NVIDIA Reports Financial Results for Annual and Fourth Quarter Fiscal 2013

NVIDIA Reports Financial Results for Annual and Fourth Quarter Fiscal 2013 
SANTA CLARA, CA -- (Marketwire) -- 02/13/13 --  NVIDIA (NASDAQ: NVDA) 


 
--  Full-year revenue increased 7.1 percent to a record $4.28 billion
--  Quarterly revenue decreased 8.1 percent sequentially to $1.11 billion;
    year on year, revenue was up 16.1 percent
--  Quarterly GAAP diluted EPS of $0.28, off from $0.33 in Q3; non-GAAP
    diluted EPS of $0.35, off from $0.39 in Q3
--  Quarterly GAAP gross margin of 52.9 percent; non-GAAP gross margin of
    53.2 percent

  
NVIDIA (NASDAQ: NVDA) today reported revenue for fiscal 2013 ended Jan.
27, 2013, of a record $4.28 billion, up 7.1 percent from $4.00
billion in fiscal 2012.  
GAAP earnings per share for the year were $0.90 per diluted share, a
decrease of 4.3 percent from $0.94 in fiscal 2012. Non-GAAP earnings
per diluted share were $1.17, down 1.7 percent from $1.19 in fiscal
2012. 
During the quarter, NVIDIA repurchased $100.0 million of stock and
paid a dividend of $0.075 per share, equivalent to $46.9 million. 
"This year we did the best work in our company's history," said
Jen-Hsun Huang, president and chief executive officer of NVIDIA. "We
achieved record revenues, margins and cash, despite significant
market headwinds.  
"We grew our GPU and Tegra Processor businesses. We are sampling
production silicon of the Tegra 4 platform which includes our 4G LTE
modem. And we created new pillars for long term growth with Project
SHIELD and NVIDIA GRID -- first-of-their-kind devices that will
extend our leadership in visual computing into mobile and the cloud." 


 
                                                                            
----------------------------------------------------------------------------
                      GAAP Annual Financial Comparison                      
----------------------------------------------------------------------------
  (in millions except per                                                   
        share data)            FY13        FY12        Y/Y$         Y/Y%    
----------------------------------------------------------------------------
Revenue                       $4,280.2    $3,997.9   up $282.3       up 7.1%
--------------------------------------------------
--------------------------
Gross Margin                     52.0%       51.4%      ------   up 0.6 p.p.
----------------------------------------------------------------------------
Operating Expenses            $1,578.1    $1,408.2   up $169.9      up 12.1%
----------------------------------------------------------------------------
Net Income                      $562.5      $581.1  down $18.6     down 3.2%
----------------------------------------------------------------------------
Earnings Per Share               $0.90       $0.94  down $0.04     down 4.3%
----------------------------------------------------------------------------
                                                                            
                                                                            
                                                                            
----------------------------------------------------------------------------
                    Non-GAAP* Annual Financial Comparison                   
----------------------------------------------------------------------------
  (in millions except per                                                   
        share data)            FY13        FY12        Y/Y$         Y/Y%    
----------------------------------------------------------------------------
Revenue                       $4,280.2    $3,997.9   up $282.3       up 7.1%
----------------------------------------------------------------------------
Gross Margin                     52.3%       51.9%    ------     up 0.4 p.p.
----------------------------------------------------------------------------
Operating Expenses            $1,395.7    $1,245.7   up $150.0      up 12.0%
----------------------------------------------------------------------------
Net Income                      $728.4      $734.4   down $6.0     down 0.8%
----------------------------------------------------------------------------
Earnings Per Share               $1.17       $1.19  down $0.02     down 1.7%
----------------------------------------------------------------------------

 
*Non-GAAP earnings excluded stock-based compensation, amortization of
acquisition-related intangible assets, other acquisition-related
costs, a contribution expense in the second quarter of fiscal 2013, a
legal settlement charge in the fourth quarter of fiscal 2012, and the
tax impact associated with such items.  


 
                                                                            
----------------------------------------------------------------------------
                     GAAP Quarterly Financial Comparison                    
----------------------------------------------------------------------------
 (in millions                                                               
  except per     Q4 FY13     Q3 FY13     Q4 FY12       Q/Q           Y/Y    
  share data)                                                               
----------------------------------------------------------------------------
Revenue          $1,106.9    $1,204.1      $953.2    down 8.1%      up 16.1%
----------------------------------------------------------------------------
Gross margin        52.9%       52.9%       51.4%         flat    up 1.5 p.p
----------------------------------------------------------------------------
Operating                                                                   
 expenses          $402.0      $384.4      $367.7      up 4.6%       up 9.3%
----------------------------------------------------------------------------
Net income         $174.0      $209.1      $116.0   down 16.8%      up 50.0%
----------------------------------------------------------------------------
Earnings per                                                                
 share              $0.28       $0.33       $0.19   down 15.2%      up 47.4%
----------------------------------------------------------------------------
                                                                            
                                                                            
                                                                            
----------------------------------------------------------------------------
                  Non-GAAP* Quarterly Financial Comparison                  
----------------------------------------------------------------------------
 (in millions                                                               
  except per     Q4 FY13     Q3 FY13     Q4 FY12       Q/Q           Y/Y    
  share data)                                                               
----------------------------------------------------------------------------
Revenue          $1,106.9    $1,204.1      $953.2    down 8.1%      up 16.1%
----------------------------------------------------------------------------
Gross margin        53.2%       53.1%       52.5%   up 0.1 p.p    up 0.7 p.p
----------------------------------------------------------------------------
Operating                                                                   
 expenses          $360.4      $344.8      $325.2      up 4.5%      up 10.8%
--------------
--------------------------------------------------------------
Net income         $214.9      $245.5      $158.1   down 12.5%      up 35.9%
----------------------------------------------------------------------------
Earnings per                                                                
 share              $0.35       $0.39       $0.26   down 10.3%      up 34.6%
----------------------------------------------------------------------------

 
*Non-GAAP earnings excluded stock-based compensation, amortization of
acquisition-related intangible assets, other acquisition-related
costs, a legal settlement charge in the fourth quarter of fiscal
2012, and the tax impact associated with such items.  
Our outlook for the first quarter of fiscal 2014 is as follows: 


 
--  Revenue is expected to be $940 million, plus or minus two percent.
    
    
--  GAAP and non-GAAP gross margins are expected to be flat relative to
    the prior quarter, at 52.9 percent and 53.2 percent, respectively.
    
    
--  GAAP operating expenses are expected to be approximately $430 million;
    non-GAAP operating expenses are expected to be approximately $395
    million.
    
    
--  GAAP and non-GAAP tax rates for the first quarter and annual fiscal
    2014 are both expected to be 16 percent, plus or minus one percentage
    point. This estimate excludes any discrete tax events that may occur
    during a quarter which, if realized, may increase or decrease our
    actual effective tax rates in such quarter.

  
We estimate depreciation and amortization for the first quarter to be
approximately $59 million to $61 million. Capital expenditures are
expected to be in the range of $55 million to $65 million. 
Diluted shares for the first quarter are expected to be approximately
619 million. 
Fourth Quarter Fiscal 2013 Highlights:  


 
--  NVIDIA's customers brought three Windows RT devices to market -- Asus
    VivoTab RT, IdeaPad Yoga 11 from Lenovo, and Microsoft Surface RT
--  NVIDIA announced Project SHIELD(TM), a unique Android gaming device
    that will ship in the second quarter of fiscal 2014
--  NVIDIA launched Tegra(R) 4, the world's fastest mobile SOC and the
    first quad-core A15 SOC
--  NVIDIA continued to drive the streaming of gaming from the cloud by
    signing deals with six middleware providers that will supply
    GRID(TM) gaming technology to service operators worldwide
--  NVIDIA officially launched the Tesla(R) K20 family of GPU
    accelerators, making the technology behind the world's fastest
    supercomputer, Titan, available to all

  
Dividend 
NVIDIA will pay its next quarterly cash dividend of $0.075 cents per
share on March 21, 2013 to all stockholders of record on February 28,
2013. 
Reporting Segments
 During the fourth quarter of fiscal 2013, NVIDIA
began reporting two primary financial reporting segments -- GPU and
Tegra Processor. This change reflects the way NVIDIA is now managing
its businesses internally. More information on this change is in
NVIDIA's CFO Commentary. 
CFO Commentary and Earnings Presentation
 Commentary on the quarter
by Karen Burns, NVIDIA interim chief financial officer, and a
presentation, are available at www.nvidia.com/ir.  
Conference Call and webcast Information 
 NVIDIA will conduct a
conference call with analysts and investors to discuss its fourth
quarter fiscal 2013 financial results and current financial prospects
today at 2:00 p.m. Pacific Time (5:00 p.m. Eastern Time). To listen
to the call, please dial (706) 679 2572. A live webcast (listen-only
mode) of the conference call will be accessible at the NVIDIA
investor relations web site www.nvidia.com/ir 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 first quarter fiscal 2014.  
Non-GAAP Measures 
 To supplement NVIDIA's Condensed Consolidated
Statements of Operations 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 tax expense, non-GAAP
net income, non-GAAP net income, or earnings, per share, 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, amortization of
acquisition-related intangible assets, other acquisition-related
costs, a contribution expense, a legal settlement charge, and the
associated tax impact of these items, where applicable. 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 our non-GAAP measures may be different from non-GAAP
measures used by other companies. 
About NVIDIA
 NVIDIA (NASDAQ: NVDA) awakened the world to computer
graphics when it invented the GPU in 1999. Today, its processors
power a broad range of products from smart phones to supercomputers.
NVIDIA's mobile processors are used in cell phones, tablets and auto
infotainment systems. PC gamers rely on GPUs to enjoy spectacularly
immersive worlds. Professionals use them to create visual effects in
movies and design everything from golf clubs to jumbo jets. And
researchers utilize GPUs to advance the frontiers of science with
high-performance computing. The company holds more than 5,500 issued,
allowed or filed patents worldwide, including ones covering ideas
essential to modern computing. For more information, see
www.nvidia.com. 
Certain statements in this press release including, but not limited
to statements as to: the company's financial outlook for the first
quarter of fiscal 2014; the company's tax rate for the first quarter
and fiscal year 2014; the anticipated shipment of Project SHIELD in
the second quarter; the extension of the company's visual computing
expertise; the growth of the cloud and mobile markets; and the
effects of the company's patents on modern computing 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 October
28, 2012. 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. 
(C) 2013 NVIDIA Corporation. All rights reserved. NVIDIA, the NVIDIA
logo, GRID, Tegra, SHIELD and Tesla 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 w
hich they are associated. Features, pricing,
availability, and specifications are subject to change without
notice.  


 
                                                                            
                             NVIDIA CORPORATION                             
                 CONDENSED CONSOLIDATED STATEMENTS OF INCOME                
                    (In thousands, except per share data)                   
                                 (Unaudited)                                
                                                                            
                                                                            
                                Three Months Ended     Twelve Months Ended  
                             ----------------------- -----------------------
                             January 27, January 29, January 27, January 29,
                                 2013        2012        2013        2012   
                             ----------- ----------- ----------- -----------
                                                                            
Revenue                      $ 1,106,902 $   953,194 $ 4,280,159 $ 3,997,930
Cost of revenue                  521,300     463,181   2,053,816   1,941,413
                             ----------- ----------- ----------- -----------
Gross profit                     585,602     490,013   2,226,343   2,056,517
Operating expenses                                                          
  Research and development       298,007     266,862   1,147,282   1,002,605
  Sales, general and                                                        
   administrative                104,022     100,834     430,822     405,613
                             ----------- ----------- ----------- -----------
    Total operating expenses     402,029     367,696   1,578,104   1,408,218
                             ----------- ----------- ----------- -----------
Operating income                 183,573     122,317     648,239     648,299
Interest and other income,                                                  
 net                               2,535       2,260      13,800      15,097
                             ----------- ----------- ----------- -----------
Income before income tax                                                    
 expense                         186,108     124,577     662,039     663,396
Income tax expense                12,135       8,552      99,503      82,306
                             ----------- ----------- ----------- -----------
Net income                   $   173,973 $   116,025 $   562,536 $   581,090
                             =========== =========== =========== ===========
                                                                            
Basic net income per share   $      0.28 $      0.19 $      0.91 $      0.96
                             =========== =========== =========== ===========
Diluted net income per share $      0.28 $      0.19 $      0.90 $      0.94
                             =========== =========== =========== ===========
                                                                            
Shares used in basic per                                                    
 share computation               620,169     611,432     619,324     603,646
Shares used in diluted per                                                  
 share computation               622,018     618,599     624,957     616,371
                                                                            
                                                                            
                                                                            
                             NVIDIA CORPORATION                             
                    CONDENSED CONSOLIDATED BALANCE SHEETS                   
                               (In thousands)                               
                                 (Unaudited)                                
                                                                            
                                                                            
                                                 January 27,    January 29, 
                                                    2013           2012     
                                               -------------- --------------
ASSETS                                                                      
                                                                            
Current assets:                                                             
  Cash, cash equivalents and marketable                                     
   securities                                  $    3,727,883 $    3,129,576
  Accounts receivable, net                            454,252        336,143
  Inventories                                         419,686        340,297
  Prepaid expenses and other current assets           173,437         99,342
                                               -------------- --------------
    Total current assets                            4,775,258      3,905,358
                                                                            
Property and equipment, net                           576,144        560,072
Goodwill                                              641,030        641,030
Intangible assets, net                                312,332        326,136
Other assets                                          107,481        120,332
                                               -------------- --------------
    Total assets                               $    6,412,245 $    5,552,928
                                               ============== ==============
                                                                            
LIABILITIES AND STOCKHOLDERS' EQUITY                                        
                                                                            
Current liabilities:                                                        
  Accounts payable                             $      356,428 $      335,072
  Accrued liabilities and other current                                     
   liabilities                                        619,795        594,886
                                               -------------- --------------
    Total current liabilities                         976,223        929,958
                                                                            
Other long-term liabilities                           589,321        455,807
Capital lease obligations, long term                   18,998         21,439
                                                                            
Stockholders' equity                                4,827,703      4,145,724
                                               -------------- --------------
    Total liabilities and stockholders' equity $    6,412,245 $    5,552,928
                                               ============== ==============
                                                                            
                                                                            
                                                                            
                             NVIDIA CORPORATION                             
           RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES            
                   (In thousands, except per share data)                    
                                (Unaudited)                                 
                                                                            
                              Three Months Ended       Twelve Months Ended  
                        ----------------------------- --------------------- 
                         January   October   January    January    January  
                           27,       28,       29,        27,        29,    
                           2013      2012      2012      2013       2012    
                        --------- --------- --------- ---------- ---------- 
                                                                            
GAAP gross profit       $ 585,602 $ 636,658 $ 490,013 $2,226,343 $2,056,517 
  GAAP gross margin          52.9%     52.9%     51.4%      52.0%      51.4%
                                                                            
    Stock-based                                                             
     compensation                                                           
     expense included                                                       
     in cost of revenue                                                     
     (A)                    2,826     2,489     3,048     10,490     11,322 
    Legal settlement                                                        
     (B)                        -         -     7,300          -      7,300 
                        --------- --------- --------- ---------- ---------- 
Non-GAAP gross profit   $ 588,428 $ 639,147 $ 500,361 $2,236,833 $2,075,139 
                        ========= ========= ========= ========== ========== 
  Non-GAAP gross margin      53.2%     53.1%     52.5%      52.3%      51.9%
                                                                            
GAAP operating expenses $ 402,029 $ 384,441 $ 367,696 $1,578,104 $1,408,218 
    Stock-based                                                             
     compensation                                                           
     expense included                                                       
     in operating                                                           
     expense (A)          (32,943)  (30,580)  (32,388)  (126,172)  (125,032)
    Amortization of                                                         
     acquisition-                                                           
     related intangible                                                     
     assets                (4,325)   (4,402)   (5,041)   (17,134)   (17,190)
    Other acquisition-                                                      
     related costs (C)     (4,373)   (4,666)   (5,052)   (19,004)   (20,282)
    Contribution                                                            
     expense (D)                -         -         -    (20,127)         - 
                        --------- --------- --------- ---------- ---------- 
Non-GAAP operating                                                          
 expenses               $ 360,388 $ 344,793 $ 325,215 $1,395,667 $1,245,714 
                        ========= ========= ========= ========== ========== 
                                                                            
GAAP net income         $ 173,973 $ 209,080 $ 116,025 $  562,536 $  581,090 
    Total pre-tax                                                           
     impact of non-GAAP                                                     
     adjustments           44,467    42,137    52,829    192,927    181,126 
    Income tax impact                                                       
     of non-GAAP                                                            
     adjustments           (3,507)   (5,755)  (10,718)   (27,090)   (27,810)
                        --------- --------- --------- ---------- ---------- 
Non-GAAP net income     $ 214,933 $ 245,462 $ 158,136 $  728,373 $  734,406 
                        ========= ========= ========= ========== ========== 
                                                                            
Diluted net income per                                                      
 share                                                                      
    GAAP                $    0.28 $    0.33 $    0.19 $     0.90 $     0.94 
                        ========= ========= ========= ========== ========== 
    Non-GAAP            $    0.35 $    0.39 $    0.26 $     1.17 $     1.19 
                        ========= ========= ========= ========== ========== 
                                                                            
Shares used in diluted                                                      
 net income per share                                                       
 computation              622,018   628,845   618,599    624,957    616,371 
                                                                            
Metrics:                                                                    
                                                                            
    GAAP net cash flow                                                      
     provided by                                                            
     operating                                                              
     activities         $ 451,009 $ 181,485 $ 410,518 $  824,172 $  909,156 
    Purchase of                                                             
     property and                                                           
     equipment and                                                          
     intangible assets    (47,758)  (44,684)  (45,182)  (183,309)  (138,735)
                        --------- --------- --------- ---------- ---------- 
    Free cash flow      $ 403,251 $ 136,801 $ 365,336 $  640,863 $  770,421 
                        ========= ========= ========= ========== ========== 
                                                                            
    Graphics Processing                                                     
     Unit (GPU) revenue                               $3,251,712 $3,186,764 
    Chipset product                                                         
     revenue                                             (24,309)  (197,417)
                                                      ---------- ---------- 
    GPU revenue                                                             
     excluding chipset                                                      
     products                                         $3,227,403 $2,989,347 
                                                      ========== ========== 
                                                                            
                                                                            
(A) Excludes stock-                                                         
based compensation as                                                       
follows:                      Three Months Ended       Twelve Months Ended  
                        ----------------------------- --------------------- 
                         January   October   January    January    January  
                           27,       28,       29,        27,        29,    
                           2013      2012      2012      2013       2012    
                        --------- --------- --------- ---------- ---------- 
    Cost of revenue     $   2,826 $   2,489 $   3,048 $   10,490 $   11,322 
    Research and                                                            
     development        $  22,009 $  20,056 $  20,908 $   82,157 $   80,502 
    Sales, general and                                                      
     administrative     $  10,934 $  10,524 $  11,480 $   44,015 $   44,530 
                                                                            
(B) On February 7, 2012, the Company and Rambus entered into a licensing    
 agreement and both parties also agreed to settle all outstanding legal     
 disputes. For accounting purposes, an additional charge of $7.3 million    
 associated with the fair value prescribed to the settlement portion was    
 recognized for the year ended January 29, 2012.                            
                                                                            
(C) Other acquisition-related costs are comprised of transaction costs,     
 compensation charges and restructuring costs related to the acquisition of 
 Icera, Inc. that was completed on June 10, 2011.                           
                                                                            
(D) Net present value of a $25 million charitable contribution pledged on   
 June 12, 2012 to Stanford Hospital and Clinic, payable over a ten year     
 period.                                                                    
                                                                            
                                                                            
                                                                            
                             NVIDIA CORPORATION                             
                 RECONCILIATION OF GAAP TO NON-GAAP OUTLOOK                 
                                                                            
                                                         Q1 FY2014 Outlook  
                                          
              ------------------- 
                                                                            
GAAP gross margin                                                      52.9%
  Impact of stock-based compensation (A)                                0.3%
                                                        ------------------- 
Non-GAAP gross margin                                                  53.2%
                                                        =================== 
                                                                            
                                                         Q1 FY2014 Outlook  
                                                        ------------------- 
                                                           (In millions)    
                                                                            
GAAP operating expenses                                 $             430.0 
  Stock-based compensation expense included in                              
   operating expense                                                  (28.0)
  Amortization of acquisition-related intangible assets                (4.0)
  Other acquisition-related costs (B)                                  (3.0)
                                                        ------------------- 
Non-GAAP operating expenses                             $             395.0 
                                                        =================== 
                                                                            
(A) Represents $2.6 million of stock-based compensation expense included in 
 cost of revenue.                                                           
                                                                            
(B) Other acquisition related costs are comprised primarily of compensation 
 charges related to the acquisition of Icera, Inc. that was completed on    
 June 10, 2011.                                                             

  
For further information, contact: 
Rob Csongor 
Investor Relations 
NVIDIA Corporation 
(408) 566-6373 
rcsongor@nvidia.com  
Robert Sherbin
Corporate Communications
NVIDIA Corporation
(408) 566-5150
rsherbin@nvidia.com