10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

[x] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended July 30, 2017

OR

[_] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission file number: 0-23985

NVIDIA CORPORATION

(Exact name of registrant as specified in its charter)

Delaware	94-3177549
(State or Other Jurisdiction of	(I.R.S. Employer
Incorporation or Organization)	Identification No.)

2701 San Tomas Expressway

Santa Clara, California 95050

(408) 486-2000

(Address, including zip code, and telephone number,

including area code, of principal executive offices)

N/A

(Former name, former address and former fiscal year if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes x No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See definitions of “large accelerated filer”, “accelerated filer”, “smaller reporting company”, and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer x	Accelerated filer o	Non-accelerated filer o	Smaller reporting company o	Emerging growth company o
		(Do not check if a smaller reporting company)

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No x

The number of shares of common stock, $0.001 par value, outstanding as of August 18, 2017, was 600 million.

NVIDIA CORPORATION

FORM 10-Q

FOR THE QUARTER ENDED July 30, 2017

TABLE OF CONTENTS

		Page
	PART I : FINANCIAL INFORMATION
Item 1.	Financial Statements (Unaudited)
	a) Condensed Consolidated Statements of Income for the three and six months ended July 30, 2017 and July 31, 2016	3
	b) Condensed Consolidated Statements of Comprehensive Income for the three and six months ended July 30, 2017 and July 31, 2016	4
	c) Condensed Consolidated Balance Sheets as of July 30, 2017 and January 29, 2017	5
	d) Condensed Consolidated Statements of Cash Flows for the six months ended July 30, 2017 and July 31, 2016	6
	e) Notes to Condensed Consolidated Financial Statements	7
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	23
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	31
Item 4.	Controls and Procedures	32
	PART II : OTHER INFORMATION
Item 1.	Legal Proceedings	32
Item 1A.	Risk Factors	32
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	32
Item 6.	Exhibits	34
Signature		35

WHERE YOU CAN FIND MORE INFORMATION

Investors and others should note that we announce material financial information to our investors using our investor relations website, press releases, SEC filings and public conference calls and webcasts. We also use the following social media channels as a means of disclosing information about the company, our products, our planned financial and other announcements and attendance at upcoming investor and industry conferences, and other matters and for complying with our disclosure obligations under Regulation FD: 

NVIDIA Twitter Account (https://twitter.com/NVIDIA)

NVIDIA Company Blog (http://blogs.nvidia.com/) 

NVIDIA Facebook Page (https://www.facebook.com/NVIDIA) 

NVIDIA LinkedIn Page (http://www.linkedin.com/company/nvidia)

In addition, investors and others can use the Pulse news reader to subscribe to the NVIDIA Daily News feed and can view NVIDIA videos on YouTube.

The information we post through these social media channels may be deemed material. Accordingly, investors should monitor these accounts and the blog, in addition to following our press releases, SEC filings and public conference calls and webcasts. This list may be updated from time to time. The information we post through these channels is not a part of this quarterly report on Form 10-Q. These channels may be updated from time to time on NVIDIA's investor relations website.

2

PART I. FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS (UNAUDITED)

NVIDIA CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(In millions, except per share data)

(Unaudited)

	Three Months Ended						Six Months Ended
	July 30,			July 31,			July 30,			July 31,
	2017			2016			2017			2016
Revenue	$	2,230		$	1,428		$	4,167		$	2,733
Cost of revenue	928			602			1,715			1,156
Gross profit	1,302			826			2,452			1,577
Operating expenses
Research and development	416			350			827			697
Sales, general and administrative	198			157			383			316
Restructuring and other charges	—			2			—			3
Total operating expenses	614			509			1,210			1,016
Income from operations	688			317			1,242			561
Interest income	15			12			31			23
Interest expense	(15		)	(12		)	(31		)	(23		)
Other, net	(4		)	—			(21		)	(3		)
Total other income (expense)	(4		)	—			(21		)	(3		)
Income before income tax expense	684			317			1,221			558
Income tax expense	101			56			130			89
Net income	$	583		$	261		$	1,091		$	469
Net income per share:
Basic	$	0.98		$	0.49		$	1.83		$	0.88
Diluted	$	0.92		$	0.41		$	1.71		$	0.76
Weighted average shares used in per share computation:
Basic	597			534			595			536
Diluted	633			634			637			620
Cash dividends declared and paid per common share	$	0.140		$	0.115		$	0.280		$	0.230

See accompanying Notes to Condensed Consolidated Financial Statements.

3

NVIDIA CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(In millions)

(Unaudited)

	Three Months Ended						Six Months Ended
	July 30,			July 31,			July 30,			July 31,
	2017			2016			2017			2016
Net income	$	583		$	261		$	1,091		$	469
Other comprehensive income, net of tax:
Available-for-sale securities:
Net unrealized gain	3			5			5			11
Reclassification adjustments for net realized gain included in net income	—			—			—			—
Net change in unrealized gain	3			5			5			11
Cash flow hedges:
Net unrealized loss	(1		)	(3		)	(2		)	(4		)
Reclassification adjustments for net realized loss included in net income	1			—			1			—
Net change in unrealized loss	—			(3		)	(1		)	(4		)
Other comprehensive income, net of tax	3			2			4			7
Total comprehensive income	$	586		$	263		$	1,095		$	476

See accompanying Notes to Condensed Consolidated Financial Statements.

4

NVIDIA CORPORATION AND SUBSIDIARIES 

CONDENSED CONSOLIDATED BALANCE SHEETS

(In millions)

(Unaudited)

	July 30,			January 29,
	2017			2017
ASSETS
Current assets:
Cash and cash equivalents	$	1,988		$	1,766
Marketable securities	3,889			5,032
Accounts receivable, net	1,213			826
Inventories	855			794
Prepaid expenses and other current assets	125			118
Total current assets	8,070			8,536
Property and equipment, net	578			521
Goodwill	618			618
Intangible assets, net	76			104
Other assets	60			62
Total assets	$	9,402		$	9,841
LIABILITIES, CONVERTIBLE DEBT CONVERSION OBLIGATION AND SHAREHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	431		$	485
Accrued and other current liabilities	517			507
Convertible short-term debt	84			796
Total current liabilities	1,032			1,788
Long-term debt	1,984			1,983
Other long-term liabilities	408			271
Capital lease obligations, long-term	3			6
Total liabilities	3,427			4,048
Commitments and contingencies - see Note 12
Convertible debt conversion obligation	2			31
Shareholders’ equity:
Preferred stock	—			—
Common stock	1			1
Additional paid-in capital	5,048			4,708
Treasury stock, at cost	(6,070		)	(5,039		)
Accumulated other comprehensive loss	(12		)	(16		)
Retained earnings	7,006			6,108
Total shareholders' equity	5,973			5,762
Total liabilities, convertible debt conversion obligation and shareholders' equity	$	9,402		$	9,841

See accompanying Notes to Condensed Consolidated Financial Statements.

5

NVIDIA CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In millions)

(Unaudited)

	Six Months Ended
	July 30,			July 31,
	2017			2016
Cash flows from operating activities:
Net income	$	1,091		$	469
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	96			92
Stock-based compensation expense	158			111
Deferred income taxes	115			77
Amortization of debt discount	2			14
Loss on early debt conversions	17			—
Net loss (gain) on sale and disposal of long-lived assets and investments	1			(3		)
Other	8			7
Changes in operating assets and liabilities:
Accounts receivable	(387		)	(138		)
Inventories	(61		)	(104		)
Prepaid expenses and other assets	(15		)	(17		)
Accounts payable	(63		)	131
Accrued and other current liabilities	9			(85		)
Other long-term liabilities	16			(35		)
Net cash provided by operating activities	987			519
Cash flows from investing activities:
Proceeds from sales of marketable securities	726			901
Proceeds from maturities of marketable securities	450			506
Proceeds from sale of long-lived assets and investments	—			6
Purchases of marketable securities	(36		)	(1,415		)
Purchases of property and equipment and intangible assets	(108		)	(87		)
Investment in non-affiliates	(16		)	(4		)
Net cash provided by (used in) investing activities	1,016			(93		)
Cash flows from financing activities:
Payments related to repurchases of common stock	(758		)	(509		)
Repayment of Convertible Notes	(741		)	—
Dividends paid	(166		)	(124		)
Proceeds related to employee stock plans	76			91
Payments related to tax on restricted stock units	(190		)	(51		)
Other	(2		)	(3		)
Net cash used in financing activities	(1,781		)	(596		)
Change in cash and cash equivalents	222			(170		)
Cash and cash equivalents at beginning of period	1,766			596
Cash and cash equivalents at end of period	$	1,988		$	426
Other non-cash investing activity:
Assets acquired by assuming related liabilities	$	32		$	15

See accompanying Notes to Condensed Consolidated Financial Statements.

6

NVIDIA CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Note 1 - Summary of Significant Accounting Policies

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements were prepared in accordance with accounting principles generally accepted in the United States of America, or U.S. GAAP, for interim financial information and with the instructions to Form 10-Q and Article 10 of Securities and Exchange Commission, or SEC, Regulation S-X. The January 29, 2017 consolidated balance sheet was derived from our audited consolidated financial statements included in our Annual Report on Form 10-K for the fiscal year ended January 29, 2017, as filed with the SEC, but does not include all disclosures required by U.S. GAAP. In the opinion of management, all adjustments, consisting only of normal recurring adjustments except as otherwise noted, considered necessary for a fair statement of results of operations and financial position have been included. The results for the interim periods presented are not necessarily indicative of the results expected for any future period. The following information should be read in conjunction with the audited consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the fiscal year ended January 29, 2017.

Significant Accounting Policies

For a description of significant accounting policies, see Note 1, Organization and Summary of Significant Accounting Policies, of the Notes to the Consolidated Financial Statements included in our Annual Report on Form 10-K for the fiscal year ended January 29, 2017. There have been no material changes to our significant accounting policies since the filing of the Annual Report on Form 10-K.

Fiscal Year

We operate on a 52- or 53-week year, ending on the last Sunday in January. Fiscal years 2018 and 2017 are both 52-week years. The second quarter of fiscal years 2018 and 2017 were both 13-week quarters.

Reclassifications

Certain prior fiscal year balances have been reclassified to conform to the current fiscal year presentation.

Principles of Consolidation

Our condensed consolidated financial statements include the accounts of NVIDIA Corporation and our wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation.

Use of Estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. On an on-going basis, we evaluate our estimates, including those related to revenue recognition, cash equivalents and marketable securities, accounts receivable, inventories, income taxes, goodwill, stock-based compensation, litigation, investigation and settlement costs, restructuring and other charges, and other contingencies. These estimates are based on historical facts and various other assumptions that we believe are reasonable.

7

NVIDIA CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

Adoption of New and Recently Issued Accounting Pronouncements

Recently Adopted Accounting Pronouncement

In October 2016, the Financial Accounting Standards Board, or FASB, issued an accounting standards update which requires the recognition of income tax consequences of an intra-entity transfer of an asset, other than inventory, when the transfer occurs. We elected to early adopt this new guidance in the first quarter of fiscal year 2018, which required us to reflect any adjustments as of January 30, 2017. Upon adoption of this guidance, we recorded a cumulative-effect adjustment as of the first day of fiscal year 2018 to decrease retained earnings by $28 million, with a corresponding decrease to prepaid taxes that had not been previously recognized in income tax expense.

Recent Accounting Pronouncements Not Yet Adopted

In February 2016, the FASB issued an accounting standards update regarding the accounting for leases by which we will begin recognizing lease assets and liabilities on the balance sheet for leases with a lease term of more than 12 months. The update will require additional disclosures regarding key information about leasing arrangements. Under existing guidance, operating leases are not recorded as lease assets and lease liabilities on the balance sheet. The update will be effective for us beginning in our first quarter of fiscal year 2020, with early adoption permitted. We are currently evaluating the impact of the adoption of this accounting guidance on our consolidated financial statements. However, we expect the adoption of this accounting guidance to result in an increase in lease assets and a corresponding increase in lease liabilities on our Consolidated Balance Sheets.

The FASB issued an accounting standards update that creates a single source of revenue guidance under U.S. GAAP for all companies, in all industries. We expect to adopt this guidance beginning in our first quarter of fiscal year 2019 using the modified retrospective approach. While we are still finalizing our analysis to quantify the adoption impact of the provisions of the new standard, we do not expect it to have a material impact on our consolidated financial statements.

Note 2 - Stock-Based Compensation

Our stock-based compensation expense is associated with stock options, restricted stock units, or RSUs, performance stock units that are based on our corporate financial performance targets, or PSUs, performance stock units that are based on market conditions, or market-based PSUs, and our employee stock purchase plan, or ESPP.

Our Condensed Consolidated Statements of Income include stock-based compensation expense, net of amounts capitalized as inventory, as follows:

	Three Months Ended				Six Months Ended
	July 30, 2017		July 31, 2016		July 30, 2017		July 31, 2016
	(In millions)
Cost of revenue	$	4	$	4	$	8	$	8
Research and development	44		30		85		59
Sales, general and administrative	33		24		65		44
Total	$	81	$	58	$	158	$	111

8

NVIDIA CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

Equity Award Activity

The following is a summary of equity award transactions under our equity incentive plans:

	RSUs, PSUs, and Market-based PSUs Outstanding				Options Outstanding
	Number of Shares		Weighted Average Grant-Date Fair Value Per Share		Number of Shares		Weighted Average Exercise Price Per Share
	(In millions, except per share data)
Balances, January 29, 2017	27		$	32.84	7		$	14.47
Granted (1) (2)	3		$	106.65	—		$	—
Exercised	—		$	—	(1	)	$	14.51
Vested	(5	)	$	21.06	—		$	—
Balances, July 30, 2017	25		$	42.54	6		$	14.46

(1) Includes PSUs that will be issued and eligible to vest if the corporate financial performance maximum target level for fiscal year 2018 is achieved. Depending on the actual level of achievement of the corporate performance target at the end of fiscal year 2018, the PSUs issued could be up to 0.6 million shares.

(2) Includes market-based PSUs that will be issued and eligible to vest if the maximum target for total shareholder return, or TSR, over the 3-year measurement period is achieved. Depending on the ranking of our TSR compared to the respective TSRs of the companies comprising the Standard & Poor’s 500 Index during a 3-year measurement period, the market-based PSUs issued could be up to 0.1 million shares.

Of the total fair value of equity awards granted during the second quarter and first half offiscal year 2018, we estimated that the stock-based compensation expense related to equity awards that are not expected to vest was $10 million and $39 million, respectively. Of the total fair value of equity awards granted during the second quarter and first half offiscal year 2017, we estimated that the stock-based compensation expense related to equity awards that are not expected to vest was $5 million and $17 million, respectively.

The following summarizes the aggregate unearned stock-based compensation expense and estimated weighted average amortization period as of July 30, 2017 and January 29, 2017:

	July 30,		January 29,
	2017		2017
	(In millions)
Aggregate unearned stock-based compensation expense	$	697	$	627
Estimated weighted average remaining amortization period	(In years)
Stock options	0.1		0.5
RSUs, PSUs, and market-based PSUs	2.4		2.6
ESPP	0.6		0.6

9

NVIDIA CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

Note 3 – Net Income Per Share

The following is a reconciliation of the denominator of the basic and diluted net income per share computations for the periods presented:

	Three Months Ended				Six Months Ended
	July 30,		July 31,		July 30,		July 31,
	2017		2016		2017		2016
	(In millions, except per share data)
Numerator:
Net income	$	583	$	261	$	1,091	$	469
Denominator:
Basic weighted average shares	597		534		595		536
Dilutive impact of outstanding securities:
Equity awards	26		26		26		23
1% Convertible Senior Notes	4		43		9		37
Warrants issued with the 1% Convertible Senior Notes	6		31		7		24
Diluted weighted average shares	633		634		637		620
Net income per share:
Basic (1)	$	0.98	$	0.49	$	1.83	$	0.88
Diluted (2)	$	0.92	$	0.41	$	1.71	$	0.76
Equity awards excluded from diluted net income per share because their effect would have been anti-dilutive	—		—		1		2

(1) Calculated as net income divided by basic weighted average shares.

(2) Calculated as net income divided by diluted weighted average shares.

The 1.00% Convertible Senior Notes, or the Convertible Notes, are included in the calculation of diluted net income per share. The Convertible Notes have a dilutive impact on net income per share if our average stock price for the reporting period exceeds the adjusted conversion price of $20.0480 per share. The warrants associated with our Convertible Notes, or the Warrants, outstanding are also included in the calculation of diluted net income per share. The Warrants have a dilutive impact on net income per share if our average stock price for the quarter exceeds the adjusted strike price of $26.9876 per share. All outstanding Warrants were terminated during the second quarter of fiscal year 2018.

For the second quarter and first half offiscal year 2018, our average stock price was $144.57 and $124.89, respectively, which exceeded both the adjusted conversion price and the adjusted strike price, causing the Convertible Notes and the Warrants to have a dilutive impact for these periods.

The denominator for diluted net income per share does not include any effect from the convertible note hedge transactions, or the Note Hedges, that we entered into concurrently with the issuance of the Convertible Notes, as this effect would be anti-dilutive. In the event of conversion of the Convertible Notes, the shares delivered to us under the Note Hedges will offset the dilutive effect of the shares that we would issue under the Convertible Notes.

In the fourth quarter of fiscal year 2017, we entered into an agreement to terminate 63 million Warrants and, in consideration, we delivered a total of 48 million shares of common stock to the counterparty bank. In the second quarter of fiscal year 2018, we entered into a second agreement to terminate the remaining 12 million Warrants outstanding and, in consideration, we delivered a total of 10 million shares of common stock to the counterparty bank.

Please refer to Note 11 of these Notes to Condensed Consolidated Financial Statements for additional discussion regarding the Convertible Notes, Note Hedges, and Warrants.

10

NVIDIA CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

Note 4 – Income Taxes

We recognized income tax expense of $101 million and $130 million for the second quarter and first half offiscal year 2018, respectively, and $56 million and $89 million for the second quarter and first half offiscal year 2017, respectively. Income tax expense as a percentage of income before income tax for the second quarter and first half offiscal year 2018 was 14.8% and 10.7%, respectively, and 17.6% and 15.9% for the second quarter and first half offiscal year 2017, respectively.

The decrease in our effective tax rate for the second quarter and first half offiscal year 2018 as compared to the same periods in the prior fiscal year primarily reflects the recognition of tax benefits related to stock-based compensation and a proportional decrease in the amount of earnings subject to United States tax.

Our effective tax rates for the first half of fiscal years 2018 and 2017 of 10.7% and 15.9%, respectively, were lower than the U.S. federal statutory rate of 35% due primarily to income earned in jurisdictions where the tax rate is lower than the U.S. federal statutory tax rate, tax benefits related to stock-based compensation, and the benefit of the U.S. federal research tax credit.

For the first half of fiscal year 2018, there have been no material changes to our tax years that remain subject to examination by major tax jurisdictions. Additionally, there have been no material changes to our unrecognized tax benefits and any related interest or penalties since the fiscal year ended January 29, 2017.

While we believe that we have adequately provided for all uncertain tax positions, or tax positions where we believe it is not more-likely-than-not that the position will be sustained upon review, amounts asserted by tax authorities could be greater or less than our accrued position. Accordingly, our provisions on federal, state and foreign tax related matters to be recorded in the future may change as revised estimates are made or the underlying matters are settled or otherwise resolved with the respective tax authorities. As of July 30, 2017, we do not believe that our estimates, as otherwise provided for, on such tax positions will significantly increase or decrease within the next twelve months.

Note 5 - Marketable Securities

All of our cash equivalents and marketable securities are classified as “available-for-sale” securities. These securities are reported at fair value with the related unrealized gains and losses included in accumulated other comprehensive income (loss), a component of shareholders’ equity, net of tax, and net realized gains and losses recorded in total other income (expense) on the Condensed Consolidated Statements of Income.

We performed an impairment review of our investment portfolio as of July 30, 2017. Based on our quarterly impairment review, we concluded that our investments were appropriately valued and that no other-than-temporary impairment charges were necessary on our portfolio of available-for-sale investments as of July 30, 2017.

The following is a summary of cash equivalents and marketable securities as of July 30, 2017 and January 29, 2017:

	July 30, 2017
	Amortized Cost		Unrealized Gain		Unrealized Loss			Estimated Fair Value		Reported as
										Cash Equivalents		Marketable Securities
	(In millions)
Corporate debt securities	$	1,664	$	1	$	(5	)	$	1,660	$	—	$	1,660
Debt securities of United States government agencies	1,030		—		(4		)	1,026		—		1,026
Debt securities issued by the United States Treasury	658		—		(2		)	656		—		656
Asset-backed securities	330		—		(1		)	329		—		329
Mortgage-backed securities issued by United States government-sponsored enterprises	153		2		(1		)	154		—		154
Foreign government bonds	64		—		—			64		—		64
Money market funds	1,663		—		—			1,663		1,663		—
Total	$	5,562	$	3	$	(13	)	$	5,552	$	1,663	$	3,889

	January 29, 2017
	Amortized Cost		Unrealized Gain		Unrealized Loss			Estimated Fair Value		Reported as
										Cash Equivalents		Marketable Securities
	(In millions)
Corporate debt securities	$	2,397	$	1	$	(10	)	$	2,388	$	33	$	2,355
Debt securities of United States government agencies	1,193		—		(5		)	1,188		27		1,161
Debt securities issued by the United States Treasury	852		—		(2		)	850		55		795
Asset-backed securities	490		—		(1		)	489		—		489
Mortgage-backed securities issued by United States government-sponsored enterprises	161		2		(1		)	162		—		162
Foreign government bonds	70		—		—			70		—		70
Money market funds	321		—		—			321		321		—
Total	$	5,484	$	3	$	(19	)	$	5,468	$	436	$	5,032

The following table provides the breakdown of unrealized losses as of July 30, 2017, aggregated by investment category and length of time that individual securities have been in a continuous loss position: 

	Less than 12 Months					12 Months or Greater					Total
	Estimated Fair Value		Gross Unrealized Losses			Estimated Fair Value		Gross Unrealized Losses			Estimated Fair Value		Gross Unrealized Losses
	(In millions)
Corporate debt securities	$	1,243	$	(4	)	$	86	$	(1	)	$	1,329	$	(5	)
Debt securities issued by United States government agencies	881		(3		)	100		(1		)	981		(4		)
Debt securities issued by the United States Treasury	645		(2		)	—		—			645		(2		)
Asset-backed securities	304		(1		)	—		—			304		(1		)
Mortgage-backed securities issued by United States government-sponsored enterprises	40		—			36		(1		)	76		(1		)
	$	3,113	$	(10	)	$	222	$	(3	)	$	3,335	$	(13	)

The gross unrealized losses related to fixed income securities were due to changes in interest rates. We have determined that the gross unrealized losses on investment securities as of July 30, 2017 are temporary in nature. Currently, we have the intent and ability to hold our investments with impairment indicators until maturity. Net realized gains and losses were not significant for the second quarter and first half of fiscal years 2018 and 2017.

The amortized cost and estimated fair value of cash equivalents and marketable securities, which are primarily debt instruments, are classified as available-for-sale as of July 30, 2017 and January 29, 2017 and are shown below by contractual maturity:  

	July 30, 2017				January 29, 2017
	Amortized Cost		Estimated Fair Value		Amortized Cost		Estimated Fair Value
	(In millions)
Less than 1 year	$	3,086	$	3,085	$	2,209	$	2,209
Due in 1 - 5 years	2,423		2,414		3,210		3,194
Mortgage-backed securities issued by United States government-sponsored enterprises not due at a single maturity date	53		53		65		65
Total	$	5,562	$	5,552	$	5,484	$	5,468

Note 6 – Fair Value of Financial Assets and Liabilities

The fair values of our financial assets and liabilities are determined using quoted market prices of identical assets or quoted market prices of similar assets from active markets. We review the fair value hierarchy classification on a quarterly basis. There were no significant transfers between Levels 1 and 2 assets for the second quarter of fiscal year 2018. We did not have any investments classified as Level 3 as of July 30, 2017.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

		Fair Value at
	Pricing Category	July 30, 2017		January 29, 2017
		(In millions)
Assets
Cash equivalents and marketable securities:
Corporate debt securities	Level 2	$	1,660	$	2,388
Debt securities of United States government agencies	Level 2	$	1,026	$	1,188
Debt securities issued by the United States Treasury	Level 2	$	656	$	850
Asset-backed securities	Level 2	$	329	$	489
Mortgage-backed securities issued by United States government-sponsored enterprises	Level 2	$	154	$	162
Foreign government bonds	Level 2	$	64	$	70
Money market funds	Level 1	$	1,663	$	321
Liabilities
Current liability:
1.00% Convertible Senior Notes (1)	Level 2	$	693	$	4,474
Other noncurrent liabilities:
2.20% Notes Due 2021 (1)	Level 2	$	996	$	975
3.20% Notes Due 2026 (1)	Level 2	$	1,000	$	961
Interest rate swap (2)	Level 2	$	5	$	2

(1) The remaining 1.00% Convertible Notes, 2.20% Notes Due 2021, and 3.20% Notes Due 2026 are carried on our Condensed Consolidated Balance Sheets at their original issuance value, net of unamortized debt discount and issuance costs, and are not marked to fair value each period. See Note 11 of these Notes to Condensed Consolidated Financial Statements for additional information.

(2) Please refer to Note 9 of these Notes to Condensed Consolidated Financial Statements for a discussion regarding our interest rate swap.

Note 7 - Amortizable Intangible Assets

The components of our amortizable intangible assets are as follows:

	July 30, 2017							January 29, 2017
	Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount
	(In millions)
Acquisition-related intangible assets	$	193	$	(175	)	$	18	$	193	$	(167	)	$	26
Patents and licensed technology	469		(411		)	58		468		(390		)	78
Total intangible assets	$	662	$	(586	)	$	76	$	661	$	(557	)	$	104

Amortization expense associated with intangible assets was $14 million and $29 million for the second quarter and first half offiscal year 2018, respectively, and $18 million and $35 million for the second quarter and first half offiscal year 2017, respectively. Future amortization expense related to the net carrying amount of intangible assets as of July 30, 2017 is estimated to be $25 million for the remainder of fiscal year 2018, $26 million in fiscal year 2019, $16 million in fiscal year 2020, $8 million in fiscal year 2021, and $1 million in fiscal year 2022 and beyond.

12

NVIDIA CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

Note 8 - Balance Sheet Components

Certain balance sheet components are as follows:

	July 30,		January 29,
	2017		2017
Inventories:	(In millions)
Raw materials	$	294	$	252
Work in-process	209		176
Finished goods	352		366
Total inventories	$	855	$	794

As of July 30, 2017, we had outstanding inventory purchase obligations totaling $1.04 billion.

	July 30,		January 29,
	2017		2017
Accrued and Other Current Liabilities:	(In millions)
Customer related liabilities (1)	$	218	$	197
Accrued payroll and related expenses	120		137
Deferred revenue (2)	74		85
Coupon interest on debt obligations	20		21
Professional service fees	15		13
Warranty accrual (3)	14		8
Taxes payable	12		4
Accrued royalties	11		7
Accrued restructuring and other charges (4)	10		13
Leases payable	5		4
Contributions payable	4		4
Other	14		14
Total accrued and other current liabilities	$	517	$	507

(1) Customer related liabilities include accrued customer programs, such as rebates and marketing development funds.

(2) Deferred revenue primarily includes customer advances and deferrals related to license and service arrangements.

(3) Please refer to Note 10 of these Notes to Condensed Consolidated Financial Statements for a discussion regarding warranties.

(4) Please refer to Note 15 of these Notes to Condensed Consolidated Financial Statements for a discussion regarding restructuring and other charges.

13

NVIDIA CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

	July 30,		January 29,
	2017		2017
Other Long-Term Liabilities:	(In millions)
Deferred income tax liability	$	252	$	141
Income tax payable	105		96
Contributions payable	12		9
Employee benefits liability	11		10
Deferred rent	8		6
Licenses payable	7		1
Deferred revenue	6		4
Other	7		4
Total other long-term liabilities	$	408	$	271

Note 9 - Derivative Financial Instruments

In fiscal year 2016, we entered into an interest rate swap for a portion of the operating lease financing arrangement for our new headquarters building that entitles us to pay amounts based on a fixed interest rate in exchange for receipt of amounts based on variable interest rates. The objective of this interest rate swap is to mitigate variability in the benchmark interest rate on the first $200 million of existing operating lease financing payments. This interest rate swap is designated as a cash flow hedge, will have settlements beginning in the second quarter of fiscal year 2019, and will terminate in the fourth quarter of fiscal year 2023. Gains or losses on this swap are recorded in accumulated other comprehensive income (loss) and will subsequently be recorded in earnings at the point when the related operating lease financing expense begins to affect earnings or if ineffectiveness of the swap should occur.

We enter into foreign currency forward contracts to mitigate the impact of foreign currency exchange rate movements on our operating expenses. We designate these contracts as cash flow hedges and assess the effectiveness of the hedge relationships on a spot to spot basis. Gains or losses on the contracts are recorded in accumulated other comprehensive income (loss) and reclassified to operating expense when the related operating expenses are recognized in earnings or ineffectiveness should occur. The fair value of the contracts as of July 30, 2017 was not significant.

We also enter into foreign currency forward contracts to mitigate the impact of foreign currency movements on monetary assets and liabilities that are denominated in currencies other than our reporting currency. These foreign currency forward contracts were not designated for hedge accounting treatment. Therefore, the change in fair value of these contracts is recorded as a component of total other income (expense) and offsets the change in fair value of the foreign currency denominated monetary assets and liabilities, which is also recorded in total other income (expense).

The table below presents the notional value of our foreign currency forward contracts:

	Three Months Ended				Six Months Ended
	July 30, 2017		July 31, 2016		July 30, 2017		July 31, 2016
	(In millions)
Designated as cash flow hedges	$	89	$	61	$	163	$	96
Not designated for hedge accounting	$	69	$	13	$	120	$	13

Under the master netting agreements with the respective counterparties to our foreign currency forward contracts, we are allowed to net settle transactions with the same counterparty, subject to applicable requirements. However, we present our derivative assets and liabilities at their gross fair values on our Condensed Consolidated Balance Sheets. We are not required to pledge, and are not entitled to receive, cash collateral related to these derivative instruments.

14

NVIDIA CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

As of July 30, 2017, the maturities of the designated foreign currency forward contracts were three months or less. We expect to realize all gains and losses deferred into accumulated other comprehensive income (loss) related to foreign currency forward contracts within the next twelve months.

We formally assess, both at inception and on an ongoing basis, whether derivative financial instruments designated for hedge accounting treatment are highly effective. For the second quarter and first half of fiscal years 2018 and 2017, all derivative financial instruments designated for hedge accounting treatment were determined to be highly effective and there were no gains or losses associated with ineffectiveness.

The net change in unrealized gains (losses) on derivative financial instruments designated for hedge accounting treatment was not significant for the second quarter and first half of fiscal years 2018 and 2017.

Note 10 - Guarantees

U.S. GAAP requires that upon issuance of a guarantee, the guarantor must recognize a liability for the fair value of the obligation it assumes under that guarantee. In addition, U.S. GAAP requires disclosures about the guarantees that an entity has issued, including a tabular reconciliation of the changes of the entity’s product warranty liabilities.

Accrual for Product Warranty Liabilities

We record a reduction to revenue for estimated product returns at the time revenue is recognized primarily based on historical return rates. Cost of revenue includes the estimated cost of product warranties. Under limited circumstances, we may offer an extended limited warranty to customers for certain products. Additionally, we accrue for known warranty and indemnification issues if a loss is probable and can be reasonably estimated.

The estimated product returns and estimated product warranty liabilities as of July 30, 2017 and January 29, 2017 were as follows: 

	July 30,			January 29,
	2017			2017
	(In millions)
Balance at beginning of period	$	8		$	11
Additions	8			2
Deductions	(2		)	(5		)
Balance at end of period	$	14		$	8

In connection with certain agreements that we have entered into in the past, we have provided indemnities to cover the indemnified party for matters such as tax, product, and employee liabilities. We have included intellectual property indemnification provisions in our technology related agreements with third parties. Maximum potential future payments cannot be estimated because many of these agreements do not have a maximum stated liability. We have not recorded any liability in our Condensed Consolidated Financial Statements for such indemnifications.

15

NVIDIA CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

Note 11 - Debt

Convertible Debt

1.00% Convertible Senior Notes Due 2018

During the second quarter of fiscalyear 2018, we paid cash to settle an aggregate of $136 million in principal amount of the Convertible Notes and had $86 million in principal amount outstanding as of July 30, 2017. We also issued 5 million shares of our common stock for the excess conversion value and recognized a loss of $3 million on early conversions of the Convertible Notes. Based on the closing price of our common stock of $164.39 on the last trading day of the second quarter of fiscalyear 2018, the if-converted value of the remaining outstanding Convertible Notes as of July 30, 2017 exceeded their principal amount by approximately $619 million. As of July 30, 2017, the conversion rate was 49.8804 shares of common stock per $1,000 principal amount of the Convertible Notes after adjusting for dividend increases (equivalent to an adjusted conversion price of $20.0480 per share of common stock).

Through the second quarter of fiscalyear 2018, we settled an aggregate of $1.41 billion in principal amount of the Convertible Notes. Subsequently, we received additional conversion notices for an aggregate of $62 million in principal amount of the Convertible Notes. Settlements of these conversion requests are expected to be completed in the third quarter of fiscal year 2018. The actual number of shares issuable upon conversion will be determined based upon the terms of the Convertible Notes, and we expect to receive an equal number of shares of our common stock under the terms of the Note Hedges.

Holders may convert all or any portion of their Convertible Notes at their option at any time prior to August 1, 2018 under certain circumstances. For example, during any fiscal quarter, if the last reported sale price of the common stock for at least 20 trading days during a period of 30 consecutive trading days ending on the last trading day of the immediately preceding fiscal quarter is greater than or equal to 130% of the conversion price on each applicable trading day, the Convertible Notes become convertible at the holders' option. As this condition was met, the Convertible Notes first became convertible at the holders' option beginning on the first day of fiscal year 2017 and continue to be convertible at the holders’ option through October 29, 2017.

We separately accounted for the liability and equity components of the Convertible Notes at issuance, since our conversion obligation in excess of the aggregate principal could be fully or partially settled in cash. The liability component was assigned by estimating the fair value of a similar debt without the conversion feature. The difference between the net cash proceeds and the liability component was assigned as the equity component. The initial liability component of the Convertible Notes was valued at $1.35 billion and the initial carrying value of the equity component recorded in additional paid-in-capital was valued at $126 million. This equity component, together with the $23 million purchaser's discount to the par value of the Convertible Notes, represented the initial aggregate unamortized debt discount of $148 million. The debt discount is amortized as interest expense over the contractual term of the Convertible Notes using the effective interest method and an interest rate of 3.15%.

As of July 30, 2017, the carrying value of the Convertible Notes was classified as a current liability and the difference between the principal amount and the carrying value of the Convertible Notes was classified as convertible debt conversion obligation in the mezzanine equity section of our Condensed Consolidated Balance Sheet.

The following table presents the carrying value of the Convertible Notes:

	July 30,			January 29,
	2017			2017
	(In millions)
1.00% Convertible Senior Notes	$	86		$	827
Unamortized debt discount (1)	(2		)	(31		)
Net carrying amount	$	84		$	796

(1) As of July 30, 2017, the remaining period over which the unamortized debt discount will be amortized is 1.3 years.

16

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

The following table presents interest expense for the contractual interest and the accretion of debt discount and issuance costs related to the Convertible Notes:

	Three Months Ended				Six Months Ended
	July 30,		July 31,		July 30,		July 31,
	2017		2016		2017		2016
	(In millions)
Contractual coupon interest expense	$	—	$	4	$	—	$	8
Amortization of debt discount	1		7		2		14
Total interest expense related to Convertible Notes	$	1	$	11	$	2	$	22

Note Hedges and Warrants

Concurrently with the issuance of the Convertible Notes, we entered into the Note Hedges. The Note Hedges have an adjusted strike price of $20.0480 per share and allow us to receive shares of our common stock and/or cash related to the excess conversion value that we would deliver and/or pay, respectively, to the holders of the Convertible Notes upon conversion. During the second quarter of fiscalyear 2018, we had received 5 million shares of our common stock from the exercise of a portion of the Note Hedges related to the settlement of $136 million in principal amount of the Convertible Notes. Subsequently, we expect to receive additional shares of our common stock related to at least an additional $62 million in principal amount that is expected to settle during the third quarter of fiscal year 2018.

In addition, concurrent with the offering of the Convertible Notes and the purchase of the Note Hedges, we entered into a separate warrant transaction.

In the fourth quarter of fiscal year 2017, we entered into an agreement to terminate  63 million Warrants and, in consideration, we delivered a total of 48 million shares of common stock to the counterparty bank. In the second quarter of fiscal year 2018, we entered into a second agreement to terminate the remaining 12 million Warrants outstanding and, in consideration, we delivered a total of 10 million shares of common stock to the counterparty bank.

Long-Term Debt

2.20% Notes Due 2021 and 3.20% Notes Due 2026

In the third quarter of fiscal year 2017, we issued $1.00 billion of the 2.20% Notes Due 2021, and $1.00 billion of the 3.20% Notes Due 2026 (collectively, the Notes). Interest on the Notes is payable in March and September of each year, beginning in March 2017. Upon 30 days' notice to holders of the Notes, we may redeem the Notes for cash prior to maturity, at redemption prices that include accrued and unpaid interest, if any, and a make-whole premium. However, no make-whole premium will be paid for redemptions of the Notes Due 2021 on or after August 2021, or for redemptions of the Notes Due 2026 on or after June 2026. The net proceeds from the Notes were $1.98 billion, after deducting debt discount and issuance costs.

The Notes are our unsecured senior obligations and rank equally in right of payment with all of our existing and future unsecured and unsubordinated indebtedness. The Notes are structurally subordinated to the liabilities of our subsidiaries and are effectively subordinated to any secured indebtedness to the extent of the value of the assets securing such indebtedness. All existing and future liabilities of our subsidiaries will be effectively senior to the Notes.

17

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

The carrying value of our long-term debt and the associated interest rates were as follows:

	Expected Remaining Term (years)	Effective Interest Rate	July 30, 2017			January 29, 2017
			(In millions)
2.20% Notes Due 2021	4.1	2.38%	$	1,000		$	1,000
3.20% Notes Due 2026	9.1	3.31%	1,000			1,000
Unamortized debt discount and issuance costs			(16		)	(17		)
Net carrying amount			$	1,984		$	1,983

Note 12 - Commitments and Contingencies

Operating Lease Financing Arrangement

In fiscal year 2016, we began to construct a new headquarters building in Santa Clara, California, which is currently targeted for completion in the third quarter of fiscal year 2018. We are financing this construction under an off-balance sheet, build-to-suit operating lease arrangement. As a part of this arrangement, we leased the real property we own where the building will be constructed under a 99 year ground lease to a syndicate of banks and concurrently leased back the building under a real property lease.

Under the real property lease, we pay rent, taxes, maintenance costs, utilities, insurance and other property related costs. The lease has an initial 7.5 year term expiring in December 2022, consisting of an approximately 2.5 year construction period followed by a 5 year lease term. We have the option to renew this lease for up to three additional 5 year periods, subject to approval by the banks.

We have been overseeing the construction of the headquarters building. The banks committed to fund up to $380 million of costs relating to construction. Advances have been made periodically to reimburse us for construction costs we incur. Once construction is complete, the lease balance will remain static at the completed cost for the remaining duration of the lease term. During construction, accrued interest is capitalized into the lease balance. Following construction, we will pay rent in the form of interest. We have guaranteed the obligations under the lease held by our subsidiary.

During the term of the lease, we may elect to purchase the headquarters building for the amount of the banks’ investment in the building and any accrued but unpaid rent. At the end of the lease term, we may elect to buy the building for the outstanding balance on the maturity date or arrange for the cash sale of the building to an unaffiliated third party. The aggregate guarantee made by us under the lease is no more than 87.5% of the costs incurred in connection with the construction of the building. However, under certain default circumstances, the lease guarantee may be 100% of the banks’ investment in the building plus any and all accrued but unpaid interest and all other rent due and payable under the operative agreements.

The operative agreements are subject to customary default provisions, including, for example, those relating to payment and performance defaults, and events of bankruptcy. We are also subject to the financial covenant to maintain a maximum total leverage ratio not to exceed 3.5 to 1.0. If certain events of default occur and are continuing under the operative agreements, the banks may accelerate repayment of their investment under the lease.

Litigation

Polaris Innovations Limited

On May 16, 2016, Polaris Innovations Limited, or Polaris, a non-practicing entity and wholly-owned subsidiary of Quarterhill Inc. (formerly WiLAN Inc.), filed a complaint in the United States District Court for the Western District of Texas alleging that NVIDIA has infringed and is continuing to infringe six U.S. patents relating to the control of dynamic random-access memory (DRAM). The complaint seeks unspecified monetary damages, enhanced damages, interest, fees, expenses, and costs against NVIDIA. On September 14, 2016, NVIDIA answered the Polaris Complaint and asserted various defenses including non-infringement and invalidity of the six Polaris patents.

18

NVIDIA CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

On December 5, 2016, the Texas Court granted NVIDIA’s motion to transfer and ordered the case transferred to the Northern District of California. The California Court has not set a trial date.

On December 7, 2016, NVIDIA filed a petition for inter partes review with the United States Patent and Trademark Office (USPTO) challenging the validity of U.S. Patent No. 7,886,122, which is asserted by Polaris in that California district court litigation. On December 19, 2016, NVIDIA filed an inter partes review request with the USPTO challenging the validity of U.S. Patent No. 7,124,325, another patent asserted by Polaris. On May 5, 2017, NVIDIA filed an inter partes review request with the USPTO challenging the validity of U.S. Patent No. 8,161,344, another patent asserted by Polaris. On May 30, 2017, NVIDIA filed an inter partes review request with the USPTO challenging the validity of U.S. Patent No. 6,532,505, another patent asserted by Polaris. On June 22, 2017, the USPTO instituted inter partes review of U.S Patent No. 7,886,122. On June 23, 2017, the USPTO denied institution of inter partes review of U.S. Patent No. 7,124,325. On July 25, 2017, NVIDIA filed inter partes requests with the USPTO challenging the validity of U.S. Patent No. 8,207,976, another patent asserted by Polaris. Also on July 25, 2017, NVIDIA filed inter partes requests with the USPTO for U.S. Patent No. 8,161,344 challenging the validity of further claims and an additional inter partes request for U.S. Patent No. 7,124,325. All of the patents that Polaris has asserted in the U.S. litigation are now subject to requests for inter partes review, with institution decisions forthcoming.

On May 9, 2017, NVIDIA filed a Motion to Stay the California action pending final resolution of the inter partes review of U.S. Patents Nos. 7,886,122; 7,124,325; and 8,161,344. On June 15, 2017, the Motion to Stay was granted. The action has now been stayed until December 14, 2017 pending the institution of the inter partes review of these patents.

On December 30, 2016, NVIDIA received notice that Polaris had filed a complaint for patent infringement in Germany. The German case alleges infringement of European Patent No. EP1428225 and German Patent Nos. DE 10223167 and DE 1020066043668. On July 14, 2017, NVIDIA filed defenses to the infringement allegations including non-infringement with respect to each of the three asserted patents. An oral hearing has been scheduled for February 21, 2019.

On March 31, 2017, the German Patent Court acknowledged receipt of nullity actions filed by NVIDIA challenging the validity of EP1428225 and DE 1020066043668. On June 12, 2017, NVIDIA was notified that the nullity actions against EP1428225 and DE 1020066043668 were served on Polaris and that Polaris has filed a formal response opposing each nullity complaint. On July 14, 2017, the German Patent Court acknowledged receipt of a nullity action filed by NVIDIA challenging the validity of DE 10223167. Polaris has not yet responded to this action.

Accounting for Loss Contingencies

While there can be no assurance of favorable outcomes, we believe the claims made by the other party in the above ongoing matters are without merit and we intend to vigorously defend the actions. As of July 30, 2017, we have not recorded any accrual for contingent liabilities associated with the legal proceedings described above based on our belief that liabilities, while possible, are not probable. Further, any possible range of loss in these matters cannot be reasonably estimated at this time. We are engaged in other legal actions not described above arising in the ordinary course of its business and, while there can be no assurance of favorable outcomes, we believe that the ultimate outcome of these actions will not have a material adverse effect on our operating results, liquidity or financial position.

Note 13 - Shareholders’ Equity

Capital Return Program

Beginning August 2004, our Board of Directors authorized us, subject to certain specifications, to repurchase shares of our common stock.

During the second quarter and first half offiscal year 2018, we repurchased a total of 5 million shares for $758 million and made cash dividend payments to our shareholders of $84 million and $166 million, respectively.

Through July 30, 2017, we have repurchased an aggregate of 250 million shares under our share repurchase program for a total cost of $5.35 billion since the inception of the program. All shares delivered from these repurchases have been placed into treasury stock. As of July 30, 2017, we were authorized, subject to certain specifications, to repurchase additional shares of our common stock up to $1.97 billion through December 2020.

19

NVIDIA CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

Convertible Preferred Stock

As of July 30, 2017 and January 29, 2017, there were no shares of preferred stock outstanding.

Common Stock

We are authorized to issue up to 2.00 billion shares of our common stock at $0.001 per share par value.

Note 14 - 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.

We report our business in two primary reportable segments - the GPU business and the Tegra Processor business - based on a single underlying graphics architecture.

Our GPU product brands are aimed at specialized markets including GeForce for gamers; Quadro for designers; Tesla and DGX for AI data scientists and big data researchers; and GRID for cloud-based visual computing users. Our Tegra brand integrates an entire computer onto a single chip, and incorporates GPUs and multi-core CPUs to drive supercomputing for mobile gaming and entertainment devices, as well as autonomous robots, drones and cars.

We have a single unifying architecture for our GPU and Tegra Processors. This architecture unification leverages our visual computing expertise by charging the operating expenses of certain core engineering functions to the GPU business, while charging the Tegra Processor business for the incremental cost of the teams working directly for that business. In instances where the operating expenses of certain functions benefit both reportable segments, our CODM assigns 100% of those expenses to the reportable segment that benefits the most.

The “All Other” category presented below represents the revenue and expenses that our CODM does not assign to either the GPU business or the Tegra Processor business for purposes of making operating decisions or assessing financial performance. The revenue includes primarily patent licensing revenue and the expenses include stock-based compensation expense, unallocated cost of revenue and operating expenses, acquisition-related costs, restructuring and other charges, contributions, legal settlement costs, and other non-recurring charges and benefits that our CODM deems to be enterprise in nature.

Our CODM does not review any information regarding total assets on a reportable segment basis. Reportable 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. The table below presents details of our reportable segments and the “All Other” category.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

	GPU		Tegra Processor			All Other			Consolidated
	(In millions)
Three Months Ended July 30, 2017
Revenue	$	1,897	$	333		$	—		$	2,230
Depreciation and amortization expense	$	29	$	9		$	11		$	49
Operating income (loss)	$	761	$	71		$	(144	)	$	688
Three Months Ended July 31, 2016
Revenue	$	1,196	$	166		$	66		$	1,428
Depreciation and amortization expense	$	29	$	7		$	11		$	47
Operating income (loss)	$	379	$	(14	)	$	(48	)	$	317
Six Months Ended July 30, 2017
Revenue	$	3,459	$	665		$	43		$	4,167
Depreciation and amortization expense	$	57	$	18		$	21		$	96
Operating income (loss)	$	1,363	$	118		$	(239	)	$	1,242
Six Months Ended July 31, 2016
Revenue	$	2,275	$	326		$	132		$	2,733
Depreciation and amortization expense	$	57	$	14		$	21		$	92
Operating income (loss)	$	727	$	(52	)	$	(114	)	$	561

	Three Months Ended						Six Months Ended
	July 30, 2017			July 31, 2016			July 30, 2017			July 31, 2016
	(In millions)
Reconciling items included in "All Other" category:
Unallocated revenue	$	—		$	66		$	43		$	132
Stock-based compensation expense	(81		)	(58		)	(158		)	(111		)
Unallocated cost of revenue and operating expenses	(59		)	(49		)	(114		)	(104		)
Acquisition-related costs	(4		)	(4		)	(8		)	(8		)
Restructuring and other charges	—			(2		)	—			(3		)
Contributions	—			(1		)	(2		)	(4		)
Legal settlement costs	—			—			—			(16		)
Total	$	(144	)	$	(48	)	$	(239	)	$	(114	)

21

NVIDIA CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

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 table summarizes information pertaining to our revenue from customers based on the invoicing address by geographic regions:

	Three Months Ended				Six Months Ended
	July 30,		July 31,		July 30,		July 31,
	2017		2016		2017		2016
	(In millions)
Revenue:
Taiwan	$	674	$	505	$	1,277	$	949
China	481		256		810		504
Other Asia Pacific	420		191		797		351
United States	278		206		631		400
Other Americas	199		103		292		206
Europe	178		167		360		323
Total revenue	$	2,230	$	1,428	$	4,167	$	2,733

The following table summarizes information pertaining to our revenue by each of the specialized markets we serve:

	Three Months Ended				Six Months Ended
	July 30,		July 31,		July 30,		July 31,
	2017		2016		2017		2016
	(In millions)
Revenue:
Gaming	$	1,186	$	781	$	2,213	$	1,468
Professional Visualization	235		214		440		403
Datacenter	416		151		825		294
Automotive	142		119		282		232
OEM & IP	251		163		407		336
Total revenue	$	2,230	$	1,428	$	4,167	$	2,733

Accounts receivable from significant customers, those representing 10% or more of total accounts receivable for the respective periods, is summarized as follows: 

	July 30,		January 29,
	2017		2017
Accounts Receivable:
Customer A	14	%	19	%

Note 15 - Restructuring and Other Charges

In fiscal year 2016, we began the wind-down of our Icera operations. No restructuring charges were recorded during the second quarter and first half offiscal year 2018.

22

NVIDIA CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

The following table provides a summary of the restructuring activities and related liabilities recorded in accrued liabilities on our Condensed Consolidated Balance Sheets as of July 30, 2017 and January 29, 2017:

	July 30,			January 29,
	2017			2017
	(In millions)
Balance at beginning of period	$	13		$	23
Restructuring and other charges	—			3
Cash payments	(3		)	(13		)
Balance at end of period	$	10		$	13

The majority of the remaining balance of $10 million as of July 30, 2017 is expected to be paid during the next twelve months.

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Forward-Looking Statements

This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, which are subject to the “safe harbor” created by those sections. Forward-looking statements are based on our management’s beliefs and assumptions and on information currently available to our management. In some cases, you can identify forward-looking statements by terms such as “may,” “will,” “should,” “could,” “goal,” “would,” “expect,” “plan,” “anticipate,” “believe,” “estimate,” “project,” “predict,” “potential” and similar expressions intended to identify forward-looking statements. These statements involve known and unknown risks, uncertainties and other factors, which may cause our actual results, performance, time frames or achievements to be materially different from any future results, performance, time frames or achievements expressed or implied by the forward-looking statements. We discuss many of these risks, uncertainties and other factors in this Quarterly Report on Form 10-Q in greater detail under the heading “Risk Factors.” Given these risks, uncertainties and other factors, you should not place undue reliance on these forward-looking statements. Also, these forward-looking statements represent our estimates and assumptions only as of the date of this filing. You should read this Quarterly Report on Form 10-Q completely and with the understanding that our actual future results may be materially different from what we expect. We hereby qualify our forward-looking statements by these cautionary statements. Except as required by law, we assume no obligation to update these forward-looking statements publicly, or to update the reasons actual results could differ materially from those anticipated in these forward-looking statements, even if new information becomes available in the future.

All references to “NVIDIA,” “we,” “us,” “our” or the “Company” mean NVIDIA Corporation and its subsidiaries, except where it is made clear that the term means only the parent company.

NVIDIA, the NVIDIA logo, GeForce, Quadro, Tegra, Tesla, Jetson, NVIDIA DGX, NVIDIA DRIVE, NVIDIA GRID, NVIDIA VRWorks, OptiX, and Pascal are trademarks and/or registered trademarks of NVIDIA Corporation in the United States and other countries. MAXQ® is the registered trademark of Maxim Integrated Products, Inc. Other company and product names may be trademarks of the respective companies with which they are associated.

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with “Item 6. Selected Financial Data” of our Annual Report on Form 10-K for the fiscal year ended January 29, 2017 and “Item 1A. Risk Factors” of this Quarterly Report on Form 10-Q and our Condensed Consolidated Financial Statements and related Notes thereto, as well as other cautionary statements and risks described elsewhere in this Quarterly Report on Form 10-Q, before deciding to purchase or sell shares of our common stock.

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Overview

Our Company and Our Businesses

Starting with a focus on PC graphics, NVIDIA invented the GPU to solve some of the most complex problems in computer science. We have extended our emphasis in recent years to the revolutionary field of AI. NVIDIA delivers value to its customers through PC, mobile and cloud architectures. Vertical integration enables us to bring together hardware, system software, programmable algorithms, libraries, systems and services to create unique value for the markets we serve. We specialize in markets in which GPU-based visual computing and accelerated computing platforms can provide enhanced throughput for applications.

Our two reportable segments - GPU and Tegra Processor - are based on a single underlying graphics architecture. From our proprietary processors, we have created specialized platforms that target the four large markets where our expertise is critical: Gaming, Professional Visualization, Datacenter, and Automotive.

Our GPU product brands are aimed at specialized markets including GeForce for gamers; Quadro for designers; Tesla and DGX for AI data scientists and big data researchers; and GRID for cloud-based visual computing users. Our Tegra brand integrates an entire computer onto a single chip, and incorporates GPUs and multi-core CPUs to drive supercomputing for mobile gaming and entertainment devices, as well as autonomous robots, drones and cars.

Headquartered in Santa Clara, California, NVIDIA was incorporated in California in April 1993 and reincorporated in Delaware in April 1998.

Recent Developments, Future Objectives and Challenges

Second Quarter of Fiscal Year 2018 Summary

	Three Months Ended
	July 30, 2017			April 30, 2017			July 31, 2016			Q/Q		Y/Y
	($ in millions, except per share data)
Revenue	$	2,230		$	1,937		$	1,428		15	%	56	%
Gross margin	58.4		%	59.4		%	57.9		%	(100) bps		50 bps
Operating expenses	$	614		$	596		$	509		3	%	21	%
Income from operations	$	688		$	554		$	317		24	%	117	%
Net income	$	583		$	507		$	261		15	%	123	%
Net income per diluted share	$	0.92		$	0.79		$	0.41		16	%	124	%

Revenue for the second quarter of fiscal year 2018 increased 56% year over year and 15% sequentially. Growth was driven by GPUs for gaming, datacenter, and professional visualization, as well as Tegra processors.

GPU business revenue was $1.90 billion, up 59% from a year earlier and up 21% sequentially, led by strength across all platforms, including datacenter, gaming, and professional visualization, along with PC OEM sales. GeForce GPU gaming results were led by continued strong adoption of Pascal-based GeForce GTX gaming platforms. Datacenter revenue (including Tesla, NVIDIA GRID and DGX) was $416 million, up 175% year on year and up 2% sequentially. Datacenter revenue reflects initial shipments of our newest Volta GPU architecture and V100 platform. Datacenter growth was fueled by strong demand by hyperscale and cloud customers for deep learning training and accelerated GPU computing, as well as demand for HPC, DGX AI supercomputing and GRID virtualization platforms. Professional visualization revenue grew 10% year over year and up 15% sequentially to $235 million, led by high-end mobile platforms. Our PC OEM revenue includes GPUs designed for mainstream desktops, notebooks, and cryptocurrency mining. The recent rise in cryptocurrency prices resulted in increased demand in OEM GPU sales.

Tegra processor business revenue, which included gaming development platforms and services, was $333 million, up 101% from a year ago and flat sequentially. Tegra processor business revenue includes system-on-a-chip (SOCs) modules for the Nintendo Switch gaming console and development services. Also included was automotive revenue of $142 million, which was up 19% from a year earlier and up 1% sequentially, incorporating infotainment modules, production DRIVE PX platforms, and development agreements for self-driving cars.

24

Revenue from our patent license agreement with Intel concluded in the first quarter of fiscal year 2018, when it was $43 million.

Gross margin for the second quarter of fiscal year 2018 was 58.4%, reflecting a sequential decrease associated with the absence of licensing revenue from Intel.

Operating expenses for the second quarter of fiscal year 2018 were $614 million, up 21% from a year earlier and up 3% sequentially, reflecting increased headcount and related costs for our growth initiatives - gaming, artificial intelligence, and autonomous driving.

Income from operations for the second quarter of fiscal year 2018 was $688 million, up 117% from a year earlier and up 24% sequentially. Net income and net income per diluted share for the second quarter of fiscal year 2018 were $583 million and $0.92, respectively, up 123% and 124%, respectively, from a year earlier, fueled by strong revenue growth and improved gross and operating margins.

During the first half of fiscal year 2018, we paid $758 million in share repurchases and $166 million in cash dividends. For fiscal year 2018, we intend to return $1.25 billion to shareholders through ongoing quarterly cash dividends and share repurchases.

Cash, cash equivalents and marketable securities were $5.88 billion as of July 30, 2017, compared with $6.21 billion at the end of the prior quarter. The sequential decrease was primarily related to share repurchases made under our capital return program.

GPU Business

During the second quarter of fiscal year 2018, we introduced Max-Q, a design approach to make gaming laptops thinner, quieter, and faster. For our datacenter platform, we announced and began shipping NVIDIA Tesla V100 GPU accelerators, the first GPU based on the new Volta architecture; unveiled a new lineup of NVIDIA DGX AI supercomputers; and disclosed that the world’s 13 most energy-efficient supercomputers on the Green 500 list run on NVIDIA Tesla accelerators. For our professional visualization platform, we introduced Project Holodeck, a photorealistic, collaborative VR environment; launched external GPU support for creative professionals; and released the NVIDIA Optix 5.0 and NVIDIA VRWorks 360 Video software development kits.

During the first quarter of fiscal year 2018, we announced GeForce GTX 1080 Ti and TITAN Xp for our gaming platform. For our datacenter platform, we announced with Microsoft that it is bringing NVIDIA Tesla P100 and P40 GPUs to the Azure cloud; announced that NVIDIA Tesla accelerators designed for datacenter AI capabilities were added to Google Cloud, Tencent Cloud, IBM Cloud, and Baidu Cloud; announced that the Tokyo Institute of Technology will use NVIDIA’s accelerated computing platform in their AI supercomputer, TSUBAME3.0; announced that Fujitsu is using 24 NVIDIA DGX-1 AI systems to build a new AI supercomputer for the RIKEN research center in Japan; announced together with Facebook the Caffe2 deep learning framework and Big Basin servers with Tesla P100 GPUs; and announced plans to train 100,000 developers this year through the NVIDIA Deep Learning Institute.

Tegra Processor Business

During the second quarter of fiscal year 2018, we announced that Toyota selected NVIDIA DRIVE PX for its next-generation autonomous cars; Volvo and Autoliv selected DRIVE PX for self-driving cars targeted to hit the market by 2021; ZF and HELLA, two leading automotive suppliers, announced a system based on DRIVE PX to deliver the highest NCAP safety ratings for cars; and Baidu announced that its Project Apollo open-source self-driving platform for the China market will use DRIVE PX. We also introduced the NVIDIA Isaac robot simulator for training intelligent machines in simulated real-world conditions before deployment; and announced the NVIDIA Metropolis platform, used by more than 50 partners to make cities safer and smarter by applying deep learning to surveillance video streams.

During the first quarter of fiscal year 2018, we announced with Bosch, one of the world’s largest auto suppliers, plans to create a new Bosch-branded AI self-driving car computer. We also announced a collaboration with PACCAR, one of the world's largest truck makers with brands including Peterbilt, Kenworth and DAF, to develop solutions for autonomous trucks. We also announced NVIDIA Jetson TX2, a high-performance, low-power computer platform for delivering AI at the edge, with deep learning and computer vision capabilities for robots, drones and smart cameras.

25

Financial Information by Business Segment and Geographic Data

Please refer to Note 14 of the Notes to Condensed Consolidated Financial Statements for disclosure regarding segment information.

Results of Operations

The following table sets forth, for the periods indicated, certain items in our Condensed Consolidated Statements of Income expressed as a percentage of revenue.

	Three Months Ended				Six Months Ended
	July 30, 2017		July 31, 2016		July 30, 2017		July 31, 2016
Revenue	100.0	%	100.0	%	100.0	%	100.0	%
Cost of revenue	41.6		42.1		41.2		42.3
Gross profit	58.4		57.9		58.8		57.7
Operating expenses
Research and development	18.7		24.5		19.8		25.5
Sales, general and administrative	8.9		11.0		9.2		11.6
Restructuring and other charges	—		0.1		—		0.1
Total operating expenses	27.6		35.6		29.0		37.2
Income from operations	30.9		22.2		29.8		20.5
Interest income	0.7		0.8		0.7		0.8
Interest expense	(0.7	)	(0.8	)	(0.7	)	(0.8	)
Other, net	(0.2	)	—		(0.5	)	(0.1	)
Total other income (expense)	(0.2	)	—		(0.5	)	(0.1	)
Income before income tax expense	30.7		22.2		29.3		20.4
Income tax expense	4.5		3.9		3.1		3.3
Net income	26.2	%	18.3	%	26.2	%	17.1	%

Revenue

Revenue by Reportable Segments

	Three Months Ended									Six Months Ended
	July 30, 2017		July 31, 2016		$ Change			% Change		July 30, 2017		July 31, 2016		$ Change			% Change
	($ in millions)
GPU	$	1,897	$	1,196	$	701		59	%	$	3,459	$	2,275	$	1,184		52	%
Tegra Processor	333		166		167			101	%	665		326		339			104	%
All Other	—		66		(66		)	(100	)%	43		132		(89		)	(67	)%
Total	$	2,230	$	1,428	$	802		56	%	$	4,167	$	2,733	$	1,434		52	%

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GPU Business. GPU business revenue increased by 59% for the second quarter of fiscal year 2018 compared to the second quarter of fiscal year 2017. This increase was due primarily to increased revenue from sales of GeForce GPU products for gaming, which increased over 30%, reflecting continued strong demand for our Pascal-based GPU products. Datacenter revenue, including Tesla, GRID and DGX, increased 175%, reflecting strong demand for hyperscale and cloud customers for deep learning training and accelerated GPU computing as well as demand for DGX AI supercomputing and GRID virtualization platforms. Revenue from Quadro GPUs for professional visualization increased 10% due primarily to higher sales of high-end mobile workstation products. Our PC OEM revenue increased by approximately 200% due primarily to strong demand for GPU products targeted for use in cryptocurrency mining.

GPU business revenue increased by 52% in the first half of fiscal year 2018 compared to the first half of fiscal year 2017. This increase was due primarily to increased revenue from sales of GeForce GPU products for gaming, which increased over 30%, reflecting continued strong demand for our Pascal-based GPU products. Datacenter revenue, including Tesla, GRID and DGX, increased 180%, reflecting strong demand for hyperscale and cloud customers for deep learning training and accelerated GPU computing as well as demand for DGX AI supercomputing and GRID virtualization platforms. Revenue from Quadro GPUs for professional visualization increased 9% due primarily to higher sales in both desktop and mobile workstation products. Revenue from GeForce GPU products for mainstream PC OEMs increased by over 90% due primarily to strong demand for GPU products targeted for use in cryptocurrency mining.

Tegra Processor Business. Tegra Processor business revenue increased by 101% for the second quarter of fiscal year 2018 compared to the second quarter of fiscal year 2017. This was driven by an increase of over 800% in revenue from gaming development platforms and services, and an increase of 19% in automotive revenue, primarily from infotainment modules.

Tegra Processor business revenue increased by 104% in the first half of fiscal year 2018 compared to the first half of fiscal year 2017. This was driven by an increase of over 850% in revenue from gaming development platforms and services, and an increase of over 20% in sales of Tegra products serving automotive systems, primarily from infotainment modules compared to last year.

All Other. Our patent license agreement with Intel concluded in the first quarter of fiscal year 2018. For the first half of fiscal year 2018, we recognized related revenue of $43 million, down from $132 million for the first half of fiscal year 2017.

Concentration of Revenue 

Revenue from sales to customers outside of the United States and Other Americas accounted for 79% and 78% of total revenue for the second quarter and first half offiscal year 2018, respectively. Revenue from sales to customers outside of the United States and Other Americas accounted for 78% of total revenue for both the second quarter and first half of fiscal year 2017. Revenue by geographic region is allocated to individual countries based on the location to which the products are initially billed even if the revenue is attributable to end customers in a different location.

Gross Margin

Our overall gross margin increased to 58.4% for the second quarter of fiscal year 2018 from 57.9% for the second quarter of fiscal year 2017, and increased to 58.8% for the first half of fiscal year 2018 from 57.7% for the first half of fiscal year 2017. These increases were primarily due to the growth in GPU business revenue from our Datacenter platforms, increased sales of GeForce GTX products for gaming, and improved gross margins in our Tegra Processor business. These increases were partially offset by the absence of licensing revenue from Intel.

Inventory provision costs totaled $13 million and $5 million for the second quarter of fiscal years 2018 and 2017, respectively, unfavorably impacting our gross margin by 0.6% and 0.3%, respectively. Sales of inventory that was previously written-off or written-down totaled $9 million and $12 million for the second quarter of fiscal years 2018 and 2017, respectively, favorably impacting our gross margin by 0.4% and 0.9%, respectively. As a result, the overall net effect on our gross margin from charges for inventory provision costs and sales of items previously written-off or written-down was a 0.2% unfavorable impact for the second quarter of fiscal year 2018 and a 0.5% favorable impact for the second quarter of fiscal year 2017.

Inventory provision costs totaled $16 million and $27 million for the first half of fiscal years 2018 and 2017, respectively, unfavorably impacting our gross margin by 0.4% and 1.0%, respectively. Sales of inventory that was previously written-off or written-down totaled $22 million and $20 million for the first half of fiscal years 2018 and 2017, respectively, favorably impacting our gross margin by 0.5% and 0.7%, respectively. As a result, the overall net effect on our gross margin from charges for inventory provision costs and sales of items previously written-off or written-down was a 0.2% favorable impact for the first half of fiscal year 2018 and a 0.3% unfavorable impact for the first half of fiscal year 2017.

27

A discussion of our gross margin results for each of our reportable segments is as follows:

GPU Business. The gross margin of our GPU business increased during the second quarter and first half of fiscal year 2018 compared to the second quarter and first half of fiscal year 2017. GPU margins increased primarily due to revenue growth in Datacenter driven by strong demand for Tesla products by hyperscale and cloud customers for deep learning training and accelerated GPU computing as well as demand for DGX AI supercomputing and GRID virtualization platforms and strong sales of our GeForce GTX gaming products.

Tegra Processor Business. The gross margin of our Tegra Processor business increased during the second quarter and first half of fiscal year 2018 compared to the second quarter and first half of fiscal year 2017. The increase in Tegra margins was due primarily to strong sales of Tegra products serving automotive systems.

Operating Expenses 

	Three Months Ended											Six Months Ended
	July 30, 2017			July 31, 2016			$ Change			% Change		July 30, 2017			July 31, 2016			$ Change			% Change
	($ in millions)
Research and development expenses	$	416		$	350		$	66		19	%	$	827		$	697		$	130		19	%
Sales, general and administrative expenses	198			157			41			26	%	383			316			67			21	%
Restructuring and other charges	—			2			(2		)	(100	)%	—			3			(3		)	(100	)%
Total operating expenses	$	614		$	509		$	105		21	%	$	1,210		$	1,016		$	194		19	%
Research and development expenses as a percentage of net revenue	19		%	25		%						20		%	26		%
Sales, general and administrative expenses as a percentage of net revenue	9		%	11		%						9		%	12		%
Restructuring and other charges as a percentage of net revenue	—		%	—		%						—		%	—		%

Research and Development

Research and development expenses increased by 19% during the second quarter and first half of fiscal year 2018 compared to the second quarter and first half of fiscal year 2017, driven primarily by employee additions and increases in employee compensation and other related costs, including stock-based compensation expense.

Sales, General and Administrative

Sales, general and administrative expenses increased by 26% during the second quarter of fiscal year 2018 compared to the second quarter of fiscal year 2017, driven primarily by employee additions and increases in employee compensation and other related costs, including stock-based compensation expense.

Sales, general and administrative expenses increased by 21% during the first half of fiscal year 2018 compared to the first half of fiscal year 2017, driven primarily by employee additions and increases in employee compensation and other related costs, including stock-based compensation expense. Offsetting these increases was a decrease in outside professional fees of $11 million resulting from the resolution of our intellectual property disputes with Samsung and Qualcomm.

28

Restructuring and Other Charges

In the second quarter of fiscal year 2016, we began the wind-down of our Icera operations. No restructuring charges were recorded during the second quarter and first half offiscal year 2018. Please refer to Note 15 of the Notes to Condensed Consolidated Financial Statements for further discussion.

Total Other Income (Expense)

Interest Income and Interest Expense

Interest income consists of interest earned on cash, cash equivalents and marketable securities. Interest income was $15 million and $12 million during the second quarter of fiscal years 2018 and 2017, respectively, and $31 million and $23 million during the first half of fiscal years 2018 and 2017, respectively. The increase in interest income was primarily due to higher average cash balances invested in interest bearing securities, as well as higher purchased yields.

Interest expense is primarily comprised of coupon interest and debt discount amortization related to the 2.20% Notes Due 2021 and 3.20% Notes Due 2026 issued in September 2016, and the Convertible Notes issued in December 2013. Interest expense was $15 million and $12 million during the second quarter of fiscal years 2018 and 2017, respectively, and $31 million and $23 million during the first half of fiscal years 2018 and 2017, respectively.

Other, Net

Other, net, consists primarily of realized gains and losses from the sale of marketable securities, sales or impairments of investments in non-affiliated companies, losses on early debt conversions of the Convertible Notes, and the impact of changes in foreign currency rates. Other, net, was an expense of $4 million during the second quarter of fiscal year 2018 and $21 million during the first half of fiscal year 2018, consisting primarily of $3 million and $17 million of losses recognized from early conversions of the Convertible Notes during the second quarter and first half of fiscal year 2018, respectively. Other, net, was not significant during the second quarter or first half of fiscal year 2017.

Income Taxes

We recognized income tax expense of $101 million and $130 million for the second quarter and first half of fiscal year 2018, respectively, and $56 million and $89 million for the second quarter and first half of fiscal year 2017, respectively. Income tax expense as a percentage of income before income tax was 14.8% and 10.7% for the second quarter and first half of fiscal year 2018, respectively, and 17.6% and 15.9% for the second quarter and first half of fiscal year 2017, respectively.

The decrease in our effective tax rate in the second quarter and first half of fiscal year 2018 as compared to the same periods in the prior fiscal year primarily reflects the recognition of tax benefits related to stock-based compensation and a proportional decrease in the amount of earnings subject to United States tax.

Please refer to Note 4 of the Notes to Condensed Consolidated Financial Statements for further information.

Liquidity and Capital Resources

	July 30, 2017		January 29, 2017
	(In millions)
Cash and cash equivalents	$	1,988	$	1,766
Marketable securities	3,889		5,032
Cash, cash equivalents and marketable securities	$	5,877	$	6,798

29

	Six Months Ended
	July 30, 2017			July 31, 2016
	(In millions)
Net cash provided by operating activities	$	987		$	519
Net cash provided by (used in) investing activities	$	1,016		$	(93	)
Net cash used in financing activities	$	(1,781	)	$	(596	)

As of July 30, 2017, we had $5.88 billion in cash, cash equivalents and marketable securities, a decrease of $921 million from the end of fiscal year 2017. Our portfolio of cash equivalents and marketable securities is managed on our behalf by several financial institutions. Our portfolio managers are required to follow our investment policy, which requires the purchase of high grade investment securities, the diversification of asset types, and certain limits on our portfolio duration.

Cash provided by operating activities increased in the first half of fiscal year 2018 compared to the first half of fiscal year 2017, primarily due to higher net income, partially offset by changes in working capital.

Cash provided by investing activities increased in the first half of fiscal year 2018 compared to the first half of fiscal year 2017, primarily due to lower purchases of marketable securities.

Cash used in financing activities increased in the first half of fiscal year 2018 compared to the first half of fiscal year 2017, primarily due to repayments of Convertible Notes, higher share repurchases and payments related to employee stock plans.

Liquidity

Our primary sources of liquidity are our cash and cash equivalents, our marketable securities, and the cash generated by our operations. As of July 30, 2017 and January 29, 2017, we had $5.88 billion and $6.80 billion, respectively, in cash, cash equivalents and marketable securities. Our marketable securities consist principally of debt securities of corporations and United States government and its agencies, asset-backed securities, mortgage-backed securities issued by government-sponsored enterprises, money market funds and foreign government bonds. These investments are denominated in United States dollars. Our investment policy requires the purchase of high grade investment securities and the diversification of asset types and includes certain limits on our portfolio duration, as specified in our investment policy guidelines. These guidelines also limit the amount of credit exposure to any one issue, issuer or type of instrument. As of July 30, 2017, we were in compliance with our investment policy. As of July 30, 2017, our investments in government agencies and government-sponsored enterprises represented 33% of our total investment portfolio, while the financial sector accounted for 18% of our total investment portfolio. All of our investments are in A/A3 or better rated securities.

Please refer to Note 5 of the Notes to Condensed Consolidated Financial Statements for additional information.

Our cash balances are held in numerous locations throughout the world, including substantial amounts held outside of the United States. Most of the amounts held outside the United States may be repatriated to the United States.  However, if we repatriate foreign earnings for cash requirements in the United States, we would incur U.S. federal income tax at a rate of 35% less utilization of any net operating loss carryforwards, and further offset by any applicable research and foreign tax credits, plus any state income taxes on such income. Repatriation of some foreign balances may be restricted by local laws.

Capital Return to Shareholders

Dividend payments and share repurchases must be made from cash held in the United States. During the second quarter and first half offiscal year 2018, we repurchased a total of 5 million shares for $758 million and made cash dividend payments to our shareholders of $84 million and $166 million, respectively.

For fiscal year 2018, we intend to return $1.25 billion to shareholders through ongoing quarterly cash dividends and share repurchases.

Our cash dividend program and the payment of future cash dividends under that program are subject to continued capital availability and our Board's continuing determination that the dividend program and the declaration of dividends thereunder are in the best interests of our shareholders and are in compliance with all laws and agreements of NVIDIA applicable to the declaration and payment of cash dividends.

30

Convertible Notes

In December 2013, we issued $1.50 billion of Convertible Notes that mature in December 2018 unless repurchased or converted prior to such date. The Convertible Notes first became convertible at the holders’ option beginning on the first day of fiscal year 2017. We have utilized U.S. cash to settle an aggregate of $1.41 billion in principal amount of the Convertible Notes through the second quarter of fiscal year 2018 and we have received additional conversion notices for an aggregate of $62 million in principal amount, which are expected to be settled in the third quarter of fiscal year 2018. Please refer to Note 11 of the Notes to the Condensed Consolidated Financial Statements for further discussion.

Operating Capital and Capital Expenditure Requirements

We believe that our existing cash balances and anticipated cash flows from operations will be sufficient to meet our operating requirements for at least the next twelve months.

Off-Balance Sheet Arrangements

We are constructing a new headquarters building in Santa Clara, California, which is currently targeted for completion in the third quarter of fiscal year 2018. We are financing this construction under an off-balance sheet, build-to-suit operating lease arrangement. The banks have committed to fund up to $380 million of costs relating to construction. Once construction is complete, the lease balance will remain static at the completed cost for the remaining duration of the lease term. During construction, accrued interest will be capitalized into the lease balance. Following construction, we will pay rent in the form of interest. The lease has an initial 7.5 year term expiring in December 2022, consisting of an approximately 2.5 year construction period followed by a 5 year lease term. We have the option to renew this lease for up to three additional 5 year periods, subject to approval by the banks. During the term of the lease, we may elect to purchase the headquarters building for the amount of the banks’ investment in the building and any accrued but unpaid rent. At the end of the lease term, we may elect to buy the building for the outstanding balance on the maturity date or arrange for the cash sale of the building to an unaffiliated third party. The aggregate guarantee made by us under the lease is no more than 87.5% of the costs incurred in connection with the construction of the building. Please refer to Note 12 of the Notes to Condensed Consolidated Financial Statements for a discussion regarding our operating lease financing arrangement.

Contractual Obligations

As of July 30, 2017, we had outstanding inventory purchase obligations totaling $1.04 billion. Except as described above with respect to the Convertible Notes and the Notes, there were no other material changes in our contractual obligations from those disclosed in our Annual Report on Form 10-K for the fiscal year ended January 29, 2017.

Please see Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations - Liquidity and Capital Resources” in our Annual Report on Form 10-K for the fiscal year ended January 29, 2017 for a description of our contractual obligations.

Adoption of New and Recently Issued Accounting Pronouncements

Please see Note 1 of the Notes to Condensed Consolidated Financial Statements for a discussion of adoption of new and recently issued accounting pronouncements.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Investment and Interest Rate Risk

Financial market risks related to investment and interest rate risk are described in our 2017 Annual Report on Form 10-K. As of July 30, 2017, there have been no material changes to the financial market risks described as of January 29, 2017.

Foreign Exchange Rate Risk

The impact of foreign currency transactions related to foreign exchange rate risk is described in our 2017 Annual Report on Form 10-K. As of July 30, 2017, there have been no material changes to the foreign exchange rate risks described as of January 29, 2017.

Please see Note 9 of the Notes to Condensed Consolidated Financial Statements for additional information.

31

ITEM 4. CONTROLS AND PROCEDURES

Controls and Procedures

Disclosure Controls and Procedures

Based on their evaluation as of July 30, 2017, our management, including our Chief Executive Officer and Chief Financial Officer, has concluded that our disclosure controls and procedures (as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934, as amended) were effective to provide reasonable assurance.

Changes in Internal Control Over Financial Reporting

There were no changes in our internal control over financial reporting during the second quarter of fiscalyear 2018 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Inherent Limitations on Effectiveness of Controls

Our management, including our Chief Executive Officer and Chief Financial Officer, does not expect that our disclosure controls and procedures or our internal controls, will prevent all error and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within NVIDIA have been detected.

PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

Please see Part I, Item 1, Note 12 of the Notes to Condensed Consolidated Financial Statements for a discussion of significant developments in our legal proceedings since January 29, 2017. Please also see Item 3, “Legal Proceedings” in our Annual Report on Form 10-K for the fiscal year ended January 29, 2017 for a prior discussion of our legal proceedings.

ITEM 1A. RISK FACTORS

Please refer to the description of the risk factors associated with our business previously disclosed in Item 1A of our Annual Report on Form 10-K for the fiscal year ended January 29, 2017. There have been no material changes from the risk factors previously described under Item 1A of our Annual Report on Form 10-K for the fiscal year ended January 29, 2017.

Before you buy our common stock, you should know that making such an investment involves some risks including, but not limited to, the risks described in Item 1A of our Annual Report on Form 10-K for the fiscal year ended January 29, 2017. Additionally, any one of those risks could harm our business, financial condition and results of operations, which could cause our stock price to decline. Additional risks and uncertainties not presently known to us or that we currently deem immaterial may also impair our business operations.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

Issuer Purchases of Equity Securities

Beginning August 2004, our Board of Directors authorized us, subject to certain specifications, to repurchase shares of our common stock. In November 2016, the Board authorized an additional $2.00 billion under our repurchase program and extended it through December 2020.

Through July 30, 2017, we have repurchased an aggregate of 250 million shares under our share repurchase program for a total cost of $5.35 billion since the inception of the program. All shares delivered from these repurchases have been placed into treasury stock. As of July 30, 2017, we were authorized, subject to certain specifications, to repurchase additional shares of our common stock up to $1.97 billion through December 2020. For fiscal year 2018, we intend to return $1.25 billion to our shareholders through ongoing quarterly cash dividends and share repurchases.

32

The repurchases can be made in the open market, in privately negotiated transactions, or in structured share repurchase programs, and can be made in one or more larger repurchases, in compliance with Rule 10b-18 of the Securities Exchange Act of 1934, as amended, subject to market conditions, applicable legal requirements, and other factors. The program does not obligate NVIDIA to acquire any particular amount of common stock and the program may be suspended at any time at our discretion. As part of our share repurchase program, we have entered into, and we may continue to enter into, structured share repurchase transactions with financial institutions. These agreements generally require that we make an up-front payment in exchange for the right to receive a fixed number of shares of our common stock upon execution of the agreement, and a potential incremental number of shares of our common stock, within a pre-determined range, at the end of the term of the agreement.

The following table presents details of our share repurchase transactions during the second quarter of fiscal year 2018:

Period	Total Number of Shares Purchased (In millions)	Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Program (In millions)	Approximate Dollar Value of Shares that May Yet Be Purchased Under the Program (In billions)
May 1, 2017 - May 28, 2017	—	$	—	—	$	2.73
May 29, 2017 - June 25, 2017	3	$	151.11	3	$	2.27
June 26, 2017 - July 30, 2017	2	$	150.13	2	$	1.97
Total	5			5

Transactions Related to our Convertible Notes and Note Hedges

During the second quarter of fiscal year 2018, we issued an aggregate of 5 million shares of our common stock upon settlement of Convertible Notes submitted for conversion. In connection with these conversions, we exercised a portion of our Note Hedges to acquire shares of our common stock. The counterparty to the Note Hedges may be deemed an “affiliated purchaser” and may have purchased the shares of our common stock deliverable to us upon this exercise of our option.

During the third quarter of fiscal year 2018, we expect to settle at least an aggregate of $62 million in principal amount, and issue shares of our common stock for the excess conversion value, related to the Convertible Notes that were submitted for conversion. The actual number of shares issuable upon conversion will be determined based upon the terms of the Convertible Notes, and we expect to receive an equal number of shares of our common stock under the terms of the Note Hedges. Please refer to Note 11 of the Notes to Condensed Consolidated Financial Statements for further discussion regarding the Convertible Notes and the Note Hedges.

Restricted Stock Unit Share Withholding

We also withhold common stock shares associated with net share settlements to cover tax withholding obligations upon the vesting of restricted stock unit awards under our equity incentive program. During the first half of fiscal year 2018, we withheld approximately 2 million shares at a total cost of $190 million through net share settlements. Please refer to Note 2 of the Notes to Condensed Consolidated Financial Statements for further discussion regarding our equity incentive plans.

33

ITEM 6. EXHIBITS

Exhibit No.	Exhibit Description	Schedule /Form	File Number	Exhibit	Filing Date
10.1	Second Termination Agreement, dated as of June 2, 2017, by and between NVIDIA Corporation and Goldman Sachs & Co. LLC	8-K	000-23985	10.1	June 5, 2017
31.1*	Certification of Chief Executive Officer as required by Rule 13a-14(a) of the Securities Exchange Act of 1934
31.2*	Certification of Chief Financial Officer as required by Rule 13a-14(a) of the Securities Exchange Act of 1934
32.1#*	Certification of Chief Executive Officer as required by Rule 13a-14(b) of the Securities Exchange Act of 1934
32.2#*	Certification of Chief Financial Officer as required by Rule 13a-14(b) of the Securities Exchange Act of 1934
101.INS*	XBRL Instance Document
101.SCH*	XBRL Taxonomy Extension Schema Document
101.CAL*	XBRL Taxonomy Extension Calculation Linkbase Document
101.LAB*	XBRL Taxonomy Extension Labels Linkbase Document
101.PRE*	XBRL Taxonomy Extension Presentation Linkbase Document

* Filed herewith

# In accordance with Item 601(b)(32)(ii) of Regulation S-K and SEC Release Nos. 33-8238 and 34-47986, Final Rule: Management's Reports on Internal Control Over Financial Reporting and Certification of Disclosure in Exchange Act Periodic Reports, the certifications furnished in Exhibits 32.1 and 32.2 hereto are deemed to accompany this Quarterly Report on Form 10-Q and will not be deemed “filed” for purpose of Section 18 of the Exchange Act. Such certifications will not be deemed to be incorporated by reference into any filing under the Securities Act or the Exchange Act, except to the extent that the registrant specifically incorporates it by reference.

Copies of above exhibits not contained herein are available to any shareholder upon written request to:

Investor Relations: NVIDIA Corporation, 2701 San Tomas Expressway, Santa Clara, CA 95050.

34

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Date: August 23, 2017

	NVIDIA Corporation
By:	/s/ Colette M. Kress
	Colette M. Kress
	Executive Vice President and Chief Financial Officer (Duly Authorized Officer and Principal Financial Officer)

35

EX-31.1

EXHIBIT 31.1

CERTIFICATION

I, Jen-Hsun Huang, certify that:

1.  I have reviewed this Quarterly Report on Form 10-Q of NVIDIA Corporation;

2.  Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.  Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.  The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:  

(a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.  The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):  

(a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

(b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date:  August 23, 2017

/s/JEN-HSUN HUANG

Jen-Hsun Huang        

President and Chief Executive Officer 

EX-31.2

EXHIBIT 31.2

CERTIFICATION

I, Colette M. Kress, certify that:

1.  I have reviewed this Quarterly Report on Form 10-Q of NVIDIA Corporation;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.  Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.  The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:  

(a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.  The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

(a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

(b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date:  August 23, 2017

/s/ COLETTE M. KRESS

Colette M. Kress

Executive Vice President and Chief Financial Officer

EX-32.1

EXHIBIT 32.1

CERTIFICATION

Pursuant to the requirement set forth in Rule 13a-14(b) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and Section 1350 of Chapter 63 of Title 18 of the United States Code (18 U.S.C. § 1350), Jen-Hsun Huang, the President and Chief Executive Officer of NVIDIA Corporation (the “Company”), hereby certifies that, to the best of his knowledge:

1.  The Company’s Quarterly Report on Form 10-Q for the period ended July 30, 2017, to which this Certification is attached as Exhibit 32.1 (the “Periodic Report”), fully complies with the requirements of Section 13(a) or Section 15(d) of the Exchange Act; and

2.  The information contained in the Periodic Report fairly presents, in all material respects, the financial condition of the Company at the end of the period covered by the Periodic Report and results of operations of the Company for the period covered by the Periodic Report.

Date: August 23, 2017

/s/JEN-HSUN HUANG

Jen-Hsun Huang    

President and Chief Executive Officer

A signed original of this written statement required by Section 906 of 18 U.S.C. § 1350 has been provided to NVIDIA Corporation and will be retained by NVIDIA Corporation and furnished to the Securities and Exchange Commission or its staff upon request.

This certification accompanies the Form 10-Q to which it relates, is not deemed filed with the Securities and Exchange Commission and is not to be incorporated by reference into any filing of the Company under the Securities Act of 1933, as amended, or the Exchange Act (whether made before or after the date of the Form 10-Q), irrespective of any general incorporation language contained in such filing.

EX-32.2

EXHIBIT 32.2

CERTIFICATION

Pursuant to the requirement set forth in Rule 13a-14(b) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and Section 1350 of Chapter 63 of Title 18 of the United States Code (18 U.S.C. § 1350), Colette M. Kress, the Executive Vice President and Chief Financial Officer of NVIDIA Corporation (the “Company”), hereby certifies that, to the best of her knowledge:

1. The Company’s Quarterly Report on Form 10-Q for the period ended July 30, 2017, to which this Certification is attached as Exhibit 32.2 (the “Periodic Report”), fully complies with the requirements of Section 13(a) or Section 15(d) of the Exchange Act; and

2. The information contained in the Periodic Report fairly presents, in all material respects, the financial condition of the Company at the end of the period covered by the Periodic Report and results of operations of the Company for the period covered by the Periodic Report.

Date:  August 23, 2017

/s/ COLETTE M. KRESS

Colette M. Kress

Executive Vice President and Chief Financial Officer

A signed original of this written statement required by Section 906 of 18 U.S.C. § 1350 has been provided to NVIDIA Corporation and will be retained by NVIDIA Corporation and furnished to the Securities and Exchange Commission or its staff upon request.

This certification accompanies the Form 10-Q to which it relates, is not deemed filed with the Securities and Exchange Commission and is not to be incorporated by reference into any filing of the Company under the Securities Act of 1933, as amended, or the Exchange Act (whether made before or after the date of the Form 10-Q), irrespective of any general incorporation language contained in such filing.

XML

Document and Entity Information Document - USD ($)	6 Months Ended
	Jul. 30, 2017	Aug. 18, 2017	Jul. 29, 2016
Document Information [Line Items]
Entity Registrant Name	NVIDIA CORP
Entity Central Index Key	0001045810
Current Fiscal Year End Date	--01-28
Entity Filer Category	Large Accelerated Filer
Document Type	10-Q
Document Period End Date	Jul. 30, 2017
Document Fiscal Year Focus	2018
Document Fiscal Period Focus	Q2
Amendment Flag	false
Entity Common Stock, Shares Outstanding		600,171,277
Entity Well-known Seasoned Issuer	Yes
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Public Float			$ 28,978,018,802

XML

CONDENSED CONSOLIDATED STATEMENTS OF INCOME - USD ($) shares in Millions, $ in Millions		3 Months Ended		6 Months Ended
		Jul. 30, 2017	Jul. 31, 2016	Jul. 30, 2017	Jul. 31, 2016
Revenue		$ 2,230	$ 1,428	$ 4,167	$ 2,733
Cost of revenue		928	602	1,715	1,156
Gross profit		1,302	826	2,452	1,577
Operating expenses
Research and development		416	350	827	697
Sales, general and administrative		198	157	383	316
Restructuring and other charges		0	2	0	3
Total operating expenses		614	509	1,210	1,016
Income from operations		688	317	1,242	561
Interest income		15	12	31	23
Interest expense		(15)	(12)	(31)	(23)
Other, net		(4)	0	(21)	(3)
Total other income (expense)		(4)	0	(21)	(3)
Income before income tax expense		684	317	1,221	558
Income tax expense		101	56	130	89
Net income		$ 583	$ 261	$ 1,091	$ 469
Basic net income per share	[1]	$ 0.98	$ 0.49	$ 1.83	$ 0.88
Diluted net income per share	[2]	$ 0.92	$ 0.41	$ 1.71	$ 0.76
Weighted average shares used in basic per share computation		597	534	595	536
Weighted average shares used in diluted per share computation		633	634	637	620
Cash dividends declared and paid per common share		$ 0.140	$ 0.115	$ 0.280	$ 0.230

[1] Calculated as net income divided by basic weighted average shares.

[2] Calculated as net income divided by diluted weighted average shares.

XML

CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jul. 30, 2017	Jul. 31, 2016	Jul. 30, 2017	Jul. 31, 2016
Net income	$ 583	$ 261	$ 1,091	$ 469
Net unrealized gain on available-for-sale securities	3	5	5	11
Reclassification adjustments for net realized gains on available-for-sale securities included in net income, net of tax	0	0	0	0
Net change in unrealized gain on available-for-sale securities	3	5	5	11
Net unrealized losses on cash flow hedges	(1)	(3)	(2)	(4)
Reclassification adjustments for net realized gains on cash flow hedges included in net income, net of tax	1	0	1	0
Net change in unrealized loss on cash flow hedges	0	(3)	(1)	(4)
Other comprehensive income, net of tax	3	2	4	7
Total comprehensive income	$ 586	$ 263	$ 1,095	$ 476

XML

CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Millions	Jul. 30, 2017	Jan. 29, 2017
Current assets:
Cash and cash equivalents	$ 1,988	$ 1,766
Marketable securities	3,889	5,032
Accounts receivable, net	1,213	826
Inventories	855	794
Prepaid expenses and other current assets	125	118
Total current assets	8,070	8,536
Property and equipment, net	578	521
Goodwill	618	618
Intangible assets, net	76	104
Other assets	60	62
Total assets	9,402	9,841
Current liabilities:
Accounts payable	431	485
Accrued and other current liabilities	517	507
Convertible short-term debt	84	796
Total current liabilities	1,032	1,788
Long-term debt	1,984	1,983
Other long-term liabilities	408	271
Capital lease obligations, long-term	3	6
Total Liabilities	3,427	4,048
Commitments and contingencies - see Note 12
Convertible debt conversion obligation	2	31
Shareholders' equity
Preferred stock	0	0
Common stock	1	1
Additional paid-in capital	5,048	4,708
Treasury stock, at cost	(6,070)	(5,039)
Accumulated other comprehensive loss	(12)	(16)
Retained earnings	7,006	6,108
Total shareholders' equity	5,973	5,762
Total liabilities, convertible debt conversion obligation and shareholders' equity	$ 9,402	$ 9,841

XML

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Millions	6 Months Ended
	Jul. 30, 2017	Jul. 31, 2016
Cash flows from operating activities:
Net income	$ 1,091	$ 469
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	96	92
Stock-based compensation expense	158	111
Deferred income taxes	115	77
Amortization of debt discount	2	14
Loss on early debt conversions	17	0
Net loss (gain) on sale and disposal of long-lived assets and investments	1	(3)
Other	8	7
Changes in operating assets and liabilities:
Accounts receivable	(387)	(138)
Inventories	(61)	(104)
Prepaid expenses and other assets	(15)	(17)
Accounts payable	(63)	131
Accrued and other current liabilities	9	(85)
Other long-term liabilities	16	(35)
Net cash provided by operating activities	987	519
Cash flows from investing activities:
Proceeds from sales of marketable securities	726	901
Proceeds from maturities of marketable securities	450	506
Proceeds from sale of long-lived assets and investments	0	6
Purchases of marketable securities	(36)	(1,415)
Purchases of property and equipment and intangible assets	(108)	(87)
Investment in non-affiliates	(16)	(4)
Net cash provided by (used in) investing activities	1,016	(93)
Cash flows from financing activities:
Payments related to repurchases of common stock	(758)	(509)
Repayment of Convertible Notes	(741)	0
Dividends paid	(166)	(124)
Proceeds related to employee stock plans	76	91
Payments related to tax on restricted stock units	(190)	(51)
Other	(2)	(3)
Net cash used in financing activities	(1,781)	(596)
Change in cash and cash equivalents	222	(170)
Cash and cash equivalents at beginning of period	1,766	596
Cash and cash equivalents at end of period	1,988	426
Other non-cash activity:
Assets acquired by assuming related liabilities	$ 32	$ 15

XML

Summary of Significant Accounting Policies

6 Months Ended

Jul. 30, 2017

Accounting Policies [Abstract]

Summary of Significant Accounting Policies

Summary of Significant Accounting Policies

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements were prepared in accordance with accounting principles generally accepted in the United States of America, or U.S. GAAP, for interim financial information and with the instructions to Form 10-Q and Article 10 of Securities and Exchange Commission, or SEC, Regulation S-X. The January 29, 2017 consolidated balance sheet was derived from our audited consolidated financial statements included in our Annual Report on Form 10-K for the fiscal year ended January 29, 2017, as filed with the SEC, but does not include all disclosures required by U.S. GAAP. In the opinion of management, all adjustments, consisting only of normal recurring adjustments except as otherwise noted, considered necessary for a fair statement of results of operations and financial position have been included. The results for the interim periods presented are not necessarily indicative of the results expected for any future period. The following information should be read in conjunction with the audited consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the fiscal year ended January 29, 2017.

Significant Accounting Policies

For a description of significant accounting policies, see Note 1, Organization and Summary of Significant Accounting Policies, of the Notes to the Consolidated Financial Statements included in our Annual Report on Form 10-K for the fiscal year ended January 29, 2017. There have been no material changes to our significant accounting policies since the filing of the Annual Report on Form 10-K.

Fiscal Year

We operate on a 52- or 53-week year, ending on the last Sunday in January. Fiscal years 2018 and 2017 are both 52-week years. The second quarter of fiscal years 2018 and 2017 were both 13-week quarters.

Reclassifications

Certain prior fiscal year balances have been reclassified to conform to the current fiscal year presentation.

Principles of Consolidation

Our condensed consolidated financial statements include the accounts of NVIDIA Corporation and our wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation.

Use of Estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. On an on-going basis, we evaluate our estimates, including those related to revenue recognition, cash equivalents and marketable securities, accounts receivable, inventories, income taxes, goodwill, stock-based compensation, litigation, investigation and settlement costs, restructuring and other charges, and other contingencies. These estimates are based on historical facts and various other assumptions that we believe are reasonable.

Adoption of New and Recently Issued Accounting Pronouncements

Recently Adopted Accounting Pronouncement

In October 2016, the Financial Accounting Standards Board, or FASB, issued an accounting standards update which requires the recognition of income tax consequences of an intra-entity transfer of an asset, other than inventory, when the transfer occurs. We elected to early adopt this new guidance in the first quarter of fiscal year 2018, which required us to reflect any adjustments as of January 30, 2017. Upon adoption of this guidance, we recorded a cumulative-effect adjustment as of the first day of fiscal year 2018 to decrease retained earnings by $28 million, with a corresponding decrease to prepaid taxes that had not been previously recognized in income tax expense.

Recent Accounting Pronouncements Not Yet Adopted

In February 2016, the FASB issued an accounting standards update regarding the accounting for leases by which we will begin recognizing lease assets and liabilities on the balance sheet for leases with a lease term of more than 12 months. The update will require additional disclosures regarding key information about leasing arrangements. Under existing guidance, operating leases are not recorded as lease assets and lease liabilities on the balance sheet. The update will be effective for us beginning in our first quarter of fiscal year 2020, with early adoption permitted. We are currently evaluating the impact of the adoption of this accounting guidance on our consolidated financial statements. However, we expect the adoption of this accounting guidance to result in an increase in lease assets and a corresponding increase in lease liabilities on our Consolidated Balance Sheets.

The FASB issued an accounting standards update that creates a single source of revenue guidance under U.S. GAAP for all companies, in all industries. We expect to adopt this guidance beginning in our first quarter of fiscal year 2019 using the modified retrospective approach. While we are still finalizing our analysis to quantify the adoption impact of the provisions of the new standard, we do not expect it to have a material impact on our consolidated financial statements.

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Stock Based Compensation

6 Months Ended

Jul. 30, 2017

Employee Service Share-based Compensation, Aggregate Disclosures [Abstract]

Stock-Based Compensation

Stock-Based Compensation

Our stock-based compensation expense is associated with stock options, restricted stock units, or RSUs, performance stock units that are based on our corporate financial performance targets, or PSUs, performance stock units that are based on market conditions, or market-based PSUs, and our employee stock purchase plan, or ESPP.

Our Condensed Consolidated Statements of Income include stock-based compensation expense, net of amounts capitalized as inventory, as follows:

	Three Months Ended				Six Months Ended
	July 30, 2017		July 31, 2016		July 30, 2017		July 31, 2016
	(In millions)
Cost of revenue	$	4	$	4	$	8	$	8
Research and development	44		30		85		59
Sales, general and administrative	33		24		65		44
Total	$	81	$	58	$	158	$	111

Equity Award Activity

The following is a summary of equity award transactions under our equity incentive plans:

	RSUs, PSUs, and Market-based PSUs Outstanding				Options Outstanding
	Number of Shares		Weighted Average Grant-Date Fair Value Per Share		Number of Shares		Weighted Average Exercise Price Per Share
	(In millions, except per share data)
Balances, January 29, 2017	27		$	32.84	7		$	14.47
Granted (1) (2)	3		$	106.65	—		$	—
Exercised	—		$	—	(1	)	$	14.51
Vested	(5	)	$	21.06	—		$	—
Balances, July 30, 2017	25		$	42.54	6		$	14.46

(1) Includes PSUs that will be issued and eligible to vest if the corporate financial performance maximum target level for fiscal year 2018 is achieved. Depending on the actual level of achievement of the corporate performance target at the end of fiscal year 2018, the PSUs issued could be up to 0.6 million shares.

(2) Includes market-based PSUs that will be issued and eligible to vest if the maximum target for total shareholder return, or TSR, over the 3-year measurement period is achieved. Depending on the ranking of our TSR compared to the respective TSRs of the companies comprising the Standard & Poor’s 500 Index during a 3-year measurement period, the market-based PSUs issued could be up to 0.1 million shares.

Of the total fair value of equity awards granted during the second quarter and first half offiscal year 2018, we estimated that the stock-based compensation expense related to equity awards that are not expected to vest was $10 million and $39 million, respectively. Of the total fair value of equity awards granted during the second quarter and first half offiscal year 2017, we estimated that the stock-based compensation expense related to equity awards that are not expected to vest was $5 million and $17 million, respectively.

The following summarizes the aggregate unearned stock-based compensation expense and estimated weighted average amortization period as of July 30, 2017 and January 29, 2017:

	July 30,		January 29,
	2017		2017
	(In millions)
Aggregate unearned stock-based compensation expense	$	697	$	627
Estimated weighted average remaining amortization period	(In years)
Stock options	0.1		0.5
RSUs, PSUs, and market-based PSUs	2.4		2.6
ESPP	0.6		0.6

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Net Income Per Share

6 Months Ended

Jul. 30, 2017

Notes to financial statements [Abstract]

Net Income Per Share

Net Income Per Share

The following is a reconciliation of the denominator of the basic and diluted net income per share computations for the periods presented:

	Three Months Ended				Six Months Ended
	July 30,		July 31,		July 30,		July 31,
	2017		2016		2017		2016
	(In millions, except per share data)
Numerator:
Net income	$	583	$	261	$	1,091	$	469
Denominator:
Basic weighted average shares	597		534		595		536
Dilutive impact of outstanding securities:
Equity awards	26		26		26		23
1% Convertible Senior Notes	4		43		9		37
Warrants issued with the 1% Convertible Senior Notes	6		31		7		24
Diluted weighted average shares	633		634		637		620
Net income per share:
Basic (1)	$	0.98	$	0.49	$	1.83	$	0.88
Diluted (2)	$	0.92	$	0.41	$	1.71	$	0.76
Equity awards excluded from diluted net income per share because their effect would have been anti-dilutive	—		—		1		2

(1) Calculated as net income divided by basic weighted average shares.

(2) Calculated as net income divided by diluted weighted average shares.

The 1.00% Convertible Senior Notes, or the Convertible Notes, are included in the calculation of diluted net income per share. The Convertible Notes have a dilutive impact on net income per share if our average stock price for the reporting period exceeds the adjusted conversion price of $20.0480 per share. The warrants associated with our Convertible Notes, or the Warrants, outstanding are also included in the calculation of diluted net income per share. The Warrants have a dilutive impact on net income per share if our average stock price for the quarter exceeds the adjusted strike price of $26.9876 per share. All outstanding Warrants were terminated during the second quarter of fiscal year 2018.

For the second quarter and first half offiscal year 2018, our average stock price was $144.57 and $124.89, respectively, which exceeded both the adjusted conversion price and the adjusted strike price, causing the Convertible Notes and the Warrants to have a dilutive impact for these periods.

The denominator for diluted net income per share does not include any effect from the convertible note hedge transactions, or the Note Hedges, that we entered into concurrently with the issuance of the Convertible Notes, as this effect would be anti-dilutive. In the event of conversion of the Convertible Notes, the shares delivered to us under the Note Hedges will offset the dilutive effect of the shares that we would issue under the Convertible Notes.

In the fourth quarter of fiscal year 2017, we entered into an agreement to terminate 63 million Warrants and, in consideration, we delivered a total of 48 million shares of common stock to the counterparty bank. In the second quarter of fiscal year 2018, we entered into a second agreement to terminate the remaining 12 million Warrants outstanding and, in consideration, we delivered a total of 10 million shares of common stock to the counterparty bank.

Please refer to Note 11 of these Notes to Condensed Consolidated Financial Statements for additional discussion regarding the Convertible Notes, Note Hedges, and Warrants.

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Income Taxes

6 Months Ended

Jul. 30, 2017

Notes to financial statements [Abstract]

Income Taxes

Income Taxes

We recognized income tax expense of $101 million and $130 million for the second quarter and first half offiscal year 2018, respectively, and $56 million and $89 million for the second quarter and first half offiscal year 2017, respectively. Income tax expense as a percentage of income before income tax for the second quarter and first half offiscal year 2018 was 14.8% and 10.7%, respectively, and 17.6% and 15.9% for the second quarter and first half offiscal year 2017, respectively.

The decrease in our effective tax rate for the second quarter and first half offiscal year 2018 as compared to the same periods in the prior fiscal year primarily reflects the recognition of tax benefits related to stock-based compensation and a proportional decrease in the amount of earnings subject to United States tax.

Our effective tax rates for the first half of fiscal years 2018 and 2017 of 10.7% and 15.9%, respectively, were lower than the U.S. federal statutory rate of 35% due primarily to income earned in jurisdictions where the tax rate is lower than the U.S. federal statutory tax rate, tax benefits related to stock-based compensation, and the benefit of the U.S. federal research tax credit.

For the first half of fiscal year 2018, there have been no material changes to our tax years that remain subject to examination by major tax jurisdictions. Additionally, there have been no material changes to our unrecognized tax benefits and any related interest or penalties since the fiscal year ended January 29, 2017.

While we believe that we have adequately provided for all uncertain tax positions, or tax positions where we believe it is not more-likely-than-not that the position will be sustained upon review, amounts asserted by tax authorities could be greater or less than our accrued position. Accordingly, our provisions on federal, state and foreign tax related matters to be recorded in the future may change as revised estimates are made or the underlying matters are settled or otherwise resolved with the respective tax authorities. As of July 30, 2017, we do not believe that our estimates, as otherwise provided for, on such tax positions will significantly increase or decrease within the next twelve months.

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Marketable Securities

6 Months Ended

Jul. 30, 2017

Notes to financial statements [Abstract]

Marketable Securities

Marketable Securities

All of our cash equivalents and marketable securities are classified as “available-for-sale” securities. These securities are reported at fair value with the related unrealized gains and losses included in accumulated other comprehensive income (loss), a component of shareholders’ equity, net of tax, and net realized gains and losses recorded in total other income (expense) on the Condensed Consolidated Statements of Income.

We performed an impairment review of our investment portfolio as of July 30, 2017. Based on our quarterly impairment review, we concluded that our investments were appropriately valued and that no other-than-temporary impairment charges were necessary on our portfolio of available-for-sale investments as of July 30, 2017.

The following is a summary of cash equivalents and marketable securities as of July 30, 2017 and January 29, 2017:

	July 30, 2017
	Amortized Cost		Unrealized Gain		Unrealized Loss			Estimated Fair Value		Reported as
										Cash Equivalents		Marketable Securities
	(In millions)
Corporate debt securities	$	1,664	$	1	$	(5	)	$	1,660	$	—	$	1,660
Debt securities of United States government agencies	1,030		—		(4		)	1,026		—		1,026
Debt securities issued by the United States Treasury	658		—		(2		)	656		—		656
Asset-backed securities	330		—		(1		)	329		—		329
Mortgage-backed securities issued by United States government-sponsored enterprises	153		2		(1		)	154		—		154
Foreign government bonds	64		—		—			64		—		64
Money market funds	1,663		—		—			1,663		1,663		—
Total	$	5,562	$	3	$	(13	)	$	5,552	$	1,663	$	3,889

	January 29, 2017
	Amortized Cost		Unrealized Gain		Unrealized Loss			Estimated Fair Value		Reported as
										Cash Equivalents		Marketable Securities
	(In millions)
Corporate debt securities	$	2,397	$	1	$	(10	)	$	2,388	$	33	$	2,355
Debt securities of United States government agencies	1,193		—		(5		)	1,188		27		1,161
Debt securities issued by the United States Treasury	852		—		(2		)	850		55		795
Asset-backed securities	490		—		(1		)	489		—		489
Mortgage-backed securities issued by United States government-sponsored enterprises	161		2		(1		)	162		—		162
Foreign government bonds	70		—		—			70		—		70
Money market funds	321		—		—			321		321		—
Total	$	5,484	$	3	$	(19	)	$	5,468	$	436	$	5,032

The following table provides the breakdown of unrealized losses as of July 30, 2017, aggregated by investment category and length of time that individual securities have been in a continuous loss position: 

	Less than 12 Months					12 Months or Greater					Total
	Estimated Fair Value		Gross Unrealized Losses			Estimated Fair Value		Gross Unrealized Losses			Estimated Fair Value		Gross Unrealized Losses
	(In millions)
Corporate debt securities	$	1,243	$	(4	)	$	86	$	(1	)	$	1,329	$	(5	)
Debt securities issued by United States government agencies	881		(3		)	100		(1		)	981		(4		)
Debt securities issued by the United States Treasury	645		(2		)	—		—			645		(2		)
Asset-backed securities	304		(1		)	—		—			304		(1		)
Mortgage-backed securities issued by United States government-sponsored enterprises	40		—			36		(1		)	76		(1		)
	$	3,113	$	(10	)	$	222	$	(3	)	$	3,335	$	(13	)

The gross unrealized losses related to fixed income securities were due to changes in interest rates. We have determined that the gross unrealized losses on investment securities as of July 30, 2017 are temporary in nature. Currently, we have the intent and ability to hold our investments with impairment indicators until maturity. Net realized gains and losses were not significant for the second quarter and first half of fiscal years 2018 and 2017.

The amortized cost and estimated fair value of cash equivalents and marketable securities, which are primarily debt instruments, are classified as available-for-sale as of July 30, 2017 and January 29, 2017 and are shown below by contractual maturity:  

	July 30, 2017				January 29, 2017
	Amortized Cost		Estimated Fair Value		Amortized Cost		Estimated Fair Value
	(In millions)
Less than 1 year	$	3,086	$	3,085	$	2,209	$	2,209
Due in 1 - 5 years	2,423		2,414		3,210		3,194
Mortgage-backed securities issued by United States government-sponsored enterprises not due at a single maturity date	53		53		65		65
Total	$	5,562	$	5,552	$	5,484	$	5,468

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Fair Value of Financial Assets and Liabilities

6 Months Ended

Jul. 30, 2017

Notes to financial statements [Abstract]

Fair Value of Financial Assets and Liabilities

Fair Value of Financial Assets and Liabilities

The fair values of our financial assets and liabilities are determined using quoted market prices of identical assets or quoted market prices of similar assets from active markets. We review the fair value hierarchy classification on a quarterly basis. There were no significant transfers between Levels 1 and 2 assets for the second quarter of fiscal year 2018. We did not have any investments classified as Level 3 as of July 30, 2017.

		Fair Value at
	Pricing Category	July 30, 2017		January 29, 2017
		(In millions)
Assets
Cash equivalents and marketable securities:
Corporate debt securities	Level 2	$	1,660	$	2,388
Debt securities of United States government agencies	Level 2	$	1,026	$	1,188
Debt securities issued by the United States Treasury	Level 2	$	656	$	850
Asset-backed securities	Level 2	$	329	$	489
Mortgage-backed securities issued by United States government-sponsored enterprises	Level 2	$	154	$	162
Foreign government bonds	Level 2	$	64	$	70
Money market funds	Level 1	$	1,663	$	321
Liabilities
Current liability:
1.00% Convertible Senior Notes (1)	Level 2	$	693	$	4,474
Other noncurrent liabilities:
2.20% Notes Due 2021 (1)	Level 2	$	996	$	975
3.20% Notes Due 2026 (1)	Level 2	$	1,000	$	961
Interest rate swap (2)	Level 2	$	5	$	2

(1) The remaining 1.00% Convertible Notes, 2.20% Notes Due 2021, and 3.20% Notes Due 2026 are carried on our Condensed Consolidated Balance Sheets at their original issuance value, net of unamortized debt discount and issuance costs, and are not marked to fair value each period. See Note 11 of these Notes to Condensed Consolidated Financial Statements for additional information.

(2) Please refer to Note 9 of these Notes to Condensed Consolidated Financial Statements for a discussion regarding our interest rate swap.

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Intangible Assets

6 Months Ended

Jul. 30, 2017

Notes to financial statements [Abstract]

Intangible Assets

Amortizable Intangible Assets

The components of our amortizable intangible assets are as follows:

	July 30, 2017							January 29, 2017
	Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount
	(In millions)
Acquisition-related intangible assets	$	193	$	(175	)	$	18	$	193	$	(167	)	$	26
Patents and licensed technology	469		(411		)	58		468		(390		)	78
Total intangible assets	$	662	$	(586	)	$	76	$	661	$	(557	)	$	104

Amortization expense associated with intangible assets was $14 million and $29 million for the second quarter and first half offiscal year 2018, respectively, and $18 million and $35 million for the second quarter and first half offiscal year 2017, respectively. Future amortization expense related to the net carrying amount of intangible assets as of July 30, 2017 is estimated to be $25 million for the remainder of fiscal year 2018, $26 million in fiscal year 2019, $16 million in fiscal year 2020, $8 million in fiscal year 2021, and $1 million in fiscal year 2022 and beyond.

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Balance Sheet Components

6 Months Ended

Jul. 30, 2017

Notes to financial statements [Abstract]

Balance Sheet Components

Balance Sheet Components

Certain balance sheet components are as follows:

	July 30,		January 29,
	2017		2017
Inventories:	(In millions)
Raw materials	$	294	$	252
Work in-process	209		176
Finished goods	352		366
Total inventories	$	855	$	794

As of July 30, 2017, we had outstanding inventory purchase obligations totaling $1.04 billion.

	July 30,		January 29,
	2017		2017
Accrued and Other Current Liabilities:	(In millions)
Customer related liabilities (1)	$	218	$	197
Accrued payroll and related expenses	120		137
Deferred revenue (2)	74		85
Coupon interest on debt obligations	20		21
Professional service fees	15		13
Warranty accrual (3)	14		8
Taxes payable	12		4
Accrued royalties	11		7
Accrued restructuring and other charges (4)	10		13
Leases payable	5		4
Contributions payable	4		4
Other	14		14
Total accrued and other current liabilities	$	517	$	507

(1) Customer related liabilities include accrued customer programs, such as rebates and marketing development funds.

(2) Deferred revenue primarily includes customer advances and deferrals related to license and service arrangements.

(3) Please refer to Note 10 of these Notes to Condensed Consolidated Financial Statements for a discussion regarding warranties.

(4) Please refer to Note 15 of these Notes to Condensed Consolidated Financial Statements for a discussion regarding restructuring and other charges.

	July 30,		January 29,
	2017		2017
Other Long-Term Liabilities:	(In millions)
Deferred income tax liability	$	252	$	141
Income tax payable	105		96
Contributions payable	12		9
Employee benefits liability	11		10
Deferred rent	8		6
Licenses payable	7		1
Deferred revenue	6		4
Other	7		4
Total other long-term liabilities	$	408	$	271

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Derivative Financial Instrument

6 Months Ended

Jul. 30, 2017

Summary of Derivative Instruments [Abstract]

Derivative Instruments and Hedging Activities Disclosure

Derivative Financial Instruments

In fiscal year 2016, we entered into an interest rate swap for a portion of the operating lease financing arrangement for our new headquarters building that entitles us to pay amounts based on a fixed interest rate in exchange for receipt of amounts based on variable interest rates. The objective of this interest rate swap is to mitigate variability in the benchmark interest rate on the first $200 million of existing operating lease financing payments. This interest rate swap is designated as a cash flow hedge, will have settlements beginning in the second quarter of fiscal year 2019, and will terminate in the fourth quarter of fiscal year 2023. Gains or losses on this swap are recorded in accumulated other comprehensive income (loss) and will subsequently be recorded in earnings at the point when the related operating lease financing expense begins to affect earnings or if ineffectiveness of the swap should occur.

We enter into foreign currency forward contracts to mitigate the impact of foreign currency exchange rate movements on our operating expenses. We designate these contracts as cash flow hedges and assess the effectiveness of the hedge relationships on a spot to spot basis. Gains or losses on the contracts are recorded in accumulated other comprehensive income (loss) and reclassified to operating expense when the related operating expenses are recognized in earnings or ineffectiveness should occur. The fair value of the contracts as of July 30, 2017 was not significant.

We also enter into foreign currency forward contracts to mitigate the impact of foreign currency movements on monetary assets and liabilities that are denominated in currencies other than our reporting currency. These foreign currency forward contracts were not designated for hedge accounting treatment. Therefore, the change in fair value of these contracts is recorded as a component of total other income (expense) and offsets the change in fair value of the foreign currency denominated monetary assets and liabilities, which is also recorded in total other income (expense).

The table below presents the notional value of our foreign currency forward contracts:

	Three Months Ended				Six Months Ended
	July 30, 2017		July 31, 2016		July 30, 2017		July 31, 2016
	(In millions)
Designated as cash flow hedges	$	89	$	61	$	163	$	96
Not designated for hedge accounting	$	69	$	13	$	120	$	13

Under the master netting agreements with the respective counterparties to our foreign currency forward contracts, we are allowed to net settle transactions with the same counterparty, subject to applicable requirements. However, we present our derivative assets and liabilities at their gross fair values on our Condensed Consolidated Balance Sheets. We are not required to pledge, and are not entitled to receive, cash collateral related to these derivative instruments.

As of July 30, 2017, the maturities of the designated foreign currency forward contracts were three months or less. We expect to realize all gains and losses deferred into accumulated other comprehensive income (loss) related to foreign currency forward contracts within the next twelve months.

We formally assess, both at inception and on an ongoing basis, whether derivative financial instruments designated for hedge accounting treatment are highly effective. For the second quarter and first half of fiscal years 2018 and 2017, all derivative financial instruments designated for hedge accounting treatment were determined to be highly effective and there were no gains or losses associated with ineffectiveness.

The net change in unrealized gains (losses) on derivative financial instruments designated for hedge accounting treatment was not significant for the second quarter and first half of fiscal years 2018 and 2017.

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Guarantees

6 Months Ended

Jul. 30, 2017

Notes to financial statements [Abstract]

Guarantees

Guarantees

U.S. GAAP requires that upon issuance of a guarantee, the guarantor must recognize a liability for the fair value of the obligation it assumes under that guarantee. In addition, U.S. GAAP requires disclosures about the guarantees that an entity has issued, including a tabular reconciliation of the changes of the entity’s product warranty liabilities.

Accrual for Product Warranty Liabilities

We record a reduction to revenue for estimated product returns at the time revenue is recognized primarily based on historical return rates. Cost of revenue includes the estimated cost of product warranties. Under limited circumstances, we may offer an extended limited warranty to customers for certain products. Additionally, we accrue for known warranty and indemnification issues if a loss is probable and can be reasonably estimated.

The estimated product returns and estimated product warranty liabilities as of July 30, 2017 and January 29, 2017 were as follows: 

	July 30,			January 29,
	2017			2017
	(In millions)
Balance at beginning of period	$	8		$	11
Additions	8			2
Deductions	(2		)	(5		)
Balance at end of period	$	14		$	8

In connection with certain agreements that we have entered into in the past, we have provided indemnities to cover the indemnified party for matters such as tax, product, and employee liabilities. We have included intellectual property indemnification provisions in our technology related agreements with third parties. Maximum potential future payments cannot be estimated because many of these agreements do not have a maximum stated liability. We have not recorded any liability in our Condensed Consolidated Financial Statements for such indemnifications.

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Debt

6 Months Ended

Jul. 30, 2017

Debt Disclosure [Abstract]

Debt Disclosure

Debt

Convertible Debt

1.00% Convertible Senior Notes Due 2018

During the second quarter of fiscalyear 2018, we paid cash to settle an aggregate of $136 million in principal amount of the Convertible Notes and had $86 million in principal amount outstanding as of July 30, 2017. We also issued 5 million shares of our common stock for the excess conversion value and recognized a loss of $3 million on early conversions of the Convertible Notes. Based on the closing price of our common stock of $164.39 on the last trading day of the second quarter of fiscalyear 2018, the if-converted value of the remaining outstanding Convertible Notes as of July 30, 2017 exceeded their principal amount by approximately $619 million. As of July 30, 2017, the conversion rate was 49.8804 shares of common stock per $1,000 principal amount of the Convertible Notes after adjusting for dividend increases (equivalent to an adjusted conversion price of $20.0480 per share of common stock).

Through the second quarter of fiscalyear 2018, we settled an aggregate of $1.41 billion in principal amount of the Convertible Notes. Subsequently, we received additional conversion notices for an aggregate of $62 million in principal amount of the Convertible Notes. Settlements of these conversion requests are expected to be completed in the third quarter of fiscal year 2018. The actual number of shares issuable upon conversion will be determined based upon the terms of the Convertible Notes, and we expect to receive an equal number of shares of our common stock under the terms of the Note Hedges.

Holders may convert all or any portion of their Convertible Notes at their option at any time prior to August 1, 2018 under certain circumstances. For example, during any fiscal quarter, if the last reported sale price of the common stock for at least 20 trading days during a period of 30 consecutive trading days ending on the last trading day of the immediately preceding fiscal quarter is greater than or equal to 130% of the conversion price on each applicable trading day, the Convertible Notes become convertible at the holders' option. As this condition was met, the Convertible Notes first became convertible at the holders' option beginning on the first day of fiscal year 2017 and continue to be convertible at the holders’ option through October 29, 2017.

We separately accounted for the liability and equity components of the Convertible Notes at issuance, since our conversion obligation in excess of the aggregate principal could be fully or partially settled in cash. The liability component was assigned by estimating the fair value of a similar debt without the conversion feature. The difference between the net cash proceeds and the liability component was assigned as the equity component. The initial liability component of the Convertible Notes was valued at $1.35 billion and the initial carrying value of the equity component recorded in additional paid-in-capital was valued at $126 million. This equity component, together with the $23 million purchaser's discount to the par value of the Convertible Notes, represented the initial aggregate unamortized debt discount of $148 million. The debt discount is amortized as interest expense over the contractual term of the Convertible Notes using the effective interest method and an interest rate of 3.15%.

As of July 30, 2017, the carrying value of the Convertible Notes was classified as a current liability and the difference between the principal amount and the carrying value of the Convertible Notes was classified as convertible debt conversion obligation in the mezzanine equity section of our Condensed Consolidated Balance Sheet.

The following table presents the carrying value of the Convertible Notes:

	July 30,			January 29,
	2017			2017
	(In millions)
1.00% Convertible Senior Notes	$	86		$	827
Unamortized debt discount (1)	(2		)	(31		)
Net carrying amount	$	84		$	796

(1) As of July 30, 2017, the remaining period over which the unamortized debt discount will be amortized is 1.3 years.

The following table presents interest expense for the contractual interest and the accretion of debt discount and issuance costs related to the Convertible Notes:

	Three Months Ended				Six Months Ended
	July 30,		July 31,		July 30,		July 31,
	2017		2016		2017		2016
	(In millions)
Contractual coupon interest expense	$	—	$	4	$	—	$	8
Amortization of debt discount	1		7		2		14
Total interest expense related to Convertible Notes	$	1	$	11	$	2	$	22

Note Hedges and Warrants

Concurrently with the issuance of the Convertible Notes, we entered into the Note Hedges. The Note Hedges have an adjusted strike price of $20.0480 per share and allow us to receive shares of our common stock and/or cash related to the excess conversion value that we would deliver and/or pay, respectively, to the holders of the Convertible Notes upon conversion. During the second quarter of fiscalyear 2018, we had received 5 million shares of our common stock from the exercise of a portion of the Note Hedges related to the settlement of $136 million in principal amount of the Convertible Notes. Subsequently, we expect to receive additional shares of our common stock related to at least an additional $62 million in principal amount that is expected to settle during the third quarter of fiscal year 2018.

In addition, concurrent with the offering of the Convertible Notes and the purchase of the Note Hedges, we entered into a separate warrant transaction.

In the fourth quarter of fiscal year 2017, we entered into an agreement to terminate  63 million Warrants and, in consideration, we delivered a total of 48 million shares of common stock to the counterparty bank. In the second quarter of fiscal year 2018, we entered into a second agreement to terminate the remaining 12 million Warrants outstanding and, in consideration, we delivered a total of 10 million shares of common stock to the counterparty bank.

Long-Term Debt

2.20% Notes Due 2021 and 3.20% Notes Due 2026

In the third quarter of fiscal year 2017, we issued $1.00 billion of the 2.20% Notes Due 2021, and $1.00 billion of the 3.20% Notes Due 2026 (collectively, the Notes). Interest on the Notes is payable in March and September of each year, beginning in March 2017. Upon 30 days' notice to holders of the Notes, we may redeem the Notes for cash prior to maturity, at redemption prices that include accrued and unpaid interest, if any, and a make-whole premium. However, no make-whole premium will be paid for redemptions of the Notes Due 2021 on or after August 2021, or for redemptions of the Notes Due 2026 on or after June 2026. The net proceeds from the Notes were $1.98 billion, after deducting debt discount and issuance costs.

The Notes are our unsecured senior obligations and rank equally in right of payment with all of our existing and future unsecured and unsubordinated indebtedness. The Notes are structurally subordinated to the liabilities of our subsidiaries and are effectively subordinated to any secured indebtedness to the extent of the value of the assets securing such indebtedness. All existing and future liabilities of our subsidiaries will be effectively senior to the Notes.

The carrying value of our long-term debt and the associated interest rates were as follows:

	Expected Remaining Term (years)	Effective Interest Rate	July 30, 2017			January 29, 2017
			(In millions)
2.20% Notes Due 2021	4.1	2.38%	$	1,000		$	1,000
3.20% Notes Due 2026	9.1	3.31%	1,000			1,000
Unamortized debt discount and issuance costs			(16		)	(17		)
Net carrying amount			$	1,984		$	1,983

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Commitments and Contingencies

6 Months Ended

Jul. 30, 2017

Notes to financial statements [Abstract]

Commitments and Contingencies

Commitments and Contingencies

Operating Lease Financing Arrangement

In fiscal year 2016, we began to construct a new headquarters building in Santa Clara, California, which is currently targeted for completion in the third quarter of fiscal year 2018. We are financing this construction under an off-balance sheet, build-to-suit operating lease arrangement. As a part of this arrangement, we leased the real property we own where the building will be constructed under a 99 year ground lease to a syndicate of banks and concurrently leased back the building under a real property lease.

Under the real property lease, we pay rent, taxes, maintenance costs, utilities, insurance and other property related costs. The lease has an initial 7.5 year term expiring in December 2022, consisting of an approximately 2.5 year construction period followed by a 5 year lease term. We have the option to renew this lease for up to three additional 5 year periods, subject to approval by the banks.

We have been overseeing the construction of the headquarters building. The banks committed to fund up to $380 million of costs relating to construction. Advances have been made periodically to reimburse us for construction costs we incur. Once construction is complete, the lease balance will remain static at the completed cost for the remaining duration of the lease term. During construction, accrued interest is capitalized into the lease balance. Following construction, we will pay rent in the form of interest. We have guaranteed the obligations under the lease held by our subsidiary.

During the term of the lease, we may elect to purchase the headquarters building for the amount of the banks’ investment in the building and any accrued but unpaid rent. At the end of the lease term, we may elect to buy the building for the outstanding balance on the maturity date or arrange for the cash sale of the building to an unaffiliated third party. The aggregate guarantee made by us under the lease is no more than 87.5% of the costs incurred in connection with the construction of the building. However, under certain default circumstances, the lease guarantee may be 100% of the banks’ investment in the building plus any and all accrued but unpaid interest and all other rent due and payable under the operative agreements.

The operative agreements are subject to customary default provisions, including, for example, those relating to payment and performance defaults, and events of bankruptcy. We are also subject to the financial covenant to maintain a maximum total leverage ratio not to exceed 3.5 to 1.0. If certain events of default occur and are continuing under the operative agreements, the banks may accelerate repayment of their investment under the lease.

Litigation

Polaris Innovations Limited

On May 16, 2016, Polaris Innovations Limited, or Polaris, a non-practicing entity and wholly-owned subsidiary of Quarterhill Inc. (formerly WiLAN Inc.), filed a complaint in the United States District Court for the Western District of Texas alleging that NVIDIA has infringed and is continuing to infringe six U.S. patents relating to the control of dynamic random-access memory (DRAM). The complaint seeks unspecified monetary damages, enhanced damages, interest, fees, expenses, and costs against NVIDIA. On September 14, 2016, NVIDIA answered the Polaris Complaint and asserted various defenses including non-infringement and invalidity of the six Polaris patents.

On December 5, 2016, the Texas Court granted NVIDIA’s motion to transfer and ordered the case transferred to the Northern District of California. The California Court has not set a trial date.

On December 7, 2016, NVIDIA filed a petition for inter partes review with the United States Patent and Trademark Office (USPTO) challenging the validity of U.S. Patent No. 7,886,122, which is asserted by Polaris in that California district court litigation. On December 19, 2016, NVIDIA filed an inter partes review request with the USPTO challenging the validity of U.S. Patent No. 7,124,325, another patent asserted by Polaris. On May 5, 2017, NVIDIA filed an inter partes review request with the USPTO challenging the validity of U.S. Patent No. 8,161,344, another patent asserted by Polaris. On May 30, 2017, NVIDIA filed an inter partes review request with the USPTO challenging the validity of U.S. Patent No. 6,532,505, another patent asserted by Polaris. On June 22, 2017, the USPTO instituted inter partes review of U.S Patent No. 7,886,122. On June 23, 2017, the USPTO denied institution of inter partes review of U.S. Patent No. 7,124,325. On July 25, 2017, NVIDIA filed inter partes requests with the USPTO challenging the validity of U.S. Patent No. 8,207,976, another patent asserted by Polaris. Also on July 25, 2017, NVIDIA filed inter partes requests with the USPTO for U.S. Patent No. 8,161,344 challenging the validity of further claims and an additional inter partes request for U.S. Patent No. 7,124,325. All of the patents that Polaris has asserted in the U.S. litigation are now subject to requests for inter partes review, with institution decisions forthcoming.

On May 9, 2017, NVIDIA filed a Motion to Stay the California action pending final resolution of the inter partes review of U.S. Patents Nos. 7,886,122; 7,124,325; and 8,161,344. On June 15, 2017, the Motion to Stay was granted. The action has now been stayed until December 14, 2017 pending the institution of the inter partes review of these patents.

On December 30, 2016, NVIDIA received notice that Polaris had filed a complaint for patent infringement in Germany. The German case alleges infringement of European Patent No. EP1428225 and German Patent Nos. DE 10223167 and DE 1020066043668. On July 14, 2017, NVIDIA filed defenses to the infringement allegations including non-infringement with respect to each of the three asserted patents. An oral hearing has been scheduled for February 21, 2019.

On March 31, 2017, the German Patent Court acknowledged receipt of nullity actions filed by NVIDIA challenging the validity of EP1428225 and DE 1020066043668. On June 12, 2017, NVIDIA was notified that the nullity actions against EP1428225 and DE 1020066043668 were served on Polaris and that Polaris has filed a formal response opposing each nullity complaint. On July 14, 2017, the German Patent Court acknowledged receipt of a nullity action filed by NVIDIA challenging the validity of DE 10223167. Polaris has not yet responded to this action.

Accounting for Loss Contingencies

While there can be no assurance of favorable outcomes, we believe the claims made by the other party in the above ongoing matters are without merit and we intend to vigorously defend the actions. As of July 30, 2017, we have not recorded any accrual for contingent liabilities associated with the legal proceedings described above based on our belief that liabilities, while possible, are not probable. Further, any possible range of loss in these matters cannot be reasonably estimated at this time. We are engaged in other legal actions not described above arising in the ordinary course of its business and, while there can be no assurance of favorable outcomes, we believe that the ultimate outcome of these actions will not have a material adverse effect on our operating results, liquidity or financial position.

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Shareholders' Equity

6 Months Ended

Jul. 30, 2017

Notes to financial statements [Abstract]

Stockholders' Equity

Shareholders’ Equity

Capital Return Program

Beginning August 2004, our Board of Directors authorized us, subject to certain specifications, to repurchase shares of our common stock.

During the second quarter and first half offiscal year 2018, we repurchased a total of 5 million shares for $758 million and made cash dividend payments to our shareholders of $84 million and $166 million, respectively.

Through July 30, 2017, we have repurchased an aggregate of 250 million shares under our share repurchase program for a total cost of $5.35 billion since the inception of the program. All shares delivered from these repurchases have been placed into treasury stock. As of July 30, 2017, we were authorized, subject to certain specifications, to repurchase additional shares of our common stock up to $1.97 billion through December 2020.

Convertible Preferred Stock

As of July 30, 2017 and January 29, 2017, there were no shares of preferred stock outstanding.

Common Stock

We are authorized to issue up to 2.00 billion shares of our common stock at $0.001 per share par value.

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Segment Information

6 Months Ended

Jul. 30, 2017

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.

We report our business in two primary reportable segments - the GPU business and the Tegra Processor business - based on a single underlying graphics architecture.

Our GPU product brands are aimed at specialized markets including GeForce for gamers; Quadro for designers; Tesla and DGX for AI data scientists and big data researchers; and GRID for cloud-based visual computing users. Our Tegra brand integrates an entire computer onto a single chip, and incorporates GPUs and multi-core CPUs to drive supercomputing for mobile gaming and entertainment devices, as well as autonomous robots, drones and cars.

We have a single unifying architecture for our GPU and Tegra Processors. This architecture unification leverages our visual computing expertise by charging the operating expenses of certain core engineering functions to the GPU business, while charging the Tegra Processor business for the incremental cost of the teams working directly for that business. In instances where the operating expenses of certain functions benefit both reportable segments, our CODM assigns 100% of those expenses to the reportable segment that benefits the most.

The “All Other” category presented below represents the revenue and expenses that our CODM does not assign to either the GPU business or the Tegra Processor business for purposes of making operating decisions or assessing financial performance. The revenue includes primarily patent licensing revenue and the expenses include stock-based compensation expense, unallocated cost of revenue and operating expenses, acquisition-related costs, restructuring and other charges, contributions, legal settlement costs, and other non-recurring charges and benefits that our CODM deems to be enterprise in nature.

Our CODM does not review any information regarding total assets on a reportable segment basis. Reportable 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. The table below presents details of our reportable segments and the “All Other” category.

	GPU		Tegra Processor			All Other			Consolidated
	(In millions)
Three Months Ended July 30, 2017
Revenue	$	1,897	$	333		$	—		$	2,230
Depreciation and amortization expense	$	29	$	9		$	11		$	49
Operating income (loss)	$	761	$	71		$	(144	)	$	688
Three Months Ended July 31, 2016
Revenue	$	1,196	$	166		$	66		$	1,428
Depreciation and amortization expense	$	29	$	7		$	11		$	47
Operating income (loss)	$	379	$	(14	)	$	(48	)	$	317
Six Months Ended July 30, 2017
Revenue	$	3,459	$	665		$	43		$	4,167
Depreciation and amortization expense	$	57	$	18		$	21		$	96
Operating income (loss)	$	1,363	$	118		$	(239	)	$	1,242
Six Months Ended July 31, 2016
Revenue	$	2,275	$	326		$	132		$	2,733
Depreciation and amortization expense	$	57	$	14		$	21		$	92
Operating income (loss)	$	727	$	(52	)	$	(114	)	$	561

	Three Months Ended						Six Months Ended
	July 30, 2017			July 31, 2016			July 30, 2017			July 31, 2016
	(In millions)
Reconciling items included in "All Other" category:
Unallocated revenue	$	—		$	66		$	43		$	132
Stock-based compensation expense	(81		)	(58		)	(158		)	(111		)
Unallocated cost of revenue and operating expenses	(59		)	(49		)	(114		)	(104		)
Acquisition-related costs	(4		)	(4		)	(8		)	(8		)
Restructuring and other charges	—			(2		)	—			(3		)
Contributions	—			(1		)	(2		)	(4		)
Legal settlement costs	—			—			—			(16		)
Total	$	(144	)	$	(48	)	$	(239	)	$	(114	)

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 table summarizes information pertaining to our revenue from customers based on the invoicing address by geographic regions:

	Three Months Ended				Six Months Ended
	July 30,		July 31,		July 30,		July 31,
	2017		2016		2017		2016
	(In millions)
Revenue:
Taiwan	$	674	$	505	$	1,277	$	949
China	481		256		810		504
Other Asia Pacific	420		191		797		351
United States	278		206		631		400
Other Americas	199		103		292		206
Europe	178		167		360		323
Total revenue	$	2,230	$	1,428	$	4,167	$	2,733

The following table summarizes information pertaining to our revenue by each of the specialized markets we serve:

	Three Months Ended				Six Months Ended
	July 30,		July 31,		July 30,		July 31,
	2017		2016		2017		2016
	(In millions)
Revenue:
Gaming	$	1,186	$	781	$	2,213	$	1,468
Professional Visualization	235		214		440		403
Datacenter	416		151		825		294
Automotive	142		119		282		232
OEM & IP	251		163		407		336
Total revenue	$	2,230	$	1,428	$	4,167	$	2,733

Accounts receivable from significant customers, those representing 10% or more of total accounts receivable for the respective periods, is summarized as follows: 

	July 30,		January 29,
	2017		2017
Accounts Receivable:
Customer A	14	%	19	%

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Restructuring and Other Charges

6 Months Ended

Jul. 30, 2017

Restructuring and Other Charges [Abstract]

Restructuring and Related Activities Disclosure [Text Block]

Restructuring and Other Charges

In fiscal year 2016, we began the wind-down of our Icera operations. No restructuring charges were recorded during the second quarter and first half offiscal year 2018.

The following table provides a summary of the restructuring activities and related liabilities recorded in accrued liabilities on our Condensed Consolidated Balance Sheets as of July 30, 2017 and January 29, 2017:

	July 30,			January 29,
	2017			2017
	(In millions)
Balance at beginning of period	$	13		$	23
Restructuring and other charges	—			3
Cash payments	(3		)	(13		)
Balance at end of period	$	10		$	13

The majority of the remaining balance of $10 million as of July 30, 2017 is expected to be paid during the next twelve months.

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Summary of Significant Accounting Policies (Policies)

6 Months Ended

Jul. 30, 2017

Accounting Policies [Abstract]

Basis of Presentation and Significant Accounting Policies

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements were prepared in accordance with accounting principles generally accepted in the United States of America, or U.S. GAAP, for interim financial information and with the instructions to Form 10-Q and Article 10 of Securities and Exchange Commission, or SEC, Regulation S-X. The January 29, 2017 consolidated balance sheet was derived from our audited consolidated financial statements included in our Annual Report on Form 10-K for the fiscal year ended January 29, 2017, as filed with the SEC, but does not include all disclosures required by U.S. GAAP. In the opinion of management, all adjustments, consisting only of normal recurring adjustments except as otherwise noted, considered necessary for a fair statement of results of operations and financial position have been included. The results for the interim periods presented are not necessarily indicative of the results expected for any future period. The following information should be read in conjunction with the audited consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the fiscal year ended January 29, 2017.

Significant Accounting Policies

For a description of significant accounting policies, see Note 1, Organization and Summary of Significant Accounting Policies, of the Notes to the Consolidated Financial Statements included in our Annual Report on Form 10-K for the fiscal year ended January 29, 2017. There have been no material changes to our significant accounting policies since the filing of the Annual Report on Form 10-K.

Fiscal Year

Fiscal Year

We operate on a 52- or 53-week year, ending on the last Sunday in January. Fiscal years 2018 and 2017 are both 52-week years. The second quarter of fiscal years 2018 and 2017 were both 13-week quarters.

Reclassifications

Reclassifications

Certain prior fiscal year balances have been reclassified to conform to the current fiscal year presentation.

Principles of Consolidation

Principles of Consolidation

Our condensed consolidated financial statements include the accounts of NVIDIA Corporation and our wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation.

Use of Estimates

Use of Estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. On an on-going basis, we evaluate our estimates, including those related to revenue recognition, cash equivalents and marketable securities, accounts receivable, inventories, income taxes, goodwill, stock-based compensation, litigation, investigation and settlement costs, restructuring and other charges, and other contingencies. These estimates are based on historical facts and various other assumptions that we believe are reasonable.

Adoption of New and Recently Issued Accounting Pronouncements

Adoption of New and Recently Issued Accounting Pronouncements

Recently Adopted Accounting Pronouncement

In October 2016, the Financial Accounting Standards Board, or FASB, issued an accounting standards update which requires the recognition of income tax consequences of an intra-entity transfer of an asset, other than inventory, when the transfer occurs. We elected to early adopt this new guidance in the first quarter of fiscal year 2018, which required us to reflect any adjustments as of January 30, 2017. Upon adoption of this guidance, we recorded a cumulative-effect adjustment as of the first day of fiscal year 2018 to decrease retained earnings by $28 million, with a corresponding decrease to prepaid taxes that had not been previously recognized in income tax expense.

Recent Accounting Pronouncements Not Yet Adopted

In February 2016, the FASB issued an accounting standards update regarding the accounting for leases by which we will begin recognizing lease assets and liabilities on the balance sheet for leases with a lease term of more than 12 months. The update will require additional disclosures regarding key information about leasing arrangements. Under existing guidance, operating leases are not recorded as lease assets and lease liabilities on the balance sheet. The update will be effective for us beginning in our first quarter of fiscal year 2020, with early adoption permitted. We are currently evaluating the impact of the adoption of this accounting guidance on our consolidated financial statements. However, we expect the adoption of this accounting guidance to result in an increase in lease assets and a corresponding increase in lease liabilities on our Consolidated Balance Sheets.

The FASB issued an accounting standards update that creates a single source of revenue guidance under U.S. GAAP for all companies, in all industries. We expect to adopt this guidance beginning in our first quarter of fiscal year 2019 using the modified retrospective approach. While we are still finalizing our analysis to quantify the adoption impact of the provisions of the new standard, we do not expect it to have a material impact on our consolidated financial statements.

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Stock Based Compensation (Tables)

6 Months Ended

Jul. 30, 2017

Employee Service Share-based Compensation, Aggregate Disclosures [Abstract]

Stock-based compensation expense, net of amounts capitalized as inventory

	Three Months Ended				Six Months Ended
	July 30, 2017		July 31, 2016		July 30, 2017		July 31, 2016
	(In millions)
Cost of revenue	$	4	$	4	$	8	$	8
Research and development	44		30		85		59
Sales, general and administrative	33		24		65		44
Total	$	81	$	58	$	158	$	111

Disclosure of Share-based Compensation Arrangements by Share-based Payment Award

	RSUs, PSUs, and Market-based PSUs Outstanding				Options Outstanding
	Number of Shares		Weighted Average Grant-Date Fair Value Per Share		Number of Shares		Weighted Average Exercise Price Per Share
	(In millions, except per share data)
Balances, January 29, 2017	27		$	32.84	7		$	14.47
Granted (1) (2)	3		$	106.65	—		$	—
Exercised	—		$	—	(1	)	$	14.51
Vested	(5	)	$	21.06	—		$	—
Balances, July 30, 2017	25		$	42.54	6		$	14.46

(1) Includes PSUs that will be issued and eligible to vest if the corporate financial performance maximum target level for fiscal year 2018 is achieved. Depending on the actual level of achievement of the corporate performance target at the end of fiscal year 2018, the PSUs issued could be up to 0.6 million shares.

(2) Includes market-based PSUs that will be issued and eligible to vest if the maximum target for total shareholder return, or TSR, over the 3-year measurement period is achieved. Depending on the ranking of our TSR compared to the respective TSRs of the companies comprising the Standard & Poor’s 500 Index during a 3-year measurement period, the market-based PSUs issued could be up to 0.1 million shares.

Summary of unearned stock-based compensation expense

	July 30,		January 29,
	2017		2017
	(In millions)
Aggregate unearned stock-based compensation expense	$	697	$	627
Estimated weighted average remaining amortization period	(In years)
Stock options	0.1		0.5
RSUs, PSUs, and market-based PSUs	2.4		2.6
ESPP	0.6		0.6

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Net Income Per Share (Tables)

6 Months Ended

Jul. 30, 2017

Notes to financial statements [Abstract]

Reconciliation of numerators and denominators of basic and diluted net income (loss) per share computations

	Three Months Ended				Six Months Ended
	July 30,		July 31,		July 30,		July 31,
	2017		2016		2017		2016
	(In millions, except per share data)
Numerator:
Net income	$	583	$	261	$	1,091	$	469
Denominator:
Basic weighted average shares	597		534		595		536
Dilutive impact of outstanding securities:
Equity awards	26		26		26		23
1% Convertible Senior Notes	4		43		9		37
Warrants issued with the 1% Convertible Senior Notes	6		31		7		24
Diluted weighted average shares	633		634		637		620
Net income per share:
Basic (1)	$	0.98	$	0.49	$	1.83	$	0.88
Diluted (2)	$	0.92	$	0.41	$	1.71	$	0.76
Equity awards excluded from diluted net income per share because their effect would have been anti-dilutive	—		—		1		2

(1) Calculated as net income divided by basic weighted average shares.

(2) Calculated as net income divided by diluted weighted average shares.

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Marketable Securities (Tables)

6 Months Ended

Jul. 30, 2017

Schedule of Available-for-sale Securities [Line Items]

Cash Equivalents and Marketable Securities

	July 30, 2017
	Amortized Cost		Unrealized Gain		Unrealized Loss			Estimated Fair Value		Reported as
										Cash Equivalents		Marketable Securities
	(In millions)
Corporate debt securities	$	1,664	$	1	$	(5	)	$	1,660	$	—	$	1,660
Debt securities of United States government agencies	1,030		—		(4		)	1,026		—		1,026
Debt securities issued by the United States Treasury	658		—		(2		)	656		—		656
Asset-backed securities	330		—		(1		)	329		—		329
Mortgage-backed securities issued by United States government-sponsored enterprises	153		2		(1		)	154		—		154
Foreign government bonds	64		—		—			64		—		64
Money market funds	1,663		—		—			1,663		1,663		—
Total	$	5,562	$	3	$	(13	)	$	5,552	$	1,663	$	3,889

	January 29, 2017
	Amortized Cost		Unrealized Gain		Unrealized Loss			Estimated Fair Value		Reported as
										Cash Equivalents		Marketable Securities
	(In millions)
Corporate debt securities	$	2,397	$	1	$	(10	)	$	2,388	$	33	$	2,355
Debt securities of United States government agencies	1,193		—		(5		)	1,188		27		1,161
Debt securities issued by the United States Treasury	852		—		(2		)	850		55		795
Asset-backed securities	490		—		(1		)	489		—		489
Mortgage-backed securities issued by United States government-sponsored enterprises	161		2		(1		)	162		—		162
Foreign government bonds	70		—		—			70		—		70
Money market funds	321		—		—			321		321		—
Total	$	5,484	$	3	$	(19	)	$	5,468	$	436	$	5,032

Schedule of Unrealized Loss on Investments

	Less than 12 Months					12 Months or Greater					Total
	Estimated Fair Value		Gross Unrealized Losses			Estimated Fair Value		Gross Unrealized Losses			Estimated Fair Value		Gross Unrealized Losses
	(In millions)
Corporate debt securities	$	1,243	$	(4	)	$	86	$	(1	)	$	1,329	$	(5	)
Debt securities issued by United States government agencies	881		(3		)	100		(1		)	981		(4		)
Debt securities issued by the United States Treasury	645		(2		)	—		—			645		(2		)
Asset-backed securities	304		(1		)	—		—			304		(1		)
Mortgage-backed securities issued by United States government-sponsored enterprises	40		—			36		(1		)	76		(1		)
	$	3,113	$	(10	)	$	222	$	(3	)	$	3,335	$	(13	)

Schedule of Amortization Cost and Estimated FV of CE and MS

	July 30, 2017				January 29, 2017
	Amortized Cost		Estimated Fair Value		Amortized Cost		Estimated Fair Value
	(In millions)
Less than 1 year	$	3,086	$	3,085	$	2,209	$	2,209
Due in 1 - 5 years	2,423		2,414		3,210		3,194
Mortgage-backed securities issued by United States government-sponsored enterprises not due at a single maturity date	53		53		65		65
Total	$	5,562	$	5,552	$	5,484	$	5,468

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Fair Value of Financial Assets and Liabilities (Tables)

6 Months Ended

Jul. 30, 2017

Notes to financial statements [Abstract]

Fair Value Measurements, Recurring and Nonrecurring

		Fair Value at
	Pricing Category	July 30, 2017		January 29, 2017
		(In millions)
Assets
Cash equivalents and marketable securities:
Corporate debt securities	Level 2	$	1,660	$	2,388
Debt securities of United States government agencies	Level 2	$	1,026	$	1,188
Debt securities issued by the United States Treasury	Level 2	$	656	$	850
Asset-backed securities	Level 2	$	329	$	489
Mortgage-backed securities issued by United States government-sponsored enterprises	Level 2	$	154	$	162
Foreign government bonds	Level 2	$	64	$	70
Money market funds	Level 1	$	1,663	$	321
Liabilities
Current liability:
1.00% Convertible Senior Notes (1)	Level 2	$	693	$	4,474
Other noncurrent liabilities:
2.20% Notes Due 2021 (1)	Level 2	$	996	$	975
3.20% Notes Due 2026 (1)	Level 2	$	1,000	$	961
Interest rate swap (2)	Level 2	$	5	$	2

(1) The remaining 1.00% Convertible Notes, 2.20% Notes Due 2021, and 3.20% Notes Due 2026 are carried on our Condensed Consolidated Balance Sheets at their original issuance value, net of unamortized debt discount and issuance costs, and are not marked to fair value each period. See Note 11 of these Notes to Condensed Consolidated Financial Statements for additional information.

(2) Please refer to Note 9 of these Notes to Condensed Consolidated Financial Statements for a discussion regarding our interest rate swap.

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Intangible Assets (Tables)

6 Months Ended

Jul. 30, 2017

Notes to financial statements [Abstract]

Amortizable Intangible Assets Components

	July 30, 2017							January 29, 2017
	Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount
	(In millions)
Acquisition-related intangible assets	$	193	$	(175	)	$	18	$	193	$	(167	)	$	26
Patents and licensed technology	469		(411		)	58		468		(390		)	78
Total intangible assets	$	662	$	(586	)	$	76	$	661	$	(557	)	$	104

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Balance Sheet Components (Tables)

6 Months Ended

Jul. 30, 2017

Notes to financial statements [Abstract]

Inventories

	July 30,		January 29,
	2017		2017
Inventories:	(In millions)
Raw materials	$	294	$	252
Work in-process	209		176
Finished goods	352		366
Total inventories	$	855	$	794

Accrued and Other Current Liabilities

	July 30,		January 29,
	2017		2017
Accrued and Other Current Liabilities:	(In millions)
Customer related liabilities (1)	$	218	$	197
Accrued payroll and related expenses	120		137
Deferred revenue (2)	74		85
Coupon interest on debt obligations	20		21
Professional service fees	15		13
Warranty accrual (3)	14		8
Taxes payable	12		4
Accrued royalties	11		7
Accrued restructuring and other charges (4)	10		13
Leases payable	5		4
Contributions payable	4		4
Other	14		14
Total accrued and other current liabilities	$	517	$	507

(1) Customer related liabilities include accrued customer programs, such as rebates and marketing development funds.

(2) Deferred revenue primarily includes customer advances and deferrals related to license and service arrangements.

(3) Please refer to Note 10 of these Notes to Condensed Consolidated Financial Statements for a discussion regarding warranties.

(4) Please refer to Note 15 of these Notes to Condensed Consolidated Financial Statements for a discussion regarding restructuring and other charges.

Other Long-term Liabilities

	July 30,		January 29,
	2017		2017
Other Long-Term Liabilities:	(In millions)
Deferred income tax liability	$	252	$	141
Income tax payable	105		96
Contributions payable	12		9
Employee benefits liability	11		10
Deferred rent	8		6
Licenses payable	7		1
Deferred revenue	6		4
Other	7		4
Total other long-term liabilities	$	408	$	271

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Derivative Financial Instrument Summary of notional value of foreign currency forward contracts (Tables)

6 Months Ended

Jul. 30, 2017

Derivative [Line Items]

Schedule of Notional Amounts of Outstanding Derivative Positions

	Three Months Ended				Six Months Ended
	July 30, 2017		July 31, 2016		July 30, 2017		July 31, 2016
	(In millions)
Designated as cash flow hedges	$	89	$	61	$	163	$	96
Not designated for hedge accounting	$	69	$	13	$	120	$	13

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Guarantees (Tables)

6 Months Ended

Jul. 30, 2017

Notes to financial statements [Abstract]

Guarantees

	July 30,			January 29,
	2017			2017
	(In millions)
Balance at beginning of period	$	8		$	11
Additions	8			2
Deductions	(2		)	(5		)
Balance at end of period	$	14		$	8

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Debt (Table)

6 Months Ended

Jul. 30, 2017

Debt Disclosure [Abstract]

Convertible Debt

The following table presents the carrying value of the Convertible Notes:

	July 30,			January 29,
	2017			2017
	(In millions)
1.00% Convertible Senior Notes	$	86		$	827
Unamortized debt discount (1)	(2		)	(31		)
Net carrying amount	$	84		$	796

(1) As of July 30, 2017, the remaining period over which the unamortized debt discount will be amortized is 1.3 years.

The following table presents interest expense for the contractual interest and the accretion of debt discount and issuance costs related to the Convertible Notes:

	Three Months Ended				Six Months Ended
	July 30,		July 31,		July 30,		July 31,
	2017		2016		2017		2016
	(In millions)
Contractual coupon interest expense	$	—	$	4	$	—	$	8
Amortization of debt discount	1		7		2		14
Total interest expense related to Convertible Notes	$	1	$	11	$	2	$	22

Long-term Debt

	Expected Remaining Term (years)	Effective Interest Rate	July 30, 2017			January 29, 2017
			(In millions)
2.20% Notes Due 2021	4.1	2.38%	$	1,000		$	1,000
3.20% Notes Due 2026	9.1	3.31%	1,000			1,000
Unamortized debt discount and issuance costs			(16		)	(17		)
Net carrying amount			$	1,984		$	1,983

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Segment Information (Tables)

6 Months Ended

Jul. 30, 2017

Notes to financial statements [Abstract]

Financial Information by Operating Segment

	GPU		Tegra Processor			All Other			Consolidated
	(In millions)
Three Months Ended July 30, 2017
Revenue	$	1,897	$	333		$	—		$	2,230
Depreciation and amortization expense	$	29	$	9		$	11		$	49
Operating income (loss)	$	761	$	71		$	(144	)	$	688
Three Months Ended July 31, 2016
Revenue	$	1,196	$	166		$	66		$	1,428
Depreciation and amortization expense	$	29	$	7		$	11		$	47
Operating income (loss)	$	379	$	(14	)	$	(48	)	$	317
Six Months Ended July 30, 2017
Revenue	$	3,459	$	665		$	43		$	4,167
Depreciation and amortization expense	$	57	$	18		$	21		$	96
Operating income (loss)	$	1,363	$	118		$	(239	)	$	1,242
Six Months Ended July 31, 2016
Revenue	$	2,275	$	326		$	132		$	2,733
Depreciation and amortization expense	$	57	$	14		$	21		$	92
Operating income (loss)	$	727	$	(52	)	$	(114	)	$	561

Reconciling items included in All Other category

	Three Months Ended						Six Months Ended
	July 30, 2017			July 31, 2016			July 30, 2017			July 31, 2016
	(In millions)
Reconciling items included in "All Other" category:
Unallocated revenue	$	—		$	66		$	43		$	132
Stock-based compensation expense	(81		)	(58		)	(158		)	(111		)
Unallocated cost of revenue and operating expenses	(59		)	(49		)	(114		)	(104		)
Acquisition-related costs	(4		)	(4		)	(8		)	(8		)
Restructuring and other charges	—			(2		)	—			(3		)
Contributions	—			(1		)	(2		)	(4		)
Legal settlement costs	—			—			—			(16		)
Total	$	(144	)	$	(48	)	$	(239	)	$	(114	)

Revenue from customers based in different geographic regions

	Three Months Ended				Six Months Ended
	July 30,		July 31,		July 30,		July 31,
	2017		2016		2017		2016
	(In millions)
Revenue:
Taiwan	$	674	$	505	$	1,277	$	949
China	481		256		810		504
Other Asia Pacific	420		191		797		351
United States	278		206		631		400
Other Americas	199		103		292		206
Europe	178		167		360		323
Total revenue	$	2,230	$	1,428	$	4,167	$	2,733

Schedule of Revenue by Major Markets

	Three Months Ended				Six Months Ended
	July 30,		July 31,		July 30,		July 31,
	2017		2016		2017		2016
	(In millions)
Revenue:
Gaming	$	1,186	$	781	$	2,213	$	1,468
Professional Visualization	235		214		440		403
Datacenter	416		151		825		294
Automotive	142		119		282		232
OEM & IP	251		163		407		336
Total revenue	$	2,230	$	1,428	$	4,167	$	2,733

Schedule of Account Receivable from Major Customers

	July 30,		January 29,
	2017		2017
Accounts Receivable:
Customer A	14	%	19	%

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Restructuring and Other Charges (Tables)

6 Months Ended

Jul. 30, 2017

Restructuring and Other Charges [Abstract]

Summary of the restructuring activities and related accrued liabilities

	July 30,			January 29,
	2017			2017
	(In millions)
Balance at beginning of period	$	13		$	23
Restructuring and other charges	—			3
Cash payments	(3		)	(13		)
Balance at end of period	$	10		$	13

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Summary of Significant Accounting Policies (Details) $ in Millions	Jul. 30, 2017 USD ($)
Accounting Policies [Abstract]
Cumulative Effect of New Accounting Principle in Period of Adoption	$ 28

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Stock Based Compensation (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions		3 Months Ended			6 Months Ended
		Jul. 30, 2017	Jan. 29, 2017	Jul. 31, 2016	Jul. 30, 2017	Jul. 31, 2016
Share-based Compensation
Cost of revenue		$ 4		$ 4	$ 8	$ 8
Research and development		44		30	85	59
Sales, general and administrative		33		24	65	44
Stock-based compensation expense		$ 81		58	$ 158	111
Stock Options
Stock options beginning balance (in shares)					7.0
Stock options exercised (in shares)					(1.0)
Stock options ending balance (in shares)		6.0	7.0		6.0
Weighted average exercise price of stock options at beginning of period					$ 14.47
Weighted average exercise price of stock options exercised					14.51
Weighted average exercise price of stock options at end of period		$ 14.46	$ 14.47		$ 14.46
RSUs, PSUs, and Market-based PSUs
RSUs, PSUs and mkt-based PSUs beginning balance (in shares)					27.0
RSUs, PSUs and mkt-based PSUs granted (in shares)	[1],[2]				3.0
RSUs, PSUs and mkt-based PSUs vested (in shares)					(5.0)
RSUs, PSUs, and mkt-based PSUs ending balance (in shares)		25.0	27.0		25.0
Weighted average grant date fair value of RSUs, PSUs and mkt-based PSUs at beginning of period					$ 32.84
Weighted avg grant-date FV of RSUs, PSUs and mkt-based PSUs					106.65
Weighted average grant-date fair value of RSUs, PSUs and mkt-based PSUs vested					21.06
Weighted avg grant date FV of RSUs, PSUs and mkt-based PSUs at end of period		$ 42.54	$ 32.84		$ 42.54
Maximum number of PSUs issuable		0.6			0.6
Maximum number of market-based PSUs issuable		0.1			0.1
Stock-based compensation expense related to equity awards not expected to vest		$ 10		$ 5	$ 39	$ 17
Summary of unearned SBC expense
Aggregate amount of unearned stock-based compensation expense related to equity awards, adjusted for estimated forfeitures		$ 697	$ 627		$ 697
Employee Stock Option
Summary of unearned SBC expense
Estimated weighted average amortization period		1 month 18 days	6 months
RSUs, PSUs, and Market-based PSUs
Summary of unearned SBC expense
Estimated weighted average amortization period		2 years 4 months 17 days	2 years 7 months 6 days
Employee Stock Purchase Plan
Summary of unearned SBC expense
Estimated weighted average amortization period		7 months	7 months 5 days

[1] Includes PSUs that will be issued and eligible to vest if the corporate financial performance maximum target level for fiscal year 2018 is achieved. Depending on the actual level of achievement of the corporate performance target at the end of fiscal year 2018, the PSUs issued could be up to 0.6 million shares.

[2] Includes market-based PSUs that will be issued and eligible to vest if the maximum target for total shareholder return, or TSR, over the 3-year measurement period is achieved. Depending on the ranking of our TSR compared to the respective TSRs of the companies comprising the Standard & Poor’s 500 Index during a 3-year measurement period, the market-based PSUs issued could be up to 0.1 million shares.

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Net Income Per Share (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions		3 Months Ended		6 Months Ended
		Jul. 30, 2017	Jul. 31, 2016	Jul. 30, 2017	Jul. 31, 2016	Jan. 29, 2017
Numerator:
Net income		$ 583	$ 261	$ 1,091	$ 469
Denominator:
Basic weighted average shares		597	534	595	536
Dilutive impact of outstanding securities:
Equity awards		26	26	26	23
1% Convertible Senior Notes		4	43	9	37
Warrants issued with the 1% Convertible Senior Notes		6	31	7	24
Weighted average shares used in diluted per share computation		633	634	637	620
Net income per share:
Basic net income per share	[1]	$ 0.98	$ 0.49	$ 1.83	$ 0.88
Diluted net income per share	[2]	$ 0.92	$ 0.41	$ 1.71	$ 0.76
Equity awards excluded from diluted net income per share because their effect would have been anti-dilutive		0	0	1	2
Stated interest rate, Convertible Notes		1.00%		1.00%
Conversion price - Convertible Notes		$ 20.0480		$ 20.0480
Warrant Strike Price		26.9876
Average stock price		$ 144.57		$ 124.89
Number of warrants terminated		12		12		63
Total number of shares issued related to terminated Warrants		10		10		48

[1] Calculated as net income divided by basic weighted average shares.

[2] Calculated as net income divided by diluted weighted average shares.

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Income Taxes (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jul. 30, 2017	Jul. 31, 2016	Jul. 30, 2017	Jul. 31, 2016
Income Taxes
Income tax expense	$ 101	$ 56	$ 130	$ 89
Effective Income Tax Rate, Continuing Operations	14.80%	17.60%	10.70%	15.90%
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate	35.00%

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Marketable Securities (Details) - USD ($) $ in Millions	Jul. 30, 2017	Jan. 29, 2017
Summary of cash equivalents and marketable securities:
Amortized Cost	$ 5,562	$ 5,484
Unrealized Gain	3	3
Unrealized Loss	(13)	(19)
Classified as:
Cash equivalents	1,663	436
Marketable securities	3,889	5,032
Total cash equivalents and marketable securities	5,552	5,468
Amortized Cost
Less than one year	3,086	2,209
Due in 1-5 years	2,423	3,210
Mortgage-backed securities issued by government-sponsored enterprises not due to a single maturity date	53	65
Total	5,562	5,484
Estimated Fair Value
Less than one year	3,085	2,209
Due in 1-5 years	2,414	3,194
Mortgage-backed securities issued by United States government-sponsored enterprises not due to a single maturity date	53	65
Total	5,552	5,468
Fair value, unrealized loss position
Fair value, unrealized loss less than 12 months	3,113
Fair value, unrealized loss greater than 12 months	222
Fair value with unrealized loss, total	3,335
Unrealized Loss Position, Aggregate Losses
Unrealized loss, less than 12 months, gross	(10)
Unrealized loss, 12 months or greater, gross	(3)
Gross unrealized loss, total	(13)
Corporate debt securities
Summary of cash equivalents and marketable securities:
Amortized Cost	1,664	2,397
Unrealized Gain	1	1
Unrealized Loss	(5)	(10)
Classified as:
Cash equivalents	0	33
Marketable securities	1,660	2,355
Total cash equivalents and marketable securities	1,660	2,388
Fair value, unrealized loss position
Fair value, unrealized loss less than 12 months	1,243
Fair value, unrealized loss greater than 12 months	86
Fair value with unrealized loss, total	1,329
Unrealized Loss Position, Aggregate Losses
Unrealized loss, less than 12 months, gross	(4)
Unrealized loss, 12 months or greater, gross	(1)
Gross unrealized loss, total	(5)
Debt securities of United States government agencies
Summary of cash equivalents and marketable securities:
Amortized Cost	1,030	1,193
Unrealized Gain	0	0
Unrealized Loss	(4)	(5)
Classified as:
Cash equivalents	0	27
Marketable securities	1,026	1,161
Total cash equivalents and marketable securities	1,026	1,188
Fair value, unrealized loss position
Fair value, unrealized loss less than 12 months	881
Fair value, unrealized loss greater than 12 months	100
Fair value with unrealized loss, total	981
Unrealized Loss Position, Aggregate Losses
Unrealized loss, less than 12 months, gross	(3)
Unrealized loss, 12 months or greater, gross	(1)
Gross unrealized loss, total	(4)
Debt securities issued by the United States Treasury
Summary of cash equivalents and marketable securities:
Amortized Cost	658	852
Unrealized Gain	0	0
Unrealized Loss	(2)	(2)
Classified as:
Cash equivalents	0	55
Marketable securities	656	795
Total cash equivalents and marketable securities	656	850
Fair value, unrealized loss position
Fair value, unrealized loss less than 12 months	645
Fair value, unrealized loss greater than 12 months	0
Fair value with unrealized loss, total	645
Unrealized Loss Position, Aggregate Losses
Unrealized loss, less than 12 months, gross	(2)
Unrealized loss, 12 months or greater, gross	0
Gross unrealized loss, total	(2)
Asset-backed Securities
Summary of cash equivalents and marketable securities:
Amortized Cost	330	490
Unrealized Gain	0	0
Unrealized Loss	(1)	(1)
Classified as:
Cash equivalents	0	0
Marketable securities	329	489
Total cash equivalents and marketable securities	329	489
Fair value, unrealized loss position
Fair value, unrealized loss less than 12 months	304
Fair value, unrealized loss greater than 12 months	0
Fair value with unrealized loss, total	304
Unrealized Loss Position, Aggregate Losses
Unrealized loss, less than 12 months, gross	(1)
Unrealized loss, 12 months or greater, gross	0
Gross unrealized loss, total	(1)
Mortgage backed securities issued by United States government-sponsored enterprises
Summary of cash equivalents and marketable securities:
Amortized Cost	153	161
Unrealized Gain	2	2
Unrealized Loss	(1)	(1)
Classified as:
Cash equivalents	0	0
Marketable securities	154	162
Total cash equivalents and marketable securities	154	162
Fair value, unrealized loss position
Fair value, unrealized loss less than 12 months	40
Fair value, unrealized loss greater than 12 months	36
Fair value with unrealized loss, total	76
Unrealized Loss Position, Aggregate Losses
Unrealized loss, less than 12 months, gross	0
Unrealized loss, 12 months or greater, gross	(1)
Gross unrealized loss, total	(1)
Foreign government bonds
Summary of cash equivalents and marketable securities:
Amortized Cost	64	70
Unrealized Gain	0	0
Unrealized Loss	0	0
Classified as:
Cash equivalents	0	0
Marketable securities	64	70
Total cash equivalents and marketable securities	64	70
Money market funds
Summary of cash equivalents and marketable securities:
Amortized Cost	1,663	321
Unrealized Gain	0	0
Unrealized Loss	0	0
Classified as:
Cash equivalents	1,663	321
Marketable securities	0	0
Total cash equivalents and marketable securities	$ 1,663	$ 321

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Fair Value of Financial Assets and Liabilities (Details) - USD ($) $ in Millions		Jul. 30, 2017	Jan. 29, 2017
Financial assets and liabilities measured at fair value:
Stated interest rate, Convertible Notes		1.00%
2021 Notes [Member]
Financial assets and liabilities measured at fair value:
Long-term Debt, Stated interest rate		2.20%
2026 Notes [Member]
Financial assets and liabilities measured at fair value:
Long-term Debt, Stated interest rate		3.20%
Fair Value, Inputs, Level 1 [Member] | Money market funds
Financial assets and liabilities measured at fair value:
Assets, fair value		$ 1,663	$ 321
Fair Value, Inputs, Level 2 [Member]
Financial assets and liabilities measured at fair value:
Convertible Notes, Fair Value	[1]	693	4,474
Interest rate swap	[2]	5	2
Fair Value, Inputs, Level 2 [Member] | 2021 Notes [Member]
Financial assets and liabilities measured at fair value:
Long-term Debt, Fair Value	[1]	996	975
Fair Value, Inputs, Level 2 [Member] | 2026 Notes [Member]
Financial assets and liabilities measured at fair value:
Long-term Debt, Fair Value	[1]	1,000	961
Fair Value, Inputs, Level 2 [Member] | Corporate debt securities
Financial assets and liabilities measured at fair value:
Assets, fair value		1,660	2,388
Fair Value, Inputs, Level 2 [Member] | Debt securities of United States government agencies
Financial assets and liabilities measured at fair value:
Assets, fair value		1,026	1,188
Fair Value, Inputs, Level 2 [Member] | Debt securities issued by the United States Treasury
Financial assets and liabilities measured at fair value:
Assets, fair value		656	850
Fair Value, Inputs, Level 2 [Member] | Asset-backed Securities
Financial assets and liabilities measured at fair value:
Assets, fair value		329	489
Fair Value, Inputs, Level 2 [Member] | Mortgage backed securities issued by United States government-sponsored enterprises
Financial assets and liabilities measured at fair value:
Assets, fair value		154	162
Fair Value, Inputs, Level 2 [Member] | Foreign government bonds
Financial assets and liabilities measured at fair value:
Assets, fair value		$ 64	$ 70

[1] The remaining 1.00% Convertible Notes, 2.20% Notes Due 2021, and 3.20% Notes Due 2026 are carried on our Condensed Consolidated Balance Sheets at their original issuance value, net of unamortized debt discount and issuance costs, and are not marked to fair value each period. See Note 11 of these Notes to Condensed Consolidated Financial Statements for additional information.

[2] Please refer to Note 9 of these Notes to Condensed Consolidated Financial Statements for a discussion regarding our interest rate swap.

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Intangible Assets (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jul. 30, 2017	Jul. 31, 2016	Jul. 30, 2017	Jul. 31, 2016	Jan. 29, 2017
Amortizable intangible assets components
Amortization expense	$ 14	$ 18	$ 29	$ 35
Future amortization expense associated with intangible assets
Remainder of fiscal 2018	25		25
Fiscal 2019	26		26
Fiscal 2020	16		16
Fiscal 2021	8		8
Fiscal 2022 and beyond	1		1
Acquisition-related intangible assets
Amortizable intangible assets components
Gross Carrying Amount	193		193		$ 193
Accumulated Amortization	(175)		(175)		(167)
Net Carrying Amount	18		18		26
Patents and licensed technology
Amortizable intangible assets components
Gross Carrying Amount	469		469		468
Accumulated Amortization	(411)		(411)		(390)
Net Carrying Amount	58		58		78
Total intangible assets
Amortizable intangible assets components
Gross Carrying Amount	662		662		661
Accumulated Amortization	(586)		(586)		(557)
Net Carrying Amount	$ 76		$ 76		$ 104

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Balance Sheet Components (Details) - USD ($) $ in Millions		Jul. 30, 2017		Jan. 29, 2017		Jan. 31, 2016
Inventories
Raw materials		$ 294		$ 252
Work in-process		209		176
Finished goods		352		366
Total inventories		855		794
Outstanding Inventory Purchase Obligations		1,040
Accrued Liabilities and Other Current Liabilities
Customer related liabilities	[1]	218		197
Accrued payroll and related expenses		120		137
Deferred Revenue	[2]	74		85
Coupon interest on debt obligations		20		21
Professional service fees		15		13
Warranty accrual	[3]	14		8
Taxes payable		12		4
Accrued royalties		11		7
Accrued restructuring and other charges		10	[4]	13	[4]	$ 23
Leases payable		5		4
Contributions payable		4		4
Other		14		14
Total accrued and other current liabilities		517		507
Other Long-Term Liabilities
Deferred income tax liability		252		141
Income taxes payable		105		96
Contributions Payable		12		9
Employee benefits liability		11		10
Deferred rent		8		6
Licenses payable		7		1
Deferred Revenue		6		4
Other		7		4
Total other long-term liabilities		$ 408		$ 271

[1] Customer related liabilities include accrued customer programs, such as rebates and marketing development funds.

[2] Deferred revenue primarily includes customer advances and deferrals related to license and service arrangements.

[3] Please refer to Note 10 of these Notes to Condensed Consolidated Financial Statements for a discussion regarding warranties.

[4] Please refer to Note 15 of these Notes to Condensed Consolidated Financial Statements for a discussion regarding restructuring and other charges.

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Derivative Financial Instrument (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jul. 30, 2017	Jul. 31, 2016	Jul. 30, 2017	Jul. 31, 2016
Summary of Derivative Instruments [Abstract]
Derivative, Notional Amount	$ 200		$ 200
Notional amount of FX forward contract, designated as cash flow hedges	89	$ 61	163	$ 96
Notional amount of FX forward contract, not designated for hedge accounting	$ 69	$ 13	$ 120	$ 13

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Guarantees (Details) - USD ($) $ in Millions	6 Months Ended	12 Months Ended
	Jul. 30, 2017	Jan. 29, 2017
Estimated product warranty liabilities
Balance at beginning of period	$ 8	$ 11
Additions	8	2
Deductions	(2)	(5)
Balance at end of period	$ 14	$ 8

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Debt (Details) $ / shares in Units, $ in Thousands, shares in Millions	3 Months Ended				6 Months Ended
	Oct. 29, 2017 USD ($)	Jul. 30, 2017 USD ($) $ / shares shares		Jul. 31, 2016 USD ($)	Jul. 30, 2017 USD ($) $ / shares shares		Jul. 31, 2016 USD ($)	Jul. 28, 2017 $ / shares	Jan. 29, 2017 USD ($) shares
Debt Instrument
Stated interest rate, Convertible Notes		1.00%			1.00%
Repayment of Convertible Notes		$ 136,000
Convertible Notes - Face Amount		$ 86,000			$ 86,000				$ 827,000
Shares issued - Convertible Notes | shares		5
Loss on early debt conversions		$ 3,000			17,000		$ 0
Closing stock price | $ / shares								$ 164.39
If-converted value in excess of principal - Convertible Notes		$ 619,000
Conversion ratio - Convertible Notes		49.8804
Principal amount of Convertible Notes		$ 1			$ 1
Conversion price - Convertible Notes | $ / shares		$ 20.0480			$ 20.0480
Extinguishment of Debt, to date		$ 1,410,000			$ 1,410,000
Terms of conversion feature - Convertible Notes					during any fiscal quarter, if the last reported sale price of the common stock for at least 20 trading days during a period of 30 consecutive trading days ending on the last trading day of the immediately preceding fiscal quarter is greater than or equal to 130% of the conversion price on each applicable trading day, the Convertible Notes become convertible at the holders' option
Initial debt component - Convertible Notes		1,350,000
Initial carrying amount of equity component		126,000			$ 126,000
Purchaser's discount of Convertible Notes		23,000
Initial unamortized debt discount at issuance		$ 148,000
Effective interest rate - Convertible Notes		3.15%			3.15%
Unamortized debt discount - Convertible Notes		$ (2,000)	[1]		$ (2,000)	[1]			(31,000)
Convertible Notes, net carrying amount		84,000			$ 84,000				$ 796,000
Remaining discount amortization period					1 year 4 months 2 days
Coupon interest expense, Convertible Notes		0		$ 4,000	$ 0		8,000
Amortization of Debt Issuance Costs and Discounts		1,000		7,000	2,000		14,000
Total interest expense related to Convertible Notes		$ 1,000		$ 11,000	$ 2,000		$ 22,000
Note Hedges Strike Price | $ / shares		$ 20.0480			$ 20.0480
Shares received from Note Hedges | shares		5			5
Number of warrants terminated | shares		12			12				63
Total number of shares issued related to terminated Warrants | shares		10			10				48
Proceeds from issuance of debt		$ 1,980,000
Unamortized discount and issuance costs		(16,000)			$ (16,000)				$ (17,000)
Long-term debt, net carrying amount		1,984,000			1,984,000				1,983,000
2021 Notes [Member]
Debt Instrument
Long-term Debt, Gross		$ 1,000,000			$ 1,000,000				1,000,000
Long-term Debt, Stated interest rate		2.20%			2.20%
Expected remaining term - Long-term debt		4 years 1 month 18 days
Effective interest rate - Long-term debt		2.38%
2026 Notes [Member]
Debt Instrument
Long-term Debt, Gross		$ 1,000,000			$ 1,000,000				$ 1,000,000
Long-term Debt, Stated interest rate		3.20%			3.20%
Expected remaining term - Long-term debt		9 years 1 month 19 days
Effective interest rate - Long-term debt		3.31%
Subsequent Event [Member]
Debt Instrument
Subsequent repayment of Convertible debt	$ 62,000

[1] As of July 30, 2017, the remaining period over which the unamortized debt discount will be amortized is 1.3 years.

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Commitments and Contingencies (Details) $ in Millions	3 Months Ended
	Jul. 30, 2017 USD ($)
Commitments and Contingencies Disclosure [Abstract]
Ground lease to a syndicate of banks - Synthetic Lease	99 years
Total Synthetic Lease term	7 years 6 months
Estimated construction period	2 years 6 months
Lease term - Synthetic Lease	5 years
Maximum number of renewal options	3
Lessee, Operating Lease, Renewal Term	5 years
Expected construction costs for Synthetic lease financing	$ 380
Maximum residual value guarantee percentage	87.50%
Maximum total leverage ratio	3.5

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Shareholders' Equity (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions	3 Months Ended	6 Months Ended
	Jul. 30, 2017	Jul. 30, 2017	Jul. 31, 2016
Notes to financial statements [Abstract]
Stock Repurchased During Period, Shares	5	5
Stock Repurchased During Period, Value	$ 758	$ 758
Payments of Dividends	$ 84	$ 166	$ 124
Aggregated number of shares repurchased under stock repurchase program	250	250
Aggregated cost of shares repurchased	$ 5,350	$ 5,350
Stock Repurchase Program, Remaining Authorized Repurchase Amount	$ 1,970	$ 1,970
Authorized number of shares of common stock	2,000	2,000
Par value of common stock	$ 0.001	$ 0.001

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Segment Information (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended		12 Months Ended
	Jul. 30, 2017	Jul. 31, 2016	Jul. 30, 2017	Jul. 31, 2016	Jan. 29, 2017
Revenue by Operating Segment and Geographic Region
Revenue	$ 2,230	$ 1,428	$ 4,167	$ 2,733
Depreciation and amortization expense	49	47	96	92
Operating income (loss)	688	317	1,242	561
Reconciling items included in All Other category
Stock-based compensation expense	(81)	(58)	(158)	(111)
Unallocated cost of revenue and operating expenses	(59)	(49)	(114)	(104)
Acquisition-related costs	(4)	(4)	(8)	(8)
Restructuring and other charges	0	(2)	0	(3)	$ (3)
Contributions	0	(1)	(2)	(4)
Legal Settlement Costs	$ 0	0	$ 0	(16)
Accounts receivable from significant customers (in percent)	14.00%		14.00%		19.00%
Gaming
Revenue by Operating Segment and Geographic Region
Revenue	$ 1,186	781	$ 2,213	1,468
Professional Visualization
Revenue by Operating Segment and Geographic Region
Revenue	235	214	440	403
Datacenter
Revenue by Operating Segment and Geographic Region
Revenue	416	151	825	294
Automotive
Revenue by Operating Segment and Geographic Region
Revenue	142	119	282	232
OEM & IP
Revenue by Operating Segment and Geographic Region
Revenue	251	163	407	336
Taiwan
Revenue by Operating Segment and Geographic Region
Revenue	674	505	1,277	949
China
Revenue by Operating Segment and Geographic Region
Revenue	481	256	810	504
Other Asia Pacific
Revenue by Operating Segment and Geographic Region
Revenue	420	191	797	351
United States
Revenue by Operating Segment and Geographic Region
Revenue	278	206	631	400
Other Americas
Revenue by Operating Segment and Geographic Region
Revenue	199	103	292	206
Europe
Revenue by Operating Segment and Geographic Region
Revenue	178	167	360	323
GPU
Revenue by Operating Segment and Geographic Region
Revenue	1,897	1,196	3,459	2,275
Depreciation and amortization expense	29	29	57	57
Operating income (loss)	761	379	1,363	727
Tegra Processor
Revenue by Operating Segment and Geographic Region
Revenue	333	166	665	326
Depreciation and amortization expense	9	7	18	14
Operating income (loss)	71	(14)	118	(52)
All Other
Revenue by Operating Segment and Geographic Region
Revenue	0	66	43	132
Depreciation and amortization expense	11	11	21	21
Operating income (loss)	$ (144)	$ (48)	$ (239)	$ (114)

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Restructuring and Other Charges (Details) - USD ($) $ in Millions		3 Months Ended		6 Months Ended			12 Months Ended
		Jul. 30, 2017	Jul. 31, 2016	Jul. 30, 2017		Jul. 31, 2016	Jan. 29, 2017
Restructuring and Other Charges [Abstract]
Balance at beginning of period				$ 13	[1]	$ 23	$ 23
Restructuring and other charges		$ 0	$ 2	0		$ 3	3
Cash payments				(3)			(13)
Balance at end of period	[1]	$ 10		$ 10			$ 13

[1] Please refer to Note 15 of these Notes to Condensed Consolidated Financial Statements for a discussion regarding restructuring and other charges.