Form 8-K NVIDIA CORP For: Feb 08
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 8, 2018
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))
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 o
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. o
Item 2.02 Results of Operations and Financial Condition.
On February 8, 2018, NVIDIA Corporation, or the Company, issued a press release announcing its results for the quarter and fiscal year ended January 28, 2018. 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 28, 2018, 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
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 8, 2018 | By: /s/ Colette M. Kress | |
Colette M. Kress | ||
Executive Vice President and Chief Financial Officer | ||
FOR IMMEDIATE RELEASE:
NVIDIA Announces Financial Results for Fourth Quarter and Fiscal 2018
• | Record quarterly revenue of $2.91 billion, up 34 percent from a year ago |
• | Record full-year revenue of $9.71 billion, up 41 percent from a year ago |
• | Record quarterly GAAP gross margin of 61.9 percent, non-GAAP gross margin of 62.1 percent |
• | Record full-year GAAP EPS of $4.82, up 88 percent from a year ago |
SANTA CLARA, Calif.-Feb. 8, 2018-NVIDIA (NASDAQ: NVDA) today reported record revenue for the fourth quarter ended January 28, 2018, of $2.91 billion, up 34 percent from $2.17 billion a year earlier, and up 10 percent from $2.64 billion in the previous quarter.
GAAP earnings per diluted share for the quarter were a record $1.78, up 80 percent from $0.99 a year ago and up 34 percent from $1.33 in the previous quarter. Non-GAAP earnings per diluted share were $1.72, also a record, up 52 percent from $1.13 a year earlier and up 29 percent from $1.33 in the previous quarter.
For fiscal 2018, revenue was a record $9.71 billion, up 41 percent from $6.91 billion a year earlier. GAAP earnings per diluted share were a record $4.82, up 88 percent from $2.57 a year earlier. Non-GAAP earnings per diluted share were $4.92, also a record, up 61 percent from $3.06 a year earlier.
“We achieved another record quarter, capping an excellent year,” said Jensen Huang, founder and chief executive officer of NVIDIA. “In a powerful sign of our progress, attendees at NVIDIA’s GPU Technology Conferences reached 22,000, up tenfold in five years, as software developers working in AI, self-driving cars, and a broad range of other fields continued to discover the acceleration and money-saving benefits of our GPU computing platform.
“Industries around the world are racing to incorporate AI. Virtually every internet and cloud service provider has embraced our Volta GPUs. Hundreds of transportation companies are using our NVIDIA DRIVE platform. From manufacturing and healthcare to smart cities, innovators are using our platform to invent the future,” he said.
Capital Return
During fiscal 2018, NVIDIA returned $1.25 billion to shareholders through a combination of $909 million in share repurchases and $341 million in quarterly cash dividends.
For fiscal 2019, NVIDIA intends to return $1.25 billion to shareholders through ongoing quarterly cash dividends and share repurchases.
NVIDIA will pay its next quarterly cash dividend of $0.15 per share on March 16, 2018, to all shareholders of record on February 23, 2018.
Q4 Fiscal 2018 Summary
GAAP | |||||
($ in millions except earnings per share) | Q4 FY18 | Q3 FY18 | Q4 FY17 | Q/Q | Y/Y |
Revenue | $2,911 | $2,636 | $2,173 | Up 10% | Up 34% |
Gross margin | 61.9% | 59.5% | 60.0% | Up 240 bps | Up 190 bps |
Operating expenses | $728 | $674 | $570 | Up 8% | Up 28% |
Operating income | $1,073 | $895 | $733 | Up 20% | Up 46% |
Net income | $1,118 | $838 | $655 | Up 33% | Up 71% |
Diluted earnings per share | $1.78 | $1.33 | $0.99 | Up 34% | Up 80% |
Non-GAAP | |||||
($ in millions except earnings per share) | Q4 FY18 | Q3 FY18 | Q4 FY17 | Q/Q | Y/Y |
Revenue | $2,911 | $2,636 | $2,173 | Up 10% | Up 34% |
Gross margin | 62.1% | 59.7% | 60.2% | Up 240 bps | Up 190 bps |
Operating expenses | $607 | $570 | $498 | Up 6% | Up 22% |
Operating income | $1,202 | $1,005 | $809 | Up 20% | Up 49% |
Net income | $1,081 | $833 | $704 | Up 30% | Up 54% |
Diluted earnings per share | $1.72 | $1.33 | $1.13 | Up 29% | Up 52% |
Fiscal 2018 Summary
GAAP | |||||
($ in millions except earnings per share) | FY18 | FY17 | Y/Y | ||
Revenue | $9,714 | $6,910 | Up 41% | ||
Gross margin | 59.9 | % | 58.8 | % | Up 110 bps |
Operating expenses | $2,612 | $2,129 | Up 23% | ||
Operating income | $3,210 | $1,934 | Up 66% | ||
Net income | $3,047 | $1,666 | Up 83% | ||
Diluted earnings per share | $4.82 | $2.57 | Up 88% | ||
Non-GAAP | |||||
($ in millions except earnings per share) | FY18 | FY17 | Y/Y | ||
Revenue | $9,714 | $6,910 | Up 41% | ||
Gross margin | 60.2 | % | 59.2 | % | Up 100 bps |
Operating expenses | $2,227 | $1,867 | Up 19% | ||
Operating income | $3,617 | $2,221 | Up 63% | ||
Net income | $3,085 | $1,851 | Up 67% | ||
Diluted earnings per share | $4.92 | $3.06 | Up 61% | ||
NVIDIA’s outlook for the first quarter of fiscal 2019 is as follows:
• | Revenue is expected to be $2.90 billion, plus or minus two percent. |
• | GAAP and non-GAAP gross margins are expected to be 62.7 percent and 63.0 percent, respectively, plus or minus 50 basis points. |
• | GAAP and non-GAAP operating expenses are expected to be approximately $770 million and $645 million, respectively. |
• | GAAP and non-GAAP other income and expense are both expected to be nominal. |
• | GAAP and non-GAAP tax rates are both expected to be 12 percent, plus or minus one percent, excluding any discrete items. GAAP discrete items include excess tax benefits or deficiencies related to stock-based compensation, which the company expects to generate variability on a quarter by quarter basis. |
Fourth Quarter Fiscal 2018 Highlights
During the fourth quarter, NVIDIA achieved progress in these areas:
Datacenter
• | Announced that NVIDIA Tesla® V100 GPU accelerators are now available through every major computer maker and have been chosen by every major cloud to deliver AI and high performance computing. |
• | Added a record 34 GPU-accelerated systems to the Top500 supercomputer list, bringing the company’s total to 87. |
• | Announced partnerships to further AI in key vertical industries, including initiatives with GE Health and Nuance in medical imaging; Baker Hughes, a GE company, in oil and gas; and Japan’s Komatsu in construction and mining. |
• | Expanded the NVIDIA® GPU Cloud container registry to support scientists using HPC applications, and AI researchers using desktop GPUs. |
Gaming
• | Announced gaming laptops using the Max-Q design, which are 3x faster and 3x thinner than previous-generation gaming laptops. |
• | Introduced BFGDs™, big format gaming displays, providing ultra-low latency PC gaming and integrated streaming on a high-end 65-inch display using NVIDIA G-SYNC™ technology with NVIDIA SHIELD™. |
• | Enhanced GeForce Experience™ with new tools, including NVIDIA Freestyle for customizing gameplay and an updated interface for the NVIDIA Ansel photo mode, as well as new titles including PlayerUnknown’s Battleground and Fortnite that support NVIDIA ShadowPlay™ Highlights for capturing gaming achievements. |
• | Increased its GeForce GPU share among gamers on the Steam online gaming platform to 86 percent. |
• | Introduced two new collector’s edition Star Wars-themed NVIDIA TITAN Xp GPUs, tied to the release of Star Wars: The Last Jedi. |
Automotive
• | Announced and demonstrated NVIDIA DRIVE™ Xavier™, the world’s first autonomous machine processor, with customer availability in the first quarter. |
• | Announced NVIDIA DRIVE, the world’s first functionally safe AI self-driving platform, plus a suite of tools to test and validate neural networks by simulating all kind of driving conditions. |
• | Unveiled partnerships with Uber and Aurora to develop self-driving cars using the open NVIDIA DRIVE AI self-driving platform. |
• | Partnered with ZF and Baidu to create the first production AI autonomous vehicle platform for the China market, with Chery as the first customer. |
• | Partnered with Volkswagen to integrate AI into future VW vehicles using the NVIDIA DRIVE IX intelligent experience platform and create AI cockpits with enhanced convenience and safety features. |
• | Announced NVIDIA is powering the Mercedes-Benz MBUX in-car AI smart cockpit system, going into production next month with the new A-Class. |
• | Announced NVIDIA is partnering with Continental to build AI self-driving vehicle systems, from enhanced Level 2 to Level 5, for production in 2021. |
CFO Commentary
Commentary on the quarter by Colette Kress, NVIDIA’s executive vice president and chief financial officer, is available at http://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 2018 financial results and current financial prospects today at 2 p.m. Pacific time (5 p.m. Eastern time). To listen to the conference call, dial (877) 223-3864 in the United States or (574) 990-1377 internationally, and provide the following conference ID: 6265639. A live webcast (listen-only mode) of the conference call will be accessible at NVIDIA’s investor relations website, http://investor.nvidia.com, and at www.streetevents.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 2019.
Non-GAAP Measures
To supplement NVIDIA’s Condensed Consolidated Statements of Income and Condensed Consolidated Balance Sheets 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), non-GAAP income tax expense, non-GAAP net income, non-GAAP net income, or earnings, per diluted share, non-GAAP diluted shares, 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, legal settlement costs, acquisition-related costs, contributions, restructuring and other charges, gains from non-affiliated investments, interest expense related to amortization of debt discount, debt-related costs, the associated tax impact of these items, where applicable, and the provisional tax benefit from income tax reform. Weighted average shares used in the non-GAAP diluted net income per share computation includes the anti-dilution impact of the company’s Note Hedge. Free cash flow is calculated as GAAP net cash provided by operating activities less purchases of 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 its non-GAAP measures may be different from non-GAAP measures used by other companies.
Keep Current on NVIDIA
Subscribe to the NVIDIA blog, follow us on Facebook, Google+, Twitter, LinkedIn and Instagram, and view NVIDIA videos on YouTube and images on Flickr.
About NVIDIA
NVIDIA’s (NASDAQ: NVDA) invention of the GPU in 1999 sparked the growth of the PC gaming market, redefined modern computer graphics and revolutionized parallel computing. More recently, GPU deep learning ignited modern AI - the next era of computing - with the GPU acting as the brain of computers, robots and self-driving cars that can perceive and understand the world. More information at http://nvidianews.nvidia.com/.
###
For further information, contact:
Simona Jankowski | Robert Sherbin | |
Investor Relations | Corporate Communications | |
NVIDIA Corporation | NVIDIA Corporation | |
(408) 566-6474 | (408) 566-5150 | |
Certain statements in this press release including, but not limited to statements as to: software developers working in AI, self-driving cars and other fields discovering the benefits of NVIDIA’s GPU computing platform; industries racing to incorporate AI; internet and cloud service providers embracing our Volta GPUs; the use of the NVIDIA DRIVE platform by transportation companies; the use of our platform in a variety of fields to invent the future; NVIDIA’s intended capital return for fiscal 2019; NVIDIA’s next quarterly cash dividend; NVIDIA’s financial outlook for the first quarter of fiscal 2019; NVIDIA’s tax rates for the first quarter of fiscal year 2019; the impact and benefits of NVIDIA Tesla V100 GPU accelerators, the expansion of the NVIDIA GPU Cloud container registry, the GeForce Experience and its new tools, NVIDIA DRIVE, partnerships with GE Health, Nuance, Baker Hughes, Komatsu, Uber, Aurora, ZF, Baidu, Volkswagen and Continental; the abilities, benefits and performance of laptops using the Max-Q design and BFGDs; the availability of NVIDIA DRIVE Xavier; and Mercedes-Benz MBUX use of NVIDIA technology and its production schedule 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 reports NVIDIA files with the Securities and Exchange Commission, or SEC, including its Form 10-Q for the fiscal period ended October 29, 2017. 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.
© 2018 NVIDIA Corporation. All rights reserved. NVIDIA, the NVIDIA logo, GeForce, Tesla, BFGD, GeForce Experience, GeForce NOW, NVIDIA Ansel, NVIDIA DRIVE, NVIDIA G-SYNC, NVIDIA Shadow Play, NVIDIA SHIELD and Xavier are trademarks and/or registered trademarks of NVIDIA Corporation in the U.S. and/or other countries. MaxQ® is the registered trademark of Maxim Integrated Products, Inc. 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 28, | January 29, | January 28, | January 29, | ||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
Revenue | $ | 2,911 | $ | 2,173 | $ | 9,714 | $ | 6,910 | |||||||
Cost of revenue | 1,110 | 870 | 3,892 | 2,847 | |||||||||||
Gross profit | 1,801 | 1,303 | 5,822 | 4,063 | |||||||||||
Operating expenses | |||||||||||||||
Research and development | 508 | 394 | 1,797 | 1,466 | |||||||||||
Sales, general and administrative | 220 | 176 | 815 | 663 | |||||||||||
Total operating expenses | 728 | 570 | 2,612 | 2,129 | |||||||||||
Income from operations | 1,073 | 733 | 3,210 | 1,934 | |||||||||||
Interest income | 20 | 17 | 69 | 54 | |||||||||||
Interest expense | (15 | ) | (18 | ) | (61 | ) | (58 | ) | |||||||
Other, net | — | (6 | ) | (22 | ) | (25 | ) | ||||||||
Total other income (expense) | 5 | (7 | ) | (14 | ) | (29 | ) | ||||||||
Income before income tax | 1,078 | 726 | 3,196 | 1,905 | |||||||||||
Income tax expense (benefit) | (40 | ) | 71 | 149 | 239 | ||||||||||
Net income | $ | 1,118 | $ | 655 | $ | 3,047 | $ | 1,666 | |||||||
Net income per share: | |||||||||||||||
Basic | $ | 1.84 | $ | 1.18 | $ | 5.09 | $ | 3.08 | |||||||
Diluted | $ | 1.78 | $ | 0.99 | $ | 4.82 | $ | 2.57 | |||||||
Weighted average shares used in per share computation: | |||||||||||||||
Basic | 606 | 553 | 599 | 541 | |||||||||||
Diluted | 628 | 660 | 632 | 649 | |||||||||||
NVIDIA CORPORATION | |||||||||
CONDENSED CONSOLIDATED BALANCE SHEETS | |||||||||
(In millions) | |||||||||
(Unaudited) | |||||||||
January 28, | January 29, | ||||||||
2018 | 2017 | ||||||||
ASSETS | |||||||||
Current assets: | |||||||||
Cash, cash equivalents and marketable securities | $ | 7,108 | $ | 6,798 | |||||
Accounts receivable, net | 1,265 | 826 | |||||||
Inventories | 796 | 794 | |||||||
Prepaid expenses and other current assets | 86 | 118 | |||||||
Total current assets | 9,255 | 8,536 | |||||||
Property and equipment, net | 997 | 521 | |||||||
Goodwill | 618 | 618 | |||||||
Intangible assets, net | 52 | 104 | |||||||
Other assets | 319 | 62 | |||||||
Total assets | $ | 11,241 | $ | 9,841 | |||||
LIABILITIES, CONVERTIBLE DEBT CONVERSION OBLIGATION AND SHAREHOLDERS' EQUITY | |||||||||
Current liabilities: | |||||||||
Accounts payable | $ | 596 | $ | 485 | |||||
Accrued and other current liabilities | 542 | 507 | |||||||
Convertible short-term debt | 15 | 796 | |||||||
Total current liabilities | 1,153 | 1,788 | |||||||
Long-term debt | 1,985 | 1,983 | |||||||
Other long-term liabilities | 632 | 277 | |||||||
Total liabilities | 3,770 | 4,048 | |||||||
Convertible debt conversion obligation | — | 31 | |||||||
Shareholders' equity | 7,471 | 5,762 | |||||||
Total liabilities, convertible debt conversion obligation and shareholders' equity | $ | 11,241 | $ | 9,841 | |||||
NVIDIA CORPORATION | ||||||||||||||||||||
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES | ||||||||||||||||||||
(In millions, except per share data) | ||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||
Three Months Ended | Twelve Months Ended | |||||||||||||||||||
January 28, | October 29, | January 29, | January 28, | January 29, | ||||||||||||||||
2018 | 2017 | 2017 | 2018 | 2017 | ||||||||||||||||
GAAP gross profit | $ | 1,801 | $ | 1,569 | $ | 1,303 | $ | 5,822 | $ | 4,063 | ||||||||||
GAAP gross margin | 61.9 | % | 59.5 | % | 60.0 | % | 59.9 | % | 58.8 | % | ||||||||||
Stock-based compensation expense (A) | 7 | 6 | 4 | 21 | 15 | |||||||||||||||
Legal settlement costs | 1 | — | — | 1 | 10 | |||||||||||||||
Non-GAAP gross profit | $ | 1,809 | $ | 1,575 | $ | 1,307 | $ | 5,844 | $ | 4,088 | ||||||||||
Non-GAAP gross margin | 62.1 | % | 59.7 | % | 60.2 | % | 60.2 | % | 59.2 | % | ||||||||||
GAAP operating expenses | $ | 728 | $ | 674 | $ | 570 | $ | 2,612 | $ | 2,129 | ||||||||||
Stock-based compensation expense (A) | (119 | ) | (101 | ) | (68 | ) | (370 | ) | (233 | ) | ||||||||||
Acquisition-related costs (B) | (2 | ) | (3 | ) | (4 | ) | (13 | ) | (16 | ) | ||||||||||
Contributions | — | — | — | (2 | ) | (4 | ) | |||||||||||||
Legal settlement costs | — | — | — | — | (6 | ) | ||||||||||||||
Restructuring and other charges | — | — | — | — | (3 | ) | ||||||||||||||
Non-GAAP operating expenses | $ | 607 | $ | 570 | $ | 498 | $ | 2,227 | $ | 1,867 | ||||||||||
GAAP income from operations | $ | 1,073 | $ | 895 | $ | 733 | $ | 3,210 | $ | 1,934 | ||||||||||
Total impact of non-GAAP adjustments to income from operations | 129 | 110 | 76 | 407 | 287 | |||||||||||||||
Non-GAAP income from operations | $ | 1,202 | $ | 1,005 | $ | 809 | $ | 3,617 | $ | 2,221 | ||||||||||
GAAP other income (expense) | $ | 5 | $ | 1 | $ | (7 | ) | $ | (14 | ) | $ | (29 | ) | |||||||
Gains from non-affiliated investments | (2 | ) | — | (1 | ) | (2 | ) | (4 | ) | |||||||||||
Debt-related costs (C) | 2 | 1 | 6 | 20 | 21 | |||||||||||||||
Interest expense related to amortization of debt discount | — | — | 4 | 3 | 25 | |||||||||||||||
Non-GAAP other income (expense) | $ | 5 | $ | 2 | $ | 2 | $ | 7 | $ | 13 | ||||||||||
GAAP net income | $ | 1,118 | $ | 838 | $ | 655 | $ | 3,047 | $ | 1,666 | ||||||||||
Total pre-tax impact of non-GAAP adjustments | 129 | 111 | 85 | 428 | 329 | |||||||||||||||
Income tax impact of non-GAAP adjustments (D) | (33 | ) | (116 | ) | (36 | ) | (257 | ) | (144 | ) | ||||||||||
Provisional tax benefit from income tax reform | (133 | ) | — | — | (133 | ) | — | |||||||||||||
Non-GAAP net income | $ | 1,081 | $ | 833 | $ | 704 | $ | 3,085 | $ | 1,851 | ||||||||||
Three Months Ended | Twelve Months Ended | |||||||||||||||||||
January 28, | October 29, | January 29, | January 28, | January 29, | ||||||||||||||||
2018 | 2017 | 2017 | 2018 | 2017 | ||||||||||||||||
Diluted net income per share | ||||||||||||||||||||
GAAP | $ | 1.78 | $ | 1.33 | $ | 0.99 | $ | 4.82 | $ | 2.57 | ||||||||||
Non-GAAP | $ | 1.72 | $ | 1.33 | $ | 1.13 | $ | 4.92 | $ | 3.06 | ||||||||||
Weighted average shares used in diluted net income per share computation | ||||||||||||||||||||
GAAP | 628 | 628 | 660 | 632 | 649 | |||||||||||||||
Anti-dilution impact from note hedge (E) | (1 | ) | (2 | ) | (36 | ) | (5 | ) | (44 | ) | ||||||||||
Non-GAAP | 627 | 626 | 624 | 627 | 605 | |||||||||||||||
GAAP net cash provided by operating activities | $ | 1,358 | $ | 1,157 | $ | 721 | $ | 3,502 | $ | 1,672 | ||||||||||
Purchase of property and equipment and intangible assets | (416 | ) | (69 | ) | (52 | ) | (593 | ) | (176 | ) | ||||||||||
Free cash flow | $ | 942 | $ | 1,088 | $ | 669 | $ | 2,909 | $ | 1,496 | ||||||||||
(A) Stock-based compensation consists of the following: | ||||||||||||||||||||
Three Months Ended | Twelve Months Ended | |||||||||||||||||||
January 28, | October 29, | January 29, | January 28, | January 29, | ||||||||||||||||
2018 | 2017 | 2017 | 2018 | 2017 | ||||||||||||||||
Cost of revenue | $ | 7 | $ | 6 | $ | 4 | $ | 21 | $ | 15 | ||||||||||
Research and development | $ | 73 | $ | 61 | $ | 40 | $ | 219 | $ | 135 | ||||||||||
Sales, general and administrative | $ | 46 | $ | 40 | $ | 27 | $ | 151 | $ | 98 | ||||||||||
(B) Consists of amortization of acquisition-related intangible assets and compensation charges. | ||||||||||||||||||||
(C) Consists of loss on early debt conversions and termination of interest rate swap. | ||||||||||||||||||||
(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). | ||||||||||||||||||||
(E) Represents the number of shares that would be delivered upon conversion of the currently outstanding 1.00% Convertible Senior Notes Due 2018. Under GAAP, shares delivered in hedge transactions are not considered offsetting shares in the fully diluted share calculation until actually delivered. | ||||||||||||||||||||
NVIDIA CORPORATION | |||||
RECONCILIATION OF GAAP TO NON-GAAP OUTLOOK | |||||
Q1 FY2019 Outlook | |||||
GAAP gross margin | 62.7 | % | |||
Impact of stock-based compensation expense | 0.3 | % | |||
Non-GAAP gross margin | 63.0 | % | |||
Q1 FY2019 Outlook | |||||
(In millions) | |||||
GAAP operating expenses | $ | 770 | |||
Stock-based compensation expense, acquisition-related costs, and other costs | (125 | ) | |||
Non-GAAP operating expenses | $ | 645 | |||
CFO Commentary on Fourth Quarter and Fiscal 2018 Results
Q4 Fiscal 2018 Summary
GAAP | |||||
($ in millions except earnings per share) | Q4 FY18 | Q3 FY18 | Q4 FY17 | Q/Q | Y/Y |
Revenue | $2,911 | $2,636 | $2,173 | Up 10% | Up 34% |
Gross margin | 61.9% | 59.5% | 60.0% | Up 240 bps | Up 190 bps |
Operating expenses | $728 | $674 | $570 | Up 8% | Up 28% |
Operating income | $1,073 | $895 | $733 | Up 20% | Up 46% |
Net income | $1,118 | $838 | $655 | Up 33% | Up 71% |
Diluted earnings per share | $1.78 | $1.33 | $0.99 | Up 34% | Up 80% |
Non-GAAP | |||||
($ in millions except earnings per share) | Q4 FY18 | Q3 FY18 | Q4 FY17 | Q/Q | Y/Y |
Revenue | $2,911 | $2,636 | $2,173 | Up 10% | Up 34% |
Gross margin | 62.1% | 59.7% | 60.2% | Up 240 bps | Up 190 bps |
Operating expenses | $607 | $570 | $498 | Up 6% | Up 22% |
Operating income | $1,202 | $1,005 | $809 | Up 20% | Up 49% |
Net income | $1,081 | $833 | $704 | Up 30% | Up 54% |
Diluted earnings per share | $1.72 | $1.33 | $1.13 | Up 29% | Up 52% |
Revenue by Reportable Segments | |||||
($ in millions) | Q4 FY18 | Q3 FY18 | Q4 FY17 | Q/Q | Y/Y |
GPU Business | $2,461 | $2,217 | $1,850 | Up 11% | Up 33% |
Tegra Processor Business | 450 | 419 | 257 | Up 7% | Up 75% |
Other | -- | -- | 66 | -- | Down 100% |
Total | $2,911 | $2,636 | $2,173 | Up 10% | Up 34% |
Revenue by Market Platform | |||||
($ in millions) | Q4 FY18 | Q3 FY18 | Q4 FY17 | Q/Q | Y/Y |
Gaming | $1,739 | $1,561 | $1,348 | Up 11% | Up 29% |
Professional Visualization | 254 | 239 | 225 | Up 6% | Up 13% |
Datacenter | 606 | 501 | 296 | Up 21% | Up 105% |
Automotive | 132 | 144 | 128 | Down 8% | Up 3% |
OEM and IP | 180 | 191 | 176 | Down 6% | Up 2% |
Total | $2,911 | $2,636 | $2,173 | Up 10% | Up 34% |
Fiscal 2018 Summary
GAAP | |||||
($ in millions except earnings per share) | FY18 | FY17 | Y/Y | ||
Revenue | $9,714 | $6,910 | Up 41% | ||
Gross margin | 59.9 | % | 58.8 | % | Up 110 bps |
Operating expenses | $2,612 | $2,129 | Up 23% | ||
Operating income | $3,210 | $1,934 | Up 66% | ||
Net income | $3,047 | $1,666 | Up 83% | ||
Diluted earnings per share | $4.82 | $2.57 | Up 88% | ||
Non-GAAP | |||||
($ in millions except earnings per share) | FY18 | FY17 | Y/Y | ||
Revenue | $9,714 | $6,910 | Up 41% | ||
Gross margin | 60.2 | % | 59.2 | % | Up 100 bps |
Operating expenses | $2,227 | $1,867 | Up 19% | ||
Operating income | $3,617 | $2,221 | Up 63% | ||
Net income | $3,085 | $1,851 | Up 67% | ||
Diluted earnings per share | $4.92 | $3.06 | Up 61% | ||
Revenue by Reportable Segments | |||
($ in millions) | FY18 | FY17 | Y/Y |
GPU | $8,137 | $5,822 | Up 40% |
Tegra Processor | 1,534 | 824 | Up 86% |
Other | 43 | 264 | Down 84% |
Total | $9,714 | $6,910 | Up 41% |
Revenue by Market Platform | |||
($ in millions) | FY18 | FY17 | Y/Y |
Gaming | $5,513 | $4,060 | Up 36% |
Professional Visualization | 934 | 835 | Up 12% |
Datacenter | 1,932 | 830 | Up 133% |
Automotive | 558 | 487 | Up 15% |
OEM and IP | 777 | 698 | Up 11% |
Total | $9,714 | $6,910 | Up 41% |
Revenue
Fourth quarter revenue increased 34 percent year over year and 10 percent sequentially to a record $2.91 billion. Growth was driven by GPUs for gaming, datacenter, and professional visualization, as well as by Tegra® processors.
GPU business revenue was $2.46 billion, up 33 percent from a year earlier and up 11 percent sequentially, led by growth in gaming and datacenter. Strong growth across our Pascal™-based GeForce® gaming GPUs was driven by new games, holiday-season demand, iCafe upgrades, eSports and cryptocurrency mining. Revenue for datacenter, including Tesla®, NVIDIA GRID™ and NVIDIA DGX™, was a record $606 million, up 105 percent year on year and up 21 percent sequentially, led by strong sales of our Volta architecture, including V100 GPU accelerators, new DGX systems, and design wins in high performance computing. Professional visualization revenue grew 13 percent year over year and 6 percent sequentially to a record $254 million, led by ultra-high-end and high-end desktop workstations, as well as unique form factors and emerging opportunities, including AI, deep learning, VR and rendering.
Tegra Processor business revenue, which includes gaming development platforms and services, was $450 million, up 75 percent from a year ago and up 7 percent sequentially. Tegra Processor business revenue includes SOC modules for the Nintendo Switch gaming console and development services. Also included is automotive revenue of $132 million, which was up 3 percent from a year earlier and down 8 percent sequentially, incorporating infotainment modules, production DRIVE PX platforms, and development agreements for self-driving cars.
Revenue from our patent license agreement with Intel concluded in the first quarter of fiscal 2018.
Fiscal 2018 revenue grew 41 percent to a record $9.71 billion, reflecting broad growth and records in each of our market platforms -- gaming, professional visualization, datacenter, and automotive. GPU business revenue was $8.14 billion, up 40 percent from a year earlier, and Tegra business revenue was $1.53 billion, up 86 percent from a year ago.
Gross Margin
GAAP gross margin for the fourth quarter was a record 61.9 percent and non-GAAP gross margin was 62.1 percent. For fiscal 2018, GAAP gross margin was also a record 59.9 percent and non-GAAP gross margin was 60.2 percent. These reflect a favorable shift in mix, the growth of our GeForce gaming GPUs, and the growth of our GPU computing platform for cloud, deep learning, AI, and graphics virtualization.
Expenses
GAAP operating expenses for the fourth quarter were $728 million, including $121 million in stock-based compensation and other charges. Non-GAAP operating expenses were $607 million, up 22 percent from a year earlier and up 6 percent sequentially. For fiscal 2018, GAAP operating expenses were $2.61 billion, including $385 million in stock-based compensation and other charges. Non-GAAP operating expenses were $2.23 billion, up 19 percent from fiscal 2017. These reflect growth in employees and related costs, as well as investments in growth initiatives, including gaming, AI, and autonomous driving.
Operating Income
GAAP operating income for the fourth quarter was a record $1.07 billion, up 46 percent from a year earlier and 20 percent sequentially. Non-GAAP operating income was $1.20 billion in the fourth quarter, up 49 percent from a year earlier and 20 percent sequentially. For fiscal 2018, GAAP operating income was a record $3.21 billion and non-GAAP operating income was $3.62 billion.
Other Income & Expense and Income Tax
GAAP | |||||
($ in millions) | Q4 FY18 | Q3 FY18 | Q4 FY17 | FY18 | FY17 |
Interest income | $20 | $17 | $17 | $69 | $54 |
Interest expense | (15) | (15) | (18) | (61) | (58) |
Other income (expense) | -- | (1) | (6) | (22) | (25) |
Total | $5 | $1 | $(7) | $(14) | $(29) |
Non-GAAP | |||||
($ in millions) | Q4 FY18 | Q3 FY18 | Q4 FY17 | FY18 | FY17 |
Interest income | $20 | $17 | $17 | $69 | $54 |
Interest expense | (15) | (15) | (14) | (58) | (33) |
Other income (expense) | -- | -- | (1) | (4) | (8) |
Total | $5 | $2 | $2 | $7 | $13 |
Other income and expense, or OI&E, includes interest earned on cash and investments, interest expense associated with corporate bonds and remaining convertible debt, and other gains and losses. GAAP OI&E includes interest expense primarily associated with corporate bonds and remaining convertible debt, interest income from our investment portfolio, charges from early conversions of convertible debt, and termination of interest rate swap. Non-GAAP OI&E excludes the charges from early conversions of convertible debt, termination of interest rate swap, the portion of interest expense from the amortization of the debt discount and the gains or losses from sales of certain investments.
We recorded a U.S. tax reform provisional net tax benefit of $133 million, or $0.21 per diluted share, associated with the one-time transition tax on our historical foreign earnings and the adjustment of deferred tax balances to the lower corporate tax rate. Our fourth quarter GAAP effective tax rate was a benefit of 3.7 percent, which includes the provisional net tax benefit, excess tax benefits related to stock-based compensation, and other U.S. tax reform benefits. Overall, the lower-than-expected tax rate contributed $0.36 to GAAP earnings per diluted share.
Our fourth quarter non-GAAP effective tax rate was 10.5 percent, which excludes the U.S. tax reform provisional net tax benefit and the excess tax benefits related to stock-based compensation. The lower-than-expected tax rate contributed $0.13 to non-GAAP earnings per diluted share.
For fiscal 2018, our GAAP effective tax rate was 4.7 percent and our non-GAAP effective tax rate was 14.9 percent.
Net Income and EPS
Record fourth quarter GAAP net income was $1.12 billion and earnings per diluted share were $1.78, up 71 percent and 80 percent, respectively, from a year earlier. Non-GAAP net income was $1.08 billion and earnings per diluted share were $1.72, up 54 percent and 52 percent, respectively, from a year earlier, fueled by strong revenue growth and improved gross and operating margins.
For fiscal 2018, GAAP net income was a record $3.05 billion and earnings per diluted share were $4.82, up 83 percent and 88 percent, respectively, from a year ago. Non-GAAP net income was $3.09 billion and earnings per diluted share were $4.92, up 67 percent and 61 percent, respectively, from a year ago.
Weighted Average Shares
Weighted average shares used in the GAAP and non-GAAP diluted EPS calculations for the fourth quarter and fiscal 2018 were as follows:
Weighted Average Shares | ||||
(in millions) | Q4 FY18 GAAP | Q4 FY18 Non-GAAP | FY18 GAAP | FY18 Non-GAAP |
Basic shares | 606 | 606 | 599 | 599 |
Dilutive impact from: | ||||
Equity awards | 21 | 21 | 24 | 24 |
Warrants | -- | -- | 4 | 4 |
Convertible notes | 1 | -- | 5 | -- |
Diluted shares | 628 | 627 | 632 | 627 |
Capital Return
Capital Return | ||||||
(in millions) | FY13 | FY14 | FY15 | FY16 | FY17 | FY18 |
Dividends | $47 | $181 | $186 | $213 | $261 | $341 |
Share repurchases: | ||||||
$ | $100 | $887 | $814 | $587 | $739 | $909 |
Shares | 8 | 62 | 44 | 25 | 15 | 6 |
For fiscal 2018, we returned $1.25 billion to shareholders through a combination of $909 million in share repurchases and $341 million in quarterly cash dividends.
Since the restart of our capital return program in the fourth quarter of fiscal 2013, we have returned $5.27 billion to shareholders. This represents approximately 70 percent of our cumulative free cash flow for fiscal 2013 through fiscal 2018.
For fiscal 2019, we intend to return $1.25 billion to shareholders through ongoing quarterly cash dividends and share repurchases.
Balance Sheet and Cash Flow
Cash, cash equivalents and marketable securities at the end of the fourth quarter were $7.11 billion, compared with $6.32 billion at the end of the prior quarter. The sequential increase in cash was primarily related to the increase in operating income.
Accounts receivable at the end of the quarter was $1.27 billion compared with $1.17 billion in the prior quarter and $826 million a year earlier. DSO at quarter-end was 40 days, the same as the prior quarter and up 5 days from a year earlier.
Inventory at the end of the quarter was $796 million, down from $857 million in the prior quarter and up from $794 million a year earlier. DSI at quarter-end was 65 days, down from 73 days in the prior quarter and down from 83 days a year earlier.
Cash flow from operating activities was a record $1.36 billion in the fourth quarter, up from $1.16 billion in the prior quarter and up from $721 million a year earlier. Cash flow from operating activities in fiscal 2018 was a record $3.50 billion, up from $1.67 billion a year ago. These increases were primarily due to growth in net income and changes in working capital.
Free cash flow was $942 million in the fourth quarter, compared with $1.09 billion in the previous quarter and $669 million a year earlier. For fiscal 2018, free cash flow was $2.91 billion, up from $1.50 billion a year ago.
Depreciation and amortization expense amounted to $53 million for the fourth quarter and $199 million for fiscal 2018. Capital expenditures were $416 million for the fourth quarter and $593 million for the fiscal year, inclusive of $335 million associated with the purchase during the fourth quarter of the previously-financed Santa Clara campus building.
First Quarter of Fiscal 2019 Outlook
Our outlook for the first quarter of fiscal 2019 is as follows:
• | Revenue is expected to be $2.90 billion, plus or minus two percent. |
• | GAAP and non-GAAP gross margins are expected to be 62.7 percent and 63.0 percent, respectively, plus or minus 50 basis points. |
• | GAAP and non-GAAP operating expenses are expected to be approximately $770 million and $645 million, respectively. |
• | GAAP and non-GAAP other income and expense are both expected to be nominal. |
• | GAAP and non-GAAP tax rates are both expected to be 12.0 percent, plus or minus one percent, excluding any discrete items. GAAP discrete items include excess tax benefits or deficiencies related to stock-based compensation, which we expect to generate variability on a quarter by quarter basis. |
• | Capital expenditures are expected to be approximately $100 million to $120 million. |
______________
For further information, contact:
Simona Jankowski | Robert Sherbin | |
Investor Relations | Corporate Communications | |
NVIDIA Corporation | NVIDIA Corporation | |
(408) 566-6474 | (408) 566-5150 | |
Non-GAAP Measures
To supplement NVIDIA’s Condensed Consolidated Statements of Income and Condensed Consolidated Balance Sheets 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), non-GAAP income tax expense, non-GAAP net income, non-GAAP net income, or earnings, per diluted share, non-GAAP diluted shares, 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, legal settlement costs, acquisition-related costs, contributions, restructuring and other charges, gains from non-affiliated investments, interest expense related to amortization of debt discount, debt-related costs, the associated tax impact of these items, where applicable, and the provisional tax benefit from income tax reform. Weighted average shares used in the non-GAAP diluted net income per share computation includes the anti-dilution impact of our Note Hedge. Free cash flow is calculated as GAAP net cash provided by operating activities less purchases of 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 our 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 expectation to generate variability from excess tax benefits or deficiencies related to stock-based compensation; our intended fiscal 2019 capital return; our financial outlook for the first quarter of fiscal 2019; our expected tax rates for the first quarter of fiscal 2019; and our expected capital expenditures for the first quarter of fiscal 2019 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 reports NVIDIA files with the Securities and Exchange Commission, or SEC, including its Form 10-Q for the fiscal period ended October 29, 2017. 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.
# # #
© 2018 NVIDIA Corporation. All rights reserved. NVIDIA, the NVIDIA logo, GeForce, Tegra, Tesla, NVIDIA DGX, NVIDIA DRIVE, NVIDIA GRID and Pascal 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 28, | October 29, | January 29, | January 28, | January 29, | ||||||||||||||||
2018 | 2017 | 2017 | 2018 | 2017 | ||||||||||||||||
GAAP gross profit | $ | 1,801 | $ | 1,569 | $ | 1,303 | $ | 5,822 | $ | 4,063 | ||||||||||
GAAP gross margin | 61.9 | % | 59.5 | % | 60.0 | % | 59.9 | % | 58.8 | % | ||||||||||
Stock-based compensation expense (A) | 7 | 6 | 4 | 21 | 15 | |||||||||||||||
Legal settlement costs | 1 | — | — | 1 | 10 | |||||||||||||||
Non-GAAP gross profit | $ | 1,809 | $ | 1,575 | $ | 1,307 | $ | 5,844 | $ | 4,088 | ||||||||||
Non-GAAP gross margin | 62.1 | % | 59.7 | % | 60.2 | % | 60.2 | % | 59.2 | % | ||||||||||
GAAP operating expenses | $ | 728 | $ | 674 | $ | 570 | $ | 2,612 | $ | 2,129 | ||||||||||
Stock-based compensation expense (A) | (119 | ) | (101 | ) | (68 | ) | (370 | ) | (233 | ) | ||||||||||
Acquisition-related costs (B) | (2 | ) | (3 | ) | (4 | ) | (13 | ) | (16 | ) | ||||||||||
Contributions | — | — | — | (2 | ) | (4 | ) | |||||||||||||
Legal settlement costs | — | — | — | — | (6 | ) | ||||||||||||||
Restructuring and other charges | — | — | — | — | (3 | ) | ||||||||||||||
Non-GAAP operating expenses | $ | 607 | $ | 570 | $ | 498 | $ | 2,227 | $ | 1,867 | ||||||||||
GAAP income from operations | $ | 1,073 | $ | 895 | $ | 733 | $ | 3,210 | $ | 1,934 | ||||||||||
Total impact of non-GAAP adjustments to income from operations | 129 | 110 | 76 | 407 | 287 | |||||||||||||||
Non-GAAP income from operations | $ | 1,202 | $ | 1,005 | $ | 809 | $ | 3,617 | $ | 2,221 | ||||||||||
GAAP other income (expense) | $ | 5 | $ | 1 | $ | (7 | ) | $ | (14 | ) | $ | (29 | ) | |||||||
Gains from non-affiliated investments | (2 | ) | — | (1 | ) | (2 | ) | (4 | ) | |||||||||||
Debt-related costs (C) | 2 | 1 | 6 | 20 | 21 | |||||||||||||||
Interest expense related to amortization of debt discount | — | — | 4 | 3 | 25 | |||||||||||||||
Non-GAAP other income (expense) | $ | 5 | $ | 2 | $ | 2 | $ | 7 | $ | 13 | ||||||||||
GAAP net income | $ | 1,118 | $ | 838 | $ | 655 | $ | 3,047 | $ | 1,666 | ||||||||||
Total pre-tax impact of non-GAAP adjustments | 129 | 111 | 85 | 428 | 329 | |||||||||||||||
Income tax impact of non-GAAP adjustments (D) | (33 | ) | (116 | ) | (36 | ) | (257 | ) | (144 | ) | ||||||||||
Provisional tax benefit from income tax reform | (133 | ) | — | — | (133 | ) | — | |||||||||||||
Non-GAAP net income | $ | 1,081 | $ | 833 | $ | 704 | $ | 3,085 | $ | 1,851 | ||||||||||
Three Months Ended | Twelve Months Ended | |||||||||||||||||||
January 28, | October 29, | January 29, | January 28, | January 29, | ||||||||||||||||
2018 | 2017 | 2017 | 2018 | 2017 | ||||||||||||||||
Diluted net income per share | ||||||||||||||||||||
GAAP | $ | 1.78 | $ | 1.33 | $ | 0.99 | $ | 4.82 | $ | 2.57 | ||||||||||
Non-GAAP | $ | 1.72 | $ | 1.33 | $ | 1.13 | $ | 4.92 | $ | 3.06 | ||||||||||
Weighted average shares used in diluted net income per share computation | ||||||||||||||||||||
GAAP | 628 | 628 | 660 | 632 | 649 | |||||||||||||||
Anti-dilution impact from note hedge (E) | (1 | ) | (2 | ) | (36 | ) | (5 | ) | (44 | ) | ||||||||||
Non-GAAP | 627 | 626 | 624 | 627 | 605 | |||||||||||||||
GAAP net cash provided by operating activities | $ | 1,358 | $ | 1,157 | $ | 721 | $ | 3,502 | $ | 1,672 | ||||||||||
Purchase of property and equipment and intangible assets | (416 | ) | (69 | ) | (52 | ) | (593 | ) | (176 | ) | ||||||||||
Free cash flow | $ | 942 | $ | 1,088 | $ | 669 | $ | 2,909 | $ | 1,496 | ||||||||||
(A) Stock-based compensation consists of the following: | ||||||||||||||||||||
Three Months Ended | Twelve Months Ended | |||||||||||||||||||
January 28, | October 29, | January 29, | January 28, | January 29, | ||||||||||||||||
2018 | 2017 | 2017 | 2018 | 2017 | ||||||||||||||||
Cost of revenue | $ | 7 | $ | 6 | $ | 4 | $ | 21 | $ | 15 | ||||||||||
Research and development | $ | 73 | $ | 61 | $ | 40 | $ | 219 | $ | 135 | ||||||||||
Sales, general and administrative | $ | 46 | $ | 40 | $ | 27 | $ | 151 | $ | 98 | ||||||||||
(B) Consists of amortization of acquisition-related intangible assets and compensation charges. | ||||||||||||||||||||
(C) Consists of loss on early debt conversions and termination of interest rate swap. | ||||||||||||||||||||
(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). | ||||||||||||||||||||
(E) Represents the number of shares that would be delivered upon conversion of the currently outstanding 1.00% Convertible Senior Notes Due 2018. Under GAAP, shares delivered in hedge transactions are not considered offsetting shares in the fully diluted share calculation until actually delivered. | ||||||||||||||||||||
NVIDIA CORPORATION | |||||
RECONCILIATION OF GAAP TO NON-GAAP OUTLOOK | |||||
Q1 FY2019 Outlook | |||||
GAAP gross margin | 62.7 | % | |||
Impact of stock-based compensation expense | 0.3 | % | |||
Non-GAAP gross margin | 63.0 | % | |||
Q1 FY2019 Outlook | |||||
(In millions) | |||||
GAAP operating expenses | $ | 770 | |||
Stock-based compensation expense, acquisition-related costs, and other costs | (125 | ) | |||
Non-GAAP operating expenses | $ | 645 | |||