SANTA CLARA, CA -- NVIDIA Corp. (
- 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
NVIDIA Corp. (
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 income(1) 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
========= ========= ========= ========= =========
(1) Commencing with the fourth quarter, non-GAAP is now defined to include stock based compensation. As a result, stock-based compensation will no longer be a reconciling item between GAAP and non-GAAP measures. All historical non-GAAP measures presented here have been prepared on this basis.
"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 (
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.
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,
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
Restruct-
uring
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
adjust-
ments
(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
compu-
tation 582,081 574,381 537,595 549,574 548,126
Metrics:
GAAP net
cash flow
provided
by /(used
in)
operating
activi-
ties $ 69,245 $ 141,317 $ (19,845) $ 487,807 $ 249,360
Purchase
of
property
and
equipment
and
intan-
gible
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.