- Revenue is expected to be $2.90 billion, plus or minus 2 percent.
- GAAP and non-GAAP gross margins are expected to be 62.0 percent and 62.5 percent, respectively, plus or minus 50 basis points.
- GAAP and non-GAAP operating expenses are expected to be approximately $980 million and $765 million, respectively.
- GAAP and non-GAAP other income and expense are both expected to be income of approximately $25 million.
- GAAP and non-GAAP tax rates are both expected to be 10 percent, plus or minus 1 percent, excluding any discrete items. GAAP discrete items include excess tax benefits or deficiencies related to stock-based compensation, which are expected to generate variability on a quarter by quarter basis.
Highlights
Since the end of the first quarter of fiscal 2020, NVIDIA has achieved progress in these areas:
Data Center
- Announced breakthroughs in language understanding that allow organizations to enable real-time conversational AI, with record-setting performance in running training and inference on the BERT AI language model.
- Announced that NVIDIA’s DGX SuperPOD™ – which provides the AI infrastructure for the company’s autonomous-vehicle development program – was ranked the world’s 22nd fastest supercomputer and that its reference architecture is available commercially through partners.
- Set eight records in AI training performance in the latest MLPerf benchmarking tests.
- Announced
support for Arm CPUs, providing a new path to build highly energy-efficient, AI-enabled exascale supercomputers.
Gaming
- Supercharged its GPU lineup with GeForce® RTX 2060 SUPER™, GeForce RTX 2070 SUPER and GeForce RTX 2080 SUPER, delivering best-in-class gaming performance and real-time ray tracing.
- Announced that new blockbuster titles including Call of Duty: Modern Warfare, Cyberpunk 2077, Watch Dogs: Legion, and Wolfenstein: Youngblood will feature ray tracing, propelling the momentum of RTX technology.
- Unveiled the new NVIDIA Studio® platform for the world’s tens of millions of online and studio-based creatives, with the introduction of 27 new RTX Studio laptops powered by GeForce RTX™ and Quadro RTX™ GPUs.
- Announced the launch of 25 more gaming laptops by major makers fueled by NVIDIA Turing™ GPUs, bringing the total number of Turing laptops to more than 100.
Professional Visualization
- Announced that in its first full year, NVIDIA RTX™ ray tracing has emerged as the new industry standard in product design, architecture, effects and scientific visualization, with the support of more than 40 key applications, including eight introduced at SIGGRAPH.
- Rolled out a full range of Turing architecture-based Quadro® GPUs for mobile workstations with global system providers.
Automotive
- Volvo Group announced that it is using the NVIDIA DRIVE™ end-to-end autonomous driving platform to train networks in the data center, test them in simulation and deploy them in self-driving vehicles, targeting freight transport, refuse and recycling collection, public transport, construction, mining, forestry and more.
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 second quarter fiscal 2020 financial results and current financial prospects today at 2:30 p.m. Pacific time (5:30 p.m. Eastern time). A live webcast (listen-only mode) of the conference call will be accessible at NVIDIA’s investor relations website, http://investor.nvidia.com. The webcast will be recorded and available for replay until NVIDIA’s conference call to discuss its financial results for its third quarter of fiscal 2020.
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 income from operations, non-GAAP other income (expense), 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 expense, legal settlement costs, acquisition-related and other 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 purchase 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 the company’s non-GAAP measures may be different from non-GAAP measures used by other companies.
| NVIDIA CORPORATION | |||||||||||||||||
| CONDENSED CONSOLIDATED STATEMENTS OF INCOME | |||||||||||||||||
| (In millions, except per share data) | |||||||||||||||||
| (Unaudited) | |||||||||||||||||
| Three Months Ended | Six Months Ended | ||||||||||||||||
| July 28, | July 29, | July 28, | July 29, | ||||||||||||||
| 2019 | 2018 | 2019 | 2018 | ||||||||||||||
| Revenue | $ | 2,579 | $ | 3,123 | $ | 4,799 | $ | 6,330 | |||||||||
| Cost of revenue | 1,038 | 1,148 | 1,962 | 2,287 | |||||||||||||
| Gross profit | 1,541 | 1,975 | 2,837 | 4,043 | |||||||||||||
| Operating expenses | |||||||||||||||||
| Research and development | 704 | 581 | 1,379 | 1,124 | |||||||||||||
| Sales, general and administrative | 266 | 237 | 529 | 467 | |||||||||||||
| Total operating expenses | 970 | 818 | 1,908 | 1,591 | |||||||||||||
| Income from operations | 571 | 1,157 | 929 | 2,452 | |||||||||||||
| Interest income | 47 | 32 | 92 | 57 | |||||||||||||
| Interest expense | (13 | ) | (14 | ) | (27 | ) | (29 | ) | |||||||||
| Other, net | 1 | 5 | 1 | 11 | |||||||||||||
| Total other income (expense) | 35 | 23 | 66 | 39 | |||||||||||||
| Income before income tax | 606 | 1,180 | 995 | 2,491 | |||||||||||||
| Income tax expense | 54 | 79 | 48 | 146 | |||||||||||||
| Net income | $ | 552 | $ | 1,101 | $ | 947 | $ | 2,345 | |||||||||
| Net income per share: | |||||||||||||||||
| Basic | $ | 0.91 | $ | 1.81 | $ | 1.56 | $ | 3.86 | |||||||||
| Diluted | $ | 0.90 | $ | 1.76 | $ | 1.54 | $ | 3.74 | |||||||||
| Weighted average shares used in per share computation: | |||||||||||||||||
| Basic | 609 | 607 | 608 | 607 | |||||||||||||
| Diluted | 616 | 626 | 616 | 627 | |||||||||||||
