
| Q1 FY2022 Outlook | ||||||||||||||||
| ( in millions) | ||||||||||||||||
| GAAP gross margin | 63.8 | % | ||||||||||||||
| Impact of stock-based compensation expense, acquisition-related costs, and other costs | 2.2 | % | ||||||||||||||
| Non-GAAP gross margin | 66.0 | % | ||||||||||||||
| GAAP operating expenses | ||||||||||||||||
| Stock-based compensation expense, acquisition-related costs, and other costs | (470) | |||||||||||||||
| Non-GAAP operating expenses |
All values are in US Dollars.