NVIDIA Announces Financial Results for Second Quarter Fiscal 2020


NVIDIA CORPORATION
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES
(In millions, except per share data)
(Unaudited)

			Three Months Ended									Six Months Ended
			July 28,			April 28,			July 29,			July 28,			July 29,
				2019			2019			2018			2019			2018

GAAP gross profit			$	1,541		$	1,296		$	1,975		$	2,837		$	4,043
	GAAP gross margin			59.8	%		58.4	%		63.3	%		59.1	%		63.9	%
		Stock-based compensation expense (A)		8			4			8			12			16
		Legal settlement costs		2			10			-			11			-
Non-GAAP gross profit			$	1,551		$	1,310		$	1,983		$	2,860		$	4,059
	Non-GAAP gross margin			60.1	%		59.0	%		63.5	%		59.6	%		64.1	%

GAAP operating expenses			$	970		$	938		$	818		$	1,908		$	1,591
		Stock-based compensation expense (A)		(216	)		(174	)		(124	)		(389	)		(246	)
		Acquisition-related and other costs		(5	)		(10	)		(2	)		(15	)		(4	)
		Legal settlement costs		-			(1	)		-			(2	)		-
Non-GAAP operating expenses			$	749		$	753		$	692		$	1,502		$	1,341

GAAP income from operations			$	571		$	358		$	1,157		$	929		$	2,452
		Total impact of non-GAAP adjustments to income from operations		231			199			133			429			266
Non-GAAP income from operations			$	802		$	557		$	1,290		$	1,358		$	2,718

GAAP other income (expense)			$	35		$	31		$	23		$	66		$	39
		Gains from non-affiliated investments		-			-			(2	)		-			(8	)
		Interest expense related to amortization of debt discount		-			-			-			1			1
Non-GAAP other income (expense)			$	35		$	31		$	21		$	67		$	32

GAAP net income			$	552		$	394		$	1,101		$	947		$	2,345
		Total pre-tax impact of non-GAAP adjustments		231			199			131			430			259
		Income tax impact of non-GAAP adjustments (B)		(21	)		(50	)		(22	)		(72	)		(109	)
Non-GAAP net income			$	762		$	543		$	1,210		$	1,305		$	2,495

Diluted net income per share
		GAAP	$	0.90		$	0.64		$	1.76		$	1.54		$	3.74
		Non-GAAP	$	1.24		$	0.88		$	1.94		$	2.12		$	3.99

Weighted average shares used in diluted net income per share computation
		GAAP		616			616			626			616			627
		Anti-dilution impact from note hedge		-			-			(1	)		-			(1	)
		Non-GAAP		616			616			625			616			626

GAAP net cash provided by operating activities			$	936		$	720		$	913		$	1,656		$	2,358
		Purchase of property and equipment and intangible assets		(113	)		(128	)		(128	)		(241	)		(247	)
Free cash flow			$	823		$	592		$	785		$	1,415		$	2,111


(A) Stock-based compensation consists of the following:			Three Months Ended									Six Months Ended
			July 28,			April 28,			July 29,			July 28,			July 29,
				2019			2019			2018			2019			2018
		Cost of revenue	$	8		$	4		$	8		$	12		$	16
		Research and development	$	145		$	114		$	76		$	259		$	150
		Sales, general and administrative	$	71		$	60		$	48		$	130		$	96

(B) Income tax impact of non-GAAP adjustments, including the recognition of excess tax benefits or deficiencies related to stock-based compensation under GAAP accounting standard (ASU 2016-09).

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