| 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 | |||||||||||||
| 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 Announces Financial Results for Fourth Quarter and Fiscal 2018
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