| NVIDIA CORPORATION | |||||||||||||||||||
| RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES | |||||||||||||||||||
| (In millions, except per share data) | |||||||||||||||||||
| (Unaudited) | |||||||||||||||||||
| Three Months Ended | Nine Months Ended | ||||||||||||||||||
| October 25, | July 26, | October 27, | October 25, | October 27, | |||||||||||||||
| 2020 | 2020 | 2019 | 2020 | 2019 | |||||||||||||||
| GAAP gross profit | $ | 2,960 | $ | 2,275 | $ | 1,916 | $ | 7,240 | $ | 4,753 | |||||||||
| GAAP gross margin | 62.6 | % | 58.8 | % | 63.6 | % | 62.0 | % | 60.8 | % | |||||||||
| Acquisition-related and other costs (B) | 86 | 245 | - | 331 | - | ||||||||||||||
| Stock-based compensation expense (A) | 28 | 14 | 15 | 62 | 27 | ||||||||||||||
| Legal settlement costs | 21 | 17 | - | 38 | 11 | ||||||||||||||
| Non-GAAP gross profit | $ | 3,095 | $ | 2,551 | $ | 1,931 | $ | 7,671 | $ | 4,791 | |||||||||
| Non-GAAP gross margin | 65.5 | % | 66.0 | % | 64.1 | % | 65.7 | % | 61.3 | % | |||||||||
| GAAP operating expenses | $ | 1,562 | $ | 1,624 | $ | 989 | $ | 4,215 | $ | 2,897 | |||||||||
| Stock-based compensation expense (A) | (355 | ) | (360 | ) | (208 | ) | (919 | ) | (597 | ) | |||||||||
| Acquisition-related and other costs (B) | (106 | ) | (229 | ) | (7 | ) | (338 | ) | (22 | ) | |||||||||
| Legal settlement costs | - | - | - | - | (2 | ) | |||||||||||||
| Non-GAAP operating expenses | $ | 1,101 | $ | 1,035 | $ | 774 | $ | 2,958 | $ | 2,276 | |||||||||
| GAAP income from operations | $ | 1,398 | $ | 651 | $ | 927 | $ | 3,025 | $ | 1,856 | |||||||||
| Total impact of non-GAAP adjustments to income from operations | 595 | 865 | 229 | 1,689 | 659 | ||||||||||||||
| Non-GAAP income from operations | $ | 1,993 | $ | 1,516 | $ | 1,156 | $ | 4,714 | $ | 2,515 | |||||||||
| GAAP other income (expense), net | $ | (50 | ) | $ | (42 | ) | $ | 32 | $ | (86 | ) | $ | 98 | ||||||
| Losses from non-affiliated investments | 4 | 2 | - | 9 | 1 | ||||||||||||||
| Interest expense related to amortization of debt discount | 1 | 1 | 1 | 1 | 1 | ||||||||||||||
| Non-GAAP other income (expense), net | $ | (45 | ) | $ | (39 | ) | $ | 33 | $ | (76 | ) | $ | 100 | ||||||
| GAAP net income | $ | 1,336 | $ | 622 | $ | 899 | $ | 2,875 | $ | 1,845 | |||||||||
| Total pre-tax impact of non-GAAP adjustments | 600 | 868 | 230 | 1,699 | 660 | ||||||||||||||
| Income tax impact of non-GAAP adjustments (C) | (102 | ) | (124 | ) | (26 | ) | (255 | ) | (97 | ) | |||||||||
| Non-GAAP net income | $ | 1,834 | $ | 1,366 | $ | 1,103 | $ | 4,319 | $ | 2,408 | |||||||||
| Diluted net income per share | |||||||||||||||||||
| GAAP | $ | 2.12 | $ | 0.99 | $ | 1.45 | $ | 4.59 | $ | 2.99 | |||||||||
| Non-GAAP | $ | 2.91 | $ | 2.18 | $ | 1.78 | $ | 6.90 | $ | 3.90 | |||||||||
| Weighted average shares used in diluted net income per share computation | 630 | 626 | 618 | 626 | 617 | ||||||||||||||
| GAAP net cash provided by operating activities | $ | 1,279 | $ | 1,566 | $ | 1,640 | $ | 3,755 | $ | 3,296 | |||||||||
| Purchases related to property and equipment and intangible assets | (473 | ) | (217 | ) | (104 | ) | (845 | ) | (344 | ) | |||||||||
| Free cash flow | $ | 806 | $ | 1,349 | $ | 1,536 | $ | 2,910 | $ | 2,952 | |||||||||
| (A) Stock-based compensation consists of the following: | Three Months Ended | Nine Months Ended | |||||||||||||||||
| October 25, | July 26, | October 27, | October 25, | October 27, | |||||||||||||||
| 2020 | 2020 | 2019 | 2020 | 2019 | |||||||||||||||
| Cost of revenue | $ | 28 | $ | 14 | $ | 15 | $ | 62 | $ | 27 | |||||||||
| Research and development | $ | 232 | $ | 228 | $ | 141 | $ | 594 | $ | 400 | |||||||||
| Sales, general and administrative | $ | 123 | $ | 132 | $ | 67 | $ | 325 | $ | 197 | |||||||||
| (B) Acquisition-related and other costs primarily include amortization of intangible assets, inventory step-up, transaction costs, and certain compensation charges presented as follows: | |||||||||||||||||||
| Three Months Ended | Nine Months Ended | ||||||||||||||||||
| October 25, | July 26, | October 27, | October 25, | October 27, | |||||||||||||||
| 2020 | 2020 | 2019 | 2020 | 2019 | |||||||||||||||
| Cost of revenue | $ | 86 | $ | 245 | $ | - | $ | 331 | $ | - | |||||||||
| Research and development | $ | 2 | $ | 3 | $ | 1 | $ | 7 | $ | 4 | |||||||||
| Sales, general and administrative | $ | 104 | $ | 226 | $ | 6 | $ | 331 | $ | 18 | |||||||||
| (C) 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).
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NVIDIA Announces Financial Results for Third Quarter Fiscal 2021
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