NVIDIA Reports Financial Results for Fourth Quarter and 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 interest and other income/expense, 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, legal settlements, a credit related to a weak die/packaging material set, acquisition-related costs, a contribution expense, other expenses, a gain on sale of a non-affiliated investment, interest expense related to amortization of debt discount, 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.

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                             NVIDIA CORPORATION                             
                CONDENSED CONSOLIDATED STATEMENTS OF INCOME                 
                   (In thousands, except per share data)                    
                                (Unaudited)                                 
                                                                            
                            Three Months Ended        Twelve Months Ended   
                         ------------------------  ------------------------ 
                         January 26,  January 27,  January 26,  January 27, 
                             2014         2013         2014         2013    
                         -----------  -----------  -----------  ----------- 
                                                                            
Revenue                  $ 1,144,218  $ 1,106,902  $ 4,130,162  $ 4,280,159 
Cost of revenue              524,976      521,300    1,862,399    2,053,816 
                         -----------  -----------  -----------  ----------- 
Gross profit                 619,242      585,602    2,267,763    2,226,343 
Operating expenses                                                          
  Research and                                                              
   development               336,641      298,007    1,335,834    1,147,282 
  Sales, general and                                                        
   administrative            115,677      104,022      435,702      430,822 
                         -----------  -----------  -----------  ----------- 
    Total operating                                                                                      
          expenses                                452,318            402,029        1,771,536        1,578,104  
                                                  -----------    -----------    -----------    -----------  
Operating  income                          166,924            183,573            496,227            648,239  
    Interest  income                            4,156                4,693              17,119              19,908  
    Interest  expense                        (7,935)                (880)          (10,443)            (3,294)
    Other  income                                                                                                                            
      (expense),  net                            5,743              (1,278)              7,351              (2,814)
                                                  -----------    -----------    -----------    -----------  
Income  before  income  tax                                                                                                        
  expense                                          168,888            186,108            510,254            662,039  
Income  tax  expense                        21,971              12,135              70,264              99,503  
                                                  -----------    -----------    -----------    -----------  
Net  income                              $      146,917    $      173,973    $      439,990    $      562,536  
                                                  ===========    ===========    ===========    ===========  
                                                                                                                                                        
Basic  net  income  per                                                                                                                
  share                                      $            0.26    $            0.28    $            0.75    $            0.91  
                                                  ===========    ===========    ===========    ===========  
Diluted  net  income  per                                                                                                            
  share                                      $            0.25    $            0.28    $            0.74    $            0.90  
                                                  ===========    ===========    ===========    ===========  
                                                                                                                                                        
Shares  used  in  basic  per                                                                                                        
  share  computation                      568,483            620,169            587,893            619,324  
Shares  used  in  diluted                                                                                                            
  per  share  computation              577,356            622,018            594,517            624,957  
                                                                                                                                                        
                                                                                                                                                        
                                                                                                                                                        
                                                          NVIDIA  CORPORATION                                                          
                                        CONDENSED  CONSOLIDATED  BALANCE  SHEETS                                      
                                                              (In  thousands)                                                              
                                                                  (Unaudited)                                                                
                                                                                                                                                        
                                                                                                    January  26,      January  27,  
                                                                                                            2014                    2013        
                                                                                                  -------------  -------------
ASSETS                                                                                                                                            
                                                                                                                                                        
Current  assets:                                                                                                                          
    Cash,  cash  equivalents  and  marketable                                                                          
      securities                                                                        $      4,671,810  $      3,727,883
    Accounts  receivable,  net                                                          426,357              454,252
    Inventories                                                                                    387,765              412,467
    Prepaid  expenses  and  other  current  assets                        138,779              180,656
                                                                                                  -------------  -------------
        Total  current  assets                                                          5,624,711          4,775,258
                                                                                                                                                        
Property  and  equipment,  net                                                        582,740              576,144
Goodwill                                                                                              643,179              641,030
Intangible  assets,  net                                                                  296,012              312,332
Other  assets                                                                                      104,252              107,481
                                                                                                  -------------  -------------
        Total  assets                                                                  $      7,250,894  $      6,412,245
                                                                                                  =============  =============
                                                                                                                                                        
LIABILITIES  AND  STOCKHOLDERS'  EQUITY                                                                                
                                                                                                                                                        
Current  liabilities:                                                                                                                
    Accounts  payable                                                              $          324,391  $          356,428
    Accrued  liabilities  and  other  current                                                                          
      liabilities                                                                                  621,105              619,795
                                                                                                  -------------  -------------
        Total  current  liabilities                                                    945,496              976,223
                                                                                                                                                        
Long-term  debt                                                                              1,356,375                          -
Other  long-term  liabilities                                                        475,125              589,321
Capital  lease  obligations,  long-term                                        17,500                18,998
                                                                                                                                                        
Stockholders'  equity                                                                  4,456,398          4,827,703
                                                                                                  -------------  -------------
                                                                                                                                                        
        Total  liabilities  and  stockholders'  equity      $      7,250,894  $      6,412,245
                                                                                                  =============  =============
                                                                                                                                                        
                                                                                                                                                        
                                                                                                                                                        
                                                          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    
                                          26,  2014      27,  2013      27,  2013      26,  2014        27,  2013    
                                        ---------    ---------    ---------    ----------    ----------  
                                                                                                                                                        
GAAP  gross  profit      $  619,242    $  584,415    $  585,602    $2,267,763    $2,226,343  
    GAAP  gross  margin            54.1%            55.4%            52.9%              54.9%              52.0%
        Stock-based                                                                                                                          
          compensation                                                                                                                      
          expense                                                                                                                                
          included  in                                                                                                                        
          cost  of                                                                                                                                
          revenue  (A)                2,777            3,090            2,826            10,688            10,490  
        Legal                                                                                                                                      
          settlement                  1,450                    -                    -              3,740                      -  
        Credit  from  a                                                                                                                      
          weak                                                                                                                                      
          die/packaging                                                                                                                    
          material  set                                                                                                                      
          (B)                              (7,782)                  -                    -            (7,782)                    -  
                                        ---------    ---------    ---------    ----------    ----------  
Non-GAAP  gross                                                                                                                            
  profit                          $  615,687    $  587,505    $  588,428    $2,274,409    $2,236,833  
                                        =========    =========    =========    ==========    ==========  
    Non-GAAP  gross                                                                                                                        
      margin                                53.8%            55.7%            53.2%              55.1%              52.3%
                                                                                                                                                        
GAAP  operating                                                                                                                            
  expenses                      $  452,318    $  443,427    $  402,029    $1,771,536    $1,578,104  
        Stock-based                                                                                                                          
          compensation                                                                                                                      
          expense                                                                                                                                
          included  in                                                                                                                        
          operating                                                                                                                            
          expense  (A)            (33,427)      (31,209)      (32,943)      (125,607)      (126,172)
        Acquisition-                                                                                                                        
          related  costs                                                                                                                    
          (C)                              (9,250)        (4,577)        (8,698)        (31,652)        (36,138)
        Contribution                                                                                                                        
          expense  (D)                        -                    -                    -                      -          (20,127)
        Other  expense                                                                                                                      
          (E)                              (1,845)        (2,235)                  -            (4,080)                    -  
                                        ---------    ---------    ---------    ----------    ----------  
Non-GAAP  operating                                                                                                                    
  expenses                      $  407,796    $  405,406    $  360,388    $1,610,197    $1,395,667  
                                        =========    =========    =========    ==========    ==========  
                                                                                                                                                        
GAAP  interest  and                                                                                                                      
  other                                                                                                                                            
  income/expense,                                                                                                                        
  net                                $      1,964    $          496    $      2,535    $      14,027    $      13,800  
        Gain  on  sale  of                                                                                                                  
          a  non-                                                                                                                                  
          affiliated                                                                                                                          
          investment                (3,074)                  -                    -            (3,074)                    -  
        Interest                                                                                                                                
          expense                                                                                                                                
          related  to                                                                                                                          
          amortization                                                                                                                      
          of  debt                                                                                                                                
          discount                      4,600                    -                    -              4,600                      -  
                                        ---------    ---------    ---------    ----------    ----------  
Non-GAAP  interest                                                                                                                      
  and  other                                                                                                                                    
  income/expense,                                                                                                                        
  net                                $      3,490    $          496    $      2,535    $      15,553    $      13,800  
                                        =========    =========    =========    ==========    ==========  
                                                                                                                                                        
GAAP  net  income          $  146,917    $  118,734    $  173,973    $    439,990    $    562,536  
        Total  pre-tax                                                                                                                      
          impact  of  non-                                                                                                                  
          GAAP                                                                                                                                      
          adjustments              42,493          41,111          44,467          169,511          192,927  
        Income  tax                                                                                                                            
          impact  of  non-                                                                                                                  
          GAAP                                                                                                                                      
          adjustments              (1,924)        (6,055)        (3,507)        (21,094)        (27,090)
                                        ---------    ---------    ---------    ----------    ----------  
Non-GAAP  net  income  $  187,486    $  153,790    $  214,933    $    588,407    $    728,373  
                                        =========    =========    =========    ==========    ==========  
                                                                                                                                                        
Diluted  net  income                                                                                                                    
  per  share                                                                                                                                    
        GAAP                        $        0.25    $        0.20    $        0.28    $          0.74    $          0.90  
                                        =========    =========    =========    ==========    ==========  
        Non-GAAP                $        0.32    $        0.26    $        0.35    $          0.99    $          1.17  
                                        =========    =========    =========    ==========    ==========  
                                                                                                                                                        
Shares  used  in                                                                                                                            
  diluted  net  income                                                                                                                  
  per  share                                                                                                                                    
  computation                    577,356        588,752        622,018          594,517          624,957  
                                                                                                                                                        
Metrics:                                                                                                                                        
        GAAP  net  cash                                                                                                                      
          flow  provided                                                                                                                    
          by  operating                                                                                                                      
          activities          $  400,712    $  162,315    $  451,009    $    835,146    $    824,172  
        Purchase  of                                                                                                                          
          property  and                                                                                                                      
          equipment  and                                                                                                                    
          intangible                                                                                                                          
          assets                      (66,374)      (38,159)      (47,758)      (255,186)      (183,309)
                                        ---------    ---------    ---------    ----------    ----------  
        Free  cash  flow    $  334,338    $  124,156    $  403,251    $    579,960    $    640,863  
                                        =========    =========    =========    ==========    ==========  
                                                                                                                                                        
----------------------------------------------------------------------------
                                                                                                                                                        
(A)  Excludes  stock-                                                                                                                  
  based  compensation                                                                                                                  
  as  follows:                              Three  Months  Ended                    Twelve  Months  Ended    
                                        -------------------------------    ----------------------  
                                          January        October        January        January          January      
                                          26,  2014      27,  2013      27,  2013      26,  2014        27,  2013    
                                        ---------    ---------    ---------    ----------    ----------  
        Cost  of  revenue  $      2,777    $      3,090    $      2,826    $      10,688    $      10,490  
        Research  and                                                                                                                        
          development        $    21,548    $    20,902    $    22,009    $      82,940    $      82,157  
        Sales,  general                                                                                                                    
          and                                                                                                                                        
          administrative  $    11,879    $    10,307    $    10,934    $      42,667    $      44,015  
                                                                                                                                                        
(B)  Release  of  the  remaining  warranty  reserve  related  to  a  weak                          
  die/packaging  material  set,  as  of  January  26,  2014.                                                
                                                                                                                                                        
(C)  Consists  of  amortization  of  acquisition-related  intangible  assets,            
  transaction  costs,  compensation  charges,  and  other  credits  related  to            
  acquisitions.                                                                                                                            
                                                                                                                                                        
(D)  Net  present  value  of  a  $25  million  charitable  contribution  pledged  on      
  June  12,  2012  to  Stanford  Hospital  and  Clinic,  payable  over  ten  years.          
                                                                                                                                                        
(E)  Includes  intangible  asset  write-off,  restructuring  charge,  and  legal        
  settlement  costs,  net  of  credits.                                                                                    
                                                                                                                                                        
----------------------------------------------------------------------------
                                                                                                                                                        
                                                                                                                                                        
                                                          NVIDIA  CORPORATION                                                          
                                  RECONCILIATION  OF  GAAP  TO  NON-GAAP  OUTLOOK                                  
                                                                                                                                                        
                                                                                                                                Q1  FY2015      
                                                                                                                                  Outlook        
                                                                                                                            -------------  
                                                                                                                                                        
GAAP  gross  margin                                                                                                            54.2%
    Impact  of  stock-based  compensation                                                                        0.3%
                                                                                                                            -------------  
Non-GAAP  gross  margin                                                                                                    54.5%
                                                                                                                            =============  
                                                                                                                                                        
                                                                                                                                Q1  FY2015      
                                                                                                                                  Outlook        
                                                                                                                            -------------  
                                                                                                                            (In  millions)  
                                                                                                                                                        
GAAP  operating  expenses                                                                              $                  454  
    Stock-based  compensation  expense  and  acquisition-related                                    
      costs                                                                                                                                (41)
                                                                                                                            -------------  
Non-GAAP  operating  expenses                                                                      $                  413  
                                                                                                                            =============  
                                                                                                                                                        
                                                                                                                                                        
 




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