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): November 16, 2022
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 classTrading Symbol(s)Name of each exchange on which registeredCommon Stock, $0.001 par value per shareNVDAThe 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 November 16, 2022, NVIDIA Corporation, or the Company, issued a press release announcing its results for the quarter ended October 30, 2022. 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 ended October 30, 2022, 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, datedNovember 16, 2022, entitled "NVIDIA Announces Financial Results forThirdQuarter Fiscal 2023" |
| 99.2 | CFO Commentary onThirdQuarter Fiscal 2023 Results |
| 104 | The cover page of this Current Report on Form 8-K, formatted in inline XBRL (included as Exhibit 101) |
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: November 16, 2022 | By: /s/ Colette M. Kress |
| Colette M. Kress | |
| Executive Vice President and Chief Financial Officer |
Document
FOR IMMEDIATE RELEASE:
NVIDIA Announces Financial Results for Third Quarter Fiscal 2023
•Data Center revenue of $3.83 billion, up 31% from a year ago
•Quarterly return to shareholders of $3.75 billion
SANTA CLARA, Calif.-Nov. 16, 2022- NVIDIA (NASDAQ: NVDA) today reported revenue for the third quarter ended October 30, 2022, of $5.93 billion, down 17% from a year ago and down 12% from the previous quarter.
GAAP earnings per diluted share for the quarter were $0.27, down 72% from a year ago and up 4% from the previous quarter. Non-GAAP earnings per diluted share were $0.58, down 50% from a year ago and up 14% from the previous quarter.
“We are quickly adapting to the macro environment, correcting inventory levels and paving the way for new products,” said Jensen Huang, founder and CEO of NVIDIA.
“The ramp of our new platforms ― Ada Lovelace RTX graphics, Hopper AI computing, BlueField and Quantum networking, Orin for autonomous vehicles and robotics, and Omniverse ― is off to a great start and forms the foundation of our next phase of growth.
“NVIDIA’s pioneering work in accelerated computing is more vital than ever. Limited by physics, general purpose computing has slowed to a crawl, just as AI demands more computing. Accelerated computing lets companies achieve orders-of-magnitude increases in productivity while saving money and the environment,” he said.
During the third quarter of fiscal 2023, NVIDIA returned to shareholders $3.75 billion in share repurchases and cash dividends, bringing the return in the first three quarters to $9.29 billion. As of October 30, 2022, the company had $8.28 billion remaining under its share repurchase authorization through December 2023.
NVIDIA will pay its next quarterly cash dividend of $0.04 per share on December 22, 2022, to all shareholders of record on December 1, 2022.
Q3 Fiscal 2023 Summary
| GAAP | |||||
|---|---|---|---|---|---|
| ($ in millions, except earnings per share) | Q3 FY23 | Q2 FY23 | Q3 FY22 | Q/Q | Y/Y |
| Revenue | 5,931 | 6,704 | 7,103 | Down 12% | Down 17% |
| Gross margin | 53.6 | 43.5 | 65.2 | Up 10.1 pts | Down 11.6 pts |
| Operating expenses | 2,576 | 2,416 | 1,960 | Up 7% | Up 31% |
| Operating income | 601 | 499 | 2,671 | Up 20% | Down 77% |
| Net income | 680 | 656 | 2,464 | Up 4% | Down 72% |
| Diluted earnings per share | 0.27 | 0.26 | 0.97 | Up 4% | Down 72% |
All values are in US Dollars.
| Non-GAAP | |||||
|---|---|---|---|---|---|
| ($ in millions, except earnings per share) | Q3 FY23 | Q2 FY23 | Q3 FY22 | Q/Q | Y/Y |
| Revenue | 5,931 | 6,704 | 7,103 | Down 12% | Down 17% |
| Gross margin | 56.1 | 45.9 | 67.0 | Up 10.2 pts | Down 10.9 pts |
| Operating expenses | 1,793 | 1,749 | 1,375 | Up 3% | Up 30% |
| Operating income | 1,536 | 1,325 | 3,386 | Up 16% | Down 55% |
| Net income | 1,456 | 1,292 | 2,973 | Up 13% | Down 51% |
| Diluted earnings per share | 0.58 | 0.51 | 1.17 | Up 14% | Down 50% |
All values are in US Dollars.
Outlook
NVIDIA’s outlook for the fourth quarter of fiscal 2023 is as follows:
•Revenue is expected to be $6.00 billion, plus or minus 2%.
•GAAP and non-GAAP gross margins are expected to be 63.2% and 66.0%, respectively, plus or minus 50 basis points.
•GAAP and non-GAAP operating expenses are expected to be approximately $2.56 billion and $1.78 billion, respectively.
•GAAP and non-GAAP other income and expense are expected to be an income of approximately $40 million, excluding gains and losses from non-affiliated investments.
•GAAP and non-GAAP tax rates are expected to be 9.0%, plus or minus 1%, excluding any discrete items.
Highlights
NVIDIA achieved progress since its previous earnings announcement in these areas:
Data Center
•Third-quarter revenue was $3.83 billion, up 31% from a year ago and up 1% from the previous quarter.
•Began shipping the NVIDIA® H100 Tensor Core GPU based on the new NVIDIA Hopper™ architecture, with first systems available now.
•Announced at the SC22 supercomputing conference that NVIDIA H100 and Quantum-2 systems are being broadly adopted; that NVIDIA Omniverse™ connects to leading scientific computing visualization software; and that NVIDIA powers 90% of the new systems in the latest TOP500 list of the world’s fastest supercomputers, including the H100-powered system deployed at the Flatiron Institute, in the U.S, which topped the Green500 list of the most-efficient systems.
•Announced a multi-year collaboration with Microsoft to help enterprises train, deploy and scale AI, including state-of-the-art models, through Microsoft Azure, which is deploying tens of thousands of A100 and H100 GPUs.
•Announced a multi-year partnership with Oracle to bring NVIDIA’s full accelerated computing stack to Oracle Cloud Infrastructure, which is deploying tens of thousands more NVIDIA GPUs, including A100 and H100 accelerators.
•Announced a partnership with Nuance Communications to bring AI-based diagnostic tools to clinical radiologists.
•Announced that Rescale is integrating NVIDIA AI Enterprise software into its HPC-as-a-service offering.
•Announced two new large language model cloud AI services — NVIDIA NeMo™ LLM and NVIDIA BioNeMo™ LLM — enabling developers to easily adapt LLMs and deploy customized AI applications for content generation, text summarization, protein structure and biomolecular property predictions, and more.
•Announced that NVIDIA H100 Tensor Core GPUs set records in both AI inference and AI training on all workloads in their first appearances on the MLPerf AI benchmarks.
•Unveiled the second generation of NVIDIA OVX™, powered by the Ada Lovelace GPU architecture and enhanced networking technology, enabling the creation of 3D worlds with groundbreaking real-time graphics, AI and digital-twin simulation capabilities.
•Announced a new data center solution delivering zero-trust security optimized for VMware vSphere 8 combining Dell PowerEdge servers with NVIDIA BlueField® DPUs, NVIDIA GPUs and NVIDIA AI Enterprise software.
Gaming
•Third-quarter revenue was $1.57 billion, down 51% from a year ago and down 23% from the previous quarter.
•Launched GeForce RTX™ 4090, the first Ada Lovelace architecture GPU for gamers and creators, which quickly sold out in many locations. Sales began today of the RTX 4080.
•Introduced NVIDIA DLSS 3, an AI-powered performance multiplier for a new era of NVIDIA RTX™ neural rendering. More than 240 DLSS games and applications are now available, and 35 have announced support for DLSS 3, including Marvel’s Spider-Man Remastered, Cyberpunk 2077 and Microsoft Flight Simulator.
•Shipped 37 new RTX games and apps, pushing up the total available to more than 360.
•Expanded the GeForce NOW™ library with 85+ games, bringing the total available games to 1,400+.
Professional Visualization
•Third-quarter revenue was $200 million, down 65% from a year ago and down 60% from the previous quarter.
•Introduced NVIDIA Omniverse™ Cloud, the company’s first software- and infrastructure-as-a-service offering, with a comprehensive suite of cloud services for artists, developers and enterprise teams to access metaverse applications.
Automotive and Embedded
•Third-quarter revenue was $251 million, up 86% from a year ago and up 14% from the previous quarter.
•Introduced NVIDIA DRIVE Thor™, the company’s 2,000 TFLOPS next-generation centralized computer for safe and secure autonomous vehicles, with Geely-owned ZEEKR integrating it into electric vehicles in 2025.
•Marked the launch of the all-electric Volvo EX90, powered by NVIDIA DRIVE Orin and Xavier™, and Polestar 3, the brand’s first SUV, which runs on the NVIDIA DRIVE™ platform.
•Announced that Hozon Auto’s Neta brand will build future electric vehicles on the NVIDIA DRIVE Orin™ platform, enabling automated driving and intelligent features.
•Announced new DRIVE IX ecosystem partners that are building on the company’s open AI cockpit software stack to deliver interactive features for vehicles.
•Launched Jetson Orin Nano™ system-on-modules that deliver up to 80x the performance over the prior generation for entry-level edge AI and robotics.
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 third quarter fiscal 2023 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 fourth quarter and fiscal 2023.
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 acquisition termination costs, stock-based compensation expense, acquisition-related and other costs, contributions, IP-related costs, legal settlement costs, restructuring costs, gains and losses from non-affiliated investments, interest expense related to amortization of debt discount, the associated tax impact of these items where applicable and domestication tax benefit. 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
Since its founding in 1993, NVIDIA (NASDAQ: NVDA) has been a pioneer in accelerated computing. The company’s invention of the GPU in 1999 sparked the growth of the PC gaming market, redefined computer graphics, ignited the era of modern AI and is fueling the creation of the metaverse. NVIDIA is now a full-stack computing company with data-center-scale offerings that are reshaping industry. 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 quickly adapting to the macro environment, correcting inventory levels and paving the way for new products; the ramp of NVIDIA’s new platforms forming the foundation of NVIDIA’s next phase of growth; NVIDIA’s pioneering work in accelerated computing being more vital than ever; AI demanding more computing; accelerated computing letting companies achieve orders-of-magnitude increases in productivity while saving money and the environment; NVIDIA’s next quarterly cash dividend; NVIDIA’s financial outlook for the fourth quarter of fiscal 2023; NVIDIA’s expected tax rates for the fourth quarter of fiscal 2023; the benefits, impact, performance, and availabilities of our products and technologies; NVIDIA H100 and Quantum-2 systems being broadly adopted; the multi-year collaboration with Microsoft to help enterprises train, deploy and scale AI, including state-of-the-art models; the multi-year partnership with Oracle to bring NVIDIA’s full accelerated computing stack to Oracle Cloud Infrastructure; the partnership with Nuance Communications to bring AI-based diagnostic tools to clinical radiologists; Rescale integrating NVIDIA AI Enterprise into its HPC-as-a-service offering; NVIDIA NeMo LLM and NVIDIA BioNeMo LLM enabling developers to easily adapt LLMs and deploy customized AI applications for content generation, text summarization, protein structure, biomolecular property predictions, and more; the second generation of NVIDIA OVX enabling the creation of 3D worlds with groundbreaking real-time graphics, AI and digital-twin simulation capabilities; the new data center solution delivering zero-trust security optimized for VMware vSphere 8 combining Dell PowerEdge servers with NVIDIA BlueField DPUs, NVIDIA GPUs and NVIDIA AI Enterprise software; NVIDIA Omniverse Cloud providing a comprehensive suite of cloud services for artists, developers and enterprise teams to access metaverse applications; ZEEKR integrating NVIDIA DRIVE Thor into electric vehicles in 2025; Hozon Auto’s Neta brand building future electric vehicles on the NVIDIA DRIVE Orin platform, enabling automated driving and intelligent features; new DRIVE IX ecosystem partners building on the company’s open AI cockpit software stack to deliver interactive features for vehicles; and the Jetson Orin Nano system-on-modules delivering up to 80x the performance over the prior generation for entry-level edge AI and robotics 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.
© 2022 NVIDIA Corporation. All rights reserved. NVIDIA, the NVIDIA logo, GeForce, GeForce NOW, GeForce RTX, Jetson Orin Nano, NVIDIA BioNeMo, NVIDIA BlueField, NVIDIA DRIVE, NVIDIA DRIVE Orin, NVIDIA DRIVE Thor, NVIDIA Hopper, NVIDIA NeMo, NVIDIA RTX, NVIDIA OVX and NVIDIA Omniverse 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 | Nine Months Ended | |||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| October 30, | October 31, | October 30, | October 31, | |||||||||||||
| 2022 | 2021 | 2022 | 2021 | |||||||||||||
| Revenue | $ | 5,931 | $ | 7,103 | $ | 20,923 | $ | 19,271 | ||||||||
| Cost of revenue | 2,754 | 2,472 | 9,400 | 6,795 | ||||||||||||
| Gross profit | 3,177 | 4,631 | 11,523 | 12,476 | ||||||||||||
| Operating expenses | ||||||||||||||||
| Research and development | 1,945 | 1,403 | 5,387 | 3,802 | ||||||||||||
| Sales, general and administrative | 631 | 557 | 1,815 | 1,603 | ||||||||||||
| Acquisition termination cost | — | — | 1,353 | — | ||||||||||||
| Total operating expenses | 2,576 | 1,960 | 8,555 | 5,405 | ||||||||||||
| Income from operations | 601 | 2,671 | 2,968 | 7,071 | ||||||||||||
| Interest income | 88 | 7 | 152 | 20 | ||||||||||||
| Interest expense | (65) | (62) | (198) | (175) | ||||||||||||
| Other, net | (11) | 22 | (29) | 160 | ||||||||||||
| Other income (expense), net | 12 | (33) | (75) | 5 | ||||||||||||
| Income before income tax | 613 | 2,638 | 2,893 | 7,076 | ||||||||||||
| Income tax expense (benefit) | (67) | 174 | (61) | 327 | ||||||||||||
| Net income | $ | 680 | $ | 2,464 | $ | 2,954 | $ | 6,749 | ||||||||
| Net income per share: | ||||||||||||||||
| Basic | $ | 0.27 | $ | 0.99 | $ | 1.18 | $ | 2.71 | ||||||||
| Diluted | $ | 0.27 | $ | 0.97 | $ | 1.17 | $ | 2.67 | ||||||||
| Weighted average shares used in per share computation: | ||||||||||||||||
| Basic | 2,483 | 2,499 | 2,495 | 2,493 | ||||||||||||
| Diluted | 2,499 | 2,538 | 2,517 | 2,532 | ||||||||||||
| NVIDIA CORPORATION | ||||||||||||||||
| --- | --- | --- | --- | --- | --- | --- | ||||||||||
| CONDENSED CONSOLIDATED BALANCE SHEETS | ||||||||||||||||
| (In millions) | ||||||||||||||||
| (Unaudited) | ||||||||||||||||
| October 30, | January 30, | |||||||||||||||
| 2022 | 2022 | |||||||||||||||
| ASSETS | ||||||||||||||||
| Current assets: | ||||||||||||||||
| Cash, cash equivalents and marketable securities | $ | 13,143 | $ | 21,208 | ||||||||||||
| Accounts receivable, net | 4,908 | 4,650 | ||||||||||||||
| Inventories | 4,454 | 2,605 | ||||||||||||||
| Prepaid expenses and other current assets | 718 | 366 | ||||||||||||||
| Total current assets | 23,223 | 28,829 | ||||||||||||||
| Property and equipment, net | 3,774 | 2,778 | ||||||||||||||
| Operating lease assets | 927 | 829 | ||||||||||||||
| Goodwill | 4,372 | 4,349 | ||||||||||||||
| Intangible assets, net | 1,850 | 2,339 | ||||||||||||||
| Deferred income tax assets | 2,762 | 1,222 | ||||||||||||||
| Other assets | 3,580 | 3,841 | ||||||||||||||
| Total assets | $ | 40,488 | $ | 44,187 | ||||||||||||
| LIABILITIES AND SHAREHOLDERS' EQUITY | ||||||||||||||||
| Current liabilities: | ||||||||||||||||
| Accounts payable | $ | 1,491 | $ | 1,783 | ||||||||||||
| Accrued and other current liabilities | 4,115 | 2,552 | ||||||||||||||
| Short-term debt | 1,249 | — | ||||||||||||||
| Total current liabilities | 6,855 | 4,335 | ||||||||||||||
| Long-term debt | 9,701 | 10,946 | ||||||||||||||
| Long-term operating lease liabilities | 798 | 741 | ||||||||||||||
| Other long-term liabilities | 1,785 | 1,553 | ||||||||||||||
| Total liabilities | 19,139 | 17,575 | ||||||||||||||
| Shareholders' equity | 21,349 | 26,612 | ||||||||||||||
| Total liabilities and shareholders' equity | $ | 40,488 | $ | 44,187 | ||||||||||||
| NVIDIA CORPORATION | ||||||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | ||||||||
| CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||||||||||||
| (In millions) | ||||||||||||||||
| (Unaudited) | ||||||||||||||||
| Three Months Ended | Nine Months Ended | |||||||||||||||
| October 30, | October 31, | October 30, | October 31, | |||||||||||||
| 2022 | 2021 | 2022 | 2021 | |||||||||||||
| Cash flows from operating activities: | ||||||||||||||||
| Net income | $ | 680 | $ | 2,464 | $ | 2,954 | $ | 6,749 | ||||||||
| Adjustments to reconcile net income to net cash | ||||||||||||||||
| provided by operating activities: | ||||||||||||||||
| Stock-based compensation expense | 745 | 559 | 1,971 | 1,453 | ||||||||||||
| Depreciation and amortization | 406 | 298 | 1,118 | 865 | ||||||||||||
| Losses (gains) on investments in non affiliates, net | 11 | (21) | 35 | (152) | ||||||||||||
| Deferred income taxes | (532) | (20) | (1,517) | (182) | ||||||||||||
| Acquisition termination cost | — | — | 1,353 | — | ||||||||||||
| Other | (45) | 10 | (27) | 25 | ||||||||||||
| Changes in operating assets and liabilities, net of acquisitions: | ||||||||||||||||
| Accounts receivable | 410 | (366) | (258) | (1,523) | ||||||||||||
| Inventories | (563) | (118) | (1,848) | (400) | ||||||||||||
| Prepaid expenses and other assets | 247 | (1,575) | (1,307) | (1,557) | ||||||||||||
| Accounts payable | (917) | 141 | (358) | 385 | ||||||||||||
| Accrued and other current liabilities | (92) | (8) | 1,175 | 159 | ||||||||||||
| Other long-term liabilities | 42 | 155 | 102 | 253 | ||||||||||||
| Net cash provided by operating activities | 392 | 1,519 | 3,393 | 6,075 | ||||||||||||
| Cash flows from investing activities: | ||||||||||||||||
| Proceeds from maturities of marketable securities | 5,809 | 2,545 | 16,792 | 7,780 | ||||||||||||
| Proceeds from sales of marketable securities | 75 | 211 | 1,806 | 916 | ||||||||||||
| Purchases of marketable securities | (2,188) | (6,752) | (9,764) | (16,020) | ||||||||||||
| Purchases related to property and equipment and intangible assets | (530) | (221) | (1,324) | (703) | ||||||||||||
| Acquisitions, net of cash acquired | — | (203) | (49) | (203) | ||||||||||||
| Investments and other, net | (18) | (18) | (83) | (14) | ||||||||||||
| Net cash provided by (used in) investing activities | 3,148 | (4,438) | 7,378 | (8,244) | ||||||||||||
| Cash flows from financing activities: | ||||||||||||||||
| Proceeds related to employee stock plans | 143 | 149 | 349 | 277 | ||||||||||||
| Payments related to repurchases of common stock | (3,485) | — | (8,826) | — | ||||||||||||
| Payments related to tax on restricted stock units | (294) | (440) | (1,131) | (1,282) | ||||||||||||
| Dividends paid | (100) | (100) | (300) | (298) | ||||||||||||
| Principal payments on property and equipment and intangible assets | (18) | (22) | (54) | (62) | ||||||||||||
| Issuance of debt, net of issuance costs | — | (8) | — | 4,977 | ||||||||||||
| Repayment of debt | — | (1,000) | — | (1,000) | ||||||||||||
| Other | 1 | — | 1 | (2) | ||||||||||||
| Net cash provided by (used in) financing activities | (3,753) | (1,421) | (9,961) | 2,610 | ||||||||||||
| Change in cash and cash equivalents | (213) | (4,340) | 810 | 441 | ||||||||||||
| Cash and cash equivalents at beginning of period | 3,013 | 5,628 | 1,990 | 847 | ||||||||||||
| Cash and cash equivalents at end of period | $ | 2,800 | $ | 1,288 | $ | 2,800 | $ | 1,288 | ||||||||
| NVIDIA CORPORATION | ||||||||||||||||
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| 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 | ||||||
| Three Months Ended | Nine Months Ended | |||||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | |||||
| October 30, | July 31, | October 31, | October 30, | October 31, | ||||||||||||
| 2022 | 2022 | 2021 | 2022 | 2021 | ||||||||||||
| 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). | ||||||||||||||||
| NVIDIA CORPORATION | ||||||||||||||||
| --- | --- | --- | --- | |||||||||||||
| RECONCILIATION OF GAAP TO NON-GAAP OUTLOOK | ||||||||||||||||
| Q4 FY2023 Outlook | ||||||||||||||||
| ( in millions) | ||||||||||||||||
| GAAP gross margin | 63.2 | % | ||||||||||||||
| Impact of stock-based compensation expense, acquisition-related costs, and other costs | 2.8 | % | ||||||||||||||
| Non-GAAP gross margin | 66.0 | % | ||||||||||||||
| GAAP operating expenses | ||||||||||||||||
| Stock-based compensation expense, acquisition-related costs, and other costs | (780) | |||||||||||||||
| Non-GAAP operating expenses |
All values are in US Dollars.
Document
CFO Commentary on Third Quarter Fiscal 2023 Results
Q3 Fiscal 2023 Summary
| GAAP | |||||
|---|---|---|---|---|---|
| ($ in millions, except earnings per share) | Q3 FY23 | Q2 FY23 | Q3 FY22 | Q/Q | Y/Y |
| Revenue | 5,931 | 6,704 | 7,103 | Down 12% | Down 17% |
| Gross margin | 53.6 | 43.5 | 65.2 | Up 10.1 pts | Down 11.6 pts |
| Operating expenses | 2,576 | 2,416 | 1,960 | Up 7% | Up 31% |
| Operating income | 601 | 499 | 2,671 | Up 20% | Down 77% |
| Net income | 680 | 656 | 2,464 | Up 4% | Down 72% |
| Diluted earnings per share | 0.27 | 0.26 | 0.97 | Up 4% | Down 72% |
All values are in US Dollars.
| Non-GAAP | |||||
|---|---|---|---|---|---|
| ($ in millions, except earnings per share) | Q3 FY23 | Q2 FY23 | Q3 FY22 | Q/Q | Y/Y |
| Revenue | 5,931 | 6,704 | 7,103 | Down 12% | Down 17% |
| Gross margin | 56.1 | 45.9 | 67.0 | Up 10.2 pts | Down 10.9 pts |
| Operating expenses | 1,793 | 1,749 | 1,375 | Up 3% | Up 30% |
| Operating income | 1,536 | 1,325 | 3,386 | Up 16% | Down 55% |
| Net income | 1,456 | 1,292 | 2,973 | Up 13% | Down 51% |
| Diluted earnings per share | 0.58 | 0.51 | 1.17 | Up 14% | Down 50% |
All values are in US Dollars.
| Revenue by Reportable Segments | ||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| ($ in millions) | Q3 FY23 | Q2 FY23 | Q3 FY22 | Q/Q | Y/Y | |||||||
| Compute & Networking | $3,816 | $3,907 | $3,011 | Down 2% | Up 27% | |||||||
| Graphics | 2,115 | 2,797 | 4,092 | Down 24% | Down 48% | |||||||
| Total | $5,931 | $6,704 | $7,103 | Down 12% | Down 17% | Revenue by Market Platform | ||||||
| --- | --- | --- | --- | --- | --- | |||||||
| ($ in millions) | Q3 FY23 | Q2 FY23 | Q3 FY22 | Q/Q | Y/Y | |||||||
| Data Center | $3,833 | $3,806 | $2,936 | Up 1% | Up 31% | |||||||
| Gaming | 1,574 | 2,042 | 3,221 | Down 23% | Down 51% | |||||||
| Professional Visualization | 200 | 496 | 577 | Down 60% | Down 65% | |||||||
| Automotive | 251 | 220 | 135 | Up 14% | Up 86% | |||||||
| OEM and Other | 73 | 140 | 234 | Down 48% | Down 69% | |||||||
| Total | $5,931 | $6,704 | $7,103 | Down 12% | Down 17% |
We specialize in markets where our computing platforms can provide tremendous acceleration for applications. These platforms incorporate processors, interconnects, software, algorithms, systems, and services to deliver unique value. Our platforms address four large markets where our expertise is critical: Data Center, Gaming, Professional Visualization, and Automotive.
Revenue
Revenue was $5.93 billion, down 17% from a year ago and down 12% sequentially.
Data Center revenue was up 31% from a year ago and up 1% sequentially. Year-on-year growth was broad-based across U.S. cloud service providers, consumer internet companies and other vertical industries. Sequential growth was impacted by softness in China. We started shipping our flagship H100 data center GPU based on the new Hopper-architecture.
During the third quarter, the U.S. government announced new restrictions on exports of our A100 and H100-based products to China, and any product destined for certain systems or entities in China. These restrictions impacted third-quarter revenue, with the decline largely offset by sales of alternative products into China.
Gaming revenue was down 51% from a year ago and down 23% sequentially, reflecting lower sell-in to partners to help align channel inventory levels with current demand expectations as macro-economic conditions and COVID lockdowns in China continue to weigh on consumer demand. The year-on-year decrease was driven by lower GPU sales for both desktops and laptops; the sequential decline was primarily driven by lower GPU sales for laptops. We believe the recent transition in verifying Ethereum cryptocurrency transactions from proof-of-work to proof-of-stake has reduced the utility of GPUs for cryptocurrency mining. This may have contributed to increased aftermarket sales of our GPUs in certain markets, potentially impacting demand for some of our products, particularly in the low-end.
Professional Visualization revenue was down 65% from a year ago and down 60% sequentially, reflecting lower sell-in to partners to help align channel inventory levels with current demand expectations.
Automotive revenue was up 86% from a year ago and up 14% sequentially, primarily driven by revenue from self-driving solutions.
OEM and Other revenue was down 69% from a year ago and down 48% sequentially. The sequential decline was driven by lower Jetson and notebook OEM sales. Cryptocurrency Mining Processor (CMP) revenue was nominal in the current and prior quarter, and $105 million in the third quarter of fiscal 2022.
Gross Margin
| Reconciliation of GAAP to Non-GAAP Gross Margin | |||
|---|---|---|---|
| ($ in millions) | Q3 FY23 | Q2 FY23 | Q3 FY22 |
| GAAP gross profit | 3,177 | 2,915 | 4,631 |
| GAAP gross margin | 53.6 | 43.5 | 65.2 |
| Acquisition-related and other costs | 120 | 121 | 86 |
| Stock-based compensation expense | 32 | 38 | 44 |
| Non-GAAP gross profit | 3,329 | 3,074 | 4,761 |
| Non-GAAP gross margin | 56.1 | 45.9 | 67.0 |
All values are in US Dollars.
GAAP gross margin for the third quarter was down 11.6% and non-GAAP gross margin was down 10.9% from a year earlier, primarily due to a $702 million inventory charge, largely relating to lower Data Center demand in China, partially offset by a warranty benefit of approximately $70 million.
Sequentially, GAAP gross margin was up 10.1% and non-GAAP gross margin was up 10.2%, primarily due to lower inventory charges compared with the second quarter.
The $702 million inventory charge consists of approximately $354 million for inventory on hand and approximately $348 million for inventory purchase obligations in excess of our current demand projections.
Expenses
| Reconciliation of GAAP to Non-GAAP Operating Expenses | |||
|---|---|---|---|
| ($ in millions) | Q3 FY23 | Q2 FY23 | Q3 FY22 |
| GAAP operating expenses | $2,576 | $2,416 | $1,960 |
| Stock-based compensation expense | (713) | (611) | (515) |
| Acquisition-related and other costs | (54) | (54) | (70) |
| Restructuring costs | (16) | — | — |
| Contributions | — | (2) | — |
| Non-GAAP operating expenses | $1,793 | $1,749 | $1,375 |
GAAP and non-GAAP operating expenses increased primarily due to compensation and data center infrastructure. The year-on-year increase also reflects employee growth.
Other Income & Expense and Income Tax
| GAAP OI&E | ||||||||
|---|---|---|---|---|---|---|---|---|
| ($ in millions) | Q3 FY23 | Q2 FY23 | Q3 FY22 | |||||
| Interest income | $88 | $46 | $7 | |||||
| Interest expense | (65) | (65) | (62) | |||||
| Gains (losses) from non-affiliated investments | (11) | (7) | 20 | |||||
| Other | — | 2 | 2 | |||||
| Total | $12 | ($24) | ($33) | Non-GAAP OI&E | ||||
| --- | --- | --- | --- | |||||
| ($ in millions) | Q3 FY23 | Q2 FY23 | Q3 FY22 | |||||
| Interest income | $88 | $46 | $7 | |||||
| Interest expense | (64) | (64) | (61) | |||||
| Other | — | 2 | 2 | |||||
| Total | $24 | ($16) | ($52) |
GAAP other income and expense (OI&E) includes interest income, interest expense, gains and losses from non-affiliated investments and other. Non-GAAP OI&E excludes the portion of interest expense from the amortization of the debt discount and the gains or losses from non-affiliated investments.
Interest income was $88 million, up from a year ago and sequentially, due to higher interest rates on investments. Net loss from non-affiliated investments was $11 million due to the mark-to-market of publicly traded equity investments and changes in value from our non-affiliated private investments.
GAAP effective tax rate for the third quarter was a benefit of 10.9%, which reflects the foreign derived intangible income deduction, U.S. research tax credit, and excess tax benefits related to stock-based compensation. Non-GAAP effective tax rate was 6.7%.
Balance Sheet and Cash Flow
Cash, cash equivalents and marketable securities were $13.14 billion, down from $19.30 billion a year ago and down from $17.04 billion a quarter ago. The year-on-year and sequential decreases reflect share repurchases and changes in free cash flow.
Accounts receivable was $4.91 billion, compared with $3.95 billion a year ago and $5.32 billion a quarter ago. DSO was 75 days, up from 51 days a year ago and up from 72 days a quarter ago.
Inventory was $4.45 billion, compared with $2.23 billion a year ago and $3.89 billion a quarter ago. Inventory increased sequentially primarily driven by new Data Center and Gaming architecture supply. Outstanding gross inventory purchase and long-term supply obligations were $7.02 billion, up from $6.90 billion a year ago, and down from $9.22 billion a quarter ago. Prepaid supply agreements were $3.14 billion, the same level as a quarter ago. Other non-inventory purchase obligations of $2.75 billion include $1.59 billion of multi-year cloud service agreements. DSI was 147 days, up from 82 days a year ago and up from 93 days a quarter ago.
Cash flow from operating activities was $392 million, down from $1.52 billion a year ago and down from $1.27 billion a quarter ago. The year-on-year decrease reflects lower operating income, timing of supplier payments and inventory deliveries, partially offset by lower supplier prepayments. The sequential decrease reflects timing of supplier and other payments as well as inventory deliveries, partially offset by lower cash tax payments. Free cash flow was an outflow of $156 million compared with inflows of $1.28 billion a year ago and $824 million a quarter ago.
Depreciation and amortization expense was $406 million, including amortization of acquisition-related intangible assets. Capital expenditures including principal payments on property and equipment were $548 million, up from $243 million a year ago and $447 million a quarter ago, primarily driven by equipment to support product bring-up and compute infrastructure for research and development.
During the third quarter of fiscal 2023, we returned $3.75 billion to shareholders in the form of share repurchases and cash dividends, and we returned $9.29 billion in the first nine months of fiscal 2023. As of the end of the third quarter of fiscal 2023, we had $8.28 billion remaining under our share repurchase authorization through December 2023.
Fourth Quarter of Fiscal 2023 Outlook
Outlook for the fourth quarter of fiscal 2023 is as follows:
•Revenue is expected to be $6.00 billion, plus or minus 2%.
•GAAP and non-GAAP gross margins are expected to be 63.2% and 66.0%, respectively, plus or minus 50 basis points.
•GAAP and non-GAAP operating expenses are expected to be approximately $2.56 billion and $1.78 billion, respectively.
•GAAP and non-GAAP other income and expense are expected to be an income of approximately $40 million, excluding gains and losses from non-affiliated investments.
•GAAP and non-GAAP tax rates are expected to be 9.0%, plus or minus 1%, excluding any discrete items.
•Capital expenditures are expected to be approximately $500 million to $550 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 acquisition termination costs, stock-based compensation expense, acquisition-related and other costs, contributions, IP-related costs, legal settlement costs, restructuring costs, gains and losses from non-affiliated investments, interest expense related to amortization of debt discount, the associated tax impact of these items where applicable, and domestication tax benefit. 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: our computing platforms providing tremendous acceleration for applications and delivering unique value; macro-economic conditions and COVID lockdowns in China continuing to weigh on consumer demand; the expected growth of our full-year non-GAAP operating expense; our financial outlook for the fourth quarter of fiscal 2023; our expected tax rates for the fourth quarter of fiscal 2023; and our expected capital expenditures for the fourth quarter of fiscal 2023 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.
#
© 2022 NVIDIA Corporation. All rights reserved. NVIDIA and the NVIDIA logo 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 | 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 | ||||||
| Three Months Ended | Nine Months Ended | |||||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | |||||
| October 30, | July 31, | October 31, | October 30, | October 31, | ||||||||||||
| 2022 | 2022 | 2021 | 2022 | 2021 | ||||||||||||
| 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). | ||||||||||||||||
| NVIDIA CORPORATION | ||||||||||||||||
| --- | --- | --- | --- | |||||||||||||
| RECONCILIATION OF GAAP TO NON-GAAP OUTLOOK | ||||||||||||||||
| Q4 FY2023 Outlook | ||||||||||||||||
| ( in millions) | ||||||||||||||||
| GAAP gross margin | 63.2 | % | ||||||||||||||
| Impact of stock-based compensation expense, acquisition-related costs, and other costs | 2.8 | % | ||||||||||||||
| Non-GAAP gross margin | 66.0 | % | ||||||||||||||
| GAAP operating expenses | ||||||||||||||||
| Stock-based compensation expense, acquisition-related costs, and other costs | (780) | |||||||||||||||
| Non-GAAP operating expenses |
All values are in US Dollars.