SANTA CLARA, CA - NVIDIA ( NASDAQ : NVDA )

Revenue of $1.94 billion, up 48 percent from a year ago

GAAP EPS of $0.79, up 126 percent from a year ago

Non-GAAP EPS of $0.85, up 85 percent from a year ago

Broad growth across all platforms



NVIDIA ( NASDAQ : NVDA ) today reported revenue for the first quarter ended April 30, 2017, of $1.94 billion, up 48 percent from $1.30 billion a year earlier, and down 11 percent from $2.17 billion in the previous quarter.

GAAP earnings per diluted share for the quarter were $0.79, up 126 percent from $0.35 a year ago and down 20 percent from $0.99 in the previous quarter. Non-GAAP earnings per diluted share were $0.85, up 85 percent from $0.46 a year earlier and down 25 percent from $1.13 in the previous quarter.

"The AI revolution is moving fast and continuing to accelerate," said Jensen Huang, founder and chief executive officer of NVIDIA. "NVIDIA's GPU deep learning platform is the instrument of choice for researchers, internet giants and startups as they invent the future.

"Our Datacenter GPU computing business nearly tripled from last year, as more of the world's computer scientists engage deep learning. One industry after another is awakening to the power of GPU deep learning and AI, the most important technology force of our time," he said.

Capital Return

For fiscal 2018, NVIDIA intends to return $1.25 billion to shareholders through ongoing quarterly cash dividends and share repurchases. During the first quarter of fiscal 2018, NVIDIA paid $82 million in cash dividends.

NVIDIA will pay its next quarterly cash dividend of $0.14 per share on June 14, 2017, to all shareholders of record on May 23, 2017.

Q1 FY2018 Summary

GAAP ($ in millions except earnings per share) Q1 FY18 Q4 FY17 Q1 FY17 Q/Q Y/Y Revenue $1,937 $2,173 $1,305 down 11% up 48% Gross margin 59.4% 60.0% 57.5% down 60 bps up 190 bps Operating expenses $596 $570 $506 up 5% up 18% Operating income $554 $733 $245 down 24% up 126% Net income $507 $655 $208 down 23% up 144% Diluted earnings per share $0.79 $0.99 $0.35 down 20% up 126%

Non-GAAP ($ in millions except earnings per share) Q1 FY18 Q4 FY17 Q1 FY17 Q/Q Y/Y Revenue $1,937 $2,173 $1,305 down 11% up 48% Gross margin 59.6% 60.2% 58.6% down 60 bps up 100 bps Operating expenses $517 $498 $443 up 4% up 17% Operating income $637 $809 $322 down 21% up 98% Net income $533 $704 $263 down 24% up 103% Diluted earnings per share $0.85 $1.13 $0.46 down 25% up 85%

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

Revenue is expected to be $1.95 billion, plus or minus two percent.



GAAP and non-GAAP gross margins are expected to be 58.4 percent and 58.6 percent, respectively, plus or minus 50 basis points.



GAAP operating expenses are expected to be approximately $605 million. Non-GAAP operating expenses are expected to be approximately $530 million.



GAAP other income and expense is expected to be an expense of approximately $8 million, inclusive of additional charges from early conversions of convertible notes. Non-GAAP other income and expense is expected to be an expense of approximately $3 million.



GAAP and non-GAAP tax rates for the second 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 $55 million to $65 million.



First Quarter Fiscal 2018 Highlights

During the first quarter, NVIDIA achieved broad progress.

Gaming:

Announced GeForce® GTX 1080 Ti, the world's fastest gaming GPU.

Announced TITAN Xp for enthusiasts and researchers requiring extreme performance.



Datacenter:

Automotive:

Announced with Bosch, the world's largest auto supplier, plans to create a new Bosch-branded AI self-driving car computer.

Announced a collaboration with PACCAR, one of the world's largest truck makers with brands including Peterbilt, Kenworth and DAF, to develop solutions for autonomous trucks.



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 2018 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: 4018413. 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 second 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), non-GAAP income tax expense, non-GAAP net income, non-GAAP net income, or earnings, per diluted share, non-GAAP diluted shares, revenue excluding Intel license, 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, 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 April 30, May 1, 2017 2016 Revenue $ 1,937 $ 1,305 Cost of revenue 787 554 Gross profit 1,150 751 Operating expenses Research and development 411 346 Sales, general and administrative 185 159 Restructuring and other charges - 1 Total operating expenses 596 506 Income from operations 554 245 Interest income 16 12 Interest expense (16 ) (12 ) Other, net (18 ) (4 ) Total other income (expense) (18 ) (4 ) Income before income tax expense 536 241 Income tax expense 29 33 Net income $ 507 $ 208 Net income per share: Basic $ 0.86 $ 0.39 Diluted $ 0.79 $ 0.35 Weighted average shares used in per share computation: Basic 592 537 Diluted 641 599

NVIDIA CORPORATION CONDENSED CONSOLIDATED BALANCE SHEETS (In millions) (Unaudited) April 30, January 29, 2017 2017 ASSETS Current assets: Cash, cash equivalents and marketable securities $ 6,206 $ 6,798 Accounts receivable, net 976 826 Inventories 821 794 Prepaid expenses and other current assets 113 118 Total current assets 8,116 8,536 Property and equipment, net 539 521 Goodwill 618 618 Intangible assets, net 90 104 Other assets 47 62 Total assets $ 9,410 $ 9,841 LIABILITIES, CONVERTIBLE DEBT CONVERSION OBLIGATION AND SHAREHOLDERS' EQUITY Current liabilities: Accounts payable $ 348 $ 485 Accrued and other current liabilities 420 507 Convertible short-term debt 215 796 Total current liabilities 983 1,788 Long-term debt 1,984 1,983 Other long-term liabilities 300 271 Capital lease obligations, long-term 4 6 Total liabilities 3,271 4,048 Convertible debt conversion obligation 7 31 Shareholders' equity 6,132 5,762 Total liabilities, convertible debt conversion obligation and shareholders' equity $ 9,410 $ 9,841

NVIDIA CORPORATION RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES (In millions, except per share data) (Unaudited) Three Months Ended April 30, January 29, May 1, 2017 2017 2016 GAAP gross profit $ 1,150 $ 1,303 $ 751 GAAP gross margin 59.4 % 60.0 % 57.5 % Stock-based compensation expense (A) 4 4 4 Legal settlement costs - - 10 Non-GAAP gross profit $ 1,154 $ 1,307 $ 765 Non-GAAP gross margin 59.6 % 60.2 % 58.6 % GAAP operating expenses $ 596 $ 570 $ 506 Stock-based compensation expense (A) (73 ) (68 ) (49 ) Legal settlement costs - - (6 ) Acquisition-related costs (B) (4 ) (4 ) (4 ) Contributions (2 ) - (3 ) Restructuring and other charges - - (1 ) Non-GAAP operating expenses $ 517 $ 498 $ 443 GAAP income from operations $ 554 $ 733 $ 245 Total impact of non-GAAP adjustments to income from operations 83 76 77 Non-GAAP income from operations $ 637 $ 809 $ 322 GAAP other income (expense) $ (18 ) $ (7 ) $ (4 ) Gains from non-affiliated investments - (1 ) (3 ) Interest expense related to amortization of debt discount 2 4 7 Loss on early debt conversions 14 6 - Non-GAAP other income (expense) $ (2 ) $ 2 $ - GAAP net income $ 507 $ 655 $ 208 Total pre-tax impact of non-GAAP adjustments 99 85 81 Income tax impact of non-GAAP adjustments (73 ) (36 ) (26 ) Non-GAAP net income $ 533 $ 704 $ 263 Diluted net income per share GAAP $ 0.79 $ 0.99 $ 0.35 Non-GAAP $ 0.85 $ 1.13 $ 0.46 Weighted average shares used in diluted net income per share computation GAAP 641 660 599 Anti-dilution impact from note hedge (C) (14 ) (36 ) (29 ) Non-GAAP 627 624 570 GAAP revenue $ 1,937 $ 2,173 $ 1,305 Revenue from Intel license (43 ) (66 ) (66 ) Revenue excluding Intel license $ 1,894 $ 2,107 $ 1,239 GAAP net cash provided by operating activities $ 282 $ 721 $ 318 Purchase of property and equipment and intangible assets (53 ) (52 ) (55 ) Free cash flow $ 229 $ 669 $ 263 (A) Excludes stock-based compensation as follows: Three Months Ended April 30, January 29, May 1, 2017 2017 2016 Cost of revenue $ 4 $ 4 $ 4 Research and development $ 41 $ 40 $ 29 Sales, general and administrative $ 31 $ 27 $ 20 (B) Consists of amortization of acquisition-related intangible assets and compensation charges. (C) 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.