NVIDIA Announces Financial Results for Fourth Quarter and Fiscal 2020

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.
  • 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 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 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, http://investor.nvidia.com. 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  
               

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