SANTA CLARA, CA - NVIDIA ( NASDAQ : NVDA )

Record quarterly revenue of $2.17 billion, up 55 percent from a year ago

Record full-year revenue of $6.91 billion, up 38 percent from a year ago

Record quarterly GAAP gross margin at 60.0 percent, non-GAAP gross margin at 60.2 percent

GPU computing platform continues to power gains across full product line



NVIDIA ( NASDAQ : NVDA ) today reported revenue for the fourth quarter ended January 29, 2017, of $2.17 billion, up 55 percent from $1.40 billion a year earlier, and up 8 percent from $2.00 billion in the previous quarter.

GAAP earnings per diluted share for the quarter were $0.99, up 183 percent from $0.35 a year ago and up 19 percent from $0.83 in the previous quarter. Non-GAAP earnings per diluted share were $1.13, up 117 percent from $0.52 a year earlier and up 20 percent from $0.94 in the previous quarter.

For fiscal 2017, revenue reached a record $6.91 billion, up 38 percent from $5.01 billion a year earlier. GAAP earnings per diluted share were $2.57, up 138 percent from $1.08 a year earlier. Non-GAAP earnings per diluted share were $3.06, up 83 percent from $1.67 a year earlier.

"We had a great finish to a record year, with continued strong growth across all our businesses," said Jen-Hsun Huang, founder and chief executive officer of NVIDIA. "Our GPU computing platform is enjoying rapid adoption in artificial intelligence, cloud computing, gaming, and autonomous vehicles.‎

"Deep learning on NVIDIA GPUs, a breakthrough approach to AI, is helping to tackle challenges such as self-driving cars, early cancer detection and weather prediction. We can now see that ‎GPU-based deep learning will revolutionize major industries, from consumer internet and transportation to health care and manufacturing. The era of AI is upon us," he said.

Capital Return

During fiscal 2017, NVIDIA paid $739 million in share repurchases and $261 million in cash dividends. As a result, the company returned an aggregate of $1.00 billion to shareholders in fiscal 2017.

For fiscal 2018, 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 $0.14 per share on March 17, 2017, to all shareholders of record on February 24, 2017.

Q4 Fiscal 2017 Summary

GAAP ($ in millions except earnings per share) Q4 FY17 Q3 FY17 Q4 FY16 Q/Q Y/Y Revenue $2,173 $2,004 $1,401 up 8% up 55% Gross margin 60.0% 59.0% 56.5% up 100 bps up 350 bps Operating expenses $570 $544 $539 up 5% up 6% Operating income $733 $639 $252 up 15% up 191% Net income $655 $542 $207 up 21% up 216% Diluted earnings per share $0.99 $0.83 $0.35 up 19% up 183% Non-GAAP ($ in millions except earnings per share) Q4 FY17 Q3 FY17 Q4 FY16 Q/Q Y/Y Revenue $2,173 $2,004 $1,401 up 8% up 55% Gross margin 60.2% 59.2% 57.2% up 100 bps up 300 bps Operating expenses $498 $478 $445 up 4% up 12% Operating income $809 $708 $356 up 14% up 127% Net income $704 $570 $297 up 24% up 137% Diluted earnings per share $1.13 $0.94 $0.52 up 20% up 117%

Fiscal 2017 Summary

GAAP ($ in millions except earnings per share) FY17 FY16 Y/Y Revenue $6,910 $5,010 up 38% Gross margin 58.8% 56.1% up 270 bps Operating expenses $2,129 $2,064 up 3% Operating income $1,934 $747 up 159% Net income $1,666 $614 up 171% Diluted earnings per share $2.57 $1.08 up 138%

Non-GAAP ($ in millions except earnings per share) FY17 FY16 Y/Y Revenue $6,910 $5,010 up 38% Gross margin 59.2% 56.8% up 240 bps Operating expenses $1,867 $1,721 up 8% Operating income $2,221 $1,125 up 97% Net income $1,851 $929 up 99% Diluted earnings per share $3.06 $1.67 up 83%

NVIDIA's outlook for the first quarter of fiscal 2018 is as follows:

Revenue is expected to be $1.90 billion, plus or minus two percent.



GAAP and non-GAAP gross margins are expected to be 59.5 percent and 59.7 percent, respectively, plus or minus 50 basis points.



GAAP operating expenses are expected to be approximately $603 million. Non-GAAP operating expenses are expected to be approximately $520 million.



GAAP other income and expense, net, is expected to be an expense of approximately $20 million, inclusive of additional charges from early conversions of convertible notes. Non-GAAP other income and expense, net, is expected to be an expense of approximately $4 million.



GAAP and non-GAAP tax rates for the first quarter of fiscal 2018 are both expected to be 17 percent, plus or minus one percent, excluding any discrete items.



Weighted average shares used in the GAAP and non-GAAP diluted EPS calculations are dependent on the weighted average stock price during the quarter.



Capital expenditures are expected to be approximately $50 million to $60 million.



Fourth Quarter Fiscal 2017 Highlights

During the fourth quarter, NVIDIA achieved progress in each of its four major platforms.

Gaming:

Introduced GeForce ® GTX 1050 and 1050 Ti mobile GPUs, which debuted in more than 30 gaming laptops at CES 2017.

GTX 1050 and 1050 Ti mobile GPUs, which debuted in more than 30 gaming laptops at CES 2017. Launched the new SHIELD™ TV, integrating Google Assistant for TV, SmartThings Hub technology and the NVIDIA SPOT™ AI mic.

Unveiled the GeForce NOW™ service, delivering an NVIDIA Pascal™ gaming PC, on demand, from the cloud to all computers.



Professional Visualization:

Launched NVIDIA's new workstation-product lineup with Quadro ® GP100, enabling a new class of supercomputing workstations.

GP100, enabling a new class of supercomputing workstations. Introduced Quadro P5000, powering the first VR-ready mobile workstations from Dell and MSI.



Datacenter:

Collaborated with Microsoft to accelerate AI with a GPU-accelerated Microsoft Cognitive Toolkit available on the Microsoft Azure cloud and NVIDIA DGX-1™.

Partnered with the National Cancer Institute and the U.S. Department of Energy to build CANDLE, an AI framework that will advance cancer research.

Unveiled the NVIDIA DGX SATURNV AI supercomputer, powered by 124 Pascal-powered DGX-1 server nodes, which is the world's most efficient supercomputer.



Automotive:

Partnered with Audi, to put advanced AI cars on the road by 2020.

Partnered with Mercedes-Benz, to bring an NVIDIA AI-powered car to the market.

Partnered with Bosch, the world's largest automotive supplier, to bring self-driving systems to production vehicles

Partnered with Germany's ZF, to create a self-driving system for cars, trucks and commercial vehicles based on the NVIDIA DRIVE™ PX 2 AI car computer.

Partnered with Europe's HERE, to develop HERE HD Live Map into a real-time, high-definition mapping solution for autonomous vehicles.

Partnered with Japan's ZENRIN, to develop a cloud-to-car HD map solution for self-driving cars.



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 fourth quarter and fiscal 2017 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: 52907909. 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 the company's conference call to discuss its financial results for its first quarter of fiscal 2018.

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), net, 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, product warranty charge, acquisition-related costs, contributions, restructuring and other charges, gains from non-affiliated investments, interest expense related to amortization of debt discount, loss on early debt conversions, and the associated tax impact of these items, where applicable. Weighted average shares used in the non-GAAP diluted net income per share computation includes the anti-dilution impact of the company's 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 its non-GAAP measures may be different from non-GAAP measures used by other companies.

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NVIDIA CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF INCOME (In millions, except per share data) (Unaudited) Three Months Ended Twelve Months Ended January 29, January 31, January 29, January 31, 2017 2016 2017 2016 Revenue $ 2,173 $ 1,401 $ 6,910 $ 5,010 Cost of revenue 870 610 2,847 2,199 Gross profit 1,303 791 4,063 2,811 Operating expenses Research and development 394 344 1,463 1,331 Sales, general and administrative 176 161 663 602 Restructuring and other charges - 34 3 131 Total operating expenses 570 539 2,129 2,064 Income from operations 733 252 1,934 747 Interest income 17 11 54 39 Interest expense (18 ) (12 ) (58 ) (47 ) Other income (expense), net (6 ) 2 (25 ) 4 Income before income tax expense 726 253 1,905 743 Income tax expense 71 46 239 129 Net income $ 655 $ 207 $ 1,666 $ 614 Net income per share: Basic $ 1.18 $ 0.38 $ 3.08 $ 1.13 Diluted $ 0.99 $ 0.35 $ 2.57 $ 1.08 Weighted average shares used in per share computation: Basic 553 539 541 543 Diluted 660 593 649 569

NVIDIA CORPORATION CONDENSED CONSOLIDATED BALANCE SHEETS (In millions) (Unaudited) January 29, January 31, 2017 2016 ASSETS Current assets: Cash, cash equivalents and marketable securities $ 6,798 $ 5,037 Accounts receivable, net 826 505 Inventories 794 418 Prepaid expenses and other current assets 118 93 Total current assets 8,536 6,053 Property and equipment, net 521 466 Goodwill 618 618 Intangible assets, net 104 166 Other assets 62 67 Total assets $ 9,841 $ 7,370 LIABILITIES, CONVERTIBLE DEBT CONVERSION OBLIGATION AND SHAREHOLDERS' EQUITY Current liabilities: Accounts payable $ 485 $ 296 Accrued and other current liabilities 507 642 Convertible short-term debt 796 1,413 Total current liabilities 1,788 2,351 Long-term debt 1,983 - Other long-term liabilities 271 453 Capital lease obligations, long-term 6 10 Total liabilities 4,048 2,814 Convertible debt conversion obligation 31 87 Shareholders' equity 5,762 4,469 Total liabilities, convertible debt conversion obligation and shareholders' equity $ 9,841 $ 7,370

NVIDIA CORPORATION RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES (In millions, except per share data) (Unaudited)

Three Months Ended Twelve Months Ended January 29, October 30, January 31, January 29, January 31, 2017 2016 2016 2017 2016 GAAP gross profit $ 1,303 $ 1,183 $ 791 $ 4,063 $ 2,811 GAAP gross margin 60.0 % 59.0 % 56.5 % 58.8 % 56.1 % Stock-based compensation expense (A) 4 3 5 15 15 Legal settlement costs (B) - - - 10 - Product warranty charge (C) - - 5 - 20 Non-GAAP gross profit $ 1,307 $ 1,186 $ 801 $ 4,088 $ 2,846 Non-GAAP gross margin 60.2 % 59.2 % 57.2 % 59.2 % 56.8 % GAAP operating expenses $ 570 $ 544 $ 539 $ 2,129 $ 2,064 Stock-based compensation expense (A) (68 ) (62 ) (56 ) (233 ) (190 ) Legal settlement costs (B) - - - (6 ) - Acquisition-related costs (D) (4 ) (4 ) (4 ) (16 ) (22 ) Contributions - - - (4 ) - Restructuring and other charges - - (34 ) (3 ) (131 ) Non-GAAP operating expenses $ 498 $ 478 $ 445 $ 1,867 $ 1,721 GAAP income from operations $ 733 $ 639 $ 252 $ 1,934 $ 747 Total impact of non-GAAP adjustments to income from operations 76 69 104 287 378 Non-GAAP income from operations $ 809 $ 708 $ 356 $ 2,221 $ 1,125 GAAP other income (expense), net $ (7 ) $ (18 ) $ 1 $ (29 ) $ (4 ) Gains from non-affiliated investments (1 ) - - (4 ) (5 ) Interest expense related to amortization of debt discount 4 6 7 25 29 Loss on early debt conversions 6 15 - 21 - Non-GAAP other income, net $ 2 $ 3 $ 8 $ 13 $ 20 GAAP net income* $ 655 $ 542 $ 207 $ 1,666 $ 614 Total pre-tax impact of non-GAAP adjustments 85 90 111 329 402 Income tax impact of non-GAAP adjustments (36 ) (62 ) (21 ) (144 ) (87 ) Non-GAAP net income $ 704 $ 570 $ 297 $ 1,851 $ 929 Diluted net income per share GAAP* $ 0.99 $ 0.83 $ 0.35 $ 2.57 $ 1.08 Non-GAAP $ 1.13 $ 0.94 $ 0.52 $ 3.06 $ 1.67 Weighted average shares used in diluted net income per share computation GAAP* 660 653 593 649 569 Anti-dilution impact from note hedge (E) (36 ) (45 ) (26 ) (44 ) (13 ) Non-GAAP 624 608 567 605 556 GAAP net cash provided by operating activities* $ 721 $ 432 $ 510 $ 1,672 $ 1,175 Purchase of property and equipment and intangible assets (52 ) (38 ) (15 ) (176 ) (86 ) Free cash flow $ 669 $ 394 $ 495 $ 1,496 $ 1,089

* In third quarter of fiscal 2017, NVIDIA adopted an accounting standard (ASU 2016-09), which requires adjustments to be reflected beginning in fiscal 2017, including all fiscal quarters within the year.

(A) Excludes stock-based compensation as follows: Three Months Ended Twelve Months Ended January 29, October 30, January 31, January 29, January 31, 2017 2016 2016 2017 2016 Cost of revenue $ 4 $ 3 $ 5 $ 15 $ 15 Research and development $ 40 $ 35 $ 33 $ 135 $ 115 Sales, general and administrative $ 27 $ 27 $ 22 $ 98 $ 74 (B) Legal settlement with Advanced Silicon Technologies LLC and other settlement related costs. (C) Represents warranty charge associated with a product recall. (D) Consists of amortization of acquisition-related intangible assets and compensation charges. (E) 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.