----------------------------------------------------------------------------
                                    GAAP                                    
----------------------------------------------------------------------------
($ in millions except earnings per share)            FY16    FY15     Y/Y   
----------------------------------------------------------------------------
Revenue                                             $5,010  $4,682     up 7%
----------------------------------------------------------------------------
Gross margin                                         56.1%   55.5% up 60 bps
----------------------------------------------------------------------------
Operating expenses                                  $2,064  $1,840    up 12%
----------------------------------------------------------------------------
Operating income                                      $747    $759   down 2%
----------------------------------------------------------------------------
Net income                                            $614    $631   down 3%
----------------------------------------------------------------------------
Diluted earnings per share                           $1.08   $1.12   down 4%
----------------------------------------------------------------------------
                                                                            
                                                                            
----------------------------------------------------------------------------
                                  Non-GAAP                                  
----------------------------------------------------------------------------
($ in millions except earnings per share)           FY16    FY15      Y/Y   
----------------------------------------------------------------------------
Revenue                                            $5,010  $4,682      up 7%
----------------------------------------------------------------------------
Gross margin                                        56.8%   55.8% up 100 bps
----------------------------------------------------------------------------
Operating expenses                                 $1,721  $1,657      up 4%
----------------------------------------------------------------------------
Operating income                                   $1,125    $954     up 18%
----------------------------------------------------------------------------
Net income                                           $929    $801     up 16%
----------------------------------------------------------------------------
Diluted earnings per share                          $1.67   $1.42     up 18%
----------------------------------------------------------------------------
                                                                            

NVIDIA's outlook for the first quarter of fiscal 2017 is as follows:

• Revenue is expected to be $1.26 billion, plus or minus two percent.
  
  
• GAAP and non-GAAP gross margins are expected to be 57.2 percent and 57.5 percent, respectively, plus or minus 50 basis points.
  
  
• GAAP operating expenses are expected to be approximately $500 million. Non-GAAP operating expenses are expected to be approximately $445 million.
  
  
• GAAP and non-GAAP tax rates for the first quarter of fiscal 2017 are both expected to be 19 percent, plus or minus one percent.
  
  
• Capital expenditures are expected to be approximately $35 million to $45 million.
  
  

Fourth Quarter Fiscal 2016 Highlights
During the fourth quarter, NVIDIA achieved progress in each of its platforms.

Gaming:

• Announced the GeForce® GTX VR Ready program -- in conjunction with PC companies, notebook makers and add-in card providers - to help users discover systems that will provide great virtual reality experiences.
  
  
• Released NVIDIA GameWorks™ VR, a software development kit for developers of VR software and headsets for gaming.
  
  

Professional Visualization:

• Rolled out NVIDIA® Iray® plugins for Autodesk Maya and Autodesk 3ds Max, which enable users of these applications to create designs incorporating real-world lights and materials faster and more easily than before.
• Released NVIDIA DesignWorks™ VR, a software development kit for developers of VR software and headsets for enterprise.

Datacenter:

• Introduced an end-to-end hyperscale datacenter deep learning platform -- consisting of two accelerators, the NVIDIA Tesla® M40 and NVIDIA Tesla M4 -- that lets web-services companies accelerate deep learning workloads.
  
  
• Revealed new breakthroughs from leading web-services groups using NVIDIA GPUs:
  
  • Facebook is using the NVIDIA Tesla accelerated computing platform to power Big Sur, its next-generation computing system for machine learning applications.
    
  • Alibaba's AliCloud cloud computing business is working with NVIDIA to promote China's first GPU-accelerated, cloud-based, high performance computing platform.
    
  • IBM is adding support for NVIDIA GPU accelerators to its Watson cognitive computing platform.
    
  • Google is open-sourcing its TensorFlow deep-learning framework, which can be accelerated on GPUs.
    
  • Microsoft's Computational Network Toolkit was integrated with Azure GPU Lab, enabling neural nets for speech recognition that are up to 10x faster than their predecessors.