NVIDIA Reports Financial Results for Annual and Fourth Quarter Fiscal 2012

Wednesday, February 15, 2012

SANTA CLARA, CA--(Marketwire - Feb 15, 2012) - NVIDIA (NASDAQ: NVDA)

  • Revenue for the year increased 12.8 percent over fiscal 2011 to $4.00 billion.
  • GAAP gross margin for the year was 51.4 percent, up 11.6 percentage points; non-GAAP gross margin was 51.9 percent, up 6.8 percentage points.
  • GAAP EPS for the year rose 118.6 percent; non-GAAP EPS rose 46.9 percent.
  • Quarterly revenue decreased 10.6 percent to $953.2 million from $1.07 billion in the previous quarter.
  • GAAP gross margin was 51.4 percent for the quarter; non-GAAP gross margin was 52.5 percent.
  • Quarterly GAAP EPS were $0.19, down from $0.29 in the previous quarter; non-GAAP EPS were $0.26, down from $0.35 in the previous quarter.

NVIDIA (NASDAQ: NVDA) today reported revenue for fiscal 2012 ended Jan. 29, 2012 of $4.00 billion, up 12.8 percent from $3.54 billion in fiscal 2011. GAAP earnings per share for the year were $0.94 per diluted share, an increase of 118.6 percent over $0.43 in fiscal 2011. Non-GAAP earnings per share for fiscal 2012 were $1.19, up 46.9 percent over $0.81 in fiscal 2011.

Revenue for the fourth quarter of fiscal 2012 was $953.2 million, down 10.6 percent from the prior quarter, and up 7.5 percent from $886.4 million in the same period a year earlier.

"I am pleased with our achievements last year. Our GPU business grew sharply. And, with the success of Tegra, we established our position in the mobile market," said Jen-Hsun Huang, president and chief executive officer of NVIDIA. "We expect continued growth ahead, as Tegra 3 powers a new wave of quad-core super phones and Kepler, our next-generation GPU architecture, sets new standards in visual and parallel computing."

     
    Annual Highlights
(in millions except per
share data)
  FY12
GAAP
  FY11
GAAP
  FY12
NON-GAAP
  FY11
NON-GAAP
Revenue   $3,997.9   $3,543.3   $3,997.9   $3,543.3
Gross margin   51.4%   39.8%   51.9%   45.1%
Operating expenses   $1,408.2   $1,153.3   $1,245.7   $1,096.4
Net income   $581.1   $253.1   $734.4   $476.4
Earnings per share   $0.94   $0.43   $1.19   $0.81
                 
     
    Quarterly Highlights
(in millions except per
share data)
  Q4 FY12
GAAP
  Q3 FY12
GAAP
  Q4 FY12
NON-GAAP
  Q3 FY12
NON-GAAP
Revenue   $953.2   $1,066.2   $953.2   $1,066.2
Gross margin   51.4%   52.2%   52.5%   52.5%
Operating expenses   $367.7   $359.6   $325.2   $317.6
Net income   $116.0   $178.3   $158.1   $217.0
Earnings per share   $0.19   $0.29   $0.26   $0.35
                 

On a GAAP basis, the company recorded net income of $116.0 million, or $0.19 per diluted share, for the fourth quarter of fiscal 2012. That compares with net income of $178.3 million, or $0.29 per diluted share, in the prior quarter and $171.7 million, or $0.29 per diluted share, in the same period a year earlier.

On a non-GAAP basis -- which excludes certain charges or credits, as applicable in the fiscal quarter, and the tax impact associated with such items, including: stock-based compensation, amortization of acquisition-related intangible assets, other acquisition-related costs, and legal settlements -- net income was $158.1 million, or $0.26 per diluted share. That compares with non-GAAP net income of $217.0 million, or $0.35 per diluted share, in the prior quarter, and net income of $142.4 million, $0.24 per share, in the same period a year earlier.

GAAP gross margin was 51.4 percent, compared with 52.2 percent in the previous quarter and 48.1 percent in the same period a year earlier. Non-GAAP gross margin, which excludes stock-based compensation and a legal settlement charge, was 52.5 percent and compares with 52.5 percent in the previous quarter and 48.3 percent in the same period a year earlier.

Outlook

Our outlook for the first quarter of fiscal 2013, is as follows:

  • Revenue is expected to be between $900 million and $930 million.
     
  • GAAP gross margins are expected to be 49.2 percent, plus or minus 1 percentage point; non-GAAP gross margins are expected to be 49.5 percent, plus or minus 1 percentage point.
     
  • GAAP operating expenses are expected to be approximately $383 million; non-GAAP operating expenses are expected to be approximately $340 million.
     
  • GAAP and non-GAAP tax rates are expected to be approximately 20 percent for the fiscal year 2013; and approximately 16 percent for the year, if the research tax credit is reinstated into U.S. tax law. Our annual projected tax rates reflect our expectation for the quarter, excluding any discrete tax events that may occur, which, if realized, may increase or decrease our GAAP and non-GAAP tax rates.

We estimate depreciation and amortization for the first quarter to be approximately $52 million to $56 million. Capital expenditures are expected to be in the range of $35 to $45 million.

Diluted shares for the first quarter are expected to be approximately 622.5 million.

Fourth Quarter Fiscal 2012 Highlights:

  • NVIDIA's Tegra 3® processors started shipping to consumers in the Asus Transformer Prime tablet. The tablet is the first to run Android 4.0, "Ice Cream Sandwich." Asus also announced a $249 tablet to be based on Tegra 3.
     
  • Other Tegra 3 devices announced in the quarter include:
     
    • Asus Transformer Prime TF700T, similar to the Prime, but with a 1920x1200 resolution display.
    • Acer Iconia Tab A700, also with a 1920x1200 display.
    • Lenovo IdeaPad K2, again with a 1920x1200 display.
    • Fujitsu announced an unnamed Android phone, running Android 4.0 "Ice Cream Sandwich."
       
  • NVIDIA announced NVIDIA Maximus™ technology, which increases productivity by enabling design and simulation to be accelerated on a single workstation.
     

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 fourth 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 first quarter fiscal 2013.

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 legal settlements, 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 2,200 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 financial outlook for the first quarter of fiscal 2013; the benefits of NVIDIA Maximus technology; the company's continued growth; the success and momentum of Tegra 3; the impact of the company's next-generation Kepler architecture; 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 October 30, 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.

© 2012 NVIDIA Corporation. All rights reserved. NVIDIA, the NVIDIA logo, Maximus, 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.

   
NVIDIA CORPORATION  
CONDENSED CONSOLIDATED STATEMENTS OF INCOME  
(In thousands, except per share data)  
(Unaudited)  
                         
    Three Months Ended     Twelve Months Ended  
    January 29,     January 30,     January 29,     January 30,  
    2012     2011     2012     2011  
                                 
Revenue   $ 953,194     $ 886,376     $ 3,997,930     $ 3,543,309  
Cost of revenue     463,181       460,017       1,941,413       2,134,219  
Gross profit     490,013       426,359       2,056,517       1,409,090  
                                 
Operating expenses                                
  Research and development     266,862       215,563       1,002,605       848,830  
  Sales, general and administrative     100,834       88,018       405,613       361,513  
  Legal settlement (A)     -       (57,000 )     -       (57,000 )
    Total operating expenses     367,696       246,581       1,408,218       1,153,343  
                                     
Operating income     122,317       179,778       648,299       255,747  
Interest and other income, net     2,260       6,128       15,097       15,422  
Income before income tax expense     124,577       185,906       663,396       271,169  
Income tax expense     8,552       14,255       82,306       18,023  
Net income   $ 116,025     $ 171,651     $ 581,090     $ 253,146  
                                 
Basic net income per share   $ 0.19     $ 0.29     $ 0.96     $ 0.44  
Diluted net income per share   $ 0.19     $ 0.29     $ 0.94     $ 0.43  
                                 
Shares used in basic per share computation     611,432       583,439       603,646       575,177  
Shares used in diluted per share computation     618,599       601,559       616,371       588,684  
                                 
(A)   On January 10, 2011, the Company and Intel entered into a new six-year cross licensing agreement and both parties also agreed to settle all outstanding legal disputes. For accounting purposes, the fair valued benefit prescribed to the settlement portion was $57.0 million.
     
     
     
     
NVIDIA CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)
           
    January 29,     January 30,
    2012     2011
ASSETS              
               
Current assets:              
  Cash, cash equivalents and marketable securities   $ 3,129,576     $ 2,490,563
  Accounts receivable, net     336,143       348,770
  Inventories     340,297       345,525
  Prepaid expenses and other current assets     99,342       42,092
    Total current assets     3,905,358       3,226,950
               
Property and equipment, net     560,072       568,857
  Goodwill     641,030       369,844
  Intangible assets, net     326,136       288,745
  Other assets     120,332       40,850
    Total assets   $ 5,552,928     $ 4,495,246
               
LIABILITIES AND STOCKHOLDERS' EQUITY              
               
Current liabilities:              
  Accounts payable   $ 335,072     $ 286,138
  Accrued liabilities and other current liabilities     594,886       656,544
    Total current liabilities     929,958       942,682
               
Other long-term liabilities     455,807       347,713
Capital lease obligations, long term     21,439       23,389
               
Stockholders' equity     4,145,724       3,181,462
    Total liabilities and stockholders' equity   $ 5,552,928     $ 4,495,246
               
               
               
               
NVIDIA CORPORATION
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES
(In thousands, except per share data)
(Unaudited)
                     
    Three Months Ended   Twelve Months Ended
    January 29,   October 30,   January 30,   January 29,   January 30,
    2012   2011   2011   2012   2011
                               
GAAP gross profit   $ 490,013   $ 556,717   $ 426,359   $ 2,056,517   $ 1,409,090
  GAAP gross margin     51.4%     52.2%     48.1%     51.4%     39.8%
    Stock-based compensation expense included in cost of revenue (A)     3,048     3,049     1,726     11,322     8,308
    Legal settlement (D)     7,300     -     -     7,300     -
    Net charge against cost of revenue arising from a weak die/packaging material set (B)     -     -     -     -     181,193
Non-GAAP gross profit   $ 500,361   $ 559,766   $ 428,085   $ 2,075,139   $ 1,598,591
  Non-GAAP gross margin     52.5%     52.5%     48.3%     51.9%     45.1%
                               
GAAP operating expenses   $ 367,696   $ 359,627   $ 246,581   $ 1,408,218   $ 1,153,343
    Stock-based compensation expense included in operating expense (A)     (32,388)     (30,180)     (23,640)     (125,032)     (92,045)
    Amortization of acquisition-related intangible assets     (5,041)     (5,399)     (2,295)     (17,190)     (9,182)
    Net charge against operating expenses arising from a weak die/packaging material set (B)     -     -     -     -     (12,705)
    Other acquisition-related costs (C)     (5,052)     (6,413)     -     (20,282)     -
    Legal settlement (D)     -     -     57,000     -     57,000
Non-GAAP operating expenses   $ 325,215   $ 317,635   $ 277,646   $ 1,245,714   $ 1,096,411
                               
GAAP net income   $ 116,025   $ 178,273   $ 171,651   $ 581,090   $ 253,146
    Total pre-tax impact of non-GAAP adjustments     52,829     45,041     (29,339)     181,126     246,433
    Income tax impact of non-GAAP adjustments     (10,718)     (6,302)     126     (27,810)     (23,165)
Non-GAAP net income   $ 158,136   $ 217,012   $ 142,438   $ 734,406   $ 476,414
                               
Diluted net income per share                              
    GAAP   $ 0.19   $ 0.29   $ 0.29   $ 0.94   $ 0.43
    Non-GAAP   $ 0.26   $ 0.35   $ 0.24   $ 1.19   $ 0.81
                               
Shares used in diluted net income per share computation     618,599     613,560     601,559     616,371     588,684
                               
Metrics:                              
Graphics Processing Unit (GPU) revenue                     $ 2,542,430   $ 2,527,144
    Chipset product revenue                       (197,417)     (687,033)
GPU revenue excluding chipset products                     $ 2,345,013   $ 1,840,111
                               
GAAP Revenue                     $ 3,997,930   $ 3,543,309
    Chipset product revenue                       (197,417)     (687,033)
Revenue excluding chipset products                     $ 3,800,513   $ 2,856,276
                               
                               
(A)   Excludes stock-based compensation as follows:   Three Months Ended   Twelve Months Ended
        January 29,   October 30,   January 30,   January 29,   January 30,
        2012   2011   2011   2012   2011
    Cost of revenue   $ 3,048   $ 3,049   $ 1,726   $ 11,322   $ 8,308
    Research and development   $ 20,908   $ 19,308   $ 14,724   $ 80,502   $ 57,974
    Sales, general and administrative   $ 11,480   $ 10,872   $ 8,916   $ 44,530   $ 34,071
                                   
(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.
                                   
(D)   Excludes legal settlement charges and benefits as follows:
     
    On February 7, 2012, the Company and Rambus entered into a licensing agreement and both parties also agreed to settle all outstanding legal disputes. For accounting purposes, an additional charge of $7.3 million associated with the fair value prescribed to the settlement portion was recognized for the year ended January 29, 2012.
     
    On January 10, 2011, the Company and Intel entered into a new six-year cross licensing agreement and both parties also agreed to settle all outstanding legal disputes. For accounting purposes, the fair valued benefit prescribed to the settlement portion was $57.0 million.
     
     
     
     
NVIDIA CORPORATION  
RECONCILIATION OF GAAP TO NON-GAAP OUTLOOK  
   
    Q1 FY2013 Outlook  
         
GAAP gross margin     49.2 %
    Impact of stock-based compensation (A)     0.3 %
Non-GAAP gross margin     49.5 %
         
    Q1 FY2013 Outlook  
    (In millions)  
         
GAAP operating expenses   $ 383.0  
    Stock-based compensation expense included in operating expense     (34.0 )
    Amortization of acquisition-related intangible assets     (4.2 )
    Other acquisition-related costs (B)     (4.8 )
         
Non-GAAP operating expenses   $ 340.0  
         
(A)   Represents $2.8 million of stock-based compensation expense included in cost of revenue.
     
(B)   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.
     
     
     
     
About NVIDIA
NVIDIA (NASDAQ: NVDA) is the AI computing company. Its invention of the GPU in 1999 sparked the growth of the PC gaming market, redefined modern computer graphics and revolutionized parallel computing. More recently, GPU deep learning ignited modern AI — the next era of computing — with the GPU acting as the brain of computers, robots and self-driving cars that can perceive and understand the world. More information at http://nvidianews.nvidia.com/. 
© 2016 NVIDIA Corporation. All rights reserved. NVIDIA and the NVIDIA logo are trademarks and/or registered trademarks of NVIDIA Corporation in the U.S. and 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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