NVIDIA CORPORATION |
(Exact name of registrant as specified in its charter) |
Delaware | 0-23985 | 94-3177549 |
(State or other jurisdiction | (Commission | (IRS Employer |
of incorporation) | File Number) | Identification No.) |
2701 San Tomas Expressway, Santa Clara, CA | 95050 | |
(Address of principal executive offices) | (Zip Code) |
Exhibit | Description | |
99.1 | Press Release, dated August 11, 2016, entitled "NVIDIA Announces Financial Results for Second Quarter Fiscal 2017" | |
99.2 | CFO Commentary on Second Quarter Fiscal Year 2017 Results |
NVIDIA Corporation | ||
Date: August 11, 2016 | By: /s/ Colette M. Kress | |
Colette M. Kress | ||
Executive Vice President and Chief Financial Officer |
Exhibit | Description | |
99.1 | Press Release, dated August 11, 2016, entitled "NVIDIA Announces Financial Results for Second Quarter Fiscal 2017" | |
99.2 | CFO Commentary on Second Quarter Fiscal Year 2017 Results |
• | Record revenue of $1.43 billion, up 24 percent from a year ago - growth across all platforms |
• | GAAP EPS of $0.40. Non-GAAP EPS of $0.53, up 56 percent from a year ago |
• | Strong launch of Pascal-based GPUs, growing demand for deep learning |
GAAP | |||||
($ in millions except earnings per share) | Q2 FY17 | Q1 FY17 | Q2 FY16 | Q/Q | Y/Y |
Revenue | $1,428 | $1,305 | $1,153 | Up 9% | Up 24% |
Gross margin | 57.9% | 57.5% | 55.0% | Up 40 bps | Up 290 bps |
Operating expenses | $509 | $506 | $558 | Up 1% | Down 9% |
Operating income | $317 | $245 | $76 | Up 29% | Up 317% |
Net income | $253 | $196 | $26 | Up 29% | Up 873% |
Diluted earnings per share | $0.40 | $0.33 | $0.05 | Up 21% | Up 700% |
Non-GAAP | |||||
($ in millions except earnings per share) | Q2 FY17 | Q1 FY17 | Q2 FY16 | Q/Q | Y/Y |
Revenue | $1,428 | $1,305 | $1,153 | Up 9% | Up 24% |
Gross margin | 58.1% | 58.6% | 56.6% | Down 50 bps | Up 150 bps |
Operating expenses | $448 | $443 | $421 | Up 1% | Up 6% |
Operating income | $382 | $322 | $231 | Up 19% | Up 65% |
Net income | $313 | $263 | $190 | Up 19% | Up 65% |
Diluted earnings per share | $0.53 | $0.46 | $0.34 | Up 15% | Up 56% |
• | Revenue is expected to be $1.68 billion, plus or minus two percent. |
• | GAAP and non-GAAP gross margins are expected to be 57.8 percent and 58.0 percent, respectively, plus or minus 50 basis points. |
• | GAAP operating expenses are expected to be approximately $530 million. Non-GAAP operating expenses are expected to be approximately $465 million. |
• | GAAP and non-GAAP tax rates for the third quarter of fiscal 2017 are both expected to be 21 percent, plus or minus one percent. |
• | Capital expenditures are expected to be approximately $35 million to $45 million. |
• | Introduced the first four members of its Pascal™ family of gaming GPUs: NVIDIA® GeForce® GTX 1080 and 1070, which have set records for speed and power efficiency; GTX 1060, which delivers immersive VR at strong value; and TITAN X, the most powerful consumer GPU ever built. |
• | Released its first game, NVIDIA VR Funhouse, which uses enhanced graphics, interactive audio and simulated physics to bring a new level of immersion to VR. |
• | Released NVIDIA Ansel, an in-game 360° capture tool, which enables gamers to take and share screenshots of their favorite in-game moments. |
• | Unveiled Quadro® P6000 to power the most advanced workstations, enabling designers to manipulate complex designs up to twice as fast as before. |
• | Introduced in partnership with SMI an innovative rendering technique that uses eye tracking to enable developers to create more immersive VR environments. |
• | Refreshed NVIDIA DesignWorks™ and NVIDIA VRWorks™ with new SDKs and updates that bring developers enhanced capabilities for interactive ray tracing, 360° video stitching and streaming and physically based materials. |
• | Opened the path to virtualizing all enterprise applications with Tesla® M10, providing the industry’s highest user density. |
• | Introduced Tesla P100 GPU accelerator for PCI Express-based servers, delivering substantial performance and value compared with CPU-based systems. |
• | Unveiled its Inception Program which provides access to NVIDIA technology and expertise to support the growth of startups driving breakthroughs in deep learning and data science. |
• | Initiated collaborative research in advanced self-driving technology with New York University’s pioneering deep learning team. |
Arnab Chanda | Robert Sherbin | |
Investor Relations | Corporate Communications | |
NVIDIA Corporation | NVIDIA Corporation | |
(408) 566-6616 | (408) 566-5150 | |
achanda@nvidia.com | rsherbin@nvidia.com |
Three Months Ended | Six Months Ended | ||||||||||||||
July 31, | July 26, | July 31, | July 26, | ||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||
Revenue | $ | 1,428 | $ | 1,153 | $ | 2,733 | $ | 2,304 | |||||||
Cost of revenue | 602 | 519 | 1,156 | 1,018 | |||||||||||
Gross profit | 826 | 634 | 1,577 | 1,286 | |||||||||||
Operating expenses | |||||||||||||||
Research and development | 350 | 320 | 697 | 658 | |||||||||||
Sales, general and administrative | 157 | 149 | 316 | 289 | |||||||||||
Restructuring and other charges | 2 | 89 | 3 | 89 | |||||||||||
Total operating expenses | 509 | 558 | 1,016 | 1,036 | |||||||||||
Income from operations | 317 | 76 | 561 | 250 | |||||||||||
Interest income | 12 | 9 | 23 | 18 | |||||||||||
Interest expense | (12 | ) | (12 | ) | (23 | ) | (22 | ) | |||||||
Other income (expense), net | — | (1 | ) | (3 | ) | (2 | ) | ||||||||
Income before income tax expense | 317 | 72 | 558 | 244 | |||||||||||
Income tax expense | 64 | 46 | 109 | 84 | |||||||||||
Net income | $ | 253 | $ | 26 | $ | 449 | $ | 160 | |||||||
Net income per share: | |||||||||||||||
Basic | $ | 0.47 | $ | 0.05 | $ | 0.84 | $ | 0.29 | |||||||
Diluted | $ | 0.40 | $ | 0.05 | $ | 0.73 | $ | 0.28 | |||||||
Weighted average shares used in per share computation: | |||||||||||||||
Basic | 534 | 541 | 536 | 545 | |||||||||||
Diluted | 631 | 556 | 617 | 563 |
NVIDIA CORPORATION | |||||||||
CONDENSED CONSOLIDATED BALANCE SHEETS | |||||||||
(In millions) | |||||||||
(Unaudited) | |||||||||
July 31, | January 31, | ||||||||
2016 | 2016 | ||||||||
ASSETS | |||||||||
Current assets: | |||||||||
Cash, cash equivalents and marketable securities | $ | 4,879 | $ | 5,037 | |||||
Accounts receivable, net | 644 | 505 | |||||||
Inventories | 521 | 418 | |||||||
Prepaid expenses and other current assets | 112 | 93 | |||||||
Total current assets | 6,156 | 6,053 | |||||||
Property and equipment, net | 485 | 466 | |||||||
Goodwill | 618 | 618 | |||||||
Intangible assets, net | 138 | 166 | |||||||
Other assets | 64 | 67 | |||||||
Total assets | $ | 7,461 | $ | 7,370 | |||||
LIABILITIES, CONVERTIBLE DEBT CONVERSION OBLIGATION AND SHAREHOLDERS' EQUITY | |||||||||
Current liabilities: | |||||||||
Accounts payable | $ | 423 | $ | 296 | |||||
Accrued and other current liabilities | 556 | 642 | |||||||
Convertible short-term debt | 1,428 | 1,413 | |||||||
Total current liabilities | 2,407 | 2,351 | |||||||
Other long-term liabilities | 494 | 453 | |||||||
Capital lease obligations, long-term | 8 | 10 | |||||||
Total liabilities | 2,909 | 2,814 | |||||||
Convertible debt conversion obligation | 72 | 87 | |||||||
Shareholders' equity | 4,480 | 4,469 | |||||||
Total liabilities, convertible debt conversion obligation and shareholders' equity | $ | 7,461 | $ | 7,370 |
NVIDIA CORPORATION | ||||||||||||||||||||
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES | ||||||||||||||||||||
(In millions, except per share data) | ||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||
Three Months Ended | Six Months Ended | |||||||||||||||||||
July 31, | May 1, | July 26, | July 31, | July 26, | ||||||||||||||||
2016 | 2016 | 2015 | 2016 | 2015 | ||||||||||||||||
GAAP gross profit | $ | 826 | $ | 751 | $ | 634 | $ | 1,577 | $ | 1,286 | ||||||||||
GAAP gross margin | 57.9 | % | 57.5 | % | 55.0 | % | 57.7 | % | 55.8 | % | ||||||||||
Stock-based compensation expense (A) | 4 | 4 | 3 | 8 | 6 | |||||||||||||||
Legal settlement costs (B) | — | 10 | — | 10 | — | |||||||||||||||
Product warranty charge (C) | — | — | 15 | — | 15 | |||||||||||||||
Non-GAAP gross profit | $ | 830 | $ | 765 | $ | 652 | $ | 1,595 | $ | 1,307 | ||||||||||
Non-GAAP gross margin | 58.1 | % | 58.6 | % | 56.6 | % | 58.4 | % | 56.7 | % | ||||||||||
GAAP operating expenses | $ | 509 | $ | 506 | $ | 558 | $ | 1,016 | $ | 1,036 | ||||||||||
Stock-based compensation expense (A) | (54 | ) | (49 | ) | (44 | ) | (104 | ) | (87 | ) | ||||||||||
Legal settlement costs (B) | — | (6 | ) | — | (6 | ) | — | |||||||||||||
Acquisition-related costs (D) | (4 | ) | (4 | ) | (4 | ) | (8 | ) | (13 | ) | ||||||||||
Contributions | (1 | ) | (3 | ) | — | (4 | ) | — | ||||||||||||
Restructuring and other charges | (2 | ) | (1 | ) | (89 | ) | (3 | ) | (89 | ) | ||||||||||
Non-GAAP operating expenses | $ | 448 | $ | 443 | $ | 421 | $ | 891 | $ | 847 | ||||||||||
GAAP income from operations | $ | 317 | $ | 245 | $ | 76 | $ | 561 | $ | 250 | ||||||||||
Total impact of non-GAAP adjustments to income from operations | 65 | 77 | 155 | 143 | 211 | |||||||||||||||
Non-GAAP income from operations | $ | 382 | $ | 322 | $ | 231 | $ | 704 | $ | 461 | ||||||||||
GAAP other income (expense), net | $ | — | $ | (4 | ) | $ | (4 | ) | $ | (3 | ) | $ | (6 | ) | ||||||
Gains from non-affiliated investments | — | (3 | ) | — | (3 | ) | — | |||||||||||||
Interest expense related to amortization of debt discount | 7 | 7 | 7 | 14 | 14 | |||||||||||||||
Non-GAAP other income (expense), net | $ | 7 | $ | — | $ | 3 | $ | 8 | $ | 8 | ||||||||||
GAAP net income | $ | 253 | $ | 196 | $ | 26 | $ | 449 | $ | 160 | ||||||||||
Total pre-tax impact of non-GAAP adjustments | 72 | 81 | 162 | 154 | 225 | |||||||||||||||
Income tax impact of non-GAAP adjustments | (12 | ) | (14 | ) | 2 | (27 | ) | (8 | ) | |||||||||||
Non-GAAP net income | $ | 313 | $ | 263 | $ | 190 | $ | 576 | $ | 377 |
Three Months Ended | Six Months Ended | |||||||||||||||||||
July 31, | May 1, | July 26, | July 31, | July 26, | ||||||||||||||||
2016 | 2016 | 2015 | 2016 | 2015 | ||||||||||||||||
Diluted net income per share | ||||||||||||||||||||
GAAP | $ | 0.40 | $ | 0.33 | $ | 0.05 | $ | 0.73 | $ | 0.28 | ||||||||||
Non-GAAP | $ | 0.53 | $ | 0.46 | $ | 0.34 | $ | 0.99 | $ | 0.68 | ||||||||||
Weighted average shares used in diluted net income per share computation | ||||||||||||||||||||
GAAP | 631 | 597 | 556 | 617 | 563 | |||||||||||||||
Anti-dilution impact from note hedge (E) | (43 | ) | (29 | ) | (4 | ) | (37 | ) | (5 | ) | ||||||||||
Non-GAAP | 588 | 568 | 552 | 580 | 558 | |||||||||||||||
GAAP net cash provided by operating activities | $ | 184 | $ | 309 | $ | 163 | $ | 493 | $ | 409 | ||||||||||
Purchase of property and equipment and intangible assets | (33 | ) | (55 | ) | (24 | ) | (88 | ) | (54 | ) | ||||||||||
Free cash flow | $ | 151 | $ | 254 | $ | 139 | $ | 405 | $ | 355 |
(A) Excludes stock-based compensation as follows: | ||||||||||||||||||||
Three Months Ended | Six Months Ended | |||||||||||||||||||
July 31, | May 1, | July 26, | July 31, | July 26, | ||||||||||||||||
2016 | 2016 | 2015 | 2016 | 2015 | ||||||||||||||||
Cost of revenue | $ | 4 | $ | 4 | $ | 3 | $ | 8 | $ | 6 | ||||||||||
Research and development | $ | 30 | $ | 29 | $ | 27 | $ | 59 | $ | 54 | ||||||||||
Sales, general and administrative | $ | 24 | $ | 20 | $ | 17 | $ | 44 | $ | 33 | ||||||||||
(B) Legal settlement with Advanced Silicon Technologies LLC and other settlement related costs. | ||||||||||||||||||||
(C) Represents warranty charge associated with a product recall. | ||||||||||||||||||||
(D) Consists of amortization of acquisition-related intangible assets, transaction costs, compensation charges, and other credits related to acquisitions. | ||||||||||||||||||||
(E) Represents the number of shares that would be delivered upon conversion of the currently outstanding 1.00% Convertible Senior Notes Due 2018. Under U.S. GAAP, shares delivered in hedge transactions are not considered offsetting shares in the fully diluted share calculation until actually delivered. |
NVIDIA CORPORATION | |||||
RECONCILIATION OF GAAP TO NON-GAAP OUTLOOK | |||||
Q3 FY2017 Outlook | |||||
GAAP gross margin | 57.8 | % | |||
Impact of stock-based compensation expense | 0.2 | % | |||
Non-GAAP gross margin | 58.0 | % | |||
Q3 FY2017 Outlook | |||||
(In millions) | |||||
GAAP operating expenses | $ | 530 | |||
Stock-based compensation expense, acquisition-related costs, and other costs | (65 | ) | |||
Non-GAAP operating expenses | $ | 465 |
GAAP | |||||
($ in millions except earnings per share) | Q2 FY17 | Q1 FY17 | Q2 FY16 | Q/Q | Y/Y |
Revenue | $1,428 | $1,305 | $1,153 | Up 9% | Up 24% |
Gross margin | 57.9% | 57.5% | 55.0% | Up 40 bps | Up 290 bps |
Operating expenses | $509 | $506 | $558 | Up 1% | Down 9% |
Operating income | $317 | $245 | $76 | Up 29% | Up 317% |
Net income | $253 | $196 | $26 | Up 29% | Up 873% |
Diluted earnings per share | $0.40 | $0.33 | $0.05 | Up 21% | Up 700% |
Non-GAAP | |||||
($ in millions except earnings per share) | Q2 FY17 | Q1 FY17 | Q2 FY16 | Q/Q | Y/Y |
Revenue | $1,428 | $1,305 | $1,153 | Up 9% | Up 24% |
Gross margin | 58.1% | 58.6% | 56.6% | Down 50 bps | Up 150 bps |
Operating expenses | $448 | $443 | $421 | Up 1% | Up 6% |
Operating income | $382 | $322 | $231 | Up 19% | Up 65% |
Net income | $313 | $263 | $190 | Up 19% | Up 65% |
Diluted earnings per share | $0.53 | $0.46 | $0.34 | Up 15% | Up 56% |
Revenue by Reportable Segments | |||||
($ in millions) | Q2 FY17 | Q1 FY17 | Q2 FY16 | Q/Q | Y/Y |
GPU Business | $1,196 | $1,079 | $959 | Up 11% | Up 25% |
Tegra Processor Business | 166 | 160 | 128 | Up 4% | Up 30% |
Other | 66 | 66 | 66 | -- | -- |
Total | $1,428 | $1,305 | $1,153 | Up 9% | Up 24% |
Revenue by Market Platform | |||||
($ in millions) | Q2 FY17 | Q1 FY17 | Q2 FY16 | Q/Q | Y/Y |
Gaming | $781 | $687 | $660 | Up 14% | Up 18% |
Professional Visualization | 214 | 189 | 176 | Up 13% | Up 22% |
Datacenter | 151 | 143 | 72 | Up 6% | Up 110% |
Automotive | 119 | 113 | 71 | Up 5% | Up 68% |
OEM and IP | 163 | 173 | 174 | Down 6% | Down 6% |
Total | $1,428 | $1,305 | $1,153 | Up 9% | Up 24% |
GAAP | |||
($ in millions) | Q2 FY17 | Q1 FY17 | Q2 FY16 |
Interest income | $12 | $12 | $9 |
Interest expense | (12) | (12) | (12) |
Other income (expense) | -- | (4) | (1) |
Total | $ -- | $(4) | $(4) |
Non-GAAP | |||
($ in millions) | Q2 FY17 | Q1 FY17 | Q2 FY16 |
Interest income | $12 | $12 | $9 |
Interest expense | (5) | (5) | (5) |
Other income (expense) | -- | (7) | (1) |
Total | $7 | $ -- | $3 |
Weighted Average Shares | ||
(in millions) | GAAP | Non-GAAP |
Basic shares | 534 | 534 |
Dilutive impact from: | ||
Equity awards | 23 | 23 |
Warrants | 31 | 31 |
Convertible notes | 43 | -- |
Diluted shares | 631 | 588 |
Capital Return | ||||||
(in millions) | FY13 | FY14 | FY15 | FY16 | Q1FY17 | Q2FY17 |
Dividends | $47 | $181 | $186 | $213 | $62 | $62 |
Share repurchases: | ||||||
$ | $100 | $887 | $814 | $587 | $500 | $9 |
Shares | 8 | 62 | 44 | 25 | 12 | -- |
• |
• | Revenue is expected to be $1.68 billion, plus or minus two percent. |
• | GAAP and non-GAAP gross margins are expected to be 57.8 percent and 58.0 percent, respectively, plus or minus 50 basis points. |
• | GAAP operating expenses are expected to be approximately $530 million. Non-GAAP operating expenses are expected to be approximately $465 million. |
• | GAAP and non-GAAP tax rates for the third quarter of fiscal 2017 are both expected to be 21 percent, plus or minus one percent. |
• | Capital expenditures are expected to be approximately $35 million to $45 million. |
Arnab Chanda | Robert Sherbin | |
Investor Relations | Corporate Communications | |
NVIDIA Corporation | NVIDIA Corporation | |
(408) 566-6616 | (408) 566-5150 | |
achanda@nvidia.com | rsherbin@nvidia.com |
NVIDIA CORPORATION | ||||||||||||||||||||
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES | ||||||||||||||||||||
(In millions, except per share data) | ||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||
Three Months Ended | Six Months Ended | |||||||||||||||||||
July 31, | May 1, | July 26, | July 31, | July 26, | ||||||||||||||||
2016 | 2016 | 2015 | 2016 | 2015 | ||||||||||||||||
GAAP gross profit | $ | 826 | $ | 751 | $ | 634 | $ | 1,577 | $ | 1,286 | ||||||||||
GAAP gross margin | 57.9 | % | 57.5 | % | 55.0 | % | 57.7 | % | 55.8 | % | ||||||||||
Stock-based compensation expense (A) | 4 | 4 | 3 | 8 | 6 | |||||||||||||||
Legal settlement costs (B) | — | 10 | — | 10 | — | |||||||||||||||
Product warranty charge (C) | — | — | 15 | — | 15 | |||||||||||||||
Non-GAAP gross profit | $ | 830 | $ | 765 | $ | 652 | $ | 1,595 | $ | 1,307 | ||||||||||
Non-GAAP gross margin | 58.1 | % | 58.6 | % | 56.6 | % | 58.4 | % | 56.7 | % | ||||||||||
GAAP operating expenses | $ | 509 | $ | 506 | $ | 558 | $ | 1,016 | $ | 1,036 | ||||||||||
Stock-based compensation expense (A) | (54 | ) | (49 | ) | (44 | ) | (104 | ) | (87 | ) | ||||||||||
Legal settlement costs (B) | — | (6 | ) | — | (6 | ) | — | |||||||||||||
Acquisition-related costs (D) | (4 | ) | (4 | ) | (4 | ) | (8 | ) | (13 | ) | ||||||||||
Contributions | (1 | ) | (3 | ) | — | (4 | ) | — | ||||||||||||
Restructuring and other charges | (2 | ) | (1 | ) | (89 | ) | (3 | ) | (89 | ) | ||||||||||
Non-GAAP operating expenses | $ | 448 | $ | 443 | $ | 421 | $ | 891 | $ | 847 | ||||||||||
GAAP income from operations | $ | 317 | $ | 245 | $ | 76 | $ | 561 | $ | 250 | ||||||||||
Total impact of non-GAAP adjustments to income from operations | 65 | 77 | 155 | 143 | 211 | |||||||||||||||
Non-GAAP income from operations | $ | 382 | $ | 322 | $ | 231 | $ | 704 | $ | 461 | ||||||||||
GAAP other income (expense), net | $ | — | $ | (4 | ) | $ | (4 | ) | $ | (3 | ) | $ | (6 | ) | ||||||
Gains from non-affiliated investments | — | (3 | ) | — | (3 | ) | — | |||||||||||||
Interest expense related to amortization of debt discount | 7 | 7 | 7 | 14 | 14 | |||||||||||||||
Non-GAAP other income (expense), net | $ | 7 | $ | — | $ | 3 | $ | 8 | $ | 8 | ||||||||||
GAAP net income | $ | 253 | $ | 196 | $ | 26 | $ | 449 | $ | 160 | ||||||||||
Total pre-tax impact of non-GAAP adjustments | 72 | 81 | 162 | 154 | 225 | |||||||||||||||
Income tax impact of non-GAAP adjustments | (12 | ) | (14 | ) | 2 | (27 | ) | (8 | ) | |||||||||||
Non-GAAP net income | $ | 313 | $ | 263 | $ | 190 | $ | 576 | $ | 377 |
Three Months Ended | Six Months Ended | |||||||||||||||||||
July 31, | May 1, | July 26, | July 31, | July 26, | ||||||||||||||||
2016 | 2016 | 2015 | 2016 | 2015 | ||||||||||||||||
Diluted net income per share | ||||||||||||||||||||
GAAP | $ | 0.40 | $ | 0.33 | $ | 0.05 | $ | 0.73 | $ | 0.28 | ||||||||||
Non-GAAP | $ | 0.53 | $ | 0.46 | $ | 0.34 | $ | 0.99 | $ | 0.68 | ||||||||||
Weighted average shares used in diluted net income per share computation | ||||||||||||||||||||
GAAP | 631 | 597 | 556 | 617 | 563 | |||||||||||||||
Anti-dilution impact from note hedge (E) | (43 | ) | (29 | ) | (4 | ) | (37 | ) | (5 | ) | ||||||||||
Non-GAAP | 588 | 568 | 552 | 580 | 558 | |||||||||||||||
GAAP net cash provided by operating activities | $ | 184 | $ | 309 | $ | 163 | $ | 493 | $ | 409 | ||||||||||
Purchase of property and equipment and intangible assets | (33 | ) | (55 | ) | (24 | ) | (88 | ) | (54 | ) | ||||||||||
Free cash flow | $ | 151 | $ | 254 | $ | 139 | $ | 405 | $ | 355 |
(A) Excludes stock-based compensation as follows: | ||||||||||||||||||||
Three Months Ended | Six Months Ended | |||||||||||||||||||
July 31, | May 1, | July 26, | July 31, | July 26, | ||||||||||||||||
2016 | 2016 | 2015 | 2016 | 2015 | ||||||||||||||||
Cost of revenue | $ | 4 | $ | 4 | $ | 3 | $ | 8 | $ | 6 | ||||||||||
Research and development | $ | 30 | $ | 29 | $ | 27 | $ | 59 | $ | 54 | ||||||||||
Sales, general and administrative | $ | 24 | $ | 20 | $ | 17 | $ | 44 | $ | 33 | ||||||||||
(B) Legal settlement with Advanced Silicon Technologies LLC and other settlement related costs. | ||||||||||||||||||||
(C) Represents warranty charge associated with a product recall. | ||||||||||||||||||||
(D) Consists of amortization of acquisition-related intangible assets, transaction costs, compensation charges, and other credits related to acquisitions. | ||||||||||||||||||||
(E) Represents the number of shares that would be delivered upon conversion of the currently outstanding 1.00% Convertible Senior Notes Due 2018. Under U.S. GAAP, shares delivered in hedge transactions are not considered offsetting shares in the fully diluted share calculation until actually delivered. |
NVIDIA CORPORATION | |||||
RECONCILIATION OF GAAP TO NON-GAAP OUTLOOK | |||||
Q3 FY2017 Outlook | |||||
GAAP gross margin | 57.8 | % | |||
Impact of stock-based compensation expense | 0.2 | % | |||
Non-GAAP gross margin | 58.0 | % | |||
Q3 FY2017 Outlook | |||||
(In millions) | |||||
GAAP operating expenses | $ | 530 | |||
Stock-based compensation expense, acquisition-related costs, and other costs | (65 | ) | |||
Non-GAAP operating expenses | $ | 465 |
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