NVIDIA Announces Financial Results for Second Quarter Fiscal 2023


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

			Three Months Ended									Six Months Ended
			July 31,			May 1,			August 1,			July 31,			August 1,
			2022			2022			2021			2022			2021

GAAP gross profit			$	2,915		$	5,431		$	4,215		$	8,346		$	7,844
	GAAP gross margin			43.5	%		65.5	%		64.8	%		55.7	%		64.5	%
		Acquisition-related and other costs (A)		121			94			86			214			173
		Stock-based compensation expense (B)		38			38			32			76			57
		IP-related costs		-			-			4			-			9
Non-GAAP gross profit			$	3,074		$	5,563		$	4,337		$	8,636		$	8,083
	Non-GAAP gross margin			45.9	%		67.1	%		66.7	%		57.6	%		66.4	%

GAAP operating expenses			$	2,416		$	3,563		$	1,771		$	5,979		$	3,444
		Stock-based compensation expense (B)		(611	)		(540	)		(433	)		(1,151	)		(837	)
		Acquisition-related and other costs (A)		(54	)		(55	)		(72	)		(110	)		(152	)
		Contributions		(2	)		-			-			(2	)		-
		Acquisition termination cost		-			(1,353	)		-			(1,353	)		-
		Legal settlement costs		-			(7	)		-			(7	)		-
Non-GAAP operating expenses			$	1,749		$	1,608		$	1,266		$	3,356		$	2,455

GAAP income from operations			$	499		$	1,868		$	2,444		$	2,367		$	4,400
		Total impact of non-GAAP adjustments to income from operations		826			2,087			627			2,913			1,228
Non-GAAP income from operations			$	1,325		$	3,955		$	3,071		$	5,280		$	5,628

GAAP other income (expense), net			$	(24	)	$	(63	)	$	(50	)	$	(87	)	$	38
		(Gains) losses from non-affiliated investments		7			17			-			24			(133	)
		Interest expense related to amortization of debt discount		1			1			1			2			2
Non-GAAP other income (expense), net			$	(16	)	$	(45	)	$	(49	)	$	(61	)	$	(93	)

GAAP net income			$	656		$	1,618		$	2,374		$	2,274		$	4,285
		Total pre-tax impact of non-GAAP adjustments		833			2,105			628			2,940			1,097
		Income tax impact of non-GAAP adjustments (C)		(197	)		(280	)		(127	)		(478	)		(194	)
		Domestication tax adjustments		-			-			(252	)		-			(252	)
Non-GAAP net income			$	1,292		$	3,443		$	2,623		$	4,736		$	4,936

Diluted net income per share
		GAAP	$	0.26		$	0.64		$	0.94		$	0.90		$	1.69
		Non-GAAP	$	0.51		$	1.36		$	1.04		$	1.87		$	1.95

Weighted average shares used in diluted net income per share computation				2,516			2,537			2,532			2,527			2,529

GAAP net cash provided by operating activities			$	1,271		$	1,731		$	2,682		$	3,001		$	4,556
		Purchases related to property and equipment and intangible assets		(432	)		(361	)		(183	)		(794	)		(481	)
		Principal payments on property and equipment		(15	)		(22	)		(21	)		(36	)		(40	)
Free cash flow			$	824		$	1,348		$	2,478		$	2,171		$	4,035


(A) Acquisition-related and other costs are comprised of amortization of intangible assets, transaction costs and certain compensation charges presented in the following line items:
			Three Months Ended									Six Months Ended
			July 31,			May 1,			August 1,			July 31,			August 1,
			2022			2022			2021			2022			2021
		Cost of revenue	$	121		$	94		$	86		$	214		$	173
		Research and development	$	10		$	9		$	1		$	19		$	4
		Sales, general and administrative	$	44		$	46		$	71		$	91		$	148

(B) Stock-based compensation consists of the following:
			Three Months Ended									Six Months Ended
			July 31,			May 1,			August 1,			July 31,			August 1,
			2022			2022			2021			2022			2021
		Cost of revenue	$	38		$	38		$	32		$	76		$	57
		Research and development	$	452		$	384		$	297		$	836		$	573
		Sales, general and administrative	$	159		$	156		$	136		$	315		$	264

(C) 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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