NVIDIA today reported revenue for the fourth quarter ended Jan. 26, 2020, of $3.11 billion, up 41 percent from $2.21 billion a year earlier, and up 3 percent from $3.01 billion in the previous quarter.

GAAP earnings per diluted share for the quarter were $1.53, up 66 percent from $0.92 a year ago, and up 6 percent from $1.45 in the previous quarter. Non-GAAP earnings per diluted share were $1.89, up 136 percent from $0.80 a year earlier, and up 6 percent from $1.78 in the previous quarter.

For fiscal 2020, revenue was $10.92 billion, down 7 percent from $11.72 billion a year earlier. GAAP earnings per diluted share were $4.52, down 32 percent from $6.63 a year earlier. Non-GAAP earnings per diluted share were $5.79, down 13 percent from $6.64 a year earlier.

“Adoption of NVIDIA accelerated computing drove excellent results, with record data center revenue,” said Jensen Huang, founder and CEO of NVIDIA. “Our initiatives are achieving great success.

“NVIDIA RTX ray tracing is reinventing computer graphics, driving powerful adoption across gaming, VR and design markets, while opening new opportunities in rendering and cloud gaming. NVIDIA AI is enabling breakthroughs in language understanding, conversational AI and recommendation engines ― the core algorithms that power the internet today. And new NVIDIA computing applications in 5G, genomics, robotics and autonomous vehicles enable us to continue important work that has great impact.

“We are well positioned for the greatest technology trends of our time,” he said.

NVIDIA will pay its next quarterly cash dividend of $0.16 per share on March 20, 2020, to all shareholders of record on Feb. 28, 2020.

Q4 Fiscal 2020 Summary

GAAP ($ in millions, except earnings per share) Q4 FY20 Q3 FY20 Q4 FY19 Q/Q Y/Y Revenue $3,105 $3,014 $2,205 Up 3% Up 41% Gross margin 64.9% 63.6% 54.7% Up 130 bps Up 1,020 bps Operating expenses $1,025 $989 $913 Up 4% Up 12% Operating income $990 $927 $294 Up 7% Up 237% Net income $950 $899 $567 Up 6% Up 68% Diluted earnings per share $1.53 $1.45 $0.92 Up 6% Up 66%

Non-GAAP ($ in millions, except earnings per share) Q4 FY20 Q3 FY20 Q4 FY19 Q/Q Y/Y Revenue $3,105 $3,014 $2,205 Up 3% Up 41% Gross margin 65.4% 64.1% 56.0% Up 130 bps Up 940 bps Operating expenses $810 $774 $755 Up 5% Up 7% Operating income $1,220 $1,156 $479 Up 6% Up 155% Net income $1,172 $1,103 $496 Up 6% Up 136% Diluted earnings per share $1.89 $1.78 $0.80 Up 6% Up 136%

Fiscal 2020 Summary

GAAP ($ in millions except earnings per share) FY20 FY19 Y/Y Revenue $10,918 $11,716 Down 7% Gross margin 62.0% 61.2% Up 80 bps Operating expenses $3,922 $3,367 Up 16% Operating income $2,846 $3,804 Down 25% Net income $2,796 $4,141 Down 32% Diluted earnings per share $4.52 $6.63 Down 32%

Non-GAAP ($ in millions except earnings per share) FY20 FY19 Y/Y Revenue $10,918 $11,716 Down 7% Gross margin 62.5% 61.7% Up 80 bps Operating expenses $3,086 $2,826 Up 9% Operating income $3,735 $4,407 Down 15% Net income $3,580 $4,143 Down 14% Diluted earnings per share $5.79 $6.64 Down 13%

NVIDIA’s outlook for the first quarter of fiscal 2021 does not include any contribution from the pending acquisition of Mellanox Technologies, Ltd. Discussions with China’s regulatory agency, the State Administration for Market Regulation, are progressing, and NVIDIA believes the acquisition will likely close in the early part of calendar 2020.

While the ultimate effect of the coronavirus is difficult to estimate, the company has reduced its revenue outlook for the first quarter of fiscal 2021 by $100 million to account for its potential impact.

Revenue is expected to be $3.00 billion, plus or minus 2 percent.

GAAP and non-GAAP gross margins are expected to be 65.0 percent and 65.4 percent, respectively, plus or minus 50 basis points.

GAAP and non-GAAP operating expenses are expected to be approximately $1.05 billion and $835 million, respectively.

GAAP and non-GAAP other income and expense are both expected to be income of approximately $25 million.

GAAP and non-GAAP tax rates are both expected to be 9 percent, plus or minus 1 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.

Highlights

Since the end of the third quarter of fiscal 2020, NVIDIA has achieved progress in these areas:



Gaming

Grew momentum for ray tracing with the launch of such RTX-enabled games as Deliver Us The Moon, Wolfenstein: Youngblood and Bright Memory.

Brought its GeForce NOW ™ cloud gaming service out of beta, opening up PC gaming to hundreds of millions of consumers who can now add a virtual GeForce® graphics card to their device and play games they own, as well as free-to-play games.

cloud gaming service out of beta, opening up PC gaming to hundreds of millions of consumers who can now add a virtual GeForce® graphics card to their device and play games they own, as well as free-to-play games. Brought its number of gaming laptops to a record 125 models, including the world’s first 14-inch GeForce RTX™ laptop, the ASUS ROG Zephyrus G14.

Continued to build G-SYNC® momentum at CES, with the launch of the ASUS ROG Swift 360, the world’s fastest monitor, with a 360Hz refresh rate; and with LG adopting G-SYNC in its new lineup of OLED TVs.

Data Center and Edge Computing

Professional Visualization

Automotive

Announced DRIVE AGX Orin ™, an advanced software-defined platform for autonomous vehicles capable of achieving 200 TOPS, nearly 7x that of the previous generation SoC.

CFO Commentary

Commentary on the quarter by Colette Kress, NVIDIA’s executive vice president and chief financial officer, is available at https://investor.nvidia.com/home/default.aspx .

Conference Call and Webcast Information

NVIDIA will conduct a conference call with analysts and investors to discuss its fourth quarter and fiscal 2020 financial results and current financial prospects today at 2:30 p.m. Pacific time (5:30 p.m. Eastern time). A live webcast (listen-only mode) of the conference call will be accessible at NVIDIA’s investor relations website, https://investor.nvidia.com/home/default.aspx . The webcast will be recorded and available for replay until NVIDIA’s conference call to discuss its financial results for its first quarter of fiscal 2021.

Non-GAAP Measures

To supplement NVIDIA’s condensed consolidated financial statements 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, 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 and other costs, gains and losses from non-affiliated investments, interest expense related to amortization of debt discount, and the associated tax impact of these items, where applicable. Free cash flow is calculated as GAAP net cash provided by operating activities less purchase 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.





NVIDIA CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF INCOME (In millions, except per share data) (Unaudited) Three Months Ended Twelve Months Ended January 26, January 27, January 26, January 27, 2020 2019 2020 2019 Revenue $ 3,105 $ 2,205 $ 10,918 $ 11,716 Cost of revenue 1,090 998 4,150 4,545 Gross profit 2,015 1,207 6,768 7,171 Operating expenses Research and development 738 647 2,829 2,376 Sales, general and administrative 287 266 1,093 991 Total operating expenses 1,025 913 3,922 3,367 Income from operations 990 294 2,846 3,804 Interest income 41 42 178 136 Interest expense (12 ) (14 ) (52 ) (58 ) Other, net (3 ) 2 (2 ) 14 Total other income 26 30 124 92 Income before income tax 1,016 324 2,970 3,896 Income tax expense (benefit) 66 (243 ) 174 (245 ) Net income $ 950 $ 567 $ 2,796 $ 4,141 Net income per share: Basic $ 1.55 $ 0.93 $ 4.59 $ 6.81 Diluted $ 1.53 $ 0.92 $ 4.52 $ 6.63 Weighted average shares used in per share computation: Basic 612 609 609 608 Diluted 621 619 618 625





NVIDIA CORPORATION CONDENSED CONSOLIDATED BALANCE SHEETS (In millions) (Unaudited) January 26, January 27, 2020 2019 ASSETS Current assets: Cash, cash equivalents and marketable securities $ 10,897 $ 7,422 Accounts receivable, net 1,657 1,424 Inventories 979 1,575 Prepaid expenses and other current assets 157 136 Total current assets 13,690 10,557 Property and equipment, net 1,674 1,404 Operating lease assets 618 - Goodwill 618 618 Intangible assets, net 49 45 Deferred income tax assets 548 560 Other assets 118 108 Total assets $ 17,315 $ 13,292 LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Accounts payable $ 687 $ 511 Accrued and other current liabilities 1,097 818 Total current liabilities 1,784 1,329 Long-term debt 1,991 1,988 Long-term operating lease liabilities 561 - Other long-term liabilities 775 633 Total liabilities 5,111 3,950 Shareholders' equity 12,204 9,342 Total liabilities and shareholders' equity $ 17,315 $ 13,292





NVIDIA CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (In millions) (Unaudited) Three Months Ended Twelve Months Ended January 26, January 27, January 26, January 27, 2020 2019 2020 2019 Cash flows from operating activities: Net income $ 950 $ 567 $ 2,796 $ 4,141 Adjustments to reconcile net income to net cash provided by operating activities: Stock-based compensation expense 220 156 844 557 Depreciation and amortization 106 78 381 262 Deferred income taxes 23 (345 ) 18 (315 ) Other - (10 ) 5 (45 ) Changes in operating assets and liabilities: Accounts receivable (202 ) 794 (233 ) (149 ) Inventories 66 (156 ) 597 (776 ) Prepaid expenses and other assets 22 13 77 (55 ) Accounts payable 104 (359 ) 194 (135 ) Accrued and other current liabilities 157 109 54 256 Other long-term liabilities 19 51 28 2 Net cash provided by operating activities 1,465 898 4,761 3,743 Cash flows from investing activities: Proceeds from maturities of marketable securities - 964 4,744 7,232 Proceeds from sales of marketable securities 2 314 3,365 428 Purchases of marketable securities - (1,036 ) (1,461 ) (11,148 ) Purchases of property and equipment and intangible assets (144 ) (203 ) (489 ) (600 ) Investments and other, net (9 ) - (14 ) (9 ) Net cash provided by (used in) investing activities (151 ) 39 6,145 (4,097 ) Cash flows from financing activities: Payments related to repurchases of common stock - (724 ) - (1,579 ) Repayment of Convertible Notes - (3 ) - (16 ) Dividends paid (98 ) (98 ) (390 ) (371 ) Proceeds related to employee stock plans 2 3 149 137 Payments related to tax on restricted stock units (87 ) (50 ) (551 ) (1,032 ) Other - (4 ) - (5 ) Net cash used in financing activities (183 ) (876 ) (792 ) (2,866 ) Change in cash and cash equivalents 1,131 61 10,114 (3,220 ) Cash and cash equivalents at beginning of period 9,765 721 782 4,002 Cash and cash equivalents at end of period $ 10,896 $ 782 $ 10,896 $ 782





NVIDIA CORPORATION RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES (In millions, except per share data) (Unaudited) Three Months Ended Twelve Months Ended January 26, October 27, January 27, January 26, January 27, 2020 2019 2019 2020 2019 GAAP gross profit $ 2,015 $ 1,916 $ 1,207 $ 6,768 $ 7,171 GAAP gross margin 64.9 % 63.6 % 54.7 % 62.0 % 61.2 % Stock-based compensation expense (A) 12 15 6 39 27 Legal settlement costs 3 - 21 14 35 Non-GAAP gross profit $ 2,030 $ 1,931 $ 1,234 $ 6,821 $ 7,233 Non-GAAP gross margin 65.4 % 64.1 % 56.0 % 62.5 % 61.7 % GAAP operating expenses $ 1,025 $ 989 $ 913 $ 3,922 $ 3,367 Stock-based compensation expense (A) (208 ) (208 ) (150 ) (805 ) (530 ) Acquisition-related and other costs (7 ) (7 ) (1 ) (30 ) (2 ) Legal settlement costs - - (7 ) (1 ) (9 ) Non-GAAP operating expenses $ 810 $ 774 $ 755 $ 3,086 $ 2,826 GAAP income from operations $ 990 $ 927 $ 294 $ 2,846 $ 3,804 Total impact of non-GAAP adjustments to income from operations 230 229 185 889 603 Non-GAAP income from operations $ 1,220 $ 1,156 $ 479 $ 3,735 $ 4,407 GAAP other income $ 26 $ 32 $ 30 $ 124 $ 92 Losses (Gains) from non-affiliated investments - - (1 ) 1 (12 ) Interest expense related to amortization of debt discount - 1 - 2 2 Non-GAAP other income $ 26 $ 33 $ 29 $ 127 $ 82 GAAP net income $ 950 $ 899 $ 567 $ 2,796 $ 4,141 Total pre-tax impact of non-GAAP adjustments 230 230 184 890 593 Income tax impact of non-GAAP adjustments (B) (8 ) (26 ) (25 ) (106 ) (223 ) Tax benefit from income tax reform - - (230 ) - (368 ) Non-GAAP net income $ 1,172 $ 1,103 $ 496 $ 3,580 $ 4,143 Diluted net income per share GAAP $ 1.53 $ 1.45 $ 0.92 $ 4.52 $ 6.63 Non-GAAP $ 1.89 $ 1.78 $ 0.80 $ 5.79 $ 6.64 Weighted average shares used in diluted net income per share computation GAAP 621 618 619 618 625 Anti-dilution impact from note hedge - - - - (1 ) Non-GAAP 621 618 619 618 624 GAAP net cash provided by operating activities $ 1,465 $ 1,640 $ 898 $ 4,761 $ 3,743 Purchase of property and equipment and intangible assets (144 ) (104 ) (203 ) (489 ) (600 ) Free cash flow $ 1,321 $ 1,536 $ 695 $ 4,272 $ 3,143 (A) Stock-based compensation consists of the following: Three Months Ended Twelve Months Ended January 26, October 27, January 27, January 26, January 27, 2020 2019 2019 2020 2019 Cost of revenue $ 12 $ 15 $ 6 $ 39 $ 27 Research and development $ 140 $ 141 $ 99 $ 540 $ 336 Sales, general and administrative $ 68 $ 67 $ 51 $ 265 $ 194 (B) 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).



