Attached files
| file | filename |
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| 8-K - Q312 FORM 8K - NVIDIA CORP | nvda2012q38k.htm |
| EX-99.2 - Q312 CFO COMMENTARY - NVIDIA CORP | cfocommentary.htm |
FOR IMMEDIATE RELEASE:
NVIDIA Reports Financial Results for Third Quarter Fiscal Year 2012
• | Revenue increased 4.9 percent to $1.07 billion from $1.02 billion in the previous quarter. |
• | GAAP net income was $178.3 million, or $0.29 per diluted share; non-GAAP net income was $217.0 million, or $0.35 per diluted share. |
• | GAAP gross margin increased to 52.2 percent; non-GAAP gross margin increased to 52.5 percent from the second quarter's 51.9 percent. Both are records for the fifth consecutive quarter. |
SANTA CLARA, Calif.-Nov. 10, 2011-NVIDIA (NASDAQ: NVDA) today reported revenue of $1.07 billion for the third quarter of fiscal 2012 ended Oct. 30, 2011, up 4.9 percent from the prior quarter, and up 26.3 percent from $843.9 million in the same period a year earlier.
(in millions except per share data) | Q3 FY12 GAAP | Q2 FY12 GAAP | Q3 FY12 NON-GAAP | Q2 FY12 NON-GAAP | |||||||||||
Revenue | $ | 1,066.2 | $ | 1,016.5 | $ | 1,066.2 | $ | 1,016.5 | |||||||
Gross margin | 52.2 | % | 51.7 | % | 52.5 | % | 51.9 | % | |||||||
Operating expenses | $ | 359.6 | $ | 351.3 | $ | 317.6 | $ | 306.0 | |||||||
Net income | $ | 178.3 | $ | 151.6 | $ | 217.0 | $ | 193.5 | |||||||
Earnings per share | $ | 0.29 | $ | 0.25 | $ | 0.35 | $ | 0.32 | |||||||
On a GAAP basis, the company recorded net income of $178.3 million, or $0.29 per diluted share, for the third quarter of fiscal 2012. That compares with net income of $151.6 million, or $0.25 per diluted share, in the prior quarter and $84.9 million, or $0.15 per diluted share, in the same period a year earlier.
On a non-GAAP basis - which excludes stock-based compensation, amortization of acquisition-related intangible assets, other acquisition related costs, and the tax impact associated with these items - net income was $217.0 million, or $0.35 per diluted share. That compares with net income of $193.5 million, or $0.32 per diluted share, in the prior quarter, and net income of $117.4 million, $0.20 per share, in the same period a year earlier.
GAAP gross margin was 52.2 percent, a fifth consecutive record, compared with 51.7 percent in the previous quarter and 46.5 percent in the same period a year earlier. Non-GAAP gross margin, at 52.5 percent, was also a record, and compares with 51.9 percent in the prior quarter and 46.8 percent in the same period a year earlier.
“NVIDIA's strategy is coming into its own, as the world becomes increasingly visual and mobile,” said Jen-Hsun Huang, president and chief executive of NVIDIA. “Our GPU business accelerated in the third quarter, driven by strong demand from gamers and the professional market. And our mobile business benefited from new devices coming onto the market. With Tegra 3 phone wins well ahead of Tegra 2's pace, we're expecting strong growth in the year ahead.”
Outlook
Our outlook for the fourth quarter of fiscal 2012 is as follows:
• | Revenue is expected to be relatively flat, plus or minus two percent, from the third quarter. |
• | GAAP and non-GAAP gross margins are expected to be flat to up 0.5 percentage points from the respective GAAP and non-GAAP gross margins in the third quarter. |
• | GAAP operating expenses are expected to be approximately $372 million; non-GAAP operating expenses are expected to be approximately $330 million. |
• | Our GAAP and non-GAAP tax rates are both expected to be between 14 to 16 percent, excluding any discrete tax events that may occur in the quarter. |
We estimate depreciation and amortization for the fourth quarter to be approximately $53 million to $57 million. Capital expenditures are expected to be in the range of $30 to $40 million.
Diluted shares for the fourth quarter are expected to be approximately 618 million.
Third Quarter Fiscal 2012 and Recent Highlights:
• | NVIDIA launched Tegra 3, the world's first quad-core processor for super phones and tablets, bringing PC-class performance levels to tablets and phones. Simultaneously, Asus announced that its Eee Pad Transformer Prime, the first device based on Tegra 3, will be available worldwide in December. |
• | In addition, NVIDIA and its partners added three more Tegra®-based superphones to the eight already available - LG Optimus EX, LG Optimus BQ and Motorola Electrify. They also added 13 new tablets, bringing the total to 23. New models include the Asus Slider, Sony Tablet S, Sony Tablet P, Toshiba Scorpio 7”, Acer Iconia A100, Sharp Galapagos E-Reader, Dell Streak 10, Lenovo ThinkPad, and Samsung's Galaxy Tab 8.9. |
• | NVIDIA Tesla processors were chosen by Oak Ridge National Laboratory, which will deploy 18,000 of them in its new machine, “Titan,” expected to be the world's fastest supercomputer, with the potential to deliver speeds of over 20 petaflops. |
CFO Commentary
Commentary on the quarter by Karen Burns, NVIDIA interim chief financial officer, is available at www.nvidia.com/ir.
Conference Call and webcast Information
NVIDIA will conduct a conference call with analysts and investors to discuss its third quarter fiscal 2012 financial results and current financial prospects today at 2:00 p.m. Pacific Time (5:00 p.m. Eastern Time). To listen to the call, please dial (706) 679 2572. A live webcast (listen-only mode) of the conference call will be accessible at the NVIDIA investor relations web site www.nvidia.com/ir and at www.streetevents.com. The webcast will be recorded and available for replay until the company's conference call to discuss its financial results for its fourth quarter fiscal 2012.
Non-GAAP Measures
To supplement NVIDIA's Condensed Consolidated Statements of Operations and Condensed Consolidated Balance Sheets presented in accordance with GAAP, the company uses non-GAAP measures of certain components of financial performance. These non-GAAP measures include non-GAAP gross profit, non-GAAP gross margin, non-GAAP operating expenses, non-GAAP income tax expense, non-GAAP net income, and non-GAAP net income, or earnings, per share. 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 the NVIDIA's previous generation MCP and GPU products, net of insurance reimbursement, stock-based compensation, amortization of acquisition-related intangible assets, other acquisition-related costs, and the associated tax impact of these items, where applicable. 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 computer graphics when it invented the GPU in 1999. Today, its processors power a broad range of products from smart phones to supercomputers. NVIDIA's mobile processors are used in cell phones, tablets and auto infotainment systems. PC gamers rely on GPUs to enjoy spectacularly immersive worlds. Professionals use them to create visual effects in movies and design everything from golf clubs to jumbo jets. And researchers utilize GPUs to advance the frontiers of science with high-performance computing. The company holds more than 2,100 patents worldwide, including ones covering ideas essential to modern computing. For more information, see www.nvidia.com.
Certain statements in this press release including, but not limited to statements as to: the company's strategy; the pace of Tegra 3 design wins; anticipated company growth in the year ahead; expectation that the world is becoming increasingly visual and mobile; the company's financial outlook for the fourth quarter of fiscal 2012; and the effects of the company's patents on modern computing are forward-looking statements that are subject to risks and uncertainties that could cause results to be materially different than expectations. Important factors that could cause actual results to differ materially include: global economic conditions; our reliance on third parties to manufacture, assemble, package and test our products; the impact of technological development and competition; development of new products and technologies or enhancements to our existing product and technologies; market acceptance of our products or our partners products; design, manufacturing or software defects; changes in consumer preferences or demands; changes in industry standards and interfaces; unexpected loss of performance of our products or technologies when integrated into systems; as well as other factors detailed from time to time in the reports NVIDIA files with the Securities and Exchange Commission, or SEC, including its Form 10-Q for the fiscal period ended July 31, 2011. Copies of reports filed with the SEC are posted on the company's website and are available from NVIDIA without charge. These forward-looking statements are not guarantees of future performance and speak only as of the date hereof, and, except as required by law, NVIDIA disclaims any obligation to update these forward-looking statements to reflect future events or circumstances.
© 2011 NVIDIA Corporation. All rights reserved. NVIDIA, the NVIDIA logo, GeForce, Tegra and Tesla are trademarks and/or registered trademarks of NVIDIA Corporation in the U.S. and/or other countries. Other company and product names may be trademarks of the respective companies with which they are associated. Features, pricing, availability, and specifications are subject to change without notice.
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For further information, contact:
Rob Csongor | Robert Sherbin |
Investor Relations | Corporate Communications |
NVIDIA Corporation | NVIDIA Corporation |
(408) 566-6373 | (408) 566-5150 |
rcsongor@nvidia.com | rsherbin@nvidia.com |
NVIDIA CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share data)
(Unaudited)
Three Months Ended | Nine Months Ended | ||||||||||||||
October 30, 2011 | October 31, 2010 | October 30, 2011 | October 31, 2010 | ||||||||||||
Revenue | $ | 1,066,180 | $ | 843,912 | $ | 3,044,736 | $ | 2,656,933 | |||||||
Cost of revenue | 509,463 | 451,850 | 1,478,232 | 1,674,202 | |||||||||||
Gross profit | 556,717 | 392,062 | 1,566,504 | 982,731 | |||||||||||
Operating expenses | |||||||||||||||
Research and development | 256,498 | 204,527 | 735,743 | 633,267 | |||||||||||
Sales, general and administrative | 103,129 | 83,752 | 304,779 | 273,495 | |||||||||||
Total operating expenses | 359,627 | 288,279 | 1,040,522 | 906,762 | |||||||||||
Operating income | 197,090 | 103,783 | 525,982 | 75,969 | |||||||||||
Interest and other income, net | 7,697 | (198 | ) | 12,837 | 9,294 | ||||||||||
Income before income tax expense | 204,787 | 103,585 | 538,819 | 85,263 | |||||||||||
Income tax expense | 26,514 | 18,723 | 73,754 | 3,768 | |||||||||||
Net income | $ | 178,273 | $ | 84,862 | $ | 465,065 | $ | 81,495 | |||||||
Basic net income per share | $ | 0.29 | $ | 0.15 | $ | 0.77 | $ | 0.14 | |||||||
Diluted net income per share | $ | 0.29 | $ | 0.15 | $ | 0.76 | $ | 0.14 | |||||||
Shares used in basic per share computation | 607,063 | 577,323 | 600,563 | 572,420 | |||||||||||
Shares used in diluted per share computation | 613,560 | 582,648 | 614,688 | 584,500 | |||||||||||
NVIDIA CORPORATION | ||||||||
CONDENSED CONSOLIDATED BALANCE SHEETS | ||||||||
(In thousands) | ||||||||
(Unaudited) | ||||||||
October 30, | January 30, | |||||||
2011 | 2011 | |||||||
ASSETS | ||||||||
Current assets: | ||||||||
Cash, cash equivalents and marketable securities | $ | 2,748,354 | $ | 2,490,563 | ||||
Accounts receivable, net | 371,261 | 348,770 | ||||||
Inventories | 319,602 | 345,525 | ||||||
Prepaid expenses and other current assets | 60,854 | 42,092 | ||||||
Total current assets | 3,500,071 | 3,226,950 | ||||||
Property and equipment, net | 551,757 | 568,857 | ||||||
Goodwill | 648,053 | 369,844 | ||||||
Intangible assets, net | 342,839 | 288,745 | ||||||
Deposits and other assets | 46,323 | 40,850 | ||||||
Total assets | $ | 5,089,043 | $ | 4,495,246 | ||||
LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||
Current liabilities: | ||||||||
Accounts payable | $ | 307,943 | $ | 286,138 | ||||
Accrued liabilities and other current liabilities | 578,741 | 656,544 | ||||||
Total current liabilities | 886,684 | 942,682 | ||||||
Other long-term liabilities | 206,960 | 347,713 | ||||||
Capital lease obligations, long term | 21,949 | 23,389 | ||||||
Stockholders' equity | 3,973,450 | 3,181,462 | ||||||
Total liabilities and stockholders' equity | $ | 5,089,043 | $ | 4,495,246 | ||||
NVIDIA CORPORATION | ||||||||||||||||||||
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES | ||||||||||||||||||||
(In thousands, except per share data) | ||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||||||
October 30, | July 31, | October 31, | October 30, | October 31, | ||||||||||||||||
2011 | 2011 | 2010 | 2011 | 2010 | ||||||||||||||||
GAAP gross profit | $ | 556,717 | $ | 525,284 | $ | 392,062 | $ | 1,566,504 | $ | 982,731 | ||||||||||
GAAP gross margin | 52.2 | % | 51.7 | % | 46.5 | % | 51.4 | % | 37.0 | % | ||||||||||
Stock-based compensation expense included in cost of revenue (A) | 3,049 | 2,748 | 2,490 | 8,274 | 6,582 | |||||||||||||||
Net charge against cost of revenue arising from a weak die/packaging material set (B) | — | — | — | — | 181,193 | |||||||||||||||
Non-GAAP gross profit | $ | 559,766 | $ | 528,032 | $ | 394,552 | $ | 1,574,778 | $ | 1,170,506 | ||||||||||
Non-GAAP gross margin | 52.5 | % | 51.9 | % | 46.8 | % | 51.7 | % | 44.1 | % | ||||||||||
GAAP operating expenses | $ | 359,627 | $ | 351,254 | $ | 288,279 | $ | 1,040,522 | $ | 906,762 | ||||||||||
Stock-based compensation expense included in operating expense (A) | (30,180 | ) | (33,202 | ) | (22,689 | ) | (92,644 | ) | (68,406 | ) | ||||||||||
Amortization of acquisition-related intangible assets | (5,399 | ) | (4,454 | ) | (2,296 | ) | (12,149 | ) | (6,887 | ) | ||||||||||
Net charge against operating expenses arising from a weak die/packaging material set (B) | — | — | — | — | (12,705 | ) | ||||||||||||||
Other acquisition-related costs (C) | (6,413 | ) | (7,562 | ) | — | (15,230 | ) | — | ||||||||||||
Non-GAAP operating expenses | $ | 317,635 | $ | 306,036 | $ | 263,294 | $ | 920,499 | $ | 818,764 | ||||||||||
GAAP net income | $ | 178,273 | $ | 151,573 | $ | 84,862 | $ | 465,065 | $ | 81,495 | ||||||||||
Total pre-tax impact of non-GAAP adjustments | 45,041 | 47,966 | 27,475 | 128,297 | 275,773 | |||||||||||||||
Income tax impact of non-GAAP adjustments | (6,302 | ) | (5,994 | ) | 5,034 | (17,092 | ) | (23,292 | ) | |||||||||||
Non-GAAP net income | $ | 217,012 | $ | 193,545 | $ | 117,371 | $ | 576,270 | $ | 333,976 | ||||||||||
Diluted net income per share | ||||||||||||||||||||
GAAP | $ | 0.29 | $ | 0.25 | $ | 0.15 | $ | 0.76 | $ | 0.14 | ||||||||||
Non-GAAP | $ | 0.35 | $ | 0.32 | $ | 0.20 | $ | 0.94 | $ | 0.57 | ||||||||||
Shares used in diluted net income per share computation | 613,560 | 613,934 | 582,648 | 614,688 | 584,500 | |||||||||||||||
(A) Excludes stock-based compensation as follows: | Three Months Ended | Nine Months Ended | ||||||||||||||||||
October 30, | July 31, | October 31, | October 30, | October 31, | ||||||||||||||||
2011 | 2011 | 2010 | 2011 | 2010 | ||||||||||||||||
Cost of revenue | $ | 3,049 | $ | 2,748 | $ | 2,490 | $ | 8,274 | $ | 6,582 | ||||||||||
Research and development | $ | 19,308 | $ | 21,697 | $ | 14,104 | $ | 59,594 | $ | 43,251 | ||||||||||
Sales, general and administrative | $ | 10,872 | $ | 11,505 | $ | 8,585 | $ | 33,050 | $ | 25,155 | ||||||||||
(B) Excludes a charge related to the weak die/packaging material set, net of insurance reimbursement. | ||||||||||||||||||||
(C) Other acquisition-related costs are comprised of transaction costs, compensation charges and restructuring costs related to the acquisition of Icera, Inc. that was completed on June 10, 2011. | ||||||||||||||||||||
NVIDIA CORPORATION | ||||
RECONCILIATION OF GAAP TO NON-GAAP OUTLOOK | ||||
(In millions) | ||||
Q4 FY2012 Outlook | ||||
January 29, | ||||
2012 | ||||
GAAP operating expenses | $ | 372.0 | ||
Stock-based compensation expense included in operating expense | (32.0 | ) | ||
Amortization of acquisition-related intangible assets | (5.0 | ) | ||
Other acquisition-related costs (A) | (5.0 | ) | ||
Non-GAAP operating expenses | $ | 330.0 | ||
(A) Other acquisition related costs are comprised of transaction costs, compensation charges and restructuring costs related to the acquisition of Icera, Inc. that was completed on June 10, 2011. | ||||