NVIDIA Reports Financial Results for Third Quarter Fiscal Year 2010

About NVIDIA
NVIDIA (NASDAQ: NVDA) awakened the world to the power of computer graphics when it invented the graphics processing unit (GPU) in 1999. Since then, it has consistently set new standards in visual computing with breathtaking, interactive graphics. Expertise in programmable GPUs has led to breakthroughs in parallel processing which make supercomputing inexpensive and widely accessible. Fortune magazine has ranked NVIDIA #1 in innovation in the semiconductor industry for two years in a row. For more information, see www.nvidia.com.

Certain statements in this press release including, but not limited to, statements as to: the benefits and impact of, and demand and enthusiasm for, NVIDIA's products and technologies; and NVIDIA's revenue outlook for the fourth quarter of fiscal 2010; 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; development of faster or more efficient technology; the impact of technological development and competition; design, manufacturing or software defects; changes in consumer preferences or demands; changes in industry standards and interfaces; unexpected loss of performance of our products or technologies when integrated into systems; as well as other factors detailed from time to time in the reports NVIDIA files with the Securities and Exchange Commission, or SEC, including its Form 10-Q for the fiscal period ended July 26, 2009. Copies of reports filed with the SEC are posted on NVIDIA'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 © 2009 NVIDIA Corporation. All rights reserved. NVIDIA, the NVIDIA logo, GeForce, Tegra, NVIDIA ION and CUDA are registered trademarks and/or trademarks of NVIDIA Corporation in the United States and other countries. All other company and/or product names may be trade names, trademarks, and/or registered trademarks of the respective owners with which they are associated. Features, pricing, availability, and specifications are subject to change without notice.

                            NVIDIA CORPORATION
              CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                  (In thousands, except per share data)
                                (Unaudited)

                           Three Months Ended         Nine Months Ended
                        ------------------------- ------------------------
                        October 25,  October 26,  October 25,  October 26,
                            2009         2008         2009         2008
                        ------------ -----------  -----------  ------------

Revenue                 $    903,206 $   897,655  $ 2,343,957  $  2,943,719

Cost of revenue              511,423     529,812    1,605,755     1,911,116
                        ------------ -----------  -----------  ------------

Gross profit                 391,783     367,843      738,202     1,032,603

Operating expenses
 Research and
  development                197,948     212,360      692,600       644,100
 Sales, general and
  administrative              85,990      90,349      278,829       275,782
 Restructuring charges             -       8,338            -         8,338
                        ------------ -----------  -----------  ------------
     Total operating
      expenses               283,938     311,047      971,429       928,220
                        ------------ -----------  -----------  ------------

Operating income (loss)      107,845      56,796     (233,227)      104,383

Interest and other
 income, net                   2,362       4,207       11,512        23,038
                        ------------ -----------  -----------  ------------

Income (loss) before
 income tax expense          110,207      61,003     (221,715)      127,421

Income tax expense
 (benefit)                     2,630        (745)     (22,652)        9,797
                        ------------ -----------  -----------  ------------

Net income (loss)       $    107,577 $    61,748  $  (199,063) $    117,624
                        ============ ===========  ===========  ============


Basic net income (loss)
 per share              $       0.20 $      0.11  $     (0.36) $       0.21
                        ============ ===========  ===========  ============

Diluted net income
 (loss) per share       $       0.19 $      0.11  $     (0.36) $       0.20
                        ============ ===========  ===========  ============

Shares used in basic
 per share computation       551,283     543,807      546,737       551,623

Shares used in diluted
 per share computation       574,381     564,536      546,737       590,490


                            NVIDIA CORPORATION
                             CONDENSED  CONSOLIDATED  BALANCE  SHEETS
                                                            (In  thousands)
                                                                (Unaudited)

                                                                                                        October  25,  January  25,
                                                                                                              2009                2009
                                                                                                        -----------  -----------
ASSETS
Current  assets:
  Cash,  cash  equivalents  and  marketable  securities      $  1,634,079  $  1,255,390
  Accounts  receivable,  net                                                              397,820          318,435
  Inventories                                                                                        277,643          537,834
  Prepaid  expenses  and  other  current  assets                              48,174            56,299
                                                                                                        -----------  -----------
      Total  current  assets                                                              2,357,716      2,167,958

Property  and  equipment,  net                                                          565,296          625,798
Goodwill                                                                                                369,844          369,844
Intangible  assets,  net                                                                    127,817          147,101
Deposits  and  other  assets                                                                42,901            40,026
                                                                                                        -----------  -----------

      Total  assets                                                                          $  3,463,574  $  3,350,727
                                                                                                        ===========  ===========

LIABILITIES  AND  STOCKHOLDERS'  EQUITY

Current  liabilities:
  Accounts  payable                                                                      $      321,530  $      218,864
  Accrued  liabilities  and  other  current  liabilities            567,276          559,727
                                                                                                        -----------  -----------

      Total  current  liabilities                                                        888,806          778,591

Other  long-term  liabilities                                                          126,373          151,850
Capital  lease  obligations,  long  term                                          24,760            25,634

Stockholders'  equity                                                                    2,423,635      2,394,652
                                                                                                        -----------  -----------

      Total  liabilities  and  stockholders'  equity              $  3,463,574  $  3,350,727
                                                                                                        ===========  ===========



                                                        NVIDIA  CORPORATION
                    RECONCILIATION  OF  GAAP  TO  NON-GAAP  FINANCIAL  MEASURES
                                    (In  thousands,  except  per  share  data)
                                                                (Unaudited)

                                            Three  Months  Ended                          Nine  Months  Ended
                            ----------------------------------    ------------------------
                          October  25,      July  26,      October  26,    October  25,    October  26,
                                2009                  2009                2008                  2009                  2008
                            ---------    -----------    ----------    -----------    -----------
GAAP  gross
  profit              $  391,783    $      156,723    $    367,843    $      738,202    $  1,032,603
    GAAP  gross
      margin                    43.4%                20.2%              41.0%                31.5%                35.1%
        Stock-based
          compensation
          expense
          included  in
          cost  of
          revenue  (A)    2,650                4,828              3,558                9,708              10,027
        Net
          warranty
          charge
          against
          cost  of
          revenue
          arising
          from  a
          weak
          die/packaging
          material
          set  (B)        (24,115)          119,993                      -              95,878            195,954
        Non-recurring
          charge
          related
          to  a
          royalty
          dispute                    -                        -              4,500                        -                4,500
        Stock
          option
          purchase
          charge
          related
          to  cost  of
          revenue
          ©                            -                        -                      -              11,412                        -
                            ---------    -----------    ----------    -----------    -----------
Non-GAAP
  gross  profit  $  370,318    $      281,544    $    375,901    $      855,200    $  1,243,084
                            =========    ===========    ==========    ===========    ===========
    Non-GAAP
      gross
      margin                    41.0%                36.3%              41.9%                36.5%                42.2%

GAAP  net
  income
  (loss)              $  107,577    $    (105,302)  $      61,748    $    (199,063)  $      117,624
        Stock-
          based
          compensation
          expense  (A)  22,982              25,376            38,384              82,471            120,873
        Net
          warranty
          charge
          against
          cost  of
          revenue
          arising
          from  a
          weak
          die/packaging
          material
          set  (B)        (25,105)          119,054                      -              93,949            195,954
        Restructuring
          charges                    -                        -              8,338                        -                8,338
        Non-recurring
          charge
          related
          to  a
          royalty
          dispute                    -                        -              4,500                        -                4,500
        Stock
          option
          purchase
          charge  ©              -                        -                      -            140,241                        -
        Income  tax
          impact  of
          non-GAAP
          adjustments    4,876              (1,398)          (1,540)          (16,212)          (49,624)
                            ---------    -----------    ----------    -----------    -----------
Non-GAAP  net
  income              $  110,330    $        37,730    $    111,430    $      101,386    $      397,665
                            =========    ===========    ==========    ===========    ===========

Diluted  net
  income
  (loss)  per
  share
        GAAP            $        0.19    $          (0.19)  $          0.11    $          (0.36)  $            0.20
                            =========    ===========    ==========    ===========    ===========
        Non-GAAP    $        0.19    $            0.07    $          0.20    $            0.18    $            0.68
                            =========    ===========    ==========    ===========    ===========

Shares  used
  in  GAAP
  diluted  net
  income
  (loss)  per
  share
  computation        574,381            546,639          564,536            546,737            590,490
        Impact  of
          non-GAAP
          adjustments
          on  dilutive
          share
          computation  (1,190)            15,996            (3,374)            16,291              (9,058)
                            ---------    -----------    ----------    -----------    -----------
Shares  used
  in  non-GAAP
  diluted  net
  income  per
  share
  computation        573,191            562,635          561,162            563,028            581,432
                            =========    ===========    ==========    ===========    ===========

Metrics:
GAAP  net  cash
  flow
  provided  by
  operating
  activities      $  141,317    $      135,117    $      43,003    $      418,562    $      269,205
        Purchase
          of  property
          and  equipment
          and  intangible
          assets          (16,593)          (17,656)      (109,008)          (55,026)        (364,695)
                            ---------    -----------    ----------    -----------    -----------
Free  cash
  flow                  $  124,724    $      117,461    $    (66,005)  $      363,536    $      (95,490)
                            =========    ===========    ==========    ===========    ===========

GAAP  cost  of
  revenue  [1]    $  511,423    $      619,797    $    529,812    $  1,605,755    $  1,911,116
GAAP
  inventory
  [2]                    $  277,643    $      279,216    $    523,988    $      277,643    $      523,988
Days  in
  period  [3]                    91                      91                    91                    273                    273
                            ---------    -----------    ----------    -----------    -----------
GAAP  days
  sales  in
  inventory
  [2]*[3]÷[1]                  49                      41                    90                      47                      75
                            =========    ===========    ==========    ===========    ===========

GAAP  revenue    $  903,206    $      776,520    $    897,655    $  2,343,957    $  2,943,719
        Less:
          Non-GAAP
          gross
          profit        (370,318)        (281,544)      (375,901)        (855,200)    (1,243,084)
                            ---------    -----------    ----------    -----------    -----------
Non-GAAP  cost
  of  revenue
  [4]                    $  532,888    $      494,976    $    521,754    $  1,488,757    $  1,700,635
                            =========    ===========    ==========    ===========    ===========

GAAP  ending
  inventory
  [5]                    $  277,643    $      279,216    $    523,988    $      277,643    $      523,988
Days  in
  period  [6]                    91                      91                    91                    273                    273

Non-GAAP  days
  sales  in
  inventory
  [5]*[6]÷[4]                  47                      51                    91                      51                      84
                            =========    ===========    ==========    ===========    ===========


(A)  Results  include  stock-based  compensation  expense  as  follows  (in
        thousands):

                                            Three  Months  Ended                            Nine  Months  Ended
                            -----------------------------------  -------------------------
                            October  25,    July  26,      October  26,  October  25,    October  26,
                                2009                  2009                2008                  2009                  2008
                            ----------  ------------  -----------  ------------  ------------
  Cost  of
    revenue          $        2,650  $            4,828  $          3,558  $            9,708  $          10,027
  Research  and
    development  $      12,853  $          13,268  $        22,740  $          47,391  $          71,500
  Sales,  general
    and  adminis-
    trative          $        7,479  $            7,280  $        12,086  $          25,372  $          39,346

(B)  Excludes  a  charge  related  to  the  weak  die/packaging  material  set  that
        was  used  in  certain  versions  of  our  previous  generation  chips,  net  of
        insurance  reimbursement.
(C)  During  the  three  months  ended  April  26,  2009,  the  Company  completed  a
        tender  offer  to  purchase  an  aggregate  of  28.5  million  outstanding  stock
        options  for  a  total  cash  payment  of  $78.1  million.    As  a  result  of  the
        tender  offer  the  Company  incurred  a  charge  of  $140.2  million,
        consisting  of  the  remaining  unamortized  stock-based  compensation
        expenses  associated  with  the  unvested  portion  of  the  options  tendered
        in  the  offer,  stock-based  compensation  expense  resulting  from  amounts
        paid  in  excess  of  the  fair  value  of  the  underlying  options,  plus
        associated  payroll  taxes  and  professional  fees.  The  $140.2  million
        stock  option  purchase  charge  for  the  three  months  ended  April  26,  2009
        relates  to  personnel  associated  with  cost  of  revenue  (for
        manufacturing  personnel),  research  and  development,  and  sales,  general
        and  administrative  of  $11.4  million,  $90.5  million,  and  $38.3  million,
        respectively.
 




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