NVIDIA Announces Financial Results for Fourth Quarter and Fiscal 2015

NVIDIA's outlook for the first quarter of fiscal 2016 is as follows:

  • Revenue is expected to be $1.16 billion, plus or minus two percent.
  • GAAP and non-GAAP gross margins are expected to be 56.2 percent and 56.5 percent, respectively, plus or minus 50 basis points.
  • GAAP operating expenses are expected to be approximately $478 million; non-GAAP operating expenses are expected to be approximately $425 million, inclusive of litigation costs.
  • GAAP and non-GAAP tax rates for the first quarter of fiscal 2016 are expected to be 20 percent, plus or minus one percent -- excluding the benefit of the U.S. Federal R&D tax credit which expired December 31, 2014.
  • Capital expenditures are expected to be approximately $30 million to $40 million.

Fourth Quarter Fiscal 2015 Highlights
During the fourth quarter, NVIDIA achieved progress in each of its market-specialized platforms:

Gaming:

  • Introduced the GeForce® GTX™ 960 GPU, bringing the power and efficiency of the Maxwell architecture to the gaming market's $199 sweet spot.

Enterprise Graphics:

  • Announced, shortly after the quarter, that the new version of VMware's virtualization suite, VMware Horizon 6, includes the capability to deliver scalable, virtualized 3D graphics enabled by NVIDIA GRID vGPU™.

Accelerated Computing:

Automotive:

  • Unveiled at the International Consumer Electronics Show the NVIDIA® Tegra® X1 mobile processor -- a 256-core Maxwell™ architecture-based mobile super chip with over one teraflops of computing power.
  • Launched NVIDIA DRIVE™ automotive computers, which move the industry closer to the era of auto-piloted cars and run next-generation infotainment systems.

CFO Commentary
Commentary on the quarter by Colette Kress, NVIDIA's executive vice president and chief financial officer, is available at http://investor.nvidia.com/.

Conference Call and Webcast Information
NVIDIA will conduct a conference call with analysts and investors to discuss its fourth quarter and fiscal 2015 financial results and current financial prospects today at 2 p.m. Pacific Time (5 p.m. Eastern Time). To listen to the conference call, dial (303) 223-4365; no password is required. A live webcast (listen-only mode) of the conference call will be accessible at NVIDIA's investor relations website, http://investor.nvidia.com, 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 2016.

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 other income and expense, non-GAAP income tax expense, non-GAAP net income, non-GAAP net income, or earnings, per diluted 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, gains and losses from non-affiliated investments, interest expense related to amortization of debt discount, other expense 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.

To Keep Current on NVIDIA:

                                                                            
                             NVIDIA CORPORATION                             
                 CONDENSED CONSOLIDATED STATEMENTS OF INCOME                
                    (In thousands, except per share data)                   
                                 (Unaudited)                                
                                                                            
                                                                            
                                Three Months Ended     Twelve Months Ended  
                             ----------------------- -----------------------
                             January 25, January 26, January 25, January 26,
                                                              2015                2014                2015                2014      
                                                          -----------  -----------  -----------  -----------
                                                                                                                                                        
Revenue                                            $  1,250,514  $  1,144,218  $  4,681,507  $  4,130,162
Cost  of  revenue                                    550,911          524,976      2,082,030      1,862,399
                                                          -----------  -----------  -----------  -----------
Gross  profit                                          699,603          619,242      2,599,477      2,267,763
Operating  expenses                                                                                                                    
    Research  and  development              348,253          336,641      1,359,725      1,335,834
    Sales,  general  and                                                                                                                
      administrative                                120,214          115,677          480,763          435,702
                                                          -----------  -----------  -----------  -----------
        Total  operating  expenses          468,467          452,318      1,840,488      1,771,536
                                                          -----------  -----------  -----------  -----------
Operating  income                                  231,136          166,924          758,989          496,227
    Interest  income                                    8,129              4,156            28,090            17,119
    Interest  expense                                11,594              7,935            46,133            10,443
    Other  income,  net                                    188              5,743            13,890              7,351
                                                          -----------  -----------  -----------  -----------
Income  before  income  tax                                                                                                        
  expense                                                  227,859          168,888          754,836          510,254
Income  tax  expense                                34,731            21,971          124,249            70,264
                                                          -----------  -----------  -----------  -----------
Net  income                                      $      193,128  $      146,917  $      630,587  $      439,990
                                                          ===========  ===========  ===========  ===========
                                                                                                                                                        
Net  income  per  share:                                                                                                              
    Basic                                            $            0.35  $            0.26  $            1.14  $            0.75
                                                          ===========  ===========  ===========  ===========
    Diluted                                        $            0.35  $            0.25  $            1.12  $            0.74
                                                          ===========  ===========  ===========  ===========
                                                                                                                                                        
Weighted  average  shares  used                                                                                                
  in  per  share  computation:                                                                                                    
    Basic                                                    544,170          568,483          552,319          587,893
    Diluted                                                556,573          577,356          563,068          594,517
                                                                                                                                                        
                                                                                                                                                        
                                                          NVIDIA  CORPORATION                                                          
                                        CONDENSED  CONSOLIDATED  BALANCE  SHEETS                                      
                                                              (In  thousands)                                                              
                                                                  (Unaudited)                                                                
                                                                                                                                                        
                                                                                                                                                        
                                                                                                    January  25,      January  26,  
                                                                                                            2015                    2014        
                                                                                                  -------------  -------------
ASSETS                                                                                                                                            
                                                                                                                                                        
Current  assets:                                                                                                                          
    Cash,  cash  equivalents  and  marketable                                                                          
      securities                                                                        $      4,623,339  $      4,671,810
    Accounts  receivable,  net                                                          473,637              426,357
    Inventories                                                                                    482,893              387,765
    Prepaid  expenses  and  other  current  assets                        133,428              138,779
                                                                                                  -------------  -------------
        Total  current  assets                                                          5,713,297          5,624,711
                                                                                                                                                        
Property  and  equipment,  net                                                        557,282              582,740
Goodwill                                                                                              618,179              643,179
Intangible  assets,  net                                                                  221,714              296,012
Other  assets                                                                                        90,896              104,252
                                                                                                  -------------  -------------
        Total  assets                                                                  $      7,201,368  $      7,250,894
                                                                                                  =============  =============
                                                                                                                                                        
LIABILITIES  AND  STOCKHOLDERS'  EQUITY                                                                                
                                                                                                                                                        
Current  liabilities:                                                                                                                
    Accounts  payable                                                              $          293,223  $          324,391
    Accrued  liabilities  and  other  current                                                                          
      liabilities                                                                                  602,807              621,105
                                                                                                  -------------  -------------
        Total  current  liabilities                                                    896,030              945,496
                                                                                                                                                        
Long-term  debt                                                                              1,384,342          1,356,375
Other  long-term  liabilities                                                        488,928              475,125
Capital  lease  obligations,  long-term                                        14,086                17,500
Stockholders'  equity                                                                  4,417,982          4,456,398
                                                                                                  -------------  -------------
        Total  liabilities  and  stockholders'  equity      $      7,201,368  $      7,250,894
                                                                                                  =============  =============
                                                                                                                                                        
                                                                                                                                                        
                                                          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    
                                                    25,              26,              26,                25,                  26,        
                                                  2015            2014            2014              2015                2014        
                                              --------    --------    --------    ----------    ----------  
                                                                                                                                                        
GAAP  gross  profit            $699,603    $676,698    $619,242    $2,599,477    $2,267,763  
    GAAP  gross  margin                55.9%          55.2%          54.1%              55.5%              54.9%
        Stock-based                                                                                                                          
          compensation                                                                                                                      
          expense  included                                                                                                              
          in  cost  of                                                                                                                          
          revenue  (A)                    3,426          3,021          2,777            12,022            10,688  
        Legal  settlement                    -                  -          1,450                      -              3,740  
        Credit  from  a  weak                                                                                                            
          die/packaging                                                                                                                    
          material  set  (B)                  -                  -        (7,782)                    -            (7,782)
                                              --------    --------    --------    ----------    ----------  
    Non-GAAP  gross                                                                                                                        
      profit                            $703,029    $679,719    $615,687    $2,611,499    $2,274,409  
                                              ========    ========    ========    ==========    ==========  
        Non-GAAP  gross                                                                                                                    
          margin                                56.2%          55.5%          53.8%              55.8%              55.1%
                                                                                                                                                        
    GAAP  operating                                                                                                                        
      expenses                        $468,467    $463,383    $452,318    $1,840,488    $1,771,536  
        Stock-based                                                                                                                          
          compensation                                                                                                                      
          expense  included                                                                                                              
          in  operating                                                                                                                      
          expense  (A)                (39,044)    (38,414)    (33,427)      (145,819)      (125,607)
        Acquisition-                                                                                                                        
          related  costs  (B)      (9,169)      (9,572)      (9,250)        (37,355)        (31,652)
        Other  expense  ©                  -                  -        (1,845)                    -            (4,080)
                                              --------    --------    --------    ----------    ----------  
    Non-GAAP  operating                                                                                                                
      expenses                        $420,254    $415,397    $407,796    $1,657,314    $1,610,197  
                                              ========    ========    ========    ==========    ==========  
                                                                                                                                                        
    GAAP  other  income                                                                                                                  
      (expense),  net            $  (3,277)  $  (4,245)  $    1,964    $      (4,153)  $      14,027  
        Gains  and  losses                                                                                                                
          from  non-                                                                                                                            
          affiliated                                                                                                                          
          investments                            -                  -        (3,074)        (14,482)          (3,074)
        Interest  expense                                                                                                                
          related  to                                                                                                                          
          amortization  of                                                                                                                
          debt  discount                7,083          7,010          4,600            27,967              4,600  
                                              --------    --------    --------    ----------    ----------  
    Non-GAAP  other                                                                                                                        
      income  (expense),                                                                                                                
      net                                  $    3,806    $    2,765    $    3,490    $        9,332    $      15,553  
                                              ========    ========    ========    ==========    ==========  
                                                                                                                                                        
    GAAP  net  income            $193,128    $172,967    $146,917    $    630,587    $    439,990  
        Total  pre-tax                                                                                                                      
          impact  of  non-                                                                                                                  
          GAAP  adjustments        58,722        58,017        42,493          208,681          169,511  
        Income  tax  impact                                                                                                              
          of  non-GAAP                                                                                                                        
          adjustments                (10,783)    (10,549)      (1,924)        (38,280)        (21,094)
                                              --------    --------    --------    ----------    ----------  
    Non-GAAP  net  income    $241,067    $220,435    $187,486    $    800,988    $    588,407  
                                              ========    ========    ========    ==========    ==========  
                                                                                                                                                        
    Diluted  net  income                                                                                                                
      per  share                                                                                                                                
        GAAP                              $      0.35    $      0.31    $      0.25    $          1.12    $          0.74  
                                              ========    ========    ========    ==========    ==========  
        Non-GAAP                      $      0.43    $      0.39    $      0.32    $          1.42    $          0.99  
                                              ========    ========    ========    ==========    ==========  
                                                                                                                                                        
    Shares  used  in                                                                                                                        
      diluted  net  income                                                                                                              
      per  share                                                                                                                                
      computation                    556,573      558,201      577,356          563,068          594,517  
                                                                                                                                                        
    Metrics:                                                                                                                                    
        GAAP  net  cash  flow                                                                                                            
          provided  by                                                                                                                        
          operating                                                                                                                            
          activities                $442,729    $215,623    $400,712    $    905,656    $    835,146  
        Purchase  of                                                                                                                          
          property  and                                                                                                                      
          equipment  and                                                                                                                    
          intangible  assets    (31,045)    (39,741)    (66,374)      (122,381)      (255,186)
                                              --------    --------    --------    ----------    ----------  
        Free  cash  flow          $411,684    $175,882    $334,338    $    783,275    $    579,960  
                                              ========    ========    ========    ==========    ==========  
                                                                                                                                                        
                                                                                                                                                        
----------------------------------------------------------------------------
(A)  Excludes  stock-                                                                                                                  
  based  compensation  as                                                                                                            
  follows:                                        Three  Months  Ended                Twelve  Months  Ended    
                                              ----------------------------    ----------------------  
                                                January      October      January        January          January    
                                                    25,              26,              26,                25,                  26,        
                                                    2015            2014            2014              2015                2014      
                                              --------    --------    --------    ----------    ----------  
        Cost  of  revenue        $    3,426    $    3,021    $    2,777    $      12,022    $      10,688  
        Research  and                                                                                                                        
          development              $  23,719    $  22,680    $  21,548    $      88,355    $      82,940  
        Sales,  general  and                                                                                                            
          administrative        $  15,325    $  15,734    $  11,879    $      57,464    $      42,667  
                                                                                                                                                        
(B)  Consists  of  amortization  of  acquisition-related  intangible  assets,            
  transaction  costs,  compensation  charges,  and  other  credits  related  to            
  acquisitions.                                                                                                                            
©  Includes  intangible  asset  write-off,  restructuring  charge,  and  legal        
  settlement  cost,  net  of  credits.                                                                                      
----------------------------------------------------------------------------
                                                                                                                                                        
                                                                                                                                                        
                                                          NVIDIA  CORPORATION                                                          
                                  RECONCILIATION  OF  GAAP  TO  NON-GAAP  OUTLOOK                                  
                                                                                                                                                        
                                                                                                                Q1  FY2016  Outlook      
                                                                                                            ---------------------  
                                                                                                                                                        
GAAP  gross  margin                                                                                                            56.2%
    Impact  of  stock-based  compensation                                                                        0.3%
                                                                                                            ---------------------  
Non-GAAP  gross  margin                                                                                                    56.5%
                                                                                                            =====================  
                                                                                                                                                        
                                                                                                                Q1  FY2016  Outlook      
                                                                                                            ---------------------  
                                                                                                                    (In  millions)          
                                                                                                                                                        
GAAP  operating  expenses                                                              $                                  478  
    Stock-based  compensation  expense  and  acquisition-                                                  
      related  costs                                                                                                                (53)
                                                                                                            ---------------------  
Non-GAAP  operating  expenses                                                      $                                  425  
                                                                                                            =====================  
                                                                                                                                                        
                                                                                                                                                        
 




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