NVIDIA Reports Financial Results for First Quarter Fiscal 2014

NVIDIA Reports Financial Results for First Quarter Fiscal 2014 
SANTA CLARA, CA -- (Marketwired) -- 05/09/13 --  NVIDIA (NASDAQ:
NVDA) 


 
--  Revenue of $954.7 million
    
    
--  GAAP net income of $77.9 million, or $0.13 per diluted share. Non-GAAP
    net income of $113.8 million, or $0.18 per diluted share
    
    
--  Record GAAP and non-GAAP gross margins of 54.3 percent and 54.6
    percent respectively

  
NVIDIA (NASDAQ: NVDA) today reported revenue for the first quarter of
fiscal 2014, ended April 28, 2013, of $954.7 million, down 13.7
percent from $1.11 billion in the fourth quarter of fiscal 2013.   
GAAP earnings per diluted share were $0.13, down 53.6 percent from
$0.28 in the prior quarter. Non-GAAP earnings per diluted share were
$0.18, down 48.6 percent from $0.35 in the prior quarter.  
As previously announced, NVIDIA plans to return in excess of $1
billion this fiscal year to shareholders in the form of share
repurchases and quarterly dividend payments. During the first
quarter, NVIDIA returned $146.3 million to shareholders by
repurchasing $100 million of shares, and paying $46.3 million of
dividends, or $0.075 per share. As part of NVIDIA's capital return
program, the company plans to continue its quarterly dividend program
at $0.075 per share and to return additional cash of at least $750
million during fiscal 2014, largely through a structured share
repurchase program.  
"The success of Kepler-based GPUs within and beyond the PC helped
drive another quarter of record margins," said Jen-Hsun Huang,
president and chief executive officer of NVIDIA. "Kepler is capturing
share among gamers, strengthening our workstation and supercomputing
segments, and will fuel new growth opportunities for our GRID server
graphics solutions. With Tegra 4 devices and Tegra 4i certification
on the way, we're gearing up to return to growth in the second half." 


 
                                                                            
----------------------------------------------------------------------------
                     GAAP Quarterly Financial Comparison                    
----------------------------------------------------------------------------
(in millions except per                                                     
       share data)      Q1 FY14  Q4 FY13  Q1 FY13      Q/Q          Y/Y     
----------------------------------------------------------------------------
Revenue                   $954.7 $1,106.9   $924.9   down 13.7%      up 3.2%
----------------------------------------------------------------------------
Gross margin               54.3%    52.9%    50.1%  up 1.4 p.p.  up 4.2 p.p.
----------------------------------------------------------------------------
Operating expenses        $435.8   $402.0   $390.5      up 8.4%     up 11.6%
----------------------------------------------------------------------------
Net income                 $77.9   $174.0    $60.4   down 55.2%     up 29.0%
----------------------------------------------------------------------------
Earnings per share         $0.13    $0.28    $0.10   down 53.6%     up 30.0%
----------------------------------------------------------------------------
                                                                            
                                                                            
----------------------------------------------------------------------------
                  Non-GAAP* Quarterly Financial Comparison                  
----------------------------------------------------------------------------
(in millions except per                                                     
       share data)      Q1 FY14  Q4 FY13  Q1 FY13      Q/Q          Y/Y     
----------------------------------------------------------------------------
Revenue                   $954.7 $1,106.9   $924.9   down 13.7%      up 3.2%
----------------------------------------------------------------------------
Gross margin               54.6%    53.2%    50.4%  up 1.4 p.p.  up 4.2 p.p.
----------------------------------------------------------------------------
Operating expenses        $396.2   $360.4   $348.0      up 9.9%     up 13.9%
----------------------------------------------------------------------------
Net income                $113.8   $214.9    $97.5   down 47.1%     up 16.7%
----------------------------------------------------------------------------
Earnings per share         $0.18    $0.35    $0.16   down 48.6%     up 12.5%
----------------------------------------------------------------------------

 
*Non-GAAP earnings excluded stock-based compensation, amortization of
acquisition-related intangible assets, other acquisition-related
costs, and the tax impact associated with such items.  
NVIDIA's outlook for the second quarter of fiscal 2014 is as follows: 


 
--  Revenue is expected to be $975 million, plus or minus two percent.
    
    
--  GAAP and non-GAAP gross margins are expected to be approximately flat
    relative to the prior quarter, at 54.3 percent and 54.6 percent,
    respectively.
    
    
--  GAAP operating expenses are expected to be approximately $448 million;
    non-GAAP operating expenses are expected to be approximately $408
    million.
    
    
--  GAAP and non-GAAP tax rates for the second quarter and annual fiscal
    2014 are both expected to be 16 percent, plus or minus one percent.
    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 second quarter to be
approximately $61 million to $63 million. Capital expenditures are
expected to be in the range of $65 million to $75 million.  
Diluted shares for the second quarter are expected to be
approximately 590 million.  
Among highlights of the first quarter of fiscal 2014, NVIDIA:  


 
--  Announced its intention to return in excess of $1 billion to
    shareholders during fiscal 2014.
--  Introduced NVIDIA(R) GRID(TM) VCA(TM), the industry's first
    visual computing appliance -- enabling businesses to deliver
    ultra-fast GPU performance to any Windows, Linux or Mac client on
    their network.
--  Announced that NVIDIA GRID-based servers are now available from Dell,
    HP and IBM, and that NVIDIA GRID-enabled software is available from
    Citrix, Microsoft and VMware.
--  Introduced its first fully integrated 4G LTE mobile processor,
    NVIDIA(R) Tegra(R) 4i, which is three times faster yet half the
    size of its nearest competitor.
--  Introduced GeForce(R) GTX(TM) TITAN for gamers, with the DNA of
    the world's fastest supercomputer and powered by world's fastest GPU.

  
Dividend  
NVIDIA will pay its next quarterly cash dividend of $0.075 cents per
share on June 14, 2013, to all stockholders of record on May 23,
2013. 
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 first
quarter fiscal 2014 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 second 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, 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
 Since 1993, NVIDIA (NASDAQ: NVDA) has pioneered the art
and science of visual computing. The company's technologies are
transforming a world of displays into a world of interactive
discovery -- for everyone from gamers to scientists, and consumers to
enterprise customers. More information at
http://nvidianews.nvidia.com and http://blogs.nvidia.com. 
Certain statements in this press release including, but not limited
to statements as to: the company's dividend program and share
repurchases; Kepler capturing share among gamers, strengthening the
company's workstation and supercomputing segments, and fueling new
growth opportunities for the company's GRID server graphics
solutions; Tegra 4 devices and Tegra 4i certification on the way; the
company's return to growth in the second half; the benefits of NVIDIA
GRID VCA and NVIDIA Tegra 4i; the company's financial outlook for the
second quarter of fiscal 2014; and the company's tax rate for the
second quarter and fiscal year 2014 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-K
for the fiscal period ended January 27, 2013. 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. 
Copyright 2013 NVIDIA Corporation. All rights reserved. NVIDIA, the
NVIDIA logo, GRID and Tegra 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 which 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      
                                             -------------------------------
                                                April 28,       April 29,   
                                                   2013            2012     
                                             --------------- ---------------
                                                                            
Revenue                                      $       954,739 $       924,877
Cost of revenue                                      436,171         461,513
                                             --------------- ---------------
Gross profit                                         518,568         463,364
Operating expenses                                                          
  Research and development                           327,161         283,902
  Sales, general and administrative                  108,626         106,636
                                             --------------- ---------------
    Total operating expenses                         435,787         390,538
                                             --------------- ---------------
Operating income                                      82,781          72,826
Interest and other income, net                         5,281           4,269
                                             --------------- ---------------
Income before income tax expense                      88,062          77,095
Income tax expense                                    10,171          16,658
                                             --------------- ---------------
Net income                                   $        77,891 $        60,437
                                             =============== ===============
                                                                            
Basic net income per share                   $          0.13 $          0.10
                                             =============== ===============
Diluted net income per share                 $          0.13 $          0.10
                                             =============== ===============
                                                                            
Shares used in basic per share computation           616,872         615,780
Shares used in diluted per share computation         619,302         623,786
                                                                            
                                                                            
                                                                            
                             NVIDIA CORPORATION                             
                    CONDENSED CONSOLIDATED BALANCE SHEETS                   
                               (In thousands)                               
                                 (Unaudited)                                
                                                                            
                                                                            
                                                April 28,      January 27,  
                                                   2013            2013     
                                             --------------- ---------------
ASSETS                                                                      
                                                                            
Current assets:                                                             
  Cash, cash equivalents and marketable                                     
   securities                                $     3,713,351 $     3,727,883
  Accounts receivable, net                           346,998         454,252
  Inventories                                        377,597         419,686
  Prepaid expenses and other current assets          168,670         173,437
                                             --------------- ---------------
    Total current assets                           4,606,616       4,775,258
                                                                            
Property and equipment, net                          588,023         576,144
Goodwill                                             641,030         641,030
Intangible assets, net                               336,733         312,332
Other assets                                         107,125         107,481
                                             --------------- ---------------
    Total assets                             $     6,279,527 $     6,412,245
                                             =============== ===============
                                                                            
LIABILITIES AND STOCKHOLDERS' EQUITY                                        
                                                                            
Current liabilities:                                                        
  Accounts payable                           $       328,259 $       356,428
  Accrued liabilities and other current                                     
   liabilities                                       597,318         619,795
                                             --------------- ---------------
    Total current liabilities                        925,577         976,223
                                                                            
Other long-term liabilities                          511,433         589,321
Capital lease obligations, long term                  18,333          18,998
                                                                            
Stockholders' equity                               4,824,184       4,827,703
                                             --------------- ---------------
                                                                            
    Total liabilities and stockholders'                                     
     equity                                  $     6,279,527 $     6,412,245
                                             =============== ===============
                                                                            
                                                                            
                                                                            
                             NVIDIA CORPORATION                             
           RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES            
                   (In thousands, except per share data)                    
                                (Unaudited)                                 
                                                                            
                                             Three Months Ended             
                                ------------------------------------------- 
                                  April 28,     January 27,     April 29,   
                                     2013           2013           2012     
                                -------------  -------------  ------------- 
                                                                            
GAAP gross profit               $     518,568  $     585,602  $     463,364 
  GAAP gross margin                      54.3%          52.9%          50.1%
    Stock-based compensation                                                
     expense included in cost of                                            
     revenue (A)                        2,653          2,826          2,526 
                                -------------  -------------  ------------- 
Non-GAAP gross profit           $     521,221  $     588,428  $     465,890 
                                =============  =============  ============= 
  Non-GAAP gross margin                  54.6%          53.2%          50.4%
                                                                            
GAAP operating expenses         $     435,787  $     402,029  $     390,538 
    Stock-based compensation                                                
     expense included in                                                    
     operating expense (A)            (30,744)       (32,943)       (33,043)
    Amortization of acquisition-                                            
     related intangible assets         (3,915)        (4,325)        (4,342)
    Other acquisition-related                                               
     costs (B)                         (4,946)        (4,373)        (5,171)
                                -------------  -------------  ------------- 
Non-GAAP operating expenses     $     396,182  $     360,388  $     347,982 
                                =============  =============  ============= 
                                                                            
GAAP net income                 $      77,891  $     173,973  $      60,437 
    Total pre-tax impact of non-                                            
     GAAP adjustments                  42,258         44,467         45,082 
    Income tax impact of non-                                               
     GAAP adjustments                  (6,348)        (3,507)        (7,989)
                                -------------  -------------  ------------- 
Non-GAAP net income             $     113,801  $     214,933  $      97,530 
                                =============  =============  ============= 
                                                                            
Diluted net income per share                                                
    GAAP                        $        0.13  $        0.28  $        0.10 
                                =============  =============  ============= 
    Non-GAAP                    $        0.18  $        0.35  $        0.16 
                                =============  =============  ============= 
                                                                            
Shares used in diluted net                                                  
 income per share computation         619,302        622,018        623,786 
                                                                            
Metrics:                                                                    
                                                                            
    GAAP net cash flow provided                                             
     by operating activities    $     175,650  $     451,009  $      (9,208)
    Purchase of property and                                                
     equipment and intangible                                               
     assets                           (65,667)       (47,758)       (28,923)
                                -------------  -------------  ------------- 
    Free cash flow              $     109,983  $     403,251  $     (38,131)
                                =============  =============  ============= 
                                                                            
                                                                            
(A) Excludes stock-based                                                    
 compensation as follows:                    Three Months Ended             
                                ------------------------------------------- 
                                    April 28,    January 27,      April 29, 
                                         2013           2013           2012 
                                -------------  -------------  ------------- 
    Cost of revenue             $       2,653  $       2,826  $       2,526 
    Research and development    $      21,935  $      22,009  $      21,207 
    Sales, general and                                                      
     administrative             $       8,809  $      10,934  $      11,836 
                                                                            
(B) Comprise of transaction costs and compensation charges related to       
 acquisitions.                                                              
                                                                            
                                                                            
                                                                            
                           NVIDIA CORPORATION                               
               RECONCILIATION OF GAAP TO NON-GAAP OUTLOOK                   
                                                                            
                                                 Q2 FY2014                  
                                                  Outlook                   
                                               -------------                
                                                                            
GAAP gross margin                                       54.3%               
  Impact of stock-based compensation (A)                 0.3%               
                                               -------------                
Non-GAAP gross margin                                   54.6%               
                                               =============                
                                                                            
                                                 Q2 FY2014        FY2014    
                                                  Outlook        Outlook    
                                               -------------  ------------- 
                                               (In millions)  (In millions) 
                                                                            
GAAP operating expenses                        $       448.0  $     1,760.0 
  Stock-based compensation expense included in                              
   operating expense                                   (31.0)        (125.0)
  Amortization of acquisition-related                                       
   intangible assets                                    (4.0)         (17.0)
  Other acquisition-related costs (B)                   (5.0)         (18.0)
                                                                            
                                               -------------  ------------- 
Non-GAAP operating expenses                    $       408.0  $     1,600.0 
                                               =============  ============= 
                                                                            
(A) Represents $2.4 million of stock-based compensation expense included in 
 cost of revenue.                                                           
                                                                            
(B) Comprise of transaction costs and compensation charges related to       
 acquisitions.                                                              

  
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
 
 
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