| NVIDIA CORPORATION | ||||||||||||||||||||||
| RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES | ||||||||||||||||||||||
| (In millions, except per share data) | ||||||||||||||||||||||
| (Unaudited) | ||||||||||||||||||||||
| Three Months Ended | Six Months Ended | |||||||||||||||||||||
| July 28, | April 28, | July 29, | July 28, | July 29, | ||||||||||||||||||
| 2019 | 2019 | 2018 | 2019 | 2018 | ||||||||||||||||||
| GAAP gross profit | $ | 1,541 | $ | 1,296 | $ | 1,975 | $ | 2,837 | $ | 4,043 | ||||||||||||
| GAAP gross margin
| 59.8 | % | 58.4 | % | 63.3 | % | 59.1 | % | 63.9 | % | ||||||||||||
| Stock-based compensation expense (A) | 8 | 4 | 8 | 12 | 16 | |||||||||||||||||
| Legal settlement costs | 2 | 10 | - | 11 | - | |||||||||||||||||
| Non-GAAP gross profit | $ | 1,551 | $ | 1,310 | $ | 1,983 | $ | 2,860 | $ | 4,059 | ||||||||||||
| Non-GAAP gross margin
| 60.1 | % | 59.0 | % | 63.5 | % | 59.6 | % | 64.1 | % | ||||||||||||
| GAAP operating expenses | $ | 970 | $ | 938 | $ | 818 | $ | 1,908 | $ | 1,591 | ||||||||||||
| Stock-based compensation expense (A) | (216 | ) | (174 | ) | (124 | ) | (389 | ) | (246 | ) | ||||||||||||
| Acquisition-related and other costs | (5 | ) | (10 | ) | (2 | ) | (15 | ) | (4 | ) | ||||||||||||
| Legal settlement costs | - | (1 | ) | - | (2 | ) | - | |||||||||||||||
| Non-GAAP operating expenses | $ | 749 | $ | 753 | $ | 692 | $ | 1,502 | $ | 1,341 | ||||||||||||
| GAAP income from operations | $ | 571 | $ | 358 | $ | 1,157 | $ | 929 | $ | 2,452 | ||||||||||||
| Total impact of non-GAAP adjustments to income from operations | 231 | 199 | 133 | 429 | 266 | |||||||||||||||||
| Non-GAAP income from operations | $ | 802 | $ | 557 | $ | 1,290 | $ | 1,358 | $ | 2,718 | ||||||||||||
| GAAP other income (expense) | $ | 35 | $ | 31 | $ | 23 | $ | 66 | $ | 39 | ||||||||||||
| Gains from non-affiliated investments | - | - | (2 | ) | - | (8 | ) | |||||||||||||||
| Interest expense related to amortization of debt discount | - | - | - | 1 | 1 | |||||||||||||||||
| Non-GAAP other income (expense) | $ | 35 | $ | 31 | $ | 21 | $ | 67 | $ | 32 | ||||||||||||
| GAAP net income | $ | 552 | $ | 394 | $ | 1,101 | $ | 947 | $ | 2,345 | ||||||||||||
| Total pre-tax impact of non-GAAP adjustments | 231 | 199 | 131 | 430 | 259 | |||||||||||||||||
| Income tax impact of non-GAAP adjustments (B) | (21 | ) | (50 | ) | (22 | ) | (72 | ) | (109 | ) | ||||||||||||
| Non-GAAP net income | $ | 762 | $ | 543 | $ | 1,210 | $ | 1,305 | $ | 2,495 | ||||||||||||
| Diluted net income per share | ||||||||||||||||||||||
| GAAP | $ | 0.90 | $ | 0.64 | $ | 1.76 | $ | 1.54 | $ | 3.74 | ||||||||||||
| Non-GAAP | $ | 1.24 | $ | 0.88 | $ | 1.94 | $ | 2.12 | $ | 3.99 | ||||||||||||
| Weighted average shares used in diluted net income per share computation | ||||||||||||||||||||||
| GAAP | 616 | 616 | 626 | 616 | 627 | |||||||||||||||||
| Anti-dilution impact from note hedge | - | - | (1 | ) | - | (1 | ) | |||||||||||||||
| Non-GAAP | 616 | 616 | 625 | 616 | 626 | |||||||||||||||||
| GAAP net cash provided by operating activities | $ | 936 | $ | 720 | $ | 913 | $ | 1,656 | $ | 2,358 | ||||||||||||
| Purchase of property and equipment and intangible assets | (113 | ) | (128 | ) | (128 | ) | (241 | ) | (247 | ) | ||||||||||||
| Free cash flow | $ | 823 | $ | 592 | $ | 785 | $ | 1,415 | $ | 2,111 | ||||||||||||
| (A) Stock-based compensation consists of the following: | Three Months Ended | Six Months Ended | ||||||||||||||||||||
| July 28, | April 28, | July 29, | July 28, | July 29, | ||||||||||||||||||
| 2019 | 2019 | 2018 | 2019 | 2018 | ||||||||||||||||||
| Cost of revenue | $ | 8 | $ | 4 | $ | 8 | $ | 12 | $ | 16 | ||||||||||||
| Research and development | $ | 145 | $ | 114 | $ | 76 | $ | 259 | $ | 150 | ||||||||||||
| Sales, general and administrative | $ | 71 | $ | 60 | $ | 48 | $ | 130 | $ | 96 | ||||||||||||
| (B) 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). | ||||||||||||||||||||||
NVIDIA Announces Financial Results for Second Quarter Fiscal 2020
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