[ Back ]   [ More News ]   [ Home ]
NVIDIA Announces Financial Results for Third Quarter Fiscal 2017

SANTA CLARA, CA -- (Marketwired) -- Nov 10, 2016 -- NVIDIA (NASDAQ: NVDA)

NVIDIA (NASDAQ: NVDA) today reported revenue for the third quarter ended October 30, 2016, of $2.00 billion, up 54 percent from $1.30 billion a year earlier, and up 40 percent from $1.43 billion in the previous quarter.

GAAP earnings per diluted share for the quarter were $0.83, up 89 percent from $0.44 a year ago and up 102 percent from $0.41 in the previous quarter. Non-GAAP earnings per diluted share were $0.94, up 104 percent from $0.46 a year earlier and up 77 percent from $0.53 in the previous quarter.

"We had a breakout quarter - record revenue, record margins and record earnings were driven by strength across all product lines," said Jen-Hsun Huang, founder and chief executive officer, NVIDIA. "Our new Pascal GPUs are fully ramped and enjoying great success in gaming, VR, self-driving cars and datacenter AI computing.

"We have invested years of work and billions of dollars to advance deep learning. Our GPU deep learning platform runs every AI framework, and is available in cloud services from Amazon, IBM, Microsoft and Alibaba, and in servers from every OEM. GPU deep learning has sparked a wave of innovations that will usher in the next era of computing," he said.

Capital Return
During the first nine months of fiscal 2017, NVIDIA paid $509 million in share repurchases and $185 million in cash dividends. As a result, the company has returned an aggregate of $694 million to shareholders in the first nine months of the fiscal year. The company intends to return $1.0 billion to shareholders in fiscal 2017.

For fiscal 2018, NVIDIA intends to return $1.25 billion to shareholders through ongoing quarterly cash dividends and share repurchases. The company's board of directors has authorized an additional $2.00 billion under the company's stock repurchase program for a total of $2.96 billion available through the end of December 2020.

The company announced a 22 percent increase in its quarterly cash dividend to $0.14 per share from $0.115 per share, to be paid with its next quarterly cash dividend on December 19, 2016, to all shareholders of record on November 28, 2016.

Q3 FY2017 Summary

                                                                            
----------------------------------------------------------------------------
                                    GAAP                                    
----------------------------------------------------------------------------
($ in millions except                                                       
 earnings per share)       Q3 FY17  Q2 FY17  Q3 FY16     Q/Q         Y/Y    
----------------------------------------------------------------------------
Revenue                   $  2,004 $  1,428 $  1,305      Up 40%      Up 54%
----------------------------------------------------------------------------
Gross margin                 59.0%    57.9%    56.3%  Up 110 bps  Up 270 bps
----------------------------------------------------------------------------
Operating expenses        $    544 $    509 $    489       Up 7%      Up 11%
----------------------------------------------------------------------------
Operating income          $    639 $    317 $    245     Up 102%     Up 161%
----------------------------------------------------------------------------
Net income*               $    542 $    261 $    246     Up 108%     Up 120%
----------------------------------------------------------------------------
Diluted earnings per                                                        
 share*                   $   0.83 $   0.41 $   0.44     Up 102%      Up 89%
----------------------------------------------------------------------------
                                                                            
                                                                            
----------------------------------------------------------------------------
                                  Non-GAAP                                  
----------------------------------------------------------------------------
($ in millions except                                                       
 earnings per share)       Q3 FY17  Q2 FY17  Q3 FY16     Q/Q         Y/Y    
----------------------------------------------------------------------------
Revenue                   $  2,004 $  1,428 $  1,305      Up 40%      Up 54%
----------------------------------------------------------------------------
Gross margin                 59.2%    58.1%    56.5%  Up 110 bps  Up 270 bps
----------------------------------------------------------------------------
Operating expenses        $    478 $    448 $    430       Up 7%      Up 11%
----------------------------------------------------------------------------
Operating income          $    708 $    382 $    308      Up 85%     Up 130%
----------------------------------------------------------------------------
Net income                $    570 $    313 $    255      Up 82%     Up 124%
----------------------------------------------------------------------------
Diluted earnings per                                                        
 share                    $   0.94 $   0.53 $   0.46      Up 77%     Up 104%
----------------------------------------------------------------------------
                                                                            

* In the third quarter of fiscal 2017, NVIDIA adopted a new accounting standard (ASU 2016-09), which requires adjustments to be reflected beginning in fiscal 2017, including all fiscal quarters within the year. The primary impact of adoption was the recognition of excess tax benefits in the provision for income taxes rather than paid-in capital on the balance sheet. Adoption of the new standard resulted in a GAAP diluted earnings per share benefit of $0.02 and $0.01 for the first and second quarters of fiscal 2017, respectively.

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

Third Quarter Fiscal 2017 Highlights

Gaming:

Datacenter:

Automotive:

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 third quarter fiscal 2017 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: 945 459 89. 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 the company's conference call to discuss its financial results for its fourth quarter and fiscal year 2017.

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), net, 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, product warranty charge, acquisition-related costs, contributions, restructuring and other charges, gains from non-affiliated investments, interest expense related to amortization of debt discount, loss on early debt conversions, and the associated tax impact of these items, where applicable. 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.

                                                                            
                                                                            
                             NVIDIA CORPORATION                             
                CONDENSED CONSOLIDATED STATEMENTS OF INCOME                 
                    (In millions, except per share data)                    
                                (Unaudited)                                 
                                                                            
                                                                            
                            Three Months Ended         Nine Months Ended    
                         ------------------------  ------------------------ 
                         October 30,  October 25,  October 30,  October 25, 
                             2016         2015         2016         2015    
                         -----------  -----------  -----------  ----------- 
                                                                            
Revenue                  $     2,004  $     1,305  $     4,737  $     3,609 
Cost of revenue                  821          571        1,977        1,589 
                         -----------  -----------  -----------  ----------- 
Gross profit                   1,183          734        2,760        2,020 
Operating expenses                                                          
 Research and                                                               
  development                    373          329        1,069          987 
 Sales, general and                                                         
  administrative                 171          152          487          441 
 Restructuring and other                                                    
  charges                          -            8            3           97 
                         -----------  -----------  -----------  ----------- 
  Total operating                                                           
   expenses                      544          489        1,559        1,525 
                         -----------  -----------  -----------  ----------- 
Income from operations           639          245        1,201          495 
 Interest income                  14            9           37           28 
 Interest expense                (16)         (12)         (39)         (35)
 Other income (expense),                                                    
  net                            (16)           3          (19)           1 
                         -----------  -----------  -----------  ----------- 
Income before income tax                                                    
 expense                         621          245        1,180          489 
Income tax expense                                                          
 (benefit)                        79           (1)         168           83 
                         -----------  -----------  -----------  ----------- 
Net income               $       542  $       246  $     1,012  $       406 
                         ===========  ===========  ===========  =========== 
                                                                            
Net income per share:                                                       
 Basic                   $      1.01  $      0.45  $      1.89  $      0.75 
                         ===========  ===========  ===========  =========== 
 Diluted                 $      0.83  $      0.44  $      1.59  $      0.72 
                         ===========  ===========  ===========  =========== 
                                                                            
Weighted average shares                                                     
 used in per share                                                          
 computation:                                                               
 Basic                           538          542          536          544 
 Diluted                         653          565          636          563 
                                                                            
                                                                            
                                                                            
                             NVIDIA CORPORATION                             
                    CONDENSED CONSOLIDATED BALANCE SHEETS                   
                                (In millions)                               
                                 (Unaudited)                                
                                                                            
                                                                            
                                                    October 30,  January 31,
                                                        2016         2016   
                                                    -----------  -----------
ASSETS                                                                      
                                                                            
Current assets:                                                             
  Cash, cash equivalents and marketable securities  $     6,671  $     5,037
  Accounts receivable, net                                  833          505
  Inventories                                               679          418
  Prepaid expenses and other current assets                 124           93
                                                    -----------  -----------
    Total current assets                                  8,307        6,053
                                                                            
Property and equipment, net                                 503          466
Goodwill                                                    618          618
Intangible assets, net                                      120          166
Other assets                                                 64           67
                                                    -----------  -----------
    Total assets                                    $     9,612  $     7,370
                                                    ===========  ===========
                                                                            
LIABILITIES, CONVERTIBLE DEBT CONVERSION OBLIGATION AND SHAREHOLDERS' EQUITY
                                                                            
Current liabilities:                                                        
  Accounts payable                                  $       523  $       296
  Accrued and other current liabilities                     507          642
  Convertible short-term debt                             1,011        1,413
                                                    -----------  -----------
    Total current liabilities                             2,041        2,351
                                                                            
Long-term debt                                            1,982            -
Other long-term liabilities                                 213          453
Capital lease obligations, long-term                          7           10
                                                    -----------  -----------
    Total liabilities                                     4,243        2,814
                                                                            
Convertible debt conversion obligation                       45           87
                                                                            
Shareholders' equity                                      5,324        4,469
                                                    -----------  -----------
    Total liabilities, convertible debt conversion                          
     obligation and shareholders' equity            $     9,612  $     7,370
                                                    ===========  ===========
                                                                            
                                                                            
                                                                            
                             NVIDIA CORPORATION                             
           RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES            
                    (In millions, except per share data)                    
                                (Unaudited)                                 
                                                                            
                          Three Months Ended            Nine Months Ended   
                  ---------------------------------  ---------------------- 
                    October    July 31,    October     October     October  
                      30,                    25,         30,         25,    
                     2016        2016       2015        2016        2015    
                  ----------  ---------  ----------  ----------  ---------- 
                                                                            
GAAP gross profit $    1,183  $     826  $      734  $    2,760  $    2,020 
 GAAP gross                                                                 
  margin                59.0%      57.9%       56.3%       58.3%       56.0%
  Stock-based                                                               
   compensation                                                             
   expense (A)             3          4           4          11          10 
  Legal                                                                     
   settlement                                                               
   costs (B)               -          -           -          10           - 
  Product                                                                   
   warranty                                                                 
   charge (C)              -          -           -           -          15 
                  ----------  ---------  ----------  ----------  ---------- 
Non-GAAP gross                                                              
 profit           $    1,186  $     830  $      738  $    2,781  $    2,045 
                  ==========  =========  ==========  ==========  ========== 
 Non-GAAP gross                                                             
  margin                59.2%      58.1%       56.5%       58.7%       56.7%
                                                                            
GAAP operating                                                              
 expenses         $      544  $     509  $      489  $    1,559  $    1,525 
  Stock-based                                                               
   compensation                                                             
   expense (A)           (62)       (54)        (47)       (166)       (134)
  Legal                                                                     
   settlement                                                               
   costs (B)               -          -           -          (6)          - 
  Acquisition-                                                              
   related costs                                                            
   (D)                    (4)        (4)         (4)        (12)        (18)
  Contributions            -         (1)          -          (4)          - 
  Restructuring                                                             
   and other                                                                
   charges                 -         (2)         (8)         (3)        (97)
                  ----------  ---------  ----------  ----------  ---------- 
Non-GAAP                                                                    
 operating                                                                  
 expenses         $      478  $     448  $      430  $    1,368  $    1,276 
                  ==========  =========  ==========  ==========  ========== 
                                                                            
GAAP income from                                                            
 operations       $      639  $     317  $      245  $    1,201  $      495 
  Total impact of                                                           
   non-GAAP                                                                 
   adjustments to                                                           
   income from                                                              
   operations             69         65          63         211         274 
                  ----------  ---------  ----------  ----------  ---------- 
Non-GAAP income                                                             
 from operations  $      708  $     382  $      308  $    1,412  $      769 
                  ==========  =========  ==========  ==========  ========== 
                                                                            
GAAP other income                                                           
 (expense), net   $      (18) $       -  $        -  $      (21) $       (6)
  Gains from non-                                                           
   affiliated                                                               
   investments             -          -          (4)         (3)         (4)
  Interest                                                                  
   expense                                                                  
   related to                                                               
   amortization                                                             
   of debt                                                                  
   discount                6          7           7          20          21 
  Loss on early                                                             
   debt                                                                     
   conversions            15          -           -          15           - 
                  ----------  ---------  ----------  ----------  ---------- 
Non-GAAP other                                                              
 income                                                                     
 (expense), net   $        3  $       7  $        3  $       11  $       11 
                  ==========  =========  ==========  ==========  ========== 
                                                                            
GAAP net income*  $      542  $     261  $      246  $    1,012  $      406 
  Total pre-tax                                                             
   impact of non-                                                           
   GAAP                                                                     
   adjustments            90         72          66         243         291 
  Income tax                                                                
   impact of non-                                                           
   GAAP                                                                     
   adjustments           (62)       (20)        (57)       (108)        (65)
                  ----------  ---------  ----------  ----------  ---------- 
Non-GAAP net                                                                
 income           $      570  $     313  $      255  $    1,147  $      632 
                  ==========  =========  ==========  ==========  ========== 
                                                                            
Diluted net                                                                 
 income per share                                                           
  GAAP*           $     0.83  $    0.41  $     0.44  $     1.59  $     0.72 
                  ==========  =========  ==========  ==========  ========== 
  Non-GAAP        $     0.94  $    0.53  $     0.46  $     1.93  $     1.13 
                  ==========  =========  ==========  ==========  ========== 
                                                                            
Weighted average                                                            
 shares used in                                                             
 diluted net                                                                
 income per share                                                           
 computation                                                                
  GAAP*                  653        634         565         636         563 
  Anti-dilution                                                             
   impact from                                                              
   note hedge (E)        (45)       (43)        (10)        (42)         (6)
                  ----------  ---------  ----------  ----------  ---------- 
  Non-GAAP               608        591         555         594         557 
                  ==========  =========  ==========  ==========  ========== 
                                                                            
GAAP net cash                                                               
 provided by                                                                
 operating                                                                  
 activities*      $      432  $     201  $      255  $      951  $      664 
  Purchase of                                                               
   property and                                                             
   equipment and                                                            
   intangible                                                               
   assets                (38)       (33)        (16)       (125)        (71)
                  ----------  ---------  ----------  ----------  ---------- 
Free cash flow    $      394  $     168  $      239  $      826  $      593 
                  ==========  =========  ==========  ==========  ========== 
                                                                            
* In third quarter of fiscal 2017, NVIDIA adopted an accounting standard    
 (ASU 2016-09), which requires adjustments to be reflected beginning in     
 fiscal 2017, including all fiscal quarters within the year.                
                                                                            
----------------------------------------------------------------------------
(A) Excludes                                                                
 stock-based                                                                
 compensation as                                                            
 follows:                 Three Months Ended            Nine Months Ended   
                  ---------------------------------  ---------------------- 
                    October                October     October     October  
                      30,      July 31,      25,         30,         25,    
                     2016        2016       2015        2016        2015    
                  ----------  ---------  ----------  ----------  ---------- 
  Cost of revenue $        3  $       4  $        4  $       11  $       10 
  Research and                                                              
   development    $       35  $      30  $       28  $       95  $       82 
  Sales, general                                                            
   and                                                                      
   administrative $       27  $      24  $       19  $       71  $       53 
                                                                            
(B) Legal settlement with Advanced Silicon Technologies LLC and other       
 settlement related costs.                                                  
                                                                            
(C) Represents warranty charge associated with a product recall.            
                                                                            
(D) Consists of amortization of acquisition-related intangible assets,      
 transaction costs, compensation charges, and other credits related to      
 acquisitions.                                                              
                                                                            
(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                 
                                                                            
                                                                            
                                                                Q4 FY2017   
                                                                 Outlook    
                                                              ------------- 
                                                                            
GAAP gross margin                                                      59.0%
  Impact of stock-based compensation expense                            0.2%
                                                              ------------- 
Non-GAAP gross margin                                                  59.2%
                                                              ============= 
                                                                            
                                                                            
                                                                Q4 FY2017   
                                                                 Outlook    
                                                              ------------- 
                                                              (In millions) 
                                                                            
GAAP operating expenses                                       $         572 
  Stock-based compensation expense, acquisition-related                     
   costs, and other costs                                               (72)
                                                              ------------- 
Non-GAAP operating expenses                                   $         500 
                                                              ============= 
                                                                            
                                                                            

About NVIDIA
NVIDIA (NASDAQ: NVDA) is the AI computing company. Its 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/.

Certain statements in this press release including, but not limited to statements as to: strength across all product lines; Pascal GPUs enjoying great success; the availability of the company's GPU deep learning platform; the impact of GPU deep learning; the company's intended capital return for fiscal 2017 and fiscal 2018; the company's next quarterly cash dividend; the company's financial outlook for the fourth quarter of fiscal 2017; the company's tax rates for the fourth quarter of fiscal 2017; and the impact and benefits of NVIDIA gaming technology, GeForce GTX GPUs, Tesla P40 and P4 GPUs, TensorRT, the collaboration with FANUC, DRIVE PX 2, the partnership with Baidu and the AI partnership with TomTom 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 July 31, 2016. 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.

© 2016 NVIDIA Corporation. All rights reserved. NVIDIA, the NVIDIA logo, GeForce, Tegra, Tesla, NVIDIA DGX-1, NVIDIA DRIVE, 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.

For further information, contact:

Arnab Chanda 
Investor Relations 
NVIDIA Corporation 
(408) 566-6616 

achanda@nvidia.com 

Robert Sherbin
Corporate Communications
NVIDIA Corporation
(408) 566-5150

rsherbin@nvidia.com