Record revenue of $3.21 billion, up 66 percent from a year ago

Record GAAP EPS of $1.98, up 151 percent from a year ago

Record Datacenter revenue of $701 million, up 71 percent from a year earlier



NVIDIA 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 Return

During 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.

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.

, 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.

, 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.

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.

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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.