EX-99.1 2 q414pr.htm Q4'14 PRESS RELEASE Q4'14 PR


FOR IMMEDIATE RELEASE:

NVIDIA Reports Financial Results for Fourth Quarter and Fiscal 2014
GPU business delivers across gaming, workstation, high-performance computing

•
Fiscal fourth quarter revenue of $1.14 billion.
•
Quarterly GAAP diluted EPS of $0.25, up from $0.20 in Q3; non-GAAP diluted EPS of $0.32, up from $0.26 in Q3.
•
Quarterly GAAP gross margin of 54.1 percent; non-GAAP gross margin of 53.8 percent.
SANTA CLARA, Calif.-Feb. 12, 2014-NVIDIA (NASDAQ: NVDA) today reported revenue for the fourth quarter of fiscal 2014, ended Jan. 26, 2014, of $1.14 billion, up 8.6 percent from $1.05 billion in the previous quarter.
GAAP earnings per diluted share for the quarter were $0.25, up 25 percent from $0.20 in the previous quarter. Non-GAAP earnings per diluted share for the quarter were $0.32, up 23 percent from $0.26 in the previous quarter.
“Quarterly revenue came in well above our outlook, driven by PC gaming, capping an outstanding year for our GPU business,” said Jen-Hsun Huang, president and chief executive officer of NVIDIA.  “Tesla and Quadro both achieved record annual revenue. GRID cloud technology is being evaluated at hundreds of large enterprises worldwide.  And Tegra K1 is disrupting the auto industry, paving the way to self-piloted cars.  The groundbreaking work we are doing in visual computing is expanding the opportunities for our GPUs.”
During the quarter, NVIDIA repurchased $37 million of stock and paid a dividend of $0.085 per share, equivalent to $48 million. During the year, NVIDIA returned $1.07 billion to shareholders - $887 million towards the repurchase of 62 million shares and dividend payments totaling $181 million. NVIDIA will pay its next quarterly cash dividend of $0.085 per share on Mar. 20, 2014, to all shareholders of record on Feb. 27, 2014.
Revenue for the full year was $4.13 billion. GAAP earnings per diluted share for the year were $0.74 and non-GAAP earnings per diluted share for the year were $0.99.




GAAP Quarterly Financial Comparison
(in millions except earnings per share)
Q4 FY14
Q3 FY14
Q4 FY13
Q/Q
Y/Y
Revenue
$1,144
$1,054
$1,107
up 9%
 up 3%
Gross margin
54.1%
55.4%
52.9%
down 130 bps
 up 120 bps
Operating expenses
$452
$443
$402
up 2%
up 13%
Net income
$147
$119
$174
up 24%
 down 16%
Earnings per share
$0.25
$0.20
$0.28
up 25%
 down 11%

Non-GAAP Quarterly Financial Comparison
(in millions except earnings per share)
Q4 FY14
Q3 FY14
Q4 FY13
Q/Q
Y/Y
Revenue
$1,144
$1,054
$1,107
up 9%
 up 3%
Gross margin
53.8%
55.7%
53.2%
 down 190 bps
 up 60 bps
Operating expenses
$408
$405
$360
 up 1%
 up 13%
Net income
$187
$154
$215
up 22%
 down 13%
Earnings per share
$0.32
$0.26
$0.35
up 23%
 down 9%

Among highlights of the fourth quarter of fiscal 2014, NVIDIA:
•
Grew GeForce® GTX™ GPU revenue nearly 50 percent over the fourth quarter of fiscal 2013.
•
Launched Tegra®K1, NVIDIA’s next-generation mobile system-on-a-chip, extending the Kepler™ architecture across the company’s entire line of processors.
•
Demonstrated Denver, NVIDIA’s custom 64-bit ARM core inside Tegra K1. This was the first time Android had been shown running on 64-bit ARM.
•
Announced Audi is introducing a new Tegra-powered infotainment system, smart display and digital cockpit. Audi also announced it will use Tegra K1 to power its future piloted-driving initiatives.
•
Launched Tesla® K40, the world’s fastest accelerator for supercomputing and big data analytics.
•
Partnered with IBM to build supercomputers for the HPC community and accelerate enterprise data analytics applications with GPUs.




NVIDIA’s outlook for the first quarter of fiscal 2015 is as follows:
•
Revenue is expected to be $1.05 billion, plus or minus two percent.
•
GAAP and non-GAAP gross margins are expected to be approximately 54.2 percent and 54.5 percent, respectively.
•
GAAP operating expenses are expected to be approximately $454 million; non-GAAP operating expenses are expected to be approximately $413 million.
•
GAAP and non-GAAP tax rates for the first quarter and annual fiscal 2015 are both expected to be 20 percent, plus or minus one percent. If the U.S. R&D tax credit is renewed, the tax rate is expected to be 16 percent.
•
Capital expenditures are expected to be approximately $45 million for the first quarter of fiscal 2015.

CFO Commentary
Commentary on the quarter by Colette Kress, NVIDIA chief financial officer, is available at www.nvidia.com/ir.

Conference Call and Webcast Information
NVIDIA will conduct a conference call with analysts and investors to discuss its fourth quarter fiscal 2014 financial results and financial outlook today at 2:00 p.m. Pacific Time (5:00 p.m. Eastern Time). To listen to the call, please dial (212) 231-2922. A live webcast (listen-only mode) of the conference call will be accessible at the NVIDIA investor relations web site www.nvidia.com/ir 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 fiscal 2015.

Non-GAAP Measures
To supplement NVIDIA’s Condensed Consolidated Statements of Operations 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 interest and other income/expense, non-GAAP income tax expense, non-GAAP net income, non-GAAP net income, or earnings, per share, 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, legal settlements, a credit related to a weak die/packaging material set, acquisition-related costs, a contribution expense, other expenses, a gain on sale of a non-affiliated investment, 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 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 our non-GAAP measures may be different from non-GAAP measures used by other companies.




To Keep Current on NVIDIA:
•
Like NVIDIA on Facebook.
•
Connect with NVIDIA on LinkedIn.
•
Follow @NVIDIA on Twitter.
•
View NVIDIA videos on YouTube.
•
Keep up with the NVIDIA Blog.
•
Use the Pulse news reader to subscribe to the NVIDIA Daily News feed.


About NVIDIA
Since 1993, NVIDIA (NASDAQ: NVDA) has pioneered the art and science of visual computing. The company’s technologies are transforming a world of displays into a world of interactive discovery - for everyone from gamers to scientists, and consumers to enterprise customers. More information at http://nvidianews.nvidia.com and http://blogs.nvidia.com.

Certain statements in this press release including, but not limited to statements as to: the evaluation of GRID cloud technology; the effects of Tegra K1; the expansion of opportunities for the company’s GPUs; the company’s financial outlook for the first quarter of fiscal 2015; and the company’s tax rate for the first quarter and fiscal 2015 are forward-looking statements that are subject to risks and uncertainties that could cause results to be materially different than expectations. Important factors that could cause actual results to differ materially include: global economic conditions; our reliance on third parties to manufacture, assemble, package and test our products; the impact of technological development and competition; development of new products and technologies or enhancements to our existing product and technologies; market acceptance of our products or our partners’ products; design, manufacturing or software defects; changes in consumer preferences or demands; changes in industry standards and interfaces; unexpected loss of performance of our products or technologies when integrated into systems; as well as other factors detailed from time to time in the reports NVIDIA files with the Securities and Exchange Commission, or SEC, including its Form 10-Q for the fiscal period ended October 27, 2013. Copies of reports filed with the SEC are posted on the company’s website and are available from NVIDIA without charge. These forward-looking statements are not guarantees of future performance and speak only as of the date hereof, and, except as required by law, NVIDIA disclaims any obligation to update these forward-looking statements to reflect future events or circumstances.

© 2014 NVIDIA Corporation. All rights reserved. NVIDIA, the NVIDIA logo, GeForce, GeForce GTX, Tegra, Tesla, NVIDIA GRID and Kepler are trademarks and/or registered trademarks of NVIDIA Corporation in the U.S. and/or other countries. Other company and product names may be trademarks of the respective companies with which they are associated. Features, pricing, availability, and specifications are subject to change without notice.

###


For further information, contact:

Chris Evenden

 
Robert Sherbin
Investor Relations
 
Corporate Communications
NVIDIA Corporation
 
NVIDIA Corporation
(408) 566-6616
 
(408) 566-5150
cevenden@nvidia.com

 
rsherbin@nvidia.com







 
 NVIDIA CORPORATION
 
  CONDENSED CONSOLIDATED STATEMENTS OF INCOME
 
 (In thousands, except per share data)
 
 (Unaudited)
 
 
 
 
 
 
 
 
 
 
 
 
 
 Three Months Ended
 
 Twelve Months Ended
 
 
 
January 26,
 
January 27,
 
January 26,
 
January 27,
 
 
 
2014
 
2013
 
2014
 
2013
 
 
 
 
 
 
 
 
 
 
 
Revenue
 $ 1,144,218
 
 $ 1,106,902
 
 $ 4,130,162
 
 $ 4,280,159
 
Cost of revenue
        524,976
 
        521,300
 
     1,862,399
 
     2,053,816
 
Gross profit
        619,242
 
        585,602
 
     2,267,763
 
     2,226,343
 
Operating expenses
 
 
 
 
 
 
 
 
 
Research and development
        336,641
 
        298,007
 
     1,335,834
 
     1,147,282
 
 
Sales, general and administrative
        115,677
 
        104,022
 
        435,702
 
        430,822
 
 
    Total operating expenses
        452,318
 
        402,029
 
     1,771,536
 
     1,578,104
 
Operating income
        166,924
 
        183,573
 
        496,227
 
        648,239
 
 
Interest income
            4,156
 
            4,693
 
          17,119
 
          19,908
 
 
Interest expense
          (7,935)
 
              (880)
 
        (10,443)
 
          (3,294)
 
 
Other income (expense), net
            5,743
 
          (1,278)
 
            7,351
 
          (2,814)
 
Income before income tax expense
        168,888
 
        186,108
 
        510,254
 
        662,039
 
Income tax expense
          21,971
 
          12,135
 
          70,264
 
          99,503
 
Net income
 $ 146,917
 
 $ 173,973
 
 $ 439,990
 
 $ 562,536
 
 
 
 
 
 
 
 
 
 
 
Basic net income per share
 $ 0.26
 
 $ 0.28
 
 $ 0.75
 
 $ 0.91
 
Diluted net income per share
 $ 0.25
 
 $ 0.28
 
 $ 0.74
 
 $ 0.90
 
 
 
 
 
 
 
 
 
 
 
Shares used in basic per share computation
        568,483
 
        620,169
 
        587,893
 
        619,324
 
Shares used in diluted per share computation
        577,356
 
        622,018
 
        594,517
 
        624,957





NVIDIA CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)
 
 
 
 
 
 
 
 
 
January 26,
 
January 27,
 
 
 
2014
 
2013
ASSETS
 
 
 
 
 
 
 
 
 
 
Current assets:
 
 
 
 
 
Cash, cash equivalents and marketable securities
 
 $ 4,671,810
 
 $ 3,727,883

 
Accounts receivable, net
 
           426,357
 
           454,252

 
Inventories
 
           387,765
 
           412,467

 
Prepaid expenses and other current assets
 
           138,779
 
           180,656

 
  Total current assets
 
        5,624,711
 
       4,775,258

 
 
 
 
 
 
Property and equipment, net
 
           582,740
 
           576,144

Goodwill
 
           643,179
 
           641,030

Intangible assets, net
 
           296,012
 
           312,332

Other assets
 
           104,252
 
           107,481

 
  Total assets
 
 $ 7,250,894
 
 $ 6,412,245

 
 
 
 
 
 
LIABILITIES AND STOCKHOLDERS' EQUITY
 
 
 
 
 
 
 
 
 
 
Current liabilities:
 
 
 
 
 
Accounts payable
 
 $ 324,391
 
 $ 356,428

 
Accrued liabilities and other current liabilities
 
           621,105
 
           619,795

 
  Total current liabilities
 
           945,496
 
           976,223

 
 
 
 
 
 
Long-term debt
 
        1,356,375
 
—

Other long-term liabilities
 
           475,125
 
           589,321

Capital lease obligations, long-term
 
              17,500
 
             18,998

Stockholders' equity
 
        4,456,398
 
       4,827,703

 
  Total liabilities and stockholders' equity
 
 $ 7,250,894
 
 $ 6,412,245









NVIDIA CORPORATION
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES
(In thousands, except per share data)
(Unaudited)
 
 
 
 
 
 
 
 
 
 Three Months Ended
 
 Twelve Months Ended
 
 
 
January 26,
 
October 27,
 
January 27,
 
January 26,
 
January 27,
 
 
 
2014
 
2013
 
2013
 
2014
 
2013
 
 
 
 
 
 
 
 
 
 
 
 
GAAP gross profit
 
$
619,242

 
$
584,415

 
$
585,602

 
$
2,267,763

 
$
2,226,343

  GAAP gross margin
 
54.1
%
 
55.4
%
 
52.9
%
 
54.9
%
 
52.0
%
 
Stock-based compensation expense included in cost of revenue (A)
 
2,777

 
3,090

 
2,826

 
10,688

 
10,490

 
Legal settlement
 
1,450

 
—

 
—

 
3,740

 
—

 
Credit from a weak die/packaging material set (B)
 
(7,782
)
 
—

 
—

 
(7,782
)
 
—

Non-GAAP gross profit
 
$
615,687

 
$
587,505

 
$
588,428

 
$
2,274,409

 
$
2,236,833

  Non-GAAP gross margin
 
53.8
%
 
55.7
%
 
53.2
%
 
55.1
%
 
52.3
%
 
 
 
 
 
 
 
 
 
 
 
 
GAAP operating expenses
 
$
452,318

 
$
443,427

 
$
402,029

 
$
1,771,536

 
$
1,578,104

 
Stock-based compensation expense included in operating expense (A)
 
(33,427
)
 
(31,209
)
 
(32,943
)
 
(125,607
)
 
(126,172
)
 
Acquisition-related costs (C)
 
(9,250
)
 
(4,577
)
 
(8,698
)
 
(31,652
)
 
(36,138
)
 
Contribution expense (D)
 
—

 
—

 
—

 
—

 
(20,127
)
 
Other expense (E)
 
(1,845
)
 
(2,235
)
 
—

 
(4,080
)
 
—

Non-GAAP operating expenses
 
$
407,796

 
$
405,406

 
$
360,388

 
$
1,610,197

 
$
1,395,667

 
 
 
 
 
 
 
 
 
 
 
 
GAAP interest and other income/expense, net
 
$
1,964

 
$
496

 
$
2,535

 
$
14,027

 
$
13,800

 
Gain on sale of a non-affiliated investment
 
(3,074
)
 
—

 
—

 
(3,074
)
 
—

 
Interest expense related to amortization of debt discount
 
4,600

 
—

 
—

 
4,600

 
—

Non-GAAP interest and other income/expense, net
 
$
3,490

 
$
496

 
$
2,535

 
$
15,553

 
$
13,800

 
 
 
 
 
 
 
 
 
 
 
 
GAAP net income
 
$
146,917

 
$
118,734

 
$
173,973

 
$
439,990

 
$
562,536

 
Total pre-tax impact of non-GAAP adjustments
 
42,493

 
41,111

 
44,467

 
169,511

 
192,927

 
Income tax impact of non-GAAP adjustments
 
(1,924
)
 
(6,055
)
 
(3,507
)
 
(21,094
)
 
(27,090
)
Non-GAAP net income
 
$
187,486

 
$
153,790

 
$
214,933

 
$
588,407

 
$
728,373

 
 
 
 
 
 
 
 
 
 
 
 
Diluted net income per share
 
 
 
 
 
 
 
 
 
 
 
GAAP
 
$
0.25

 
$
0.20

 
$
0.28

 
$
0.74

 
$
0.90

 
Non-GAAP
 
$
0.32

 
$
0.26

 
$
0.35

 
$
0.99

 
$
1.17

 
 
 
 
 
 
 
 
 
 
 
 
Shares used in diluted net income per share computation
 
577,356

 
588,752

 
622,018

 
594,517

 
624,957

 
 
 
 
 
 
 
 
 
 
 
Metrics:
 
 
 
 
 
 
 
 
 
 
 
GAAP net cash flow provided by operating activities
 
$
400,712

 
$
162,315

 
$
451,009

 
$
835,146

 
$
824,172

 
Purchase of property and equipment and intangible assets
 
(66,374
)
 
(38,159
)
 
(47,758
)
 
(255,186
)
 
(183,309
)
 
Free cash flow
 
$
334,338

 
$
124,156

 
$
403,251

 
$
579,960

 
$
640,863






(A) Excludes stock-based compensation as follows:
 
 
Three Months Ended
 
Twelve Months Ended
 
 
January 26,
 
October 27,
 
January 27,
 
January 26,
 
January 27,
 
 
2014
 
2013
 
2013
 
2014
 
2013
Cost of revenue
 
$
2,777

 
$
3,090

 
$
2,826

 
$
10,688

 
$
10,490

Research and development
 
$
21,548

 
$
20,902

 
$
22,009

 
$
82,940

 
$
82,157

Sales, general and administrative
 
$
11,879

 
$
10,307

 
$
10,934

 
$
42,667

 
$
44,015

 
 
 
 
 
 
 
 
 
 
 
(B) Release of the remaining warranty reserve related to a weak die/packaging material set, as of January 26, 2014.
 
(C) Consists of amortization of acquisition-related intangible assets, transaction costs, compensation charges, and other credits related to acquisitions.
 
(D) Net present value of a $25 million charitable contribution pledged on June 12, 2012 to Stanford Hospital and Clinic, payable over ten years.
 
(E) Includes intangible asset write-off, restructuring charge, and legal settlement costs, net of credits.









 NVIDIA CORPORATION
 RECONCILIATION OF GAAP TO NON-GAAP OUTLOOK
 
 
 
 
 Q1 FY2015 Outlook
  GAAP gross margin
 
54.2%

 
Impact of stock-based compensation
 
0.3%

  Non-GAAP gross margin
 
54.5%

 
 
 
 
 
 
 
 Q1 FY2015 Outlook
 
 
 
(In millions)
 
 
 
 
GAAP operating expenses
 
 $ 454

 
Stock-based compensation expense and acquisition-related costs
 
(41
)
Non-GAAP operating expenses
 
 $ 413