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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended October 30, 2022
OR
☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Commission file number: 0-23985
nvda-20221030_g1.jpg

NVIDIA CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 94-3177549
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
2788 San Tomas Expressway
Santa Clara, California 95051
(408) 486-2000
(Address, including zip code, and telephone number,
including area code, of principal executive offices)
N/A
(Former name, former address and former fiscal year if changed since last report)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class Trading Symbol(s) Name of each exchange on which registered
Common Stock, $0.001 par value per share NVDA The Nasdaq Global Select Market
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See definitions of “large accelerated filer”, “accelerated filer”, “smaller reporting company”, and "emerging growth company" in Rule 12b-2 of the Exchange Act.
Large accelerated filer ☒ Accelerated filer ☐ Non-accelerated filer ☐ Smaller reporting company ☐ Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒
The number of shares of common stock, $0.001 par value, outstanding as of November 11, 2022, was 2.46 billion.


NVIDIA CORPORATION
FORM 10-Q
FOR THE QUARTER ENDED October 30, 2022
TABLE OF CONTENTS
    Page
   
Financial Statements (Unaudited)  
  a) Condensed Consolidated Statements of Income for the three and nine months ended October 30, 2022 and October 31, 2021
3
b) Condensed Consolidated Statements of Comprehensive Income for the three and nine months ended October 30, 2022 and October 31, 2021
4
  c) Condensed Consolidated Balance Sheets as of October 30, 2022 and January 30, 2022
5
d) Condensed Consolidated Statements of Shareholders' Equity for the three and nine months ended October 30, 2022 and October 31, 2021
6
  e) Condensed Consolidated Statements of Cash Flows for the nine months ended October 30, 2022 and October 31, 2021
8
  f) Notes to Condensed Consolidated Financial Statements
9
Management’s Discussion and Analysis of Financial Condition and Results of Operations
Quantitative and Qualitative Disclosures About Market Risk
Controls and Procedures
   
Legal Proceedings
Risk Factors
Unregistered Sales of Equity Securities and Use of Proceeds
Exhibits
 
WHERE YOU CAN FIND MORE INFORMATION
Investors and others should note that we announce material financial information to our investors using our investor relations website, press releases, SEC filings and public conference calls and webcasts. We also use the following social media channels as a means of disclosing information about the company, our products, our planned financial and other announcements and attendance at upcoming investor and industry conferences, and other matters, and for complying with our disclosure obligations under Regulation FD: 
NVIDIA Twitter Account (https://twitter.com/nvidia)
NVIDIA Company Blog (http://blogs.nvidia.com)
NVIDIA Facebook Page (https://www.facebook.com/nvidia)
NVIDIA LinkedIn Page (http://www.linkedin.com/company/nvidia)
NVIDIA Instagram Page (https://www.instagram.com/nvidia)
In addition, investors and others can view NVIDIA videos on YouTube (https://www.YouTube.com/nvidia).
The information we post through these social media channels may be deemed material. Accordingly, investors should monitor these accounts and the blog, in addition to following our press releases, SEC filings and public conference calls and webcasts. This list may be updated from time to time. The information we post through these channels is not a part of this Quarterly Report on Form 10-Q. These channels may be updated from time to time on NVIDIA's investor relations website.
2

PART I. FINANCIAL INFORMATION
ITEM 1.  FINANCIAL STATEMENTS (UNAUDITED)
NVIDIA CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In millions, except per share data)
(Unaudited)
  Three Months Ended Nine Months Ended
  October 30, October 31, October 30, October 31,
2022 2021 2022 2021
Revenue $ 5,931  $ 7,103  $ 20,923  $ 19,271 
Cost of revenue 2,754  2,472  9,400  6,795 
Gross profit 3,177  4,631  11,523  12,476 
Operating expenses    
Research and development 1,945  1,403  5,387  3,802 
Sales, general and administrative 631  557  1,815  1,603 
Acquisition termination cost
 —  —  1,353  — 
Total operating expenses 2,576  1,960  8,555  5,405 
Income from operations 601  2,671  2,968  7,071 
Interest income 88  7  152  20 
Interest expense (65) (62) (198) (175)
Other, net (11) 22  (29) 160 
Other income (expense), net
 12  (33) (75) 5 
Income before income tax 613  2,638  2,893  7,076 
Income tax expense (benefit) (67) 174  (61) 327 
Net income $ 680  $ 2,464  $ 2,954  $ 6,749 
Net income per share:
Basic $ 0.27  $ 0.99  $ 1.18  $ 2.71 
Diluted $ 0.27  $ 0.97  $ 1.17  $ 2.67 
Weighted average shares used in per share computation:
Basic 2,483  2,499  2,495  2,493 
Diluted 2,499  2,538  2,517  2,532 
See accompanying Notes to Condensed Consolidated Financial Statements.

3

NVIDIA CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(In millions)
(Unaudited)
  Three Months Ended Nine Months Ended
  October 30, October 31, October 30, October 31,
2022 2021 2022 2021
 
Net income $ 680  $ 2,464  $ 2,954  $ 6,749 
Other comprehensive income (loss), net of tax
Available-for-sale securities:
Net change in unrealized loss (18) (4) (53) (5)
Reclassification adjustments for net realized gain included in net income —  —  1  — 
Net change in unrealized loss (18) (4) (52) (5)
Cash flow hedges:
Net unrealized gain (loss) (14) 22  (44) (5)
Reclassification adjustments for net realized loss included in net income (1) (17) (16) — 
Net change in unrealized gain (loss) (15) 5  (60) (5)
Other comprehensive income (loss), net of tax (33) 1  (112) (10)
Total comprehensive income $ 647  $ 2,465  $ 2,842  $ 6,739 
See accompanying Notes to Condensed Consolidated Financial Statements.

4

NVIDIA CORPORATION AND SUBSIDIARIES 
CONDENSED CONSOLIDATED BALANCE SHEETS
(In millions)
(Unaudited)
October 30, January 30,
  2022 2022
ASSETS
Current assets:    
Cash and cash equivalents $ 2,800  $ 1,990 
Marketable securities 10,343  19,218 
Accounts receivable, net 4,908  4,650 
Inventories 4,454  2,605 
Prepaid expenses and other current assets 718  366 
Total current assets 23,223  28,829 
Property and equipment, net 3,774  2,778 
Operating lease assets 927  829 
Goodwill 4,372  4,349 
Intangible assets, net 1,850  2,339 
Deferred income tax assets 2,762  1,222 
Other assets 3,580  3,841 
Total assets $ 40,488  $ 44,187 
LIABILITIES AND SHAREHOLDERS’ EQUITY    
Current liabilities:    
Accounts payable $ 1,491  $ 1,783 
Accrued and other current liabilities 4,115  2,552 
Short-term debt 1,249  — 
Total current liabilities 6,855  4,335 
Long-term debt 9,701  10,946 
Long-term operating lease liabilities 798  741 
Other long-term liabilities 1,785  1,553 
Total liabilities 19,139  17,575 
Commitments and contingencies - see Note 13
Shareholders’ equity:    
Preferred stock —  — 
Common stock 2  3 
Additional paid-in capital 11,565  10,385 
Accumulated other comprehensive loss (123) (11)
Retained earnings 9,905  16,235 
Total shareholders' equity 21,349  26,612 
Total liabilities and shareholders' equity $ 40,488  $ 44,187 
See accompanying Notes to Condensed Consolidated Financial Statements.

5

NVIDIA CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY
FOR THE THREE MONTHS ENDED OCTOBER 30, 2022 AND OCTOBER 31, 2021
(Unaudited)
Common Stock
Outstanding
 Additional Paid-in Capital Treasury Stock Accumulated Other Comprehensive Income (Loss) Retained Earnings Total Shareholders' Equity
(In millions, except per share data) Shares Amount
Balances, July 31, 2022 2,489  $ 2  $ 10,968  $ —  $ (90) $ 12,971  $ 23,851 
Net income —  —  —  —  —  680  680 
Other comprehensive loss —  —  —  —  (33) —  (33)
Issuance of common stock from stock plans  9  —  143  —  —  —  143 
Tax withholding related to vesting of restricted stock units (2) —  (294) —  —  —  (294)
Shares repurchased (28) —  (1) —  —  (3,646) (3,647)
Cash dividends declared and paid ($0.04 per common share)
 —  —  —  —  —  (100) (100)
Stock-based compensation —  —  749  —  —  —  749 
Balances, October 30, 2022 2,468  $ 2  $ 11,565  $ —  $ (123) $ 9,905  $ 21,349 
Balances, August 1, 2021 2,496  $ 3  $ 9,745  $ (11,604) $ 8  $ 22,995  $ 21,147 
Net income —  —  —  —  —  2,464  2,464 
Other comprehensive income —  —  —  —  1  —  1 
Issuance of common stock from stock plans  8  —  150  —  —  —  150 
Tax withholding related to vesting of restricted stock units (2) —  —  (434) —  —  (434)
Cash dividends declared and paid ($0.04 per common share)
 —  —  —  —  —  (100) (100)
Fair value of partially vested equity awards assumed in connection with acquisitions —  —  18  —  —  —  18 
Stock-based compensation —  —  552  —  —  —  552 
Balances, October 31, 2021 2,502  $ 3  $ 10,465  $ (12,038) $ 9  $ 25,359  $ 23,798 
See accompanying Notes to Condensed Consolidated Financial Statements.
6

NVIDIA CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY
FOR THE NINE MONTHS ENDED OCTOBER 30, 2022 AND OCTOBER 31, 2021
(Unaudited)
Common Stock
Outstanding
 Additional Paid-in Capital Treasury Stock Accumulated Other Comprehensive Income (Loss) Retained Earnings Total Shareholders' Equity
(In millions, except per share data) Shares Amount
Balances, January 30, 2022 2,506  $ 3  $ 10,385  $ —  $ (11) $ 16,235  $ 26,612 
Net income —  —  —  —  —  2,954  2,954 
Other comprehensive loss —  —  —  —  (112) —  (112)
Issuance of common stock from stock plans  24  —  349  —  —  —  349 
Tax withholding related to vesting of restricted stock units (6) —  (1,131) —  —  —  (1,131)
Shares repurchased (56) (1) (3) —  —  (8,984) (8,988)
Cash dividends declared and paid ($0.12 per common share)
 —  —  —  —  —  (300) (300)
Stock-based compensation —  —  1,965  —  —  —  1,965 
Balances, October 30, 2022 2,468  $ 2  $ 11,565  $ —  $ (123) $ 9,905  $ 21,349 
Balances, January 31, 2021 2,479  $ 3  $ 8,719  $ (10,756) $ 19  $ 18,908  $ 16,893 
Net income —  —  —  —  —  6,749  6,749 
Other comprehensive loss —  —  —  —  (10) —  (10)
Issuance of common stock from stock plans  30  —  277  —  —  —  277 
Tax withholding related to vesting of restricted stock units (7) —  —  (1,282) —  —  (1,282)
Cash dividends declared and paid ($0.12 per common share)
 —  —  —  —  —  (298) (298)
Fair value of partially vested equity awards assumed in connection with acquisitions —  —  18  —  —  —  18 
Stock-based compensation —  —  1,451  —  —  —  1,451 
Balances, October 31, 2021 2,502  $ 3  $ 10,465  $ (12,038) $ 9  $ 25,359  $ 23,798 
See accompanying Notes to Condensed Consolidated Financial Statements.
7

NVIDIA CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In millions)
(Unaudited)
  Nine Months Ended
October 30, October 31,
  2022 2021
Cash flows from operating activities:    
Net income $ 2,954  $ 6,749 
Adjustments to reconcile net income to net cash provided by operating activities:
Stock-based compensation expense 1,971  1,453 
Acquisition termination cost
 1,353  — 
Depreciation and amortization 1,118  865 
Losses (gains) on investments in non-affiliates, net 35  (152)
Deferred income taxes (1,517) (182)
Other (27) 25 
Changes in operating assets and liabilities, net of acquisitions:
Accounts receivable (258) (1,523)
Inventories (1,848) (400)
Prepaid expenses and other assets (1,307) (1,557)
Accounts payable (358) 385 
Accrued and other current liabilities 1,175  159 
Other long-term liabilities 102  253 
Net cash provided by operating activities 3,393  6,075 
Cash flows from investing activities:    
Proceeds from maturities of marketable securities 16,792  7,780 
Proceeds from sales of marketable securities 1,806  916 
Purchases of marketable securities (9,764) (16,020)
Purchases related to property and equipment and intangible assets (1,324) (703)
Acquisitions, net of cash acquired (49) (203)
Investments and other, net (83) (14)
Net cash provided by (used in) investing activities 7,378  (8,244)
Cash flows from financing activities:    
Proceeds related to employee stock plans 349  277 
Payments related to repurchases of common stock (8,826) — 
Payments related to tax on restricted stock units (1,131) (1,282)
Dividends paid (300) (298)
Principal payments on property and equipment and intangible asset (54) (62)
Issuance of debt, net of issuance costs —  4,977 
Repayment of debt —  (1,000)
Other 1  (2)
Net cash provided by (used in) financing activities (9,961) 2,610 
Change in cash and cash equivalents 810  441 
Cash and cash equivalents at beginning of period 1,990  847 
Cash and cash equivalents at end of period $ 2,800  $ 1,288 
Supplemental disclosures of cash flow information:    
Cash paid for income taxes, net $ 1,372  $ 313 
See accompanying Notes to Condensed Consolidated Financial Statements.
8
NVIDIA CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)


Note 1 - Summary of Significant Accounting Policies
Basis of Presentation
The accompanying unaudited condensed consolidated financial statements were prepared in accordance with accounting principles generally accepted in the United States of America, or U.S. GAAP, for interim financial information and with the instructions to Form 10-Q and Article 10 of Securities and Exchange Commission, or SEC, Regulation S-X. The January 30, 2022 consolidated balance sheet was derived from our audited consolidated financial statements included in our Annual Report on Form 10-K for the fiscal year ended January 30, 2022, as filed with the SEC, but does not include all disclosures required by U.S. GAAP. In the opinion of management, all adjustments, consisting only of normal recurring adjustments considered necessary for a fair statement of results of operations and financial position, have been included. The results for the interim periods presented are not necessarily indicative of the results expected for any future period. The following information should be read in conjunction with the audited consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the fiscal year ended January 30, 2022. 
Significant Accounting Policies
There have been no material changes to our significant accounting policies disclosed in Note 1 - Organization and Summary of Significant Accounting Policies, of the Notes to the Consolidated Financial Statements included in our Annual Report on Form 10-K for the fiscal year ended January 30, 2022.
Fiscal Year
We operate on a 52- or 53-week year, ending on the last Sunday in January. Fiscal years 2023 and 2022 are both 52-week years. The third quarters of fiscal years 2023 and 2022 were both 13-week quarters.
Reclassifications
Certain prior fiscal year balances have been reclassified to conform to the current fiscal year presentation.
Prior period intangible asset gross carrying amount and accumulated amortization in Note 9 have been adjusted to write off immaterial fully amortized intangible assets as of January 30, 2022.
Principles of Consolidation
Our condensed consolidated financial statements include the accounts of NVIDIA Corporation and our wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation.
Note 2 - Business Combination
Termination of the Arm Share Purchase Agreement
In February 2022, NVIDIA and SoftBank Group Corp, or SoftBank, announced the termination of the Share Purchase Agreement whereby NVIDIA would have acquired Arm Limited from SoftBank. The parties agreed to terminate because of significant regulatory challenges preventing the completion of the transaction. We recorded an acquisition termination cost of $1.35 billion in the first quarter of fiscal year 2023 reflecting the write-off of the prepayment provided at signing.
9
NVIDIA CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Unaudited)


Note 3 - Leases
Our lease obligations primarily consist of operating leases for our headquarters complex, domestic and international office facilities, and data center space, with lease periods expiring between fiscal years 2023 and 2035.
Future minimum lease payments under our non-cancelable operating leases as of October 30, 2022 are as follows:
Operating Lease Obligations
  (In millions)
Fiscal Year:  
2023 (excluding first nine months of fiscal year 2023)
 $ 50 
2024 188 
2025 167 
2026 149 
2027 137 
2028 and thereafter
 393 
Total 1,084 
Less imputed interest 130 
Present value of net future minimum lease payments 954 
Less short-term operating lease liabilities 156 
Long-term operating lease liabilities $ 798 
In addition to our existing operating lease obligations, we have operating leases, primarily for our data centers, that are expected to commence between the fourth quarter of fiscal year 2023 and fiscal year 2025 with lease terms of 2 to 8 years for $647 million.
Operating lease expenses were $49 million and $44 million for the third quarter of fiscal years 2023 and 2022, respectively, and $139 million and $125 million for the first nine months of fiscal years 2023 and 2022, respectively. Short-term and variable lease expenses for the third quarter and first nine months of fiscal years 2023 and 2022 were not significant.
Other information related to leases was as follows:
Nine Months Ended
October 30, 2022 October 31, 2021
  (In millions)
Supplemental cash flows information  
Operating cash flows used for operating leases $ 134  $ 114 
Operating lease assets obtained in exchange for lease obligations $ 213  $ 230 
As of October 30, 2022, our operating leases had a weighted average remaining lease term of 6.9 years and a weighted average discount rate of 2.82%. As of January 30, 2022, our operating leases had a weighted average remaining lease term of 7.1 years and a weighted average discount rate of 2.51%.
10
NVIDIA CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Unaudited)


Note 4 - Stock-Based Compensation
Our stock-based compensation expense is associated with restricted stock units, or RSUs, performance stock units that are based on our corporate financial performance targets, or PSUs, performance stock units that are based on market conditions, or market-based PSUs, and our employee stock purchase plan, or ESPP.
Our Condensed Consolidated Statements of Income include stock-based compensation expense, net of amounts allocated to inventory, as follows:
  Three Months Ended Nine Months Ended
  October 30,
2022		 October 31,
2021		 October 30,
2022		 October 31,
2021
(In millions)
Cost of revenue $ 32  $ 44  $ 108  $ 102 
Research and development 530  363  1,365  935 
Sales, general and administrative 183  152  498  416 
Total $ 745  $ 559  $ 1,971  $ 1,453 
Equity Award Activity
The following is a summary of our equity award transactions under our equity incentive plans:
RSUs, PSUs, and Market-based PSUs Outstanding
  Number of Shares Weighted Average Grant-Date Fair Value Per Share
(In millions, except per share data)
Balances, January 30, 2022 46  $ 114.19 
Granted 23  $ 185.07 
Vested restricted stock (18) $ 94.82 
Canceled and forfeited (1) $ 137.27 
Balances, October 30, 2022 50  $ 153.73 
As of October 30, 2022, there was $7.19 billion of aggregate unearned stock-based compensation expense. This amount is expected to be recognized over a weighted average period of 2.7 years for RSUs, PSUs, and market-based PSUs, and 1.1 years for ESPP.

11
NVIDIA CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Unaudited)


Note 5 – Net Income Per Share
The following is a reconciliation of the denominator of the basic and diluted net income per share computations for the periods presented:
  Three Months Ended Nine Months Ended
October 30, October 31, October 30, October 31,
2022 2021 2022 2021
  (In millions, except per share data)
Numerator:    
Net income
 $ 680  $ 2,464  $ 2,954  $ 6,749 
Denominator:
Basic weighted average shares
 2,483  2,499  2,495  2,493 
Dilutive impact of outstanding
equity awards
 16  39  22  39 
Diluted weighted average shares
 2,499  2,538  2,517  2,532 
Net income per share:
Basic (1)
 $ 0.27  $ 0.99  $ 1.18  $ 2.71 
Diluted (2)
 $ 0.27  $ 0.97  $ 1.17  $ 2.67 
Equity awards excluded from diluted net income per share because their effect would have been anti-dilutive 36  2  29  21 
(1)    Calculated as net income divided by basic weighted average shares.
(2)    Calculated as net income divided by diluted weighted average shares.
Note 6 – Income Taxes
We recognized an income tax benefit of $67 million and $61 million for the third quarter and first nine months of fiscal year 2023, respectively, and an income tax expense of $174 million and $327 million for the third quarter and first nine months of fiscal year 2022, respectively. Income tax as a percentage of income before income tax was a benefit of 10.9% and 2.1% for the third quarter and first nine months of fiscal year 2023, respectively, and an expense of 6.6% and 4.6% for the third quarter and first nine months of fiscal year 2022, respectively.
The decrease in our effective tax rate for the third quarter and first nine months of fiscal year 2023 as compared to the same periods of fiscal year 2022 was primarily due to the increased tax benefit of the foreign-derived intangible income deduction, stock-based compensation, and the U.S. federal research tax credit, relative to a lower expected profitability. This is partially offset by the impact of an increase in the proportion of earnings subject to U.S. tax in fiscal year 2023 and the one-time discrete benefit from re-valuing certain deferred tax assets in connection with the domestication of one of our foreign subsidiaries, or the Domestication, in fiscal year 2022.
Our effective tax rate for the first nine months of fiscal year 2023 was lower than the U.S. federal statutory rate of 21% due to tax benefits from the foreign-derived intangible income deduction, stock-based compensation and the U.S. federal research tax credit.
Our effective tax rate for the first nine months of fiscal year 2022 was lower than the U.S. federal statutory rate of 21% due to tax benefits from the foreign-derived intangible income deduction, income earned in jurisdictions that are subject to taxes lower than the U.S. federal statutory tax rate, the discrete benefit of the Domestication, and tax benefits related to stock-based compensation and the U.S. federal research tax credit.
For the first nine months of fiscal year 2023, there were no material changes to our tax years that remain subject to examination by major tax jurisdictions. We are currently under examination by the Internal Revenue Service for our fiscal years 2018 and 2019. Additionally, there have been no material changes to our unrecognized tax benefits and any related interest or penalties since the fiscal year ended January 30, 2022.
12
NVIDIA CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Unaudited)


While we believe that we have adequately provided for all uncertain tax positions, or tax positions where we believe it is not more-likely-than-not that the position will be sustained upon review, amounts asserted by tax authorities could be greater or less than our accrued position. Accordingly, our provisions on federal, state and foreign tax related matters to be recorded in the future may change as revised estimates are made or the underlying matters are settled or otherwise resolved with the respective tax authorities. As of October 30, 2022, we do not believe that our estimates, as otherwise provided for, on such tax positions will significantly increase or decrease within the next 12 months.
Note 7 - Cash Equivalents and Marketable Securities 
Our cash equivalents and marketable securities related to debt securities are classified as “available-for-sale” debt securities.
The following is a summary of cash equivalents and marketable securities as of October 30, 2022 and January 30, 2022:
  October 30, 2022
Amortized
Cost		 Unrealized
Gain		 Unrealized
Loss		 Estimated
Fair Value		 Reported as
  Cash Equivalents Marketable Securities
  (In millions)
Corporate debt securities $ 4,221  $ —  $ (19) $ 4,202  $ 239  $ 3,963 
Debt securities issued by the U.S. Treasury 4,176  1  (60) 4,117  1  4,116 
Debt securities issued by U.S. government agencies 2,259  —  (4) 2,255  344  1,911 
Certificates of deposit 316  —  —  316  58  258 
Money market funds 1,843  —  —  1,843  1,843  — 
Foreign government bonds 99  —  —  99  4  95 
Total $ 12,914  $ 1  $ (83) $ 12,832  $ 2,489  $ 10,343 
  January 30, 2022
Amortized
Cost		 Unrealized
Gain		 Unrealized
Loss		 Estimated
Fair Value		 Reported as
  Cash Equivalents Marketable Securities
  (In millions)
Corporate debt securities $ 9,977  $ —  $ (3) $ 9,974  $ 1,102  $ 8,872 
Debt securities issued by the U.S. Treasury 7,314  —  (14) 7,300  —  7,300 
Debt securities issued by U.S. government agencies 1,612  —  —  1,612  256  1,356 
Certificates of deposit 1,561  —  —  1,561  21  1,540 
Money market funds 316  —  —  316  316  — 
Foreign government bonds 150  —  —  150  —  150 
Total $ 20,930  $ —  $ (17) $ 20,913  $ 1,695  $ 19,218 
The following tables provide the breakdown of unrealized losses, aggregated by investment category and length of time that individual securities have been in a continuous loss position:
October 30, 2022
  Less than 12 Months 12 Months or Greater Total
  Estimated Fair Value Gross Unrealized Loss Estimated Fair Value Gross Unrealized Loss Estimated Fair Value Gross Unrealized Loss
  (In millions)
Debt securities issued by the U.S. Treasury $ 1,928  $ (35) $ 1,051  $ (24) $ 2,979  $ (59)
Debt securities issued by U.S. government agencies 1,888  (4) —  —  1,888  (4)
Corporate debt securities 1,786  (18) 208  (2) 1,994  (20)
Total $ 5,602  $ (57) $ 1,259  $ (26) $ 6,861  $ (83)
January 30, 2022
  Less than 12 Months 12 Months or Greater Total
  Estimated Fair Value Gross Unrealized Loss Estimated Fair Value Gross Unrealized Loss Estimated Fair Value Gross Unrealized Loss
  (In millions)
Debt securities issued by the U.S. Treasury $ 5,292  $ (14) $ —  $ —  $ 5,292  $ (14)
Corporate debt securities 2,445  (3) 19  —  2,464  (3)
Total $ 7,737  $ (17) $ 19  $ —  $ 7,756  $ (17)
The gross unrealized losses are related to fixed income securities, driven primarily by changes in interest rates. Net realized gains and losses were not significant for all periods presented.
The amortized cost and estimated fair value of cash equivalents and marketable securities as of October 30, 2022 and January 30, 2022 are shown below by contractual maturity.
October 30, 2022 January 30, 2022
Amortized Cost Estimated Fair Value Amortized Cost Estimated Fair Value
(In millions)
Less than one year $ 8,985  $ 8,952  $ 16,346  $ 16,343 
Due in 1 - 5 years 3,929  3,880  4,584  4,570 
Total $ 12,914  $ 12,832  $ 20,930  $ 20,913 
13
NVIDIA CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Unaudited)


Note 8 – Fair Value of Financial Assets and Liabilities
The fair values of our financial assets and liabilities are determined using quoted market prices of identical assets or quoted market prices of similar assets from active markets. We review fair value hierarchy classification on a quarterly basis.
Fair Value at
Pricing Category October 30, 2022 January 30, 2022
(In millions)
Assets
Cash equivalents and marketable securities:
Money market funds Level 1 $ 1,843  $ 316 
Corporate debt securities Level 2 $ 4,202  $ 9,974 
Debt securities issued by the U.S. Treasury Level 2 $ 4,117  $ 7,300 
Debt securities issued by U.S. government agencies Level 2 $ 2,255  $ 1,612 
Certificates of deposit Level 2 $ 316  $ 1,561 
Foreign government bonds Level 2 $ 99  $ 150 
Other assets (Investment in non-affiliated entities):
Publicly-held equity securities (1) Level 1 $ 27  $ 58 
Privately-held equity securities Level 3 $ 287  $ 208 
Liabilities (2)
0.309% Notes Due 2023
 Level 2 $ 1,217  $ 1,236 
0.584% Notes Due 2024
 Level 2 $ 1,168  $ 1,224 
3.20% Notes Due 2026
 Level 2 $ 945  $ 1,055 
1.55% Notes Due 2028
 Level 2 $ 1,036  $ 1,200 
2.85% Notes Due 2030
 Level 2 $ 1,281  $ 1,542 
2.00% Notes Due 2031
 Level 2 $ 979  $ 1,200 
3.50% Notes Due 2040
 Level 2 $ 764  $ 1,066 
3.50% Notes Due 2050
 Level 2 $ 1,427  $ 2,147 
3.70% Notes Due 2060
 Level 2 $ 344  $ 551 
(1)    Unrealized losses of $11 million and $35 million from investments in publicly-traded equity securities were recorded in other income (expense), net, in the third quarter and first nine months of fiscal year 2023, respectively. Unrealized gains of $8 million and $126 million from an investment in a publicly-traded equity security were recorded in other income (expense), net, in the third quarter and first nine months of fiscal year 2022, respectively.
(2)    These liabilities are carried on our Condensed Consolidated Balance Sheets at their original issuance value, net of unamortized debt discount and issuance costs.
14
NVIDIA CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Unaudited)


Note 9 - Amortizable Intangible Assets and Goodwill
The components of our amortizable intangible assets are as follows:
  October 30, 2022 January 30, 2022
  Gross
Carrying
Amount		 Accumulated
Amortization		 Net Carrying
Amount		 Gross
Carrying
Amount		 Accumulated
Amortization		 Net Carrying
Amount
  (In millions)
Acquisition-related intangible assets (1) $ 3,093  $ (1,441) $ 1,652  $ 3,061  $ (947) $ 2,114 
Patents and licensed technology 442  (244) 198  446  (221) 225 
Total intangible assets $ 3,535  $ (1,685) $ 1,850  $ 3,507  $ (1,168) $ 2,339 
(1)    During the first quarter of fiscal year 2023, we commenced amortization of a $630 million in-process research and development intangible asset related to our acquisition of Mellanox.
Amortization expense associated with intangible assets was $181 million and $518 million for the third quarter and first nine months of fiscal year 2023, respectively, and $143 million and $418 million for the third quarter and first nine months of fiscal year 2022, respectively. Future amortization expense related to the net carrying amount of intangible assets as of October 30, 2022 is estimated to be $181 million for the remainder of fiscal year 2023, $600 million in fiscal year 2024, $538 million in fiscal year 2025, $244 million in fiscal year 2026, $141 million in fiscal year 2027, and $146 million in fiscal year 2028 and thereafter.
In the first nine months of fiscal year 2023, goodwill increased by $23 million and intangible assets increased by $33 million from acquisitions. We assigned $14 million of the increase in goodwill to our Compute & Networking segment and $9 million of the increase to our Graphics segment.
Note 10 - Balance Sheet Components 
Certain balance sheet components are as follows:
October 30, January 30,
  2022 2022
Inventories: (In millions)
Raw materials $ 1,936  $ 791 
Work in-process 788  692 
Finished goods 1,730  1,122 
Total inventories $ 4,454  $ 2,605 

October 30, January 30,
  2022 2022
Other assets: (In millions)
Prepaid supply agreements $ 2,771  $ 1,747 
Prepaid royalties 393  409 
Investment in non-affiliated entities 314  266 
Advanced consideration for acquisition (1) —  1,353 
Other 102  66 
Total other assets $ 3,580  $ 3,841 
(1)    Refer to Note 2 - Business Combination for further details on the Arm acquisition.

15
NVIDIA CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Unaudited)


October 30, January 30,
  2022 2022
Accrued and Other Current Liabilities: (In millions)
Customer program accruals $ 1,394  $ 1,000 
Excess inventory purchase obligations 1,181  196 
Deferred revenue (1) 338  300 
Accrued payroll and related expenses 307  409 
Unsettled share repurchases 162  — 
Product warranty 104  46 
Taxes payable 108  132 
Other 521  469 
Total accrued and other current liabilities $ 4,115  $ 2,552 
(1)    Deferred revenue primarily includes customer advances and deferrals related to license and development arrangements, support for hardware and software, and cloud services.
October 30, January 30,
  2022 2022
Other Long-Term Liabilities: (In millions)
Income tax payable (1) $ 1,057  $ 980 
Deferred income tax 246  245 
Deferred revenue (2) 213  202 
Other 269  126 
Total other long-term liabilities $ 1,785  $ 1,553 
(1)    As of October 30, 2022, income tax payable represents the long-term portion of the one-time transition tax payable of $188 million, unrecognized tax benefits of $789 million, and related interest and penalties of $80 million. As of January 30, 2022, income tax payable represents the long-term portion of the one-time transition tax payable of $251 million, unrecognized tax benefits of $670 million, and related interest and penalties of $59 million.
(2)    Deferred revenue primarily includes deferrals related to support for hardware and software.
Deferred Revenue
The following table shows the changes in deferred revenue during the first nine months of fiscal years 2023 and 2022:
October 30, October 31,
  2022 2021
(In millions)
Balance at beginning of period $ 502  $ 451 
Deferred revenue additions during the period 577  621 
Revenue recognized during the period (528) (583)
Balance at end of period $ 551  $ 489 
Revenue related to remaining performance obligations represents the contracted license and development arrangements and support for hardware and software. This includes deferred revenue currently recorded and amounts that will be invoiced in future periods. As of October 30, 2022, $681 million of revenue related to performance obligations had not been recognized, of which we expect to recognize approximately 47% over the next twelve months and the remainder thereafter. This excludes revenue related to performance obligations for contracts with a length of one year or less.
16
NVIDIA CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Unaudited)


Note 11 - Derivative Financial Instruments
We enter into foreign currency forward contracts to mitigate the impact of foreign currency exchange rate movements on our operating expenses. These contracts are designated as cash flow hedges for hedge accounting treatment. Gains or losses on the contracts are recorded in accumulated other comprehensive income or loss and reclassified to operating expense when the related operating expenses are recognized in earnings or ineffectiveness should occur. The fair value of the contracts was not significant as of October 30, 2022 and January 30, 2022.
We also enter into foreign currency forward contracts to mitigate the impact of foreign currency movements on monetary assets and liabilities that are denominated in currencies other than the U.S. dollar. These forward contracts were not designated for hedge accounting treatment. Therefore, the change in fair value of these contracts is recorded in other income or expense and offsets the change in fair value of the hedged foreign currency denominated monetary assets and liabilities, which is also recorded in other income or expense.

The table below presents the notional value of our foreign currency forward contracts outstanding as of October 30, 2022 and January 30, 2022:
  October 30,
2022		 January 30,
2022
(In millions)
Designated as cash flow hedges $ 1,139  $ 1,023 
Not designated for hedge accounting $ 330  $ 408 
As of October 30, 2022, all designated foreign currency forward contracts mature within 18 months. The expected realized gains and losses deferred into accumulated other comprehensive income or loss related to foreign currency forward contracts within the next twelve months was not significant.
During the first nine months of fiscal years 2023 and 2022, the impact of derivative financial instruments designated for hedge accounting treatment on other comprehensive income or loss was not significant.
17
NVIDIA CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Unaudited)


Note 12 - Debt
Long-Term Debt
The carrying values of our outstanding notes and their associated interest rates were as follows:
Carrying Value at
Expected
Remaining Term (years)
 Effective
Interest Rate		 October 30, 2022 January 30, 2022
(In millions)
0.309% Notes Due 2023
 0.6 0.41% $ 1,250  $ 1,250 
0.584% Notes Due 2024
 1.6 0.66% 1,250  1,250 
3.20% Notes Due 2026
 3.9 3.31% 1,000  1,000 
1.55% Notes Due 2028
 5.6 1.64% 1,250  1,250 
2.85% Notes Due 2030
 7.4 2.93% 1,500  1,500 
2.00% Notes Due 2031
 8.6 2.09% 1,250  1,250 
3.50% Notes Due 2040
 17.4 3.54% 1,000  1,000 
3.50% Notes Due 2050
 27.4 3.54% 2,000  2,000 
3.70% Notes Due 2060
 37.4 3.73% 500  500 
Unamortized debt discount and issuance costs (50) (54)
Net carrying amount 10,950  10,946 
Less short-term portion (1,249) — 
Total long-term portion $ 9,701  $ 10,946 
All our notes are unsecured senior obligations. All existing and future liabilities of our subsidiaries will be effectively senior to the notes. Our notes pay interest semi-annually. We may redeem each of our notes prior to maturity, subject to a make-whole premium as defined in the applicable form of note.
As of October 30, 2022, we have complied with the required covenants under the notes.
Commercial Paper
We have a $575 million commercial paper program to support general corporate purposes. As of October 30, 2022, we had not issued any commercial paper.
Note 13 - Commitments and Contingencies
Purchase Obligations
Our purchase obligations primarily include our commitments to purchase components used to manufacture our products, including long-term supply agreements, certain software and technology licenses, other goods and services and long-lived assets.
We have entered into several long-term supply agreements, under which we have made advance payments and have $917 million remaining unpaid. As of October 30, 2022, we had outstanding inventory purchase and long-term supply obligations totaling $7.02 billion, inclusive of the $917 million. Other non-inventory purchase obligations of $2.75 billion include $1.59 billion of multi-year cloud service agreements.
18
NVIDIA CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Unaudited)


Total gross future unconditional purchase commitments as of October 30, 2022 are as follows:
Commitments
  (In millions)
Fiscal Year:  
2023 (excluding first nine months of fiscal year 2023)
 $ 4,234 
2024 3,362 
2025 798 
2026 504 
2027 464 
2028 and thereafter
 410 
Total $ 9,772 
Accrual for Product Warranty Liabilities
The estimated amount of product warranty liabilities was $104 million and $46 million as of October 30, 2022 and January 30, 2022, respectively. The estimated product returns and estimated product warranty activity consisted of the following:
Three Months Ended
Nine Months Ended
October 30,
October 31,
October 30,
October 31,
2022
2021
 2022
2021
(In millions)
Balance at beginning of period
 $ 168  $ 31  $ 46  $ 22 
Additions
 3 5 141 20
Utilization
 (67) (4) (83) (10)
Balance at end of period
 $ 104  $ 32  $ 104  $ 32 
In the third quarter of fiscal year 2023, we recognized a warranty-related benefit of approximately $70 million in cost of revenue due to favorable product recovery.
In connection with certain agreements that we have entered in the past, we have provided indemnities for matters such as tax, product, and employee liabilities. We have included intellectual property indemnification provisions in our technology-related agreements with third parties. Maximum potential future payments cannot be estimated because many of these agreements do not have a maximum stated liability. We have not recorded any liability in our Condensed Consolidated Financial Statements for such indemnifications.
Securities Class Action and Derivative Lawsuits
The plaintiffs in the putative securities class action lawsuit, captioned 4:18-cv-07669-HSG, initially filed on December 21, 2018 in the United States District Court for the Northern District of California, and titled In Re NVIDIA Corporation Securities Litigation, filed an amended complaint on May 13, 2020. The amended complaint asserted that NVIDIA and certain NVIDIA executives violated Section 10(b) of the Securities Exchange Act of 1934, as amended, or the Exchange Act, and SEC Rule 10b-5, by making materially false or misleading statements related to channel inventory and the impact of cryptocurrency mining on GPU demand between May 10, 2017 and November 14, 2018. Plaintiffs also alleged that the NVIDIA executives who they named as defendants violated Section 20(a) of the Exchange Act. Plaintiffs sought class certification, an award of unspecified compensatory damages, an award of reasonable costs and expenses, including attorneys’ fees and expert fees, and further relief as the Court may deem just and proper. On March 2, 2021, the district court granted NVIDIA’s motion to dismiss the complaint without leave to amend, entered judgment in favor of NVIDIA and closed the case. On March 30, 2021, plaintiffs filed an appeal from judgment in the United States Court of Appeals for the Ninth Circuit, case number 21-15604. Oral argument on the appeal was held on May 10, 2022.
19
NVIDIA CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Unaudited)


The putative derivative lawsuit pending in the United States District Court for the Northern District of California, captioned 4:19-cv-00341-HSG, initially filed January 18, 2019 and titled In re NVIDIA Corporation Consolidated Derivative Litigation, was stayed pending resolution of the plaintiffs’ appeal in the In Re NVIDIA Corporation Securities Litigation action. On February 22, 2022, the court administratively closed the case, but stated that it would reopen the case once the appeal in the In Re NVIDIA Corporation Securities Litigation action is resolved. The lawsuit asserts claims, purportedly on behalf of us, against certain officers and directors of the Company for breach of fiduciary duty, unjust enrichment, waste of corporate assets, and violations of Sections 14(a), 10(b), and 20(a) of the Exchange Act based on the dissemination of allegedly false and misleading statements related to channel inventory and the impact of cryptocurrency mining on GPU demand. The plaintiffs are seeking unspecified damages and other relief, including reforms and improvements to NVIDIA’s corporate governance and internal procedures.
The putative derivative actions initially filed September 24, 2019 and pending in the United States District Court for the District of Delaware, Lipchitz v. Huang, et al. (Case No. 1:19-cv-01795-UNA) and Nelson v. Huang, et. al. (Case No. 1:19-cv-01798- UNA), remain stayed pending resolution of the plaintiffs’ appeal in the In Re NVIDIA Corporation Securities Litigation action. The lawsuits assert claims, purportedly on behalf of us, against certain officers and directors of the Company for breach of fiduciary duty, unjust enrichment, insider trading, misappropriation of information, corporate waste and violations of Sections 14(a), 10(b), and 20(a) of the Exchange Act based on the dissemination of allegedly false, and misleading statements related to channel inventory and the impact of cryptocurrency mining on GPU demand. The plaintiffs seek unspecified damages and other relief, including disgorgement of profits from the sale of NVIDIA stock and unspecified corporate governance measures.
Accounting for Loss Contingencies
As of October 30, 2022, we have not recorded any accrual for contingent liabilities associated with the legal proceedings described above based on our belief that liabilities, while possible, are not probable. Further, except as specifically described above, any possible loss or range of loss in these matters cannot be reasonably estimated at this time. We are engaged in legal actions not described above arising in the ordinary course of business and, while there can be no assurance of favorable outcomes, we believe that the ultimate outcome of these actions will not have a material adverse effect on our operating results, liquidity or financial position.
Note 14 - Shareholders’ Equity 
Capital Return Program 
During the third quarter and first nine months of fiscal year 2023, we repurchased 28 million shares for $3.65 billion and 56 million shares for $8.99 billion, respectively. Since the inception of our share repurchase program through October 30, 2022, we have repurchased an aggregate of 1.10 billion shares for $16.07 billion. As of October 30, 2022, we were authorized, subject to certain specifications, to repurchase an additional $8.28 billion of shares through December 2023. From October 31, 2022 through November 17, 2022, we repurchased 7 million shares for $1.05 billion pursuant to a Rule 10b5-1 trading plan.
During the third quarter and first nine months of fiscal year 2023, we paid $100 million and $300 million in cash dividends to our shareholders, respectively. During the third quarter and first nine months of fiscal year 2022, we paid $100 million and $298 million in cash dividends to our shareholders, respectively.
Note 15 - Segment Information
Our Chief Executive Officer, who is considered to be our chief operating decision maker, or CODM, reviews financial information presented on an operating segment basis for purposes of making decisions and assessing financial performance.
Our Compute & Networking segment includes Data Center platforms and systems for artificial intelligence, or AI, high-performance computing, and accelerated computing; Mellanox networking and interconnect solutions; automotive AI Cockpit, autonomous driving development agreements, and autonomous vehicle solutions; cryptocurrency mining processors, or CMP; Jetson for robotics and other embedded platforms; and NVIDIA AI Enterprise and other software.
Our Graphics segment includes GeForce GPUs for gaming and PCs, the GeForce NOW game streaming service and related infrastructure, and solutions for gaming platforms; Quadro/NVIDIA RTX GPUs for enterprise workstation
20
NVIDIA CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Unaudited)


graphics; vGPU software for cloud-based visual and virtual computing; automotive platforms for infotainment systems; and Omniverse software for building 3D designs and virtual worlds.
Operating results by segment include costs or expenses that are directly attributable to each segment, and costs or expenses that are leveraged across our unified architecture and therefore allocated between our two segments.
The “All Other” category includes the expenses that our CODM does not assign to either Compute & Networking or Graphics for purposes of making operating decisions or assessing financial performance. The expenses include stock-based compensation expense, acquisition-related and other costs, corporate infrastructure and support costs, restructuring costs, acquisition termination cost, IP-related and legal settlement costs, contributions, and other non-recurring charges and benefits that our CODM deems to be enterprise in nature.
Our CODM does not review any information regarding total assets on a reportable segment basis. Depreciation and amortization expense directly attributable to each reportable segment is included in operating results for each segment. However, the CODM does not evaluate depreciation and amortization expense by operating segment and, therefore, it is not separately presented. There is no intersegment revenue. The accounting policies for segment reporting are the same as for our consolidated financial statements. The table below presents details of our reportable segments and the “All Other” category.
  Compute & Networking Graphics All Other Consolidated
  (In millions)
Three Months Ended October 30, 2022
        
Revenue $ 3,816  $ 2,115  $ —  $ 5,931 
Operating income (loss) $ 1,086  $ 606  $ (1,091) $ 601 
Three Months Ended October 31, 2021
        
Revenue $ 3,011  $ 4,092  $ —  $ 7,103 
Operating income (loss) $ 1,332  $ 2,160  $ (821) $ 2,671 
Nine Months Ended October 30, 2022
Revenue $ 11,395  $ 9,528  $ —  $ 20,923 
Operating income (loss) $ 3,509  $ 3,739  $ (4,280) $ 2,968 
Nine Months Ended October 31, 2021
Revenue $ 7,821  $ 11,450  $ —  $ 19,271 
Operating income (loss) $ 3,227  $ 6,073  $ (2,229) $ 7,071 
21
NVIDIA CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Unaudited)


Three Months Ended Nine Months Ended
October 30,
2022		 October 31,
2021		 October 30,
2022		 October 31,
2021
(In millions)
Reconciling items included in "All Other" category:
Stock-based compensation expense $ (745) $ (559) $ (1,971) $ (1,453)
Acquisition-related and other costs (174) (156) (499) (482)
Unallocated cost of revenue and operating expenses (156) (106) (432) (286)
Restructuring costs (16) —  (16) — 
Acquisition termination cost —  —  (1,353) — 
IP-related and legal settlement costs —  —  (7) (8)
Contributions —  —  (2) — 
Total $ (1,091) $ (821) $ (4,280) $ (2,229)
Revenue by geographic region is allocated to individual countries based on the billing location of the customer. End customer location may be different than our customer’s billing location. The following table summarizes information pertaining to our revenue from customers based on the invoicing address by geographic regions:
  Three Months Ended Nine Months Ended
October 30, October 31, October 30, October 31,
  2022 2021 2022 2021
  (In millions)
Revenue:    
United States $ 2,148  $ 1,126  $ 6,069  $ 2,890 
Taiwan 1,153  2,187  5,134  5,932 
China (including Hong Kong) 1,148  2,017  4,831  5,128 
Other countries 1,482  1,773  4,889  5,321 
Total revenue $ 5,931  $ 7,103  $ 20,923  $ 19,271 
The following table summarizes information pertaining to our revenue by each of the specialized markets we serve:
  Three Months Ended Nine Months Ended
October 30, October 31, October 30, October 31,
  2022 2021 2022 2021
  (In millions)
Revenue:    
Data Center $ 3,833  $ 2,936  $ 11,389  $ 7,350 
Gaming 1,574  3,221  7,236  9,042 
Professional Visualization 200  577  1,318  1,468 
Automotive 251  135  609  441 
OEM and Other 73  234  371  970 
Total revenue $ 5,931  $ 7,103  $ 20,923  $ 19,271 
One customer represented 10% of our total revenue for the third quarter of fiscal year 2023 and was attributable primarily to the Compute & Networking segment. No customer represented 10% or more of total revenue for the first nine months of fiscal year 2023 and for the third quarter and first nine months of fiscal year 2022.
22
NVIDIA CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Unaudited)


One customer represented 10% or more of accounts receivable for a total of 12% of our accounts receivable balance as of October 30, 2022. Two customers each represented 10% or more of accounts receivable for a total of 22% as of January 30, 2022.
23



ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Forward-Looking Statements 
This Quarterly Report on Form 10-Q contains forward-looking statements which are based on our management’s beliefs and assumptions and on information currently available to our management. In some cases, you can identify forward-looking statements by terms such as “may,” “will,” “should,” “could,” “goal,” “would,” “expect,” “plan,” “anticipate,” “believe,” “estimate,” “project,” “predict,” “potential” and similar expressions intended to identify forward-looking statements. These statements involve known and unknown risks, uncertainties and other factors, which may cause our actual results, performance, time frames or achievements to be materially different from any future results, performance, time frames or achievements expressed or implied by the forward-looking statements. We discuss many of these risks, uncertainties and other factors in this Quarterly Report on Form 10-Q, in our Annual Report on Form 10-K for the fiscal year ended January 30, 2022 and in our Quarterly Reports on Form 10-Q for the fiscal quarters ended May 1, 2022 and July 31, 2022 in greater detail under the heading “Risk Factors” of such reports. Given these risks, uncertainties and other factors, you should not place undue reliance on these forward-looking statements. Also, these forward-looking statements represent our estimates and assumptions only as of the date of this filing. You should read this Quarterly Report on Form 10-Q completely and with the understanding that our actual future results may be materially different from what we expect. We hereby qualify our forward-looking statements by these cautionary statements. Except as required by law, we assume no obligation to update these forward-looking statements publicly, or to update the reasons actual results could differ materially from those anticipated in these forward-looking statements, even if new information becomes available in the future.

All references to “NVIDIA,” “we,” “us,” “our” or the “Company” mean NVIDIA Corporation and its subsidiaries.
NVIDIA, the NVIDIA logo, GeForce, GeForce NOW, GeForce RTX, Mellanox, NVIDIA AI Enterprise, NVIDIA BioNeMo, NVIDIA DGX, NVIDIA DRIVE, NVIDIA DRIVE Orin, NVIDIA DRIVE Thor, NVIDIA Hopper, NVIDIA Jetson, NVIDIA NeMo, NVIDIA Omniverse, NVIDIA RTX and Quadro are trademarks and/or registered trademarks of NVIDIA Corporation in the United States 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.
The following discussion and analysis of our financial condition and results of operations should be read in conjunction with the risk factors set forth in Item 1A. “Risk Factors” of our Annual Report on Form 10-K for the fiscal year ended January 30, 2022 and Part II, Item 1A. “Risk Factors” of this Quarterly Report on Form 10-Q, of our Quarterly Reports on Form 10-Q for the fiscal quarters ended May 1, 2022 and July 31, 2022 and our Condensed Consolidated Financial Statements and related Notes thereto, as well as other cautionary statements and risks described elsewhere in this Quarterly Report on Form 10-Q and our other filings with the SEC, before deciding to purchase or sell shares of our common stock.
Overview
Our Company and Our Businesses
NVIDIA pioneered accelerated computing to help solve the most challenging computational problems. Since our original focus on PC graphics, we have expanded to several other large and important computationally intensive fields. Fueled by the sustained demand for exceptional 3D graphics and the scale of the gaming market, NVIDIA has leveraged its GPU architecture to create platforms for scientific computing, AI, data science, autonomous vehicles, robotics, and augmented and virtual reality.
Our two operating segments are "Compute & Networking" and "Graphics," as described in Note 15 of the Notes to Condensed Consolidated Financial Statements.
Headquartered in Santa Clara, California, NVIDIA was incorporated in California in April 1993 and reincorporated in Delaware in April 1998.
Recent Developments, Future Objectives and Challenges
Demand and Supply
Because we do not manufacture the semiconductors used for our products, we are dependent on third parties to manufacture and assemble our products. Our manufacturing lead times are very long, which requires us to make estimates of customers’ future demand. At the same time, we do not have a guaranteed supply of wafers, components and capacity, and our supply deliveries and production may be non-linear within a quarter or year, which has previously caused changes to expected revenue and cash flows, and which may reoccur in the future. If our estimates of customer
24



demand are ultimately inaccurate, as we have experienced from time to time, these conditions could lead to a significant mismatch between supply and demand. This mismatch has resulted in both product shortages and excess inventory, has varied across our market platforms, and significantly harmed our financial results.
We build finished products and maintain inventory in advance of anticipated demand. In periods of shortages impacting the semiconductor industry and/or limited supply or capacity in our supply chain, as we have experienced in the past, the lead time on our orders for certain supply has extended to more than twelve months, compared to a historical lead time of approximately six months. Extended lead times may continue if we experience other supply constraints caused by natural disasters or other events. As a result, we have paid premiums and provided deposits to secure future supply and capacity, which have increased our product costs, and may need to continue to do so in the future. We may not have the ability to reduce our supply commitments at the same rate or at all if our revenue declines. Our supply, which includes inventory on hand, purchase obligations and prepaid supply agreements, has grown significantly due to current supply chain conditions and complexity of our products. Purchase obligations and prepaid supply agreements represent approximately three quarters of our total supply.
Demand for our products is based on many factors, including our product introductions and transitions, time to market, competitor product releases and announcements, competing technologies, and changes in macroeconomic conditions, including rising inflation and fluctuating interest rates. Each of these factors has previously impacted, and can in the future impact, the timing and volume of our revenue. Our demand predictions may not be correct, as we have experienced from time to time. Product transitions are complex and frequently negatively impact our revenue as we manage shipments of legacy prior architecture products and channel partners prepare and adjust to support new products. We have recently begun transitioning architectures for both our Gaming and Data Center products, which may impair our ability to predict demand and impact our supply mix. We may experience, and have in the past experienced, reduced demand for current generation architectures when customers anticipate transitions. Although we have previously sold multiple product architectures at the same time, this trend may not continue for current and future architecture transitions. If we are unable to execute our architectural transitions as planned for any reason, our financial results may be negatively impacted. Our ability to sell certain products has in the past been and can in the future be impeded if components from third parties that are necessary for the finished product are not available. Additionally, we sell most of our products through channel partners, who sell to retailers, distributors, and/or end customers. As a result, the decisions made by our channel partners, retailers and distributors in response to changing market conditions and changes in end user demand for our products have impacted and could in the future continue to impact our ability to properly forecast demand, particularly as they are based on estimates provided by various downstream parties.
COVID-19-related disruptions and lockdowns in China have created and may continue to create supply and logistics constraints. The war in Ukraine has further strained global supply chains and may in the future result in a shortage of key materials that our suppliers, including our foundry partners, require to satisfy our needs.
Our products are designed for the Data Center, Gaming, Professional Visualization and Automotive markets. The use of our GPUs for use cases other than that for which they were designed and marketed, including new and unexpected use cases, has impacted and can in the future impact demand for our products, including by leading to inconsistent spikes and drops in demand. For example, many years ago, our Gaming GPUs began to be used for digital currency mining, including blockchain-based platforms such as Ethereum. It is difficult for us to estimate with any reasonable degree of precision the past or current impact of cryptocurrency mining, or forecast the future impact of cryptocurrency mining, on demand for our products. Volatility in the cryptocurrency market, including new compute technologies, price changes in cryptocurrencies, government cryptocurrency policies and regulations, new cryptocurrency standards, and changes in the method of verifying blockchain transactions, has impacted and can in the future impact cryptocurrency mining and demand for our products and can further impact our ability to estimate demand for our products. Changes to cryptocurrency standards and processes including, but not limited to, the recently implemented Ethereum 2.0 merge may decrease the usage of GPUs for Ethereum mining as well as create increased aftermarket sales of our GPUs, which could negatively impact retail prices for our GPUs and reduce demand for our new GPUs. We previously introduced Lite Hash Rate, or LHR, GeForce GPUs with limited Ethereum mining capability and provided CMP products in an effort to address demand from gamers and direct miners to CMP. With the Ethereum 2.0 merge, NVIDIA Ampere and Ada Lovelace architectures no longer include LHR. In addition, our new products or previously sold products may be resold online or on the unauthorized “gray market,” which also makes demand forecasting difficult. Gray market products or reseller marketplaces compete with our distribution channels.
During the third quarter of fiscal year 2023, the U.S. government, or USG, announced new license requirements that, with certain exceptions, impact exports to China (including Hong Kong) and Russia of our A100 and H100 integrated circuits, DGX or any other systems or boards which incorporate A100 or H100 integrated circuits and our A100X. The
25



new license requirements also apply to any future NVIDIA integrated circuit achieving both peak performance and chip-to-chip I/O performance equal to or greater than thresholds that are roughly equivalent to the A100, as well as any system or board that includes those circuits. We are also required to obtain a license to export a wide array of products, including networking products destined for certain end users and any system in China that can achieve single precision performance of 200 Petaops, or double precision performance of 100 Petaops, within a 41,600 cubic feet envelope.
We will be required to transition certain operations out of China, which could be costly and time consuming, and adversely affect our research and development and supply and distribution operations, as well as our revenue, during any such transition period.
We have engaged with customers in China to satisfy their demand with products not subject to the new license requirements, such as our new A800 offering. To the extent that a customer requires products covered by the new license requirements, we may seek a license for the customer but have no assurance that the USG will grant any exemptions or licenses for any customer, or that the USG will act on them in a timely manner. The new requirements may have a disproportionate impact on NVIDIA and may disadvantage NVIDIA against certain of our competitors who sell products that are not subject to the new restrictions or may be able to acquire licenses for their products.
Our revenue, profitability, cash flows, and competitive position may be harmed if customers in China do not want to purchase our alternative product offerings, if we are unable to provide contractual warranty or other extended service obligations, or if the USG does not grant licenses in a timely manner or denies licenses to significant customers. Even if the USG grants any requested licenses, the licenses may be temporary or impose burdensome conditions that we cannot or choose not to fulfill. The new requirements may benefit certain of our competitors, as the licensing process will make our sales and support efforts more cumbersome and less certain, and encourage customers in China to pursue alternatives to our products, including semiconductor suppliers based in China, Europe, and Israel.
COVID-19
During the third quarter of fiscal year 2023, we reopened our offices worldwide. We have and expect to incur incremental expenses and related in-office costs as we resume onsite services.
Restrictions may be imposed or reinstated as the pandemic resurfaces, such as ongoing lockdown measures due to COVID-19 containment efforts in China. End customer sales for our products in China have been negatively impacted and this impact may continue if future and continued lockdowns occur. These ongoing COVID-19-related disruptions and lockdowns in China have created and may continue to create supply chain and logistics constraints. Challenges in estimating demand could become more pronounced or volatile in the future on both a global and regional basis.
Russia
During the first quarter of fiscal year 2023, we paused direct sales to Russia. Direct sales to Russia in fiscal year 2022 were immaterial. Our revenue to partners that sell into Russia may be negatively impacted due to the war in Ukraine and we estimate that in fiscal year 2022, Russia accounted for approximately 2% of total end customer sales and 4% of Gaming end customer sales. During the third quarter of fiscal year 2023, we closed business operations in Russia.
Termination of the Arm Share Purchase Agreement
In February 2022, NVIDIA and SoftBank announced the termination of the Share Purchase Agreement whereby NVIDIA would have acquired Arm from SoftBank. The parties agreed to terminate because of significant regulatory challenges preventing the completion of the transaction. We recorded an acquisition termination cost of $1.35 billion in the first quarter of fiscal year 2023 reflecting the write-off of the prepayment provided at signing.

26



Third Quarter of Fiscal Year 2023 Summary
Three Months Ended
  October 30, 2022 July 31, 2022 October 31, 2021 Quarter-over-Quarter Change Year-over-Year Change
($ in millions, except per share data)
Revenue $ 5,931  $ 6,704  $ 7,103  (12) % (17) %
Gross margin 53.6  % 43.5  % 65.2  % 10.1 pts (11.6) pts
Operating expenses $ 2,576  $ 2,416  $ 1,960  7  % 31  %
Income from operations $ 601  $ 499  $ 2,671  20  % (77) %
Net income $ 680  $ 656  $ 2,464  4  % (72) %
Net income per diluted share $ 0.27  $ 0.26  $ 0.97  4  % (72) %
We specialize in markets where our computing platforms can provide tremendous acceleration for applications. These platforms incorporate processors, interconnects, software, algorithms, systems, and services to deliver unique value. Our platforms address four large markets where our expertise is critical: Data Center, Gaming, Professional Visualization, and Automotive.
Revenue for the third quarter of fiscal year 2023 was $5.93 billion, down 17% from a year ago and down 12% sequentially.
Data Center revenue was up 31% from a year ago and up 1% sequentially. Year-on-year growth was broad-based across U.S. cloud service providers, consumer internet companies and other vertical industries. Sequential growth was impacted by softness in China. We started shipping our flagship H100 data center GPU based on the new Hopper-architecture.
During the third quarter, the U.S. government announced new restrictions on exports of our A100 and H100-based products to China, and any product destined for certain systems or entities in China. These restrictions impacted third-quarter revenue, with the decline largely offset by sales of alternative products into China.
Gaming revenue was down 51% from a year ago and down 23% sequentially, reflecting lower sell-in to partners to help align channel inventory levels with current demand expectations as macroeconomic conditions and COVID lockdowns in China continue to weigh on consumer demand. The year-on-year decrease was driven by lower GPU sales for both desktops and laptops; the sequential decline was primarily driven by lower GPU sales for laptops. We believe the recent transition in verifying Ethereum cryptocurrency transactions from proof-of-work to proof-of-stake has reduced the utility of GPUs for cryptocurrency mining. This may have contributed to increased aftermarket sales of our GPUs in certain markets, potentially impacting demand for some of our products, particularly in the low-end.
Professional Visualization revenue was down 65% from a year ago and down 60% sequentially, reflecting lower sell-in to partners to help align channel inventory levels with current demand expectations.
Automotive revenue was up 86% from a year ago and up 14% sequentially, primarily driven by revenue from self-driving solutions.
OEM and Other revenue was down 69% from a year ago and down 48% sequentially. The sequential decline was driven by lower Jetson and notebook OEM sales. Cryptocurrency Mining Processor (CMP) revenue was nominal in the current and prior quarter, and $105 million in the third quarter of fiscal year 2022.
Gross margin for the third quarter was down 11.6% from a year earlier, primarily due to a $702 million inventory charge, largely relating to lower Data Center demand in China, partially offset by a warranty-related benefit of approximately $70 million. Sequentially, gross margin was up 10.1% primarily due to lower inventory charges compared with the second quarter. The $702 million inventory charge consists of approximately $354 million for inventory on hand and approximately $348 million for inventory purchase obligations in excess of our current demand projections.
Operating expenses increased primarily due to compensation and data center infrastructure. The year-on-year increase also reflects employee growth.
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Cash, cash equivalents and marketable securities were $13.14 billion, down from $19.30 billion a year ago and down from $17.04 billion a quarter ago. The year-on-year and sequential decreases reflect share repurchases and changes in operating cash flow.
During the third quarter and first nine months of fiscal year 2023, we returned $3.75 billion and $9.29 billion to shareholders in the form of share repurchases and cash dividends, respectively. As of the end of the third quarter of fiscal year 2023, we had $8.28 billion remaining under our share repurchase authorization through December 2023.
Market Platform Highlights
In Data Center, we began shipping production samples of the NVIDIA H100 Tensor Core GPU; announced a multi-year collaboration with Microsoft to build a cloud-based AI supercomputer; announced a multi-year partnership with Oracle to bring NVIDIA’s full accelerated computing stack to Oracle Cloud Infrastructure; announced that Rescale is integrating NVIDIA AI Enterprise into its HPC-as-service offering; announced two new large language model cloud AI services — NVIDIA NeMo LLM and NVIDIA BioNeMo LLM Service; and announced a new data center solution delivering zero-trust security optimized for VMware vSphere 8.
In Gaming, we began shipping GeForce RTX 4090; introduced NVIDIA DLSS 3; and expanded the GeForce NOW library with 85+ games bringing the total available games to 1,400+.
In Professional Visualization, we introduced NVIDIA Omniverse Cloud.
In Automotive, we introduced NVIDIA DRIVE Thor; announced that Hozon Auto’s Neta brand will build future EVs on the NVIDIA DRIVE Orin platform; marked the launch of Polestar 3; and announced new DRIVE IX ecosystem partners.
Financial Information by Business Segment and Geographic Data
Refer to Note 15 of the Notes to Condensed Consolidated Financial Statements for disclosure regarding segment information.
Critical Accounting Policies and Estimates
Refer to Part II, Item 7, "Critical Accounting Policies and Estimates" of our Annual Report on Form 10-K for the fiscal year ended January 30, 2022. There have been no material changes to our Critical Accounting Policies and Estimates.

28



Results of Operations
The following table sets forth, for the periods indicated, certain items in our Condensed Consolidated Statements of Income expressed as a percentage of revenue.
  Three Months Ended Nine Months Ended
  October 30,
2022		 October 31,
2021		 October 30,
2022		 October 31,
2021
Revenue 100.0  % 100.0  % 100.0  % 100.0  %
     Cost of revenue 46.4  34.8  44.9  35.3 
Gross profit 53.6  65.2  55.1  64.7 
Operating expenses      
     Research and development 32.8  19.8  25.7  19.7 
     Sales, general and administrative 10.6  7.8  8.7  8.3 
Acquisition termination cost —  —  6.5  — 
Total operating expenses 43.4  27.6  40.9  28.0 
Income from operations 10.2  37.6  14.2  36.7 
     Interest income 1.5  0.1  0.7  0.1 
     Interest expense (1.1) (0.9) (0.9) (0.9)
     Other, net (0.2) 0.3  (0.1) 0.8 
Other income (expense), net
 0.2  (0.5) (0.3) — 
Income before income tax 10.4  37.1  13.9  36.7 
Income tax expense (benefit) (1.1) 2.4  (0.3) 1.7 
Net income 11.5  % 34.7  % 14.2  % 35.0  %
Revenue
Revenue by Reportable Segments
Three Months Ended Nine Months Ended
  October 30,
2022		 October 31,
2021		 $
Change		 %
Change		 October 30,
2022		 October 31,
2021		 $
Change		 %
Change
  ($ in millions)
Compute & Networking $ 3,816  $ 3,011  $ 805  27  % $ 11,395  $ 7,821  $ 3,574  46  %
Graphics 2,115