NVIDIA (NASDAQ:NVDA) today reported record revenue for the first
quarter ended April 29, 2018, of $3.21 billion, up 66 percent from
$1.94 billion a year earlier, and up 10 percent from $2.91 billion
in the previous quarter.GAAP earnings per diluted share for the
quarter were a record $1.98, up 151 percent from $0.79 a year ago
and up 11 percent from $1.78 in the previous quarter. Non-GAAP
earnings per diluted share were $2.05, also a record, up 141
percent from $0.85 a year earlier and up 19 percent from $1.72 in
the previous quarter.
“We had a strong quarter with growth across every platform,”
said Jensen Huang, founder and chief executive officer of NVIDIA.
“Our datacenter business achieved another record and gaming
remained strong.
“At the heart of our opportunity is the incredible growth of
computing demand of AI, just as traditional computing has
slowed. The GPU computing approach we have pioneered is ideal
for filling this vacuum. And our invention of the Tensor Core
GPU has further enhanced our strong position to power the AI era,”
he said.
Capital ReturnDuring the first quarter of
fiscal 2019, NVIDIA returned $746 million to shareholders through a
combination of $655 million in share repurchases and $91 million in
quarterly cash dividends.
For fiscal 2019, NVIDIA intends to return $1.25 billion to
shareholders through ongoing quarterly cash dividends and share
repurchases.
NVIDIA will pay its next quarterly cash dividend of $0.15 per
share on June 15, 2018, to all shareholders of record on May 24,
2018.
Q1 Fiscal 2019 Summary
GAAP |
($ in millions except earnings per share) |
Q1 FY19 |
Q4 FY18 |
Q1 FY18 |
Q/Q |
Y/Y |
Revenue |
$3,207 |
$2,911 |
$1,937 |
Up 10% |
Up 66% |
Gross margin |
64.5% |
61.9% |
59.4% |
Up 260 bps |
Up 510 bps |
Operating expenses |
$773 |
$728 |
$596 |
Up 6% |
Up 30% |
Operating income |
$1,295 |
$1,073 |
$554 |
Up 21% |
Up 134% |
Net income |
$1,244 |
$1,118 |
$507 |
Up 11% |
Up 145% |
Diluted earnings per share |
$1.98 |
$1.78 |
$0.79 |
Up 11% |
Up 151% |
Non-GAAP |
($ in millions except earnings per share) |
Q1 FY19 |
Q4 FY18 |
Q1 FY18 |
Q/Q |
Y/Y |
Revenue |
$3,207 |
$2,911 |
$1,937 |
Up 10% |
Up 66% |
Gross margin |
64.7% |
62.1% |
59.6% |
Up 260 bps |
Up 510 bps |
Operating expenses |
$648 |
$607 |
$517 |
Up 7% |
Up 25% |
Operating income |
$1,428 |
$1,202 |
$637 |
Up 19% |
Up 124% |
Net income |
$1,285 |
$1,081 |
$533 |
Up 19% |
Up 141% |
Diluted earnings per share |
$2.05 |
$1.72 |
$0.85 |
Up 19% |
Up 141% |
NVIDIA’s outlook for the second quarter of fiscal 2019 is as
follows:
- Revenue is expected to be $3.10 billion, plus or minus two
percent.
- GAAP and non-GAAP gross margins are expected to be 63.3 percent
and 63.5 percent, respectively, plus or minus 50 basis points.
- GAAP and non-GAAP operating expenses are expected to be
approximately $810 million and $685 million,
respectively.
- GAAP and non-GAAP other income and expense are both expected to
be income of approximately $15 million.
- GAAP and non-GAAP tax rates are both expected to be 11.0
percent, plus or minus one percent, excluding any discrete items.
GAAP discrete items include excess tax benefits or deficiencies
related to stock-based compensation, which are expected to generate
variability on a quarter by quarter basis.
First Quarter Fiscal 2019 Highlights During the
first quarter, NVIDIA achieved progress in these areas:
Gaming
- Gaming revenue grew 68 percent from a year earlier to $1.72
billion.
- Announced NVIDIA RTX™, a groundbreaking computer graphics
technology that produces movie-quality images in real time.
Datacenter
- Datacenter revenue grew 71 percent from a year earlier to a
record $701 million.
- Unveiled at the annual GPU Technology Conference, in San Jose,
with nearly 8,500 registered attendees, advances to its deep
learning computing platform – including NVIDIA® Tesla® V100 GPUs
with 32GB memory, NVIDIA NVSwitch™ GPU interconnect fabric and
NVIDIA DGX-2™, the first server with two petaflops of computational
power.
- Announced TensorRT 4™, the latest version of the TensorRT AI
inference accelerator software, expanding its reach in the
inference market by accelerating deep learning across a much
broader range of applications.
- Announced GPU acceleration for Kubernetes to facilitate
enterprise inference deployment on multi-cloud GPU clusters.
Professional Visualization
- Professional Visualization revenue grew 22 percent from a year
earlier to $251 million.
- Announced the Quadro® GV100 GPU with RTX technology, making
real-time ray tracing possible on professional design and content
creation applications.
Automotive
- Automotive revenue grew 4 percent from a year earlier to a
record $145 million.
- Introduced the NVIDIA DRIVE Constellation™ server with DRIVE
Sim™ software, a complete system to safely test drive autonomous
vehicles over billions of miles in virtual reality by leveraging
NVIDIA GPUs and NVIDIA DRIVE Pegasus™.
New Platforms
- Introduced Project Clara, a medical imaging supercomputer, to
revolutionize medical imaging.
- Announced the Isaac software development kit for robotics,
offering a collection of libraries, drivers, APIs and other tools
for researchers, developers and startups.
- Announced that Arm will integrate the open-source NVIDIA Deep
Learning Accelerator to bring AI inference to mobile, consumer
electronics and Internet of Things devices.
CFO Commentary Commentary on the quarter by
Colette Kress, NVIDIA’s executive vice president and chief
financial officer, is available at http://investor.nvidia.com/.
Conference Call and Webcast Information NVIDIA
will conduct a conference call with analysts and investors to
discuss its first quarter fiscal 2019 financial results and current
financial prospects today at 2 p.m. Pacific time (5 p.m. Eastern
time). To listen to the conference call, dial (877) 223-3864 in the
United States or (574) 990-1377 internationally, and provide the
following conference ID: 2387419. A live webcast (listen-only mode)
of the conference call will be accessible at NVIDIA’s investor
relations website, http://investor.nvidia.com, and at
www.streetevents.com. The webcast will be recorded and available
for replay until NVIDIA’s conference call to discuss its financial
results for its second quarter of fiscal 2019.Non-GAAP
Measures To supplement NVIDIA’s Condensed Consolidated
Statements of Income 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 from
operations, non-GAAP other income (expense), non-GAAP income tax
expense, non-GAAP net income, non-GAAP net income, or earnings, per
diluted share, non-GAAP diluted shares, 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 stock-based compensation expense, legal settlement costs,
acquisition-related costs, contributions, gains from non-affiliated
investments, interest expense related to amortization of debt
discount, debt-related costs, the associated tax impact of these
items, where applicable, and the provisional tax benefit from
income tax reform. Weighted average shares used in the non-GAAP
diluted net income per share computation includes the anti-dilution
impact of our Note Hedge. 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 the company’s non-GAAP measures may be
different from non-GAAP measures used by other companies.
Keep Current on NVIDIASubscribe to the NVIDIA
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Flickr.
NVIDIA
CORPORATION |
CONDENSED CONSOLIDATED
STATEMENTS OF INCOME |
(In millions, except per share data) |
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended |
|
|
|
April 29, |
|
April 30, |
|
|
|
2018 |
|
2017 |
|
|
|
|
|
|
Revenue |
$ |
3,207 |
|
|
$ |
1,937 |
|
Cost of
revenue |
|
1,139 |
|
|
|
787 |
|
Gross
profit |
|
2,068 |
|
|
|
1,150 |
|
Operating
expenses |
|
|
|
|
Research
and development |
|
542 |
|
|
|
411 |
|
|
Sales,
general and administrative |
|
231 |
|
|
|
185 |
|
|
|
Total
operating expenses |
|
773 |
|
|
|
596 |
|
Income from
operations |
|
1,295 |
|
|
|
554 |
|
|
Interest
income |
|
25 |
|
|
|
16 |
|
|
Interest
expense |
|
(15 |
) |
|
|
(16 |
) |
|
Other,
net |
|
6 |
|
|
|
(18 |
) |
|
|
Total other income
(expense) |
|
16 |
|
|
|
(18 |
) |
Income
before income tax |
|
1,311 |
|
|
|
536 |
|
Income tax
expense |
|
67 |
|
|
|
29 |
|
Net
income |
$ |
1,244 |
|
|
$ |
507 |
|
|
|
|
|
|
|
Net income
per share: |
|
|
|
|
Basic |
$ |
2.05 |
|
|
$ |
0.86 |
|
|
Diluted |
$ |
1.98 |
|
|
$ |
0.79 |
|
|
|
|
|
|
|
Weighted
average shares used in per share computation: |
|
|
|
|
Basic |
|
606 |
|
|
|
592 |
|
|
Diluted |
|
627 |
|
|
|
641 |
|
|
|
|
|
|
|
NVIDIA CORPORATION |
CONDENSED CONSOLIDATED BALANCE
SHEETS |
(In millions) |
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
April 29, |
|
January 28, |
|
|
|
|
2018 |
|
2018 |
ASSETS |
|
|
|
|
|
|
|
|
|
|
|
|
|
Current
assets: |
|
|
|
|
|
|
Cash, cash
equivalents and marketable securities |
|
$ |
7,300 |
|
|
$ |
7,108 |
|
|
Accounts
receivable, net |
|
|
1,220 |
|
|
|
1,265 |
|
|
Inventories |
|
|
797 |
|
|
|
796 |
|
|
Prepaid
expenses and other current assets |
|
|
131 |
|
|
|
86 |
|
|
|
Total
current assets |
|
|
9,448 |
|
|
|
9,255 |
|
|
|
|
|
|
|
|
|
Property
and equipment, net |
|
|
1,066 |
|
|
|
997 |
|
Goodwill |
|
|
618 |
|
|
|
618 |
|
Intangible
assets, net |
|
|
55 |
|
|
|
52 |
|
Other
assets |
|
|
273 |
|
|
|
319 |
|
|
|
Total
assets |
|
$ |
11,460 |
|
|
$ |
11,241 |
|
|
|
|
|
|
|
|
|
LIABILITIES AND SHAREHOLDERS' EQUITY |
|
|
|
|
|
|
|
|
Current
liabilities: |
|
|
|
|
|
|
Accounts
payable |
|
$ |
623 |
|
|
$ |
596 |
|
|
Accrued and
other current liabilities |
|
|
469 |
|
|
|
542 |
|
|
Convertible
short-term debt |
|
|
14 |
|
|
|
15 |
|
|
|
Total
current liabilities |
|
|
1,106 |
|
|
|
1,153 |
|
|
|
|
|
|
|
|
|
Long-term
debt |
|
|
1,986 |
|
|
|
1,985 |
|
Other
long-term liabilities |
|
|
651 |
|
|
|
632 |
|
|
|
Total
liabilities |
|
|
3,743 |
|
|
|
3,770 |
|
|
|
|
|
|
|
|
|
Shareholders' equity |
|
|
7,717 |
|
|
|
7,471 |
|
|
|
Total
liabilities and shareholders' equity |
|
$ |
11,460 |
|
|
$ |
11,241 |
|
|
|
|
|
|
|
|
|
NVIDIA
CORPORATION |
RECONCILIATION OF GAAP
TO NON-GAAP FINANCIAL MEASURES |
(In millions, except per share data) |
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended |
|
|
|
April 29, |
|
January 28, |
|
April 30, |
|
|
|
2018 |
|
2018 |
|
2017 |
|
|
|
|
|
|
|
|
GAAP gross
profit |
|
$ |
2,068 |
|
|
$ |
1,801 |
|
|
$ |
1,150 |
|
GAAP
gross margin |
|
64.5 |
% |
|
|
61.9 |
% |
|
|
59.4 |
% |
|
Stock-based compensation expense (A) |
|
8 |
|
|
|
7 |
|
|
|
4 |
|
|
Legal settlement costs |
|
- |
|
|
|
1 |
|
|
|
- |
|
Non-GAAP
gross profit |
$ |
2,076 |
|
|
$ |
1,809 |
|
|
$ |
1,154 |
|
Non-GAAP gross margin |
|
64.7 |
% |
|
|
62.1 |
% |
|
|
59.6 |
% |
|
|
|
|
|
|
|
|
GAAP
operating expenses |
$ |
773 |
|
|
$ |
728 |
|
|
$ |
596 |
|
|
Stock-based compensation expense (A) |
|
|
(121 |
) |
|
|
(119 |
) |
|
|
(73 |
) |
|
Acquisition-related costs (B) |
|
(2 |
) |
|
|
(2 |
) |
|
|
(4 |
) |
|
Legal settlement costs |
|
(2 |
) |
|
|
- |
|
|
|
- |
|
|
Contributions |
|
|
- |
|
|
|
- |
|
|
|
(2 |
) |
Non-GAAP
operating expenses |
$ |
648 |
|
|
$ |
607 |
|
|
$ |
517 |
|
|
|
|
|
|
|
|
|
GAAP income
from operations |
$ |
1,295 |
|
|
$ |
1,073 |
|
|
$ |
554 |
|
|
Total impact of non-GAAP adjustments to income from
operations |
|
133 |
|
|
|
129 |
|
|
|
83 |
|
Non-GAAP
income from operations |
$ |
1,428 |
|
|
$ |
1,202 |
|
|
$ |
637 |
|
|
|
|
|
|
|
|
|
GAAP other
income (expense) |
$ |
16 |
|
|
$ |
5 |
|
|
$ |
(18 |
) |
|
Gains from
non-affiliated investments (C) |
|
(6 |
) |
|
|
(2 |
) |
|
|
- |
|
|
Interest
expense related to amortization of debt discount |
|
1 |
|
|
|
- |
|
|
|
2 |
|
|
Debt-related costs (D) |
|
- |
|
|
|
2 |
|
|
|
14 |
|
Non-GAAP
other income (expense) |
$ |
11 |
|
|
$ |
5 |
|
|
$ |
(2 |
) |
|
|
|
|
|
|
|
|
GAAP net
income |
|
$ |
1,244 |
|
|
$ |
1,118 |
|
|
$ |
507 |
|
|
Total pre-tax impact of non-GAAP adjustments |
|
128 |
|
|
|
129 |
|
|
|
99 |
|
|
Income tax
impact of non-GAAP adjustments (E) |
|
(87 |
) |
|
|
(33 |
) |
|
|
(73 |
) |
|
Provisional
tax benefit from income tax reform |
|
- |
|
|
|
(133 |
) |
|
|
- |
|
Non-GAAP
net income |
$ |
1,285 |
|
|
$ |
1,081 |
|
|
$ |
533 |
|
|
|
|
|
|
|
|
|
Diluted net
income per share |
|
|
|
|
|
|
GAAP |
|
$ |
1.98 |
|
|
$ |
1.78 |
|
|
$ |
0.79 |
|
|
Non-GAAP |
|
$ |
2.05 |
|
|
$ |
1.72 |
|
|
$ |
0.85 |
|
|
|
|
|
|
|
|
|
Weighted
average shares used in diluted net income per share
computation |
|
|
|
|
|
|
GAAP |
|
|
627 |
|
|
|
628 |
|
|
|
641 |
|
|
Anti-dilution impact
from note hedge (F) |
|
|
(1 |
) |
|
|
(1 |
) |
|
|
(14 |
) |
|
Non-GAAP |
|
|
626 |
|
|
|
627 |
|
|
|
627 |
|
|
|
|
|
|
|
|
|
GAAP net
cash provided by operating activities |
$ |
1,445 |
|
|
$ |
1,358 |
|
|
$ |
282 |
|
|
Purchase of
property and equipment and intangible assets |
|
(118 |
) |
|
|
(416 |
) |
|
|
(53 |
) |
Free cash
flow |
|
$ |
1,327 |
|
|
$ |
942 |
|
|
$ |
229 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(A) Stock-based compensation consists of the
following: |
Three Months Ended |
|
|
|
April 29, |
|
January 28, |
|
April 30, |
|
|
|
2018 |
|
2018 |
|
2017 |
|
Cost of
revenue |
|
$ |
8 |
|
|
$ |
7 |
|
|
$ |
4 |
|
|
Research
and development |
|
$ |
74 |
|
|
$ |
73 |
|
|
$ |
41 |
|
|
Sales,
general and administrative |
|
$ |
47 |
|
|
$ |
46 |
|
|
$ |
31 |
|
|
|
|
|
|
|
|
|
(B) Consists of amortization of acquisition-related
intangible assets and compensation charges. |
|
|
|
|
|
|
|
|
(C) Consists of realized and unrealized gains from
non-affiliated investments. |
|
|
|
|
|
|
|
|
(D) Consists of loss on early debt conversions and
termination of interest rate swap. |
|
|
|
|
|
|
|
|
(E) Income tax impact of non-GAAP adjustments,
including the recognition of excess tax benefits or deficiencies
related to stock-based compensation under GAAP accounting standard
(ASU 2016-09). |
|
|
|
|
|
|
|
|
(F) Represents the number of shares that would be
delivered upon conversion of the currently outstanding 1.00%
Convertible Senior Notes Due 2018. Under GAAP, shares delivered in
hedge transactions are not considered offsetting shares in the
fully diluted share calculation until actually
delivered. |
|
|
|
|
|
|
|
|
NVIDIA
CORPORATION |
RECONCILIATION OF GAAP
TO NON-GAAP OUTLOOK |
|
|
|
|
|
|
Q2 FY2019
Outlook |
|
|
|
GAAP gross
margin |
|
63.3 |
% |
|
Impact
of stock-based compensation expense |
|
0.2 |
% |
Non-GAAP
gross margin |
|
63.5 |
% |
|
|
|
|
|
Q2 FY2019
Outlook |
|
|
(In millions) |
|
|
|
GAAP
operating expenses |
$ |
810 |
|
|
Stock-based compensation expense, acquisition-related costs, and
other costs |
|
(125 |
) |
Non-GAAP
operating expenses |
$ |
685 |
|
|
|
|
About NVIDIA NVIDIA’s (NASDAQ: NVDA) 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/.
For further information, contact:
Simona
Jankowski |
|
Robert Sherbin |
Investor
Relations |
|
Corporate
Communications |
NVIDIA
Corporation |
|
NVIDIA Corporation |
sjankowski@nvidia.com |
|
rsherbin@nvidia.com |
Certain statements in this press release including, but not
limited to, statements as to: NVIDIA’s opportunities based on the
growth of computing demand for AI; NVIDIA’s GPU computing
approach being ideal for filling a vacuum as traditional computing
has slowed; NVIDIA’s invention of the Tensor Core GPU enhancing its
strong position to power the AI era; NVIDIA’s intended capital
return for fiscal 2019; NVIDIA’s next quarterly cash dividend;
NVIDIA’s financial outlook for the second quarter of fiscal 2019;
NVIDIA’s expected tax rates for the second quarter of fiscal 2019;
our expectation to generate variability from excess tax benefits or
deficiencies related to stock-based compensation; the benefits and
impacts of advances in our deep learning platform including NVIDIA
Tesla V100, NVIDIA NVSwitch, and NVIDIA DGX-2, the latest version
of our TensorRT software and the expansion of NVIDIA in the
inference market, our work with Kubernetes to facilitate enterprise
inference deployment, Project Clara to revolutionize medical
imaging, Arm integrating NVIDIA Deep Learning Accelerator and
bringing inference to devices, and the offerings of the Isaac
software development kit; and the benefits, impacts and performance
of NVIDIA RTX, Quadro GV100 GPU making real-time ray tracing
possible, and NVIDIA DRIVE Constellation server with DRIVE Sim
software to safely test drive autonomous vehicles 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-K for the fiscal
year ended January 28, 2018. 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.
© 2018 NVIDIA Corporation. All rights reserved. NVIDIA, the
NVIDIA logo, Quadro, Tesla, NVIDIA DGX, NVIDIA DRIVE, NVIDIA DRIVE
Constellation, NVIDIA DRIVE Sim, NVIDIA RTX, NVSwitch and TensorRT
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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