SOURCE: NVIDIA

NVIDIA

February 12, 2014 16:20 ET

NVIDIA Reports Financial Results for Fourth Quarter and Fiscal 2014

GPU Business Delivers Across Gaming, Workstation, High-Performance Computing

SANTA CLARA, CA--(Marketwired - Feb 12, 2014) - NVIDIA (NASDAQ: NVDA)

  • Fiscal fourth quarter revenue of $1.14 billion.

  • Quarterly GAAP diluted EPS of $0.25, up from $0.20 in Q3; non-GAAP diluted EPS of $0.32, up from $0.26 in Q3.

  • Quarterly GAAP gross margin of 54.1 percent; non-GAAP gross margin of 53.8 percent.

NVIDIA (NASDAQ: NVDA) today reported revenue for the fourth quarter of fiscal 2014, ended Jan. 26, 2014, of $1.14 billion, up 8.6 percent from $1.05 billion in the previous quarter.

GAAP earnings per diluted share for the quarter were $0.25, up 25 percent from $0.20 in the previous quarter. Non-GAAP earnings per diluted share for the quarter were $0.32, up 23 percent from $0.26 in the previous quarter.

"Quarterly revenue came in well above our outlook, driven by PC gaming, capping an outstanding year for our GPU business," said Jen-Hsun Huang, president and chief executive officer of NVIDIA. "Tesla and Quadro both achieved record annual revenue. GRID cloud technology is being evaluated at hundreds of large enterprises worldwide. And Tegra K1 is disrupting the auto industry, paving the way to self-piloted cars. The groundbreaking work we are doing in visual computing is expanding the opportunities for our GPUs."

During the quarter, NVIDIA repurchased $37 million of stock and paid a dividend of $0.085 per share, equivalent to $48 million. During the year, NVIDIA returned $1.07 billion to shareholders -- $887 million towards the repurchase of 62 million shares and dividend payments totaling $181 million. NVIDIA will pay its next quarterly cash dividend of $0.085 per share on Mar. 20, 2014, to all shareholders of record on Feb. 27, 2014.

Revenue for the full year was $4.13 billion. GAAP earnings per diluted share for the year were $0.74 and non-GAAP earnings per diluted share for the year were $0.99.

GAAP Quarterly Financial Comparison
(in millions except earnings per share)   Q4 FY14   Q3 FY14   Q4 FY13   Q/Q   Y/Y
Revenue   $1,144   $1,054   $1,107   up 9%   up 3%
Gross margin   54.1%   55.4%   52.9%   down 130 bps   up 120 bps
Operating expenses   $452   $443   $402   up 2%   up 13%
Net income   $147   $119   $174   up 24%   down 16%
Earnings per share   $0.25   $0.20   $0.28   up 25%   down 11%
                     
Non-GAAP Quarterly Financial Comparison
(in millions except earnings per share)   Q4 FY14   Q3 FY14   Q4 FY13   Q/Q   Y/Y
Revenue   $1,144   $1,054   $1,107   up 9%   up 3%
Gross margin   53.8%   55.7%   53.2%   down 190 bps   up 60 bps
Operating expenses   $408   $405   $360   up 1%   up 13%
Net income   $187   $154   $215   up 22%   down 13%
Earnings per share   $0.32   $0.26   $0.35   up 23%   down 9%

Among highlights of the fourth quarter of fiscal 2014, NVIDIA:

  • Grew GeForce® GTX™ GPU revenue nearly 50 percent over the fourth quarter of fiscal 2013.

  • Launched Tegra®K1, NVIDIA's next-generation mobile system-on-a-chip, extending the Kepler™ architecture across the company's entire line of processors.

  • Demonstrated Denver, NVIDIA's custom 64-bit ARM core inside Tegra K1. This was the first time Android had been shown running on 64-bit ARM.

  • Announced Audi is introducing a new Tegra-powered infotainment system, smart display and digital cockpit. Audi also announced it will use Tegra K1 to power its future piloted-driving initiatives.

  • Launched Tesla® K40, the world's fastest accelerator for supercomputing and big data analytics.

  • Partnered with IBM to build supercomputers for the HPC community and accelerate enterprise data analytics applications with GPUs.

NVIDIA's outlook for the first quarter of fiscal 2015 is as follows:

  • Revenue is expected to be $1.05 billion, plus or minus two percent.

  • GAAP and non-GAAP gross margins are expected to be approximately 54.2 percent and 54.5 percent, respectively.

  • GAAP operating expenses are expected to be approximately $454 million; non-GAAP operating expenses are expected to be approximately $413 million.

  • GAAP and non-GAAP tax rates for the first quarter and annual fiscal 2015 are both expected to be 20 percent, plus or minus one percent. If the U.S. R&D tax credit is renewed, the tax rate is expected to be 16 percent.

  • Capital expenditures are expected to be approximately $45 million for the first quarter of fiscal 2015.

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

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

Non-GAAP Measures
To supplement NVIDIA's Condensed Consolidated Statements of Operations and Condensed Consolidated Balance Sheets presented in accordance with GAAP, the company uses non-GAAP measures of certain components of financial performance. These non-GAAP measures include non-GAAP gross profit, non-GAAP gross margin, non-GAAP operating expenses, non-GAAP interest and other income/expense, non-GAAP income tax expense, non-GAAP net income, non-GAAP net income, or earnings, per share, and free cash flow. In order for NVIDIA's investors to be better able to compare its current results with those of previous periods, the company has shown a reconciliation of GAAP to non-GAAP financial measures. These reconciliations adjust the related GAAP financial measures to exclude stock-based compensation, legal settlements, a credit related to a weak die/packaging material set, acquisition-related costs, a contribution expense, other expenses, a gain on sale of a non-affiliated investment, interest expense related to amortization of debt discount, and the associated tax impact of these items, where applicable. Free cash flow is calculated as GAAP net cash provided by operating activities less purchases of property and equipment and intangible assets. NVIDIA believes the presentation of its non-GAAP financial measures enhances the user's overall understanding of the company's historical financial performance. The presentation of the company's non-GAAP financial measures is not meant to be considered in isolation or as a substitute for the company's financial results prepared in accordance with GAAP, and our non-GAAP measures may be different from non-GAAP measures used by other companies.

To Keep Current on NVIDIA:

  • Like NVIDIA on Facebook.
  • Connect with NVIDIA on LinkedIn.
  • Follow @NVIDIA on Twitter.
  • View NVIDIA videos on YouTube.
  • Keep up with the NVIDIA Blog.
  • Use the Pulse news reader to subscribe to the NVIDIA Daily News feed.
   
   
NVIDIA CORPORATION  
CONDENSED CONSOLIDATED STATEMENTS OF INCOME  
(In thousands, except per share data)  
(Unaudited)  
                         
    Three Months Ended     Twelve Months Ended  
    January 26,     January 27,     January 26,     January 27,  
    2014     2013     2014     2013  
                                 
Revenue   $ 1,144,218     $ 1,106,902     $ 4,130,162     $ 4,280,159  
Cost of revenue     524,976       521,300       1,862,399       2,053,816  
Gross profit     619,242       585,602       2,267,763       2,226,343  
Operating expenses                                
  Research and development     336,641       298,007       1,335,834       1,147,282  
  Sales, general and administrative     115,677       104,022       435,702       430,822  
    Total operating expenses     452,318       402,029       1,771,536       1,578,104  
Operating income     166,924       183,573       496,227       648,239  
  Interest income     4,156       4,693       17,119       19,908  
  Interest expense     (7,935 )     (880 )     (10,443 )     (3,294 )
  Other income (expense), net     5,743       (1,278 )     7,351       (2,814 )
Income before income tax expense     168,888       186,108       510,254       662,039  
Income tax expense     21,971       12,135       70,264       99,503  
Net income   $ 146,917     $ 173,973     $ 439,990     $ 562,536  
                                 
Basic net income per share   $ 0.26     $ 0.28     $ 0.75     $ 0.91  
Diluted net income per share   $ 0.25     $ 0.28     $ 0.74     $ 0.90  
                                 
Shares used in basic per share computation     568,483       620,169       587,893       619,324  
Shares used in diluted per share computation     577,356       622,018       594,517       624,957  
                                 
                                 
                                 
NVIDIA CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)
         
    January 26,   January 27,
    2014   2013
ASSETS            
             
Current assets:            
  Cash, cash equivalents and marketable securities   $ 4,671,810   $ 3,727,883
  Accounts receivable, net     426,357     454,252
  Inventories     387,765     412,467
  Prepaid expenses and other current assets     138,779     180,656
    Total current assets     5,624,711     4,775,258
             
Property and equipment, net     582,740     576,144
Goodwill     643,179     641,030
Intangible assets, net     296,012     312,332
Other assets     104,252     107,481
    Total assets   $ 7,250,894   $ 6,412,245
             
LIABILITIES AND STOCKHOLDERS' EQUITY            
             
Current liabilities:            
  Accounts payable   $ 324,391   $ 356,428
  Accrued liabilities and other current liabilities     621,105     619,795
    Total current liabilities     945,496     976,223
             
Long-term debt     1,356,375     -
Other long-term liabilities     475,125     589,321
Capital lease obligations, long-term     17,500     18,998
             
Stockholders' equity     4,456,398     4,827,703
                 
    Total liabilities and stockholders' equity   $ 7,250,894   $ 6,412,245
                 
                 
                 
NVIDIA CORPORATION  
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES  
(In thousands, except per share data)  
(Unaudited)  
                               
    Three Months Ended     Twelve Months Ended  
    January     October     January     January     January  
    26, 2014     27, 2013     27, 2013     26, 2014     27, 2013  
                                         
GAAP gross profit   $ 619,242     $ 584,415     $ 585,602     $ 2,267,763     $ 2,226,343  
  GAAP gross margin     54.1 %     55.4 %     52.9 %     54.9 %     52.0 %
    Stock-based compensation expense included in cost of revenue (A)     2,777       3,090       2,826       10,688       10,490  
    Legal settlement     1,450       -       -       3,740       -  
    Credit from a weak die/packaging material set (B)     (7,782 )     -       -       (7,782 )     -  
Non-GAAP gross profit   $ 615,687     $ 587,505     $ 588,428     $ 2,274,409     $ 2,236,833  
  Non-GAAP gross margin     53.8 %     55.7 %     53.2 %     55.1 %     52.3 %
                                         
GAAP operating expenses   $ 452,318     $ 443,427     $ 402,029     $ 1,771,536     $ 1,578,104  
    Stock-based compensation expense included in operating expense (A)     (33,427 )     (31,209 )     (32,943 )     (125,607 )     (126,172 )
    Acquisition-related costs (C)     (9,250 )     (4,577 )     (8,698 )     (31,652 )     (36,138 )
    Contribution expense (D)     -       -       -       -       (20,127 )
    Other expense (E)     (1,845 )     (2,235 )     -       (4,080 )     -  
Non-GAAP operating expenses   $ 407,796     $ 405,406     $ 360,388     $ 1,610,197     $ 1,395,667  
                                         
GAAP interest and other income/expense, net   $ 1,964     $ 496     $ 2,535     $ 14,027     $ 13,800  
    Gain on sale of a non-affiliated investment     (3,074 )     -       -       (3,074 )     -  
    Interest expense related to amortization of debt discount     4,600       -       -       4,600       -  
Non-GAAP interest and other income/expense, net   $ 3,490     $ 496     $ 2,535     $ 15,553     $ 13,800  
                                         
GAAP net income   $ 146,917     $ 118,734     $ 173,973     $ 439,990     $ 562,536  
    Total pre-tax impact of non-GAAP adjustments     42,493       41,111       44,467       169,511       192,927  
    Income tax impact of non-GAAP adjustments     (1,924 )     (6,055 )     (3,507 )     (21,094 )     (27,090 )
Non-GAAP net income   $ 187,486     $ 153,790     $ 214,933     $ 588,407     $ 728,373  
                                         
Diluted net income per share                                        
    GAAP   $ 0.25     $ 0.20     $ 0.28     $ 0.74     $ 0.90  
    Non-GAAP   $ 0.32     $ 0.26     $ 0.35     $ 0.99     $ 1.17  
                                         
Shares used in diluted net income per share computation     577,356       588,752       622,018       594,517       624,957  
                                         
Metrics:                                        
    GAAP net cash flow provided by operating activities   $ 400,712     $ 162,315     $ 451,009     $ 835,146     $ 824,172  
    Purchase of property and equipment and intangible assets     (66,374 )     (38,159 )     (47,758 )     (255,186 )     (183,309 )
    Free cash flow   $ 334,338     $ 124,156     $ 403,251     $ 579,960     $ 640,863  
                                         
                               
(A) Excludes stock-based compensation as follows:   Three Months Ended     Twelve Months Ended  
    January     October     January     January     January  
    26, 2014     27, 2013     27, 2013     26, 2014     27, 2013  
    Cost of revenue   $ 2,777     $ 3,090     $ 2,826     $ 10,688     $ 10,490  
    Research and development   $ 21,548     $ 20,902     $ 22,009     $ 82,940     $ 82,157  
    Sales, general and administrative   $ 11,879     $ 10,307     $ 10,934     $ 42,667     $ 44,015  
                                         
(B) Release of the remaining warranty reserve related to a weak die/packaging material set, as of January 26, 2014.  
   
(C) Consists of amortization of acquisition-related intangible assets, transaction costs, compensation charges, and other credits related to acquisitions.  
   
(D) Net present value of a $25 million charitable contribution pledged on June 12, 2012 to Stanford Hospital and Clinic, payable over ten years.  
   
(E) Includes intangible asset write-off, restructuring charge, and legal settlement costs, net of credits.  
   
   
   
NVIDIA CORPORATION  
RECONCILIATION OF GAAP TO NON-GAAP OUTLOOK  
   
    Q1 FY2015 Outlook  
         
GAAP gross margin     54.2 %
  Impact of stock-based compensation     0.3 %
Non-GAAP gross margin     54.5 %
         
    Q1 FY2015 Outlook  
    (In millions)  
         
GAAP operating expenses   $ 454  
  Stock-based compensation expense and acquisition-related costs     (41 )
Non-GAAP operating expenses   $ 413  
         
         

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

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

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

Contact Information

  • For further information, contact:

    Chris Evenden
    Investor Relations
    NVIDIA Corporation
    (408) 566-6616
    cevenden@nvidia.com

    Robert Sherbin
    Corporate Communications
    NVIDIA Corporation
    (408) 566-5150
    rsherbin@nvidia.com