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8-K - Q410 FORM 8K - NVIDIA CORP | form8k.htm |
EX-99.2 - CFO COMMENTARY - NVIDIA CORP | cfocommentary.htm |
FOR IMMEDIATE RELEASE: EXHIBIT 99.1
NVIDIA
Reports Financial Results for Fourth Quarter and Fiscal Year 2010
·
|
Revenue
rose 9 percent quarter-on-quarter to $982.5
million
|
·
|
GAAP
net income of $131.1 million, or $0.23 per diluted
share
|
·
|
GAAP
gross margin of 44.7 percent
|
SANTA CLARA, Calif.—Feb. 17,
2010—NVIDIA Corp. (Nasdaq: NVDA) today
reported revenue of $982.5 million for the fourth quarter of fiscal 2010
ended Jan. 31, 2010, up 9 percent from the previous quarter and more than double
the $481.1 million reported in the same period a year
earlier. For the full fiscal year, revenue was $3.3 billion
compared with $3.4 billion for the fiscal year ended Jan. 25, 2009, a decrease
of 3 percent.
On
a GAAP basis, the company recorded net income of $131.1 million, or $0.23 per
diluted share, for the fourth quarter of fiscal 2010, compared with a GAAP net
loss of $147.7 million, or $0.27 per share, in the same period a year
earlier. GAAP net loss for the fiscal year ended Jan. 31, 2010 was
$68.0 million, or $0.12 per share, compared with a net loss of $30.0 million, or
$0.05 per share, for the fiscal year ended Jan. 25, 2009.
Non-GAAP
net income1 for the fiscal year ending Jan. 31, 2010 was
$141.4 million, or $0.26 per diluted share, compared with net income of $160.3
million, or $0.29 per diluted share, for the same period a year
earlier.
Quarterly
Highlights
|
Fiscal
Year Highlights
|
|||||
($
in millions except per share data)
|
Q4
FY2010
|
Q3
FY2010
|
Q4
FY2009
|
FY2010
|
FY2009
|
|
Revenue
|
$982.5
|
$903.2
|
$481.1
|
$3,326
|
$3,425
|
|
GAAP:
|
||||||
Gross
margin
|
44.7%
|
43.4%
|
29.4%
|
35.4%
|
34.3%
|
|
Net
income (loss)
|
$131.1
|
$107.6
|
($147.7)
|
($68.0)
|
($30.0)
|
|
Income
(loss) per share
|
$0.23
|
$0.19
|
($0.27)
|
($0.12)
|
($0.05)
|
|
Non-GAAP:
(1)
|
||||||
Gross
margin
|
44.7%
|
40.7%
|
28.1%
|
38.6%
|
39.9%
|
|
Net
income (loss)
|
$131.1
|
$77.4
|
($145.3)
|
$141.4
|
$160.3
|
|
Income
(loss) per share
|
$0.23
|
$0.13
|
($0.27)
|
$0.26
|
$0.29
|
“NVIDIA’s
business continued to accelerate in the fourth quarter, with strong demand in
our PC and workstation markets,” said Jen-Hsun Huang, NVIDIA’s president and
chief executive officer. “While the yield of chips made using the latest 40nm
process has improved significantly, demand continues to exceed our constrained
supply. Looking ahead this year, we are excited to raise the bar
again with our next-generation Fermi GPU architecture; our Tegra™ mobile
processor will enable a new class of amazing mobile devices like tablets; and
our 3D Vision glasses and accompanying technology will bring a whole new
dimension to personal computing.”
Gross margin increased to 44.7 percent for the
fourth quarter fiscal 2010 from 43.4 percent in the previous quarter and 29.4
percent in the same period a year earlier. The company’s third
quarter results included a non-recurring $25.1 million credit for insurance
proceeds, of which $24.1 million was recorded as a benefit to cost of
revenue. Excluding this benefit, fourth quarter non-GAAP gross margin
improved 4.0 points sequentially to 44.7 percent from 40.7
percent.
Outlook
The
outlook for the first quarter of fiscal 2011 is as follows:
·
|
Revenue
is expected to be flat from the fourth
quarter.
|
·
|
GAAP
gross margin is expected to be in the range of 44 to 45
percent.
|
·
|
GAAP
operating expenses are expected to be flat, at approximately $305
million.
|
·
|
Tax
rate of 12% to 14% assuming a renewal of the U.S. R&D tax credit, 14%
to 16% otherwise.
|
Fourth Quarter Fiscal 2010 and Recent
Highlights:
·
|
NVIDIA®
GPU revenue was up 22 percent quarter on quarter. Within that,
desktop GPU revenue was up 19 percent, notebook GPU revenue was up 27
percent and Quadro® graphics revenue was up 25
percent.
|
·
|
NVIDIA
launched its next-generation Tegra™ chip: demonstrated Flash 10.1, Epic’s
Unreal Engine 3 and 1080p HD video on tablets; and announced that
Volkswagen and Audi will use next-generation Tegra starting in
2012.
|
·
|
NVIDIA
launched Optimus™ technology, a combination of software and hardware
innovations for notebooks, which provides the performance of discrete
graphics while still delivering great battery life. Eight
models are available now, with 50 systems to be available by the
summer.
|
CFO
Commentary
Commentary
on the quarter by David White, NVIDIA’s Chief Financial Officer and executive
vice president, is available at www.nvidia.com/investor.
Conference
Call and Web Cast Information
NVIDIA
will conduct a conference call with analysts and investors to discuss its fourth
quarter fiscal 2010 and fiscal year 2010 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 (212)
231-2901. A live Web cast (listen-only mode) of the conference call
will be held at the NVIDIA investor relations Web site www.nvidia.com/ir
and at www.streetevents.com. The
Web cast will be recorded and available for replay until the company's
conference call to discuss its financial results for its first quarter fiscal
2011.
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 net income, non-GAAP net income 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 a charge
related to the weak die/packaging material set that was used
in certain versions of NVIDIA’s previous generation chips, net of insurance
reimbursements, a non-recurring charge related to a tender offer purchase, a
non-recurring charge against cost of revenue related to a royalty dispute, a
non-recurring restructuring charge against operating expenses, a non-recurring
contract termination charge against operating expenses, and the associated tax
impact of these items, where applicable. Free cash flow is calculated
as GAAP net cash provided by operating activities less purchases of property and
equipment and intangible assets. NVIDIA believes the presentation of
its non-GAAP financial measures enhances the user's overall understanding of the
company’s historical financial performance. The presentation of the company’s
non-GAAP financial measures is not meant to be considered in isolation or as a
substitute for the company’s financial results prepared in accordance with GAAP,
and our non-GAAP measures may be different from non-GAAP measures used by other
companies.
About
NVIDIA
NVIDIA (Nasdaq:
NVDA) awakened the world to 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 for, NVIDIA’s products and
technologies; and NVIDIA’s revenue outlook for the first quarter of fiscal 2011;
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 October 25,
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
© 2010 NVIDIA Corporation. All rights reserved. NVIDIA, the NVIDIA
logo, GeForce, Quadro, 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.
###
For
further information, contact:
Michael
Hara Robert Sherbin
Investor
Relations Corporate
Communications
NVIDIA
Corporation NVIDIA
Corporation
(408)
486-2511 (408) 566-5150
mhara@nvidia.com rsherbin@nvidia.com
NVIDIA
CORPORATION
|
||||||||||||||||
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS
|
||||||||||||||||
(In
thousands, except per share data)
|
||||||||||||||||
(Unaudited)
|
||||||||||||||||
Three
Months Ended
|
Twelve
Months Ended
|
|||||||||||||||
January
31,
|
January
25,
|
January
31,
|
January
25,
|
|||||||||||||
2010
|
2009
|
2010
|
2009
|
|||||||||||||
Revenue
|
$ | 982,488 | $ | 481,140 | $ | 3,326,445 | $ | 3,424,859 | ||||||||
Cost
of revenue
|
543,767 | 339,474 | 2,149,522 | 2,250,590 | ||||||||||||
Gross
profit
|
438,721 | 141,666 | 1,176,923 | 1,174,269 | ||||||||||||
Operating
expenses
|
||||||||||||||||
Research and
development
|
216,251 | 211,779 | 908,851 | 855,879 | ||||||||||||
Sales,
general and administrative
|
88,188 | 86,440 | 367,017 | 362,222 | ||||||||||||
Restructuring
charges & other
|
- | 18,530 | - | 26,868 | ||||||||||||
Total operating
expenses
|
304,439 | 316,749 | 1,275,868 | 1,244,969 | ||||||||||||
Operating
income (loss)
|
134,282 | (175,083 | ) | (98,945 | ) | (70,700 | ) | |||||||||
Interest
and other income, net
|
5,139 | 4,708 | 16,651 | 27,746 | ||||||||||||
Income
(loss) before income tax expense
|
139,421 | (170,375 | ) | (82,294 | ) | (42,954 | ) | |||||||||
Income
tax expense (benefit)
|
8,345 | (22,710 | ) | (14,307 | ) | (12,913 | ) | |||||||||
Net
income (loss)
|
$ | 131,076 | $ | (147,665 | ) | $ | (67,987 | ) | $ | (30,041 | ) | |||||
Basic
net income (loss) per share
|
$ | 0.24 | $ | (0.27 | ) | $ | (0.12 | ) | $ | (0.05 | ) | |||||
Diluted
net income (loss) per share
|
$ | 0.23 | $ | (0.27 | ) | $ | (0.12 | ) | $ | (0.05 | ) | |||||
Shares
used in basic per share computation
|
557,479 | 537,595 | 549,574 | 548,126 | ||||||||||||
Shares
used in diluted per share computation
|
582,081 | 537,595 | 549,574 | 548,126 |
NVIDIA
CORPORATION
|
||||||||
CONDENSED
CONSOLIDATED BALANCE SHEETS
|
||||||||
(In
thousands)
|
||||||||
(Unaudited)
|
||||||||
January
31,
|
January
25,
|
|||||||
2010
|
2009
|
|||||||
ASSETS
|
||||||||
Current
assets:
|
||||||||
Cash,
cash equivalents and marketable securities
|
$ | 1,728,227 | $ | 1,255,390 | ||||
Accounts
receivable, net
|
374,963 | 318,435 | ||||||
Inventories
|
330,674 | 537,834 | ||||||
Prepaid
expenses and other current assets
|
46,966 | 56,299 | ||||||
Total
current assets
|
2,480,830 | 2,167,958 | ||||||
Property
and equipment, net
|
571,858 | 625,798 | ||||||
Goodwill
|
369,844 | 369,844 | ||||||
Intangible
assets, net
|
120,458 | 147,101 | ||||||
Deposits
and other assets
|
42,928 | 40,026 | ||||||
Total
assets
|
$ | 3,585,918 | $ | 3,350,727 | ||||
LIABILITIES
AND STOCKHOLDERS' EQUITY
|
||||||||
Current
liabilities:
|
||||||||
Accounts
payable
|
$ | 344,527 | $ | 218,864 | ||||
Accrued
liabilities and other current liabilities
|
439,851 | 559,727 | ||||||
Total
current liabilities
|
784,378 | 778,591 | ||||||
Other
long-term liabilities
|
111,950 | 151,850 | ||||||
Capital
lease obligations, long term
|
24,450 | 25,634 | ||||||
Stockholders'
equity
|
2,665,140 | 2,394,652 | ||||||
Total
liabilities and stockholders' equity
|
$ | 3,585,918 | $ | 3,350,727 |
NVIDIA
CORPORATION
|
||||||||||||||||||||
RECONCILIATION
OF GAAP TO NON-GAAP FINANCIAL MEASURES
|
||||||||||||||||||||
(In
thousands, except per share data)
|
||||||||||||||||||||
Three
Months Ended
|
Twelve
Months Ended
|
|||||||||||||||||||
January
31,
|
October
25,
|
January
25,
|
January
31,
|
January
25,
|
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2010
|
2009
|
2009
|
2010
|
2009
|
||||||||||||||||
GAAP
gross profit
|
$ | 438,721 | $ | 391,783 | $ | 141,666 | $ | 1,176,923 | $ | 1,174,269 | ||||||||||
GAAP
gross margin
|
44.7 | % | 43.4 | % | 29.4 | % | 35.4 | % | 34.3 | % | ||||||||||
Net
warranty charge against cost of revenue arising from a weak die/packaging
material set (A)
|
- | (24,115 | ) | (6,665 | ) | 95,878 | 189,289 | |||||||||||||
Non-recurring
charge related to a royalty dispute
|
- | - | - | - | 4,500 | |||||||||||||||
Stock
option purchase charge related to cost of revenue (B)
|
- | - | - | 11,412 | - | |||||||||||||||
Non-GAAP
gross profit
|
$ | 438,721 | $ | 367,668 | $ | 135,001 | $ | 1,284,213 | $ | 1,368,058 | ||||||||||
Non-GAAP
gross margin
|
44.7 | % | 40.7 | % | 28.1 | % | 38.6 | % | 39.9 | % | ||||||||||
GAAP
net income (loss)
|
$ | 131,076 | $ | 107,577 | $ | (147,665 | ) | $ | (67,987 | ) | $ | (30,041 | ) | |||||||
Net
warranty charge against cost of revenue arising from a weak die/packaging
material set (A)
|
- | (25,105 | ) | (8,000 | ) | 93,949 | 187,954 | |||||||||||||
Restructuring
charges
|
- | - | (382 | ) | - | 7,956 | ||||||||||||||
Stock
option purchase charge (B)
|
- | - | - | 140,241 | - | |||||||||||||||
Non-recurring
charge related to a royalty dispute
|
- | - | - | - | 4,500 | |||||||||||||||
Non-recurring
charge related to contract termination (C)
|
- | - | 18,912 | - | 18,912 | |||||||||||||||
Income
tax impact of non-GAAP adjustments (D)
|
- | (5,072 | ) | (8,132 | ) | (24,820 | ) | (28,997 | ) | |||||||||||
Non-GAAP
net income
|
$ | 131,076 | $ | 77,400 | $ | (145,267 | ) | $ | 141,383 | $ | 160,284 | |||||||||
Diluted
net income (loss) per share
|
||||||||||||||||||||
GAAP
|
$ | 0.23 | $ | 0.19 | $ | (0.27 | ) | $ | (0.12 | ) | $ | (0.05 | ) | |||||||
Non-GAAP
|
$ | 0.23 | $ | 0.13 | $ | (0.27 | ) | $ | 0.26 | $ | 0.29 | |||||||||
Shares
used in diluted net income (loss) per share computation
|
582,081 | 574,381 | 537,595 | 549,574 | 548,126 | |||||||||||||||
Metrics:
|
||||||||||||||||||||
GAAP
net cash flow provided by / (used in) operating activities
|
$ | 69,245 | $ | 141,317 | $ | (19,845 | ) | $ | 487,807 | $ | 249,360 | |||||||||
Purchase
of property and equipment and intangible assets
|
(22,575 | ) | (16,593 | ) | (42,975 | ) | (77,601 | ) | (407,670 | ) | ||||||||||
Free
cash flow
|
$ | 46,670 | $ | 124,724 | $ | (62,820 | ) | $ | 410,206 | $ | (158,310 | ) |
(A) Excludes a net charge related to the weak die/packaging material set that was used in certain versions of our previous generation chips, net of insurance reimbursement. |
(B) 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. |
(C) Excludes $18.9 million for the three months ended January 25,
2009, towards a non recurring charge related to termination of a
development contract for a new campus construction project we have put on
hold.
|
(D) The income tax impact of non-GAAP adjustments has only been
reported during fiscal quarters that include other GAAP to non-GAAP
reconciling items, as well as in the full fiscal year results during which
the GAAP to non-GAAP reconciling items occur. As such, any effective tax
rate differences between GAAP and non-GAAP results that result from such
adjustments have not been reported separately in the non-GAAP results for
a fiscal quarter that does not contain other GAAP to non-GAAP reconciling
items.
|