- Revenue is expected to be $1.01 billion, plus or minus two percent.
- GAAP and non-GAAP gross margins are expected to be 55.7 percent and 56.0 percent, respectively, plus or minus 50 basis points.
- GAAP operating expenses are expected to be approximately $474 million; non-GAAP operating expenses are expected to be approximately $425 million.
- GAAP and non-GAAP tax rates for the second quarter of fiscal 2016 are expected to be 23 percent and 21 percent, respectively, plus or minus one percent.
- The above GAAP outlook amounts exclude restructuring charges, which are expected to be in the range of $100 million to $125 million, primarily during fiscal 2016. These charges will consist of severance and other employee termination benefits, tax expense items and other costs associated with the wind-down, if the company is unable to sell the modem operations.
- Capital expenditures are expected to be approximately $35 million to $45 million.
First Quarter Fiscal 2016 Highlights
During the first quarter, NVIDIA achieved progress in each of its platforms.
Gaming:
- Launched NVIDIA® GeForce® GTX™ TITAN X GPU, the world's fastest GPU.
- Introduced its first living-room entertainment device, NVIDIA SHIELD™, the world's first 4K smart TV platform that uses the Internet to connect you to a world of media, games, and apps.
Enterprise Graphics:
- Introduced its roadmap for physically based rendering -- including Iray® 2015 rendering software; Quadro® M6000, the world's most powerful professional GPU; and the Quadro Visual Computing Appliance, with eight M6000 GPUs.
HPC & Cloud:
- Drew more than 4,000 guests to the sixth annual GPU Technology Conference, which focused on deep learning and self-driving cars, and featured talks by leaders in these industries.
- Major consumer web and cloud companies -- including Baidu, Facebook, Flickr/Yahoo, Microsoft and Twitter -- are using NVIDIA GPUs for deep learning.
- Announced that its next-generation Pascal™ GPU architecture will accelerate
deep learning applications 10X beyond the speed of current-generation
Maxwell™ processors.
Automotive:
- Announced availability of NVIDIA DRIVE™ PX, a powerful car computer that utilizes deep learning to enable self-driving capabilities.
CFO Commentary
Commentary on the quarter by Colette Kress, NVIDIA's executive vice president and chief financial officer, is available at
http://investor.nvidia.com/.
Conference Call and Webcast Information
NVIDIA will conduct a conference call with analysts and investors to discuss its first quarter fiscal 2016 financial results and current financial prospects today at 2 p.m. Pacific Time (5 p.m. Eastern Time). To listen to the conference call, dial (303) 223-2696; no password is required. A live webcast (listen-only mode) of the conference call will be accessible at NVIDIA's investor relations website,
http://investor.nvidia.com, 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 second quarter fiscal 2016.
Non-GAAP Measures
To supplement NVIDIA's Condensed Consolidated Statements of Income 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 other income (expense), net, non-GAAP income tax expense, non-GAAP net income, non-GAAP net income, or earnings, per diluted share, non-GAAP diluted shares, 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, acquisition-related costs, gains and losses from non-affiliated investments, interest expense related to amortization of debt discount, and the associated tax impact of these items, where applicable. Weighted average shares used in the non-GAAP diluted net income per share computation includes the anti-dilution impact of our Note Hedge. 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.
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- Keep up with the NVIDIA Blog, and follow us on Facebook, Google+, Twitter, LinkedIn and Instagram.
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NVIDIA CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In millions, except per share data)
(Unaudited)
Three Months Ended
----------------------------
April 26, April 27,
2015 2014
------------- -------------
Revenue $ 1,151 $ 1,103
Cost of revenue 498 499
------------- -------------
Gross profit 653 604
Operating expenses
Research and development 339 334
Sales, general and administrative 138 119
------------- -------------
Total operating expenses 477 453
------------- -------------
Operating income 176 151
Interest income 9 6
Interest expense (12) (11)
Other income (expense), net (1) 17
------------- -------------
Income before income tax expense 172 163
Income tax expense 38 26
------------- -------------
Net income $ 134 $ 137
============= =============
Net income per share:
Basic $ 0.24 $ 0.24
============= =============
Diluted $ 0.24 $ 0.24
============= =============
Weighted average shares used in per share
computation:
Basic 549 559
Diluted 568 570
NVIDIA CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(In millions)
(Unaudited)
April 26, January 25,
2015 2015
------------- -------------
ASSETS
Current assets:
Cash, cash equivalents and marketable
securities $ 4,792 $ 4,623
Accounts receivable, net 455 474
Inventories 438 483
Prepaid expenses and other current assets 147 133
------------- -------------
Total current assets 5,832 5,713
Property and equipment, net 547 557
Goodwill 618 618
Intangible assets, net 205 222
Other assets 89 91
------------- -------------
Total assets $ 7,291 $ 7,201
============= =============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 222 $ 293
Accrued and other current liabilities 661 603
------------- -------------
Total current liabilities 883 896
Long-term debt 1,391 1,384
Other long-term liabilities 448 489
Capital lease obligations, long-term 13 14
Stockholders' equity 4,556 4,418
------------- -------------
Total liabilities and stockholders' equity $ 7,291 $ 7,201
============= =============
NVIDIA CORPORATION
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES
(In millions, except per share data)
(Unaudited)
Three Months Ended
-------------------------------------------
April 26, January 25, April 27,
2015 2015 2014
------------- ------------- -------------
GAAP gross profit $ 653 $ 700 $ 604
GAAP gross margin 56.7% 55.9% 54.8%
Stock-based compensation
expense included in cost
of revenue (A) 2 3 3
------------- ------------- -------------
Non-GAAP gross profit $ 655 $ 703 $ 607
============= ============= =============
Non-GAAP gross margin 56.9% 56.2% 55.1%
GAAP operating expenses $ 477 $ 468 $ 453
Stock-based compensation
expense included in
operating expense (A) (43) (39) (33)
Acquisition-related costs
(B) (9) (9) (9)
------------- ------------- -------------
Non-GAAP operating expenses $ 425 $ 420 $ 411
============= ============= =============
GAAP other income (expense),
net $ (4) $ (3) $ 12
Gains and losses from non-
affiliated investments - - (17)
Interest expense related to
amortization of debt
discount 7 7 7
------------- ------------- -------------
Non-GAAP other income
(expense), net $ 3 $ 4 $ 2
============= ============= =============
GAAP net income $ 134 $ 193 $ 137
Total pre-tax impact of
non-GAAP adjustments 63 58 35
Income tax impact of non-
GAAP adjustments (10) (10) (6)
------------- ------------- -------------
Non-GAAP net income $ 187 $ 241 $ 166
============= ============= =============
Diluted net income per share
GAAP $ 0.24 $ 0.35 $ 0.24
============= ============= =============
Non-GAAP $ 0.33 $ 0.43 $ 0.29
============= ============= =============
Weighted average shares used in
diluted net income per share
computation
GAAP 568 557 570
Anti-dilution impact from
Note Hedge (C) (6) - -
------------- ------------- -------------
Non-GAAP 562 557 570
============= ============= =============
Metrics:
GAAP net cash provided by
operating activities $ 246 $ 443 $ 151
Purchase of property and
equipment and intangible
assets (30) (31) (29)
------------- ------------- -------------
Free cash flow $ 216 $ 412 $ 122
============= ============= =============
----------------------------------------------------------------------------
(A) Excludes stock-based
compensation as follows: Three Months Ended
-------------------------------------------
April 26, January 25, April 27,
2015 2015 2014
------------- ------------- -------------
Cost of revenue $ 2 $ 3 $ 3
Research and development $ 27 $ 24 $ 21
Sales, general and
administrative $ 16 $ 15 $ 12
(B) Consists of amortization of acquisition-related intangible assets,
transaction costs, compensation charges, and other credits related to
acquisitions.
(C) Represents the number of shares that would be delivered upon conversion
of the currently outstanding 1.00% Convertible Senior Notes Due 2018.
Under GAAP, shares delivered in hedge transactions are not considered
offsetting shares in the fully diluted share calculation until actually
delivered.
----------------------------------------------------------------------------
NVIDIA CORPORATION
RECONCILIATION OF GAAP TO NON-GAAP OUTLOOK
Q2 FY2016
Outlook
------------------
GAAP gross margin 55.7%
Impact of stock-based compensation 0.3%
------------------
Non-GAAP gross margin 56.0%
==================
Q2 FY2016
Outlook
------------------
(In millions)
GAAP operating expenses $ 474
Stock-based compensation expense and acquisition-
related costs (49)
------------------
Non-GAAP operating expenses $ 425
==================
