| NVIDIA CORPORATION | ||||||||||||||||||||||
| RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES | ||||||||||||||||||||||
| (In millions, except per share data) | ||||||||||||||||||||||
| (Unaudited) | ||||||||||||||||||||||
| Three Months Ended | Six Months Ended | |||||||||||||||||||||
| July 29, | April 29, | July 30, | July 29, | July 30, | ||||||||||||||||||
| 2018 | 2018 | 2017 | 2018 | 2017 | ||||||||||||||||||
| GAAP gross profit | $ | 1,975 | $ | 2,068 | $ | 1,302 | $ | 4,043 | $ | 2,452 | ||||||||||||
| GAAP gross margin | 63.3 | % | 64.5 | % | 58.4 | % | 63.9 | % | 58.8 | % | ||||||||||||
| Stock-based compensation expense (A) | 8 | 8 | 4 | 16 | 8 | |||||||||||||||||
| Non-GAAP gross profit | $ | 1,983 | $ | 2,076 | $ | 1,306 | $ | 4,059 | $ | 2,460 | ||||||||||||
| Non-GAAP gross margin | 63.5 | % | 64.7 | % | 58.6 | % | 64.1 | % | 59.0 | % | ||||||||||||
| GAAP operating expenses | $ | 818 | $ | 773 | $ | 614 | $ | 1,591 | $ | 1,210 | ||||||||||||
| Stock-based compensation expense (A) | (124 | ) | (121 | ) | (77 | ) | (246 | ) | (150 | ) | ||||||||||||
| Acquisition-related costs (B) | (2 | ) | (2 | ) | (4 | ) | (4 | ) | (8 | ) | ||||||||||||
| Legal settlement costs | - | (2 | ) | - | - | - | ||||||||||||||||
| Contributions | - | - | - | - | (2 | ) | ||||||||||||||||
| Non-GAAP operating expenses | $ | 692 | $ | 648 | $ | 533 | $ | 1,341 | $ | 1,050 | ||||||||||||
| GAAP income from operations | $ | 1,157 | $ | 1,295 | $ | 688 | $ | 2,452 | $ | 1,242 | ||||||||||||
| Total impact of non-GAAP adjustments to income from operations | 133 | 133 | 85 | 266 | 168 | |||||||||||||||||
| Non-GAAP income from operations | $ | 1,290 | $ | 1,428 | $ | 773 | $ | 2,718 | $ | 1,410 | ||||||||||||
| GAAP other income (expense) | $ | 23 | $ | 16 | $ | (4 | ) | $ | 39 | $ | (21 | ) | ||||||||||
| Gains from non-affiliated investments (C) | (2 | ) | (6 | ) | - | (8 | ) | - | ||||||||||||||
| Interest expense related to amortization of debt discount | - | 1 | 1 | 1 | 3 | |||||||||||||||||
| Debt-related costs (D) | - | - | 3 | - | 17 | |||||||||||||||||
| Non-GAAP other income (expense) | $ | 21 | $ | 11 | $ | - | $ | 32 | $ | (1 | ) | |||||||||||
| GAAP net income | $ | 1,101 | $ | 1,244 | $ | 583 | $ | 2,345 | $ | 1,091 | ||||||||||||
| Total pre-tax impact of non-GAAP adjustments | 131 | 128 | 89 | 259 | 188 | |||||||||||||||||
| Income tax impact of non-GAAP adjustments (E) | (22 | ) | (87 | ) | (34 | ) | (109 | ) | (108 | ) | ||||||||||||
| Non-GAAP net income | $ | 1,210 | $ | 1,285 | $ | 638 | $ | 2,495 | $ | 1,171 | ||||||||||||
| Diluted net income per share | ||||||||||||||||||||||
| GAAP | $ | 1.76 | $ | 1.98 | $ | 0.92 | $ | 3.74 | $ | 1.71 | ||||||||||||
| Non-GAAP | $ | 1.94 | $ | 2.05 | $ | 1.01 | $ | 3.99 | $ | 1.87 | ||||||||||||
| Weighted average shares used in diluted net income per share computation | ||||||||||||||||||||||
| GAAP | 626 | 627 | 633 | 627 | 637 | |||||||||||||||||
| Anti-dilution impact from note hedge (F) | (1 | ) | (1 | ) | (4 | ) | (1 | ) | (10 | ) | ||||||||||||
| Non-GAAP | 625 | 626 | 629 | 626 | 627 | |||||||||||||||||
| GAAP net cash provided by operating activities | $ | 913 | $ | 1,445 | $ | 705 | $ | 2,358 | $ | 987 | ||||||||||||
| Purchase of property and equipment and intangible assets | (128 | ) | (118 | ) | (55 | ) | (247 | ) | (108 | ) | ||||||||||||
| Free cash flow | $ | 785 | $ | 1,327 | $ | 650 | $ | 2,111 | $ | 879 | ||||||||||||
| (A) Stock-based compensation consists of the following: | Three Months Ended | Six Months Ended | ||||||||||||||||||||
| July 29, | April 29, | July 30, | July 29, | July 30, | ||||||||||||||||||
| 2018 | 2018 | 2017 | 2018 | 2017 | ||||||||||||||||||
| Cost of revenue | $ | 8 | $ | 8 | $ | 4 | $ | 16 | $ | 8 | ||||||||||||
| Research and development | $ | 76 | $ | 74 | $ | 44 | $ | 150 | $ | 85 | ||||||||||||
| Sales, general and administrative | $ | 48 | $ | 47 | $ | 33 | $ | 96 | $ | 65 | ||||||||||||
| (B) Consists of amortization of acquisition-related intangible assets and compensation charges. | ||||||||||||||||||||||
| (C) Consists of unrealized gains from non-affiliated investments. | ||||||||||||||||||||||
| (D) Consists of loss on early debt conversions and termination of interest rate swap. | ||||||||||||||||||||||
| (E) 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). | ||||||||||||||||||||||
| (F) 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 Second Quarter Fiscal 2019
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