Segment Information

6 Months Ended

Jul. 28, 2013

Notes to financial statements [Abstract]

Segment Information

Segment Information

Our Chief Executive Officer, who is considered to be our chief operating decision maker, or CODM, reviews financial information presented on an operating segment basis for purposes of making operating decisions and assessing financial performance. Our operating segments are equivalent to our reportable segments. During the last several years, we have operated and reported three reporting segments to our CODM: the GPU business, the Professional Solutions business, and the Consumer Products business. However, during the fourth quarter of fiscal year 2013, we began reporting two segments to reflect the way we are now managing our businesses internally which is based on whether the underlying products leverage our GPU or our Tegra Processor technologies. Comparative periods presented reflect this change.

Our GPU business leverages our GPU technology across multiple end markets. It now comprises of four primary product lines, including GeForce for desktop and notebook PCs and Macs; Quadro for professional workstations; Tesla for high-performance servers and workstations; and NVIDIA GRID for server graphics solutions. It also includes other related products, licenses and revenue supporting the GPU business, such as memory products. Our Tegra Processor business comprises product lines primarily based on our Tegra system-on-a-chip and modem processor technologies. This includes Tegra for smartphones and tablets for both Android and Windows RT-based devices; automotive computers, including infotainment and navigation systems; and gaming devices such as SHIELD. It also includes other related products, licenses, and revenue supporting the Tegra Processor business such as Icera baseband processors and RF transceivers, embedded products, and licenses and other revenue associated with game consoles.    

In addition to the two reporting segments discussed above, the “All Other” category represents unallocated revenue and expenses which primarily includes licensing revenue from our patent cross licensing agreement with Intel Corporation. Revenue related to this agreement is recognized ratably over the term of our agreement and is not actively managed. This category also includes corporate operating expenses that we do not allocate to our other reporting segments as such expenses are not directly related to the function or operations of our reporting segments. These expenses include certain corporate infrastructure and support costs that are deemed to be enterprise in nature. Additionally, we do not allocate stock-based compensation, amortization of acquisition-related intangible assets, other acquisition-related costs and non-recurring expenses and benefits. The table below presents details of our reportable segments and the “All Other” category.

Our CODM does not review any information regarding total assets on a reporting segment basis. Reporting segments do not record intersegment revenue, and, accordingly, there is none to be reported. The accounting policies for segment reporting are the same as for NVIDIA as a whole.

	GPU		Tegra Processor			All Other			Consolidated
	(In thousands)
Three Months Ended July 28, 2013
Revenue	$	858,613	$	52,625		$	66,000		$	977,238
Depreciation and amortization expense	$	32,327	$	19,116		$	10,397		$	61,840
Operating income (loss)	$	270,228	$	(150,250	)	$	(14,444	)	$	105,534
Three Months Ended July 29, 2012
Revenue	$	798,624	$	179,646		$	66,000		$	1,044,270
Depreciation and amortization expense	$	31,397	$	14,400		$	10,398		$	56,195
Operating income (loss)	$	216,030	$	(45,328	)	$	(31,079	)	$	139,623
Six Months Ended July 28, 2013
Revenue	$	1,644,225	$	155,752		$	132,000		$	1,931,977
Depreciation and amortization expense	$	62,552	$	38,352		$	20,680		$	121,584
Operating income (loss)	$	494,874	$	(274,838	)	$	(31,721	)	$	188,315
Six Months Ended July 29, 2012
Revenue	$	1,524,989	$	312,158		$	132,000		$	1,969,147
Depreciation and amortization expense	$	62,458	$	27,118		$	21,110		$	110,686
Operating income (loss)	$	369,507	$	(107,864	)	$	(49,194	)	$	212,449

	Three Months Ended						Six Months Ended
	July 28, 2013			July 29, 2012			July 28, 2013			July 29, 2012
	(In thousands)
Reconciling items included in "All Other" category :
Revenue not allocated to reporting segments	$	66,000		$	66,000		132,000			132,000
Unallocated corporate operating expenses and other expenses	(36,795		)	(35,838		)	(77,814		)	(74,871	)
Stock-based compensation	(32,395		)	(32,255		)	(65,792		)	(67,824	)
Amortization of acquisition-related intangibles	(3,980		)	(4,065		)	(7,895		)	(8,407	)
Other acquisition-related costs	(4,984		)	(4,794		)	(9,930		)	(9,965	)
Other non-recurring expenses and benefits (1)	(2,290		)	(20,127		)	(2,290		)	(20,127	)
Total	$	(14,444	)	$	(31,079	)	$	(31,721	)	(49,194	)

(1) For the three and six months ended July 29, 2012, we recorded a non-recurring charge of $20.1 million. This charge represents the net present value of a $25.0 million charitable contribution pledged to Stanford Hospital and Clinics on June 12, 2012 and is payable over a ten year period.

Revenue by geographic region is allocated to individual countries based on the location to which the products are initially billed even if our customers’ revenue is attributable to end customers that are located in a different location. The following tables summarize information pertaining to our revenue from customers based on invoicing address in different geographic regions:

	Three Months Ended				Six Months Ended
	July 28,		July 29,		July 28,		July 29,
	2013		2012		2013		2012
	(In thousands)
Revenue:
China	$	184,086	$	196,687	$	359,130	$	375,297
Taiwan	319,004		340,144		608,885		616,463
Other Asia Pacific	165,117		212,367		332,374		391,044
United States	163,796		154,814		349,774		300,756
Other Americas	76,531		81,260		141,538		157,082
Europe	68,704		58,998		140,276		128,505
Total revenue	$	977,238	$	1,044,270	$	1,931,977	$	1,969,147

Revenue from significant customers, those representing 10% or more of total revenue, was approximately 23% and 22%, respectively, of our total revenue from two customers for the three and six months endedJuly 28, 2013. Revenue from significant customers, those representing 10% or more of total revenue, was approximately 12% and 11%, respectively, of our total revenue from one customer for the three and six months ended July 29, 2012.

Accounts receivable from significant customers, those representing 10% or more of total accounts receivable, was approximately 37% of our accounts receivable balance from two customers at July 28, 2013 and approximately 40% of our accounts receivable balance from three customers at January 27, 2013.