NVIDIA Announces Financial Results for Third Quarter Fiscal 2018
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NVIDIA CORPORATION
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RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES
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(In millions, except per share data) |
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(Unaudited) |
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Three Months Ended
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Nine Months Ended
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October 29, |
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July 30, |
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October 30, |
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October 29, |
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October 30, |
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2017 |
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2017 |
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2016 |
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2017 |
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2016 |
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GAAP gross profit |
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$ |
1,569 |
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$ |
1,302 |
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$ |
1,183 |
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$ |
4,021 |
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$ |
2,760 |
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GAAP gross margin |
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59.5 |
% |
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58.4 |
% |
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59.0 |
% |
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59.1 |
% |
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58.3 |
% |
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Stock-based compensation expense (A) |
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6 |
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4 |
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3 |
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14 |
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11 |
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Legal settlement costs |
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- |
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- |
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- |
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- |
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10 |
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Non-GAAP gross profit |
$ |
1,575 |
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$ |
1,306 |
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$ |
1,186 |
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$ |
4,035 |
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$ |
2,781 |
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Non-GAAP gross margin |
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59.7 |
% |
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58.6 |
% |
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59.2 |
% |
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59.3 |
% |
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58.7 |
% |
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GAAP operating expenses |
$ |
674 |
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$ |
614 |
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$ |
544 |
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$ |
1,884 |
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$ |
1,559 |
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Stock-based compensation expense (A) |
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(101 |
) |
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(77 |
) |
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(62 |
) |
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(251 |
) |
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(166 |
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Legal settlement costs |
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- |
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- |
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- |
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- |
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(6 |
) |
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Acquisition-related costs (B) |
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(3 |
) |
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(4 |
) |
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(4 |
) |
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(11 |
) |
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(12 |
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Contributions |
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- |
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- |
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- |
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(2 |
) |
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(4 |
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Restructuring and other charges |
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- |
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- |
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- |
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- |
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(3 |
) |
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Non-GAAP operating expenses |
$ |
570 |
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$ |
533 |
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$ |
478 |
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$ |
1,620 |
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$ |
1,368 |
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GAAP income from operations |
$ |
895 |
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$ |
688 |
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$ |
639 |
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$ |
2,137 |
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$ |
1,201 |
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Total impact of non-GAAP adjustments to income from operations |
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110 |
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85 |
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69 |
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278 |
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211 |
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Non-GAAP income from operations |
$ |
1,005 |
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$ |
773 |
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$ |
708 |
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$ |
2,415 |
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$ |
1,412 |
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GAAP other income (expense) |
$ |
1 |
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$ |
(4 |
) |
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$ |
(18 |
) |
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$ |
(20 |
) |
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$ |
(21 |
) |
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Gains from non-affiliated investments |
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- |
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- |
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- |
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- |
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(3 |
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Interest expense related to amortization of debt discount |
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- |
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1 |
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6 |
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3 |
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20 |
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Loss on early debt conversions |
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1 |
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3 |
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15 |
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19 |
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15 |
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Non-GAAP other income (expense) |
$ |
2 |
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$ |
- |
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$ |
3 |
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$ |
2 |
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$ |
11 |
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GAAP net income |
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$ |
838 |
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$ |
583 |
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$ |
542 |
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$ |
1,928 |
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$ |
1,012 |
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Total pre-tax impact of non-GAAP adjustments |
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111 |
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89 |
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90 |
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300 |
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243 |
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Income tax impact of non-GAAP adjustments (C) |
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(116 |
) |
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(34 |
) |
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(62 |
) |
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(224 |
) |
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(108 |
) |
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Non-GAAP net income |
$ |
833 |
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$ |
638 |
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$ |
570 |
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$ |
2,004 |
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$ |
1,147 |
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Diluted net income per share |
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GAAP |
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$ |
1.33 |
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$ |
0.92 |
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$ |
0.83 |
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$ |
3.05 |
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$ |
1.59 |
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Non-GAAP |
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$ |
1.33 |
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$ |
1.01 |
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$ |
0.94 |
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$ |
3.20 |
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$ |
1.93 |
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Weighted average shares used in diluted net income per share computation |
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GAAP |
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628 |
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633 |
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653 |
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633 |
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636 |
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Anti-dilution impact from note hedge (D) |
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(2 |
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(4 |
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(45 |
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(7 |
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(42 |
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Non-GAAP |
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626 |
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629 |
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608 |
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626 |
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594 |
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GAAP net cash provided by operating activities |
$ |
1,157 |
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$ |
705 |
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$ |
432 |
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$ |
2,144 |
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$ |
951 |
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Purchase of property and equipment and intangible assets |
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(69 |
) |
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(55 |
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(38 |
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(178 |
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(125 |
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Free cash flow |
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$ |
1,088 |
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$ |
650 |
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$ |
394 |
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$ |
1,966 |
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$ |
826 |
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(A) Stock-based compensation consists of the following: |
Three Months Ended |
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Nine Months Ended |
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October 29, |
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July 30, |
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October 30, |
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October 29, |
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October 30, |
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2017 |
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2017 |
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2016 |
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2017 |
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2016 |
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Cost of revenue |
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$ |
6 |
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$ |
4 |
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$ |
3 |
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$ |
14 |
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$ |
11 |
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Research and development |
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$ |
61 |
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$ |
44 |
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$ |
35 |
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$ |
146 |
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$ |
95 |
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Sales, general and administrative |
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$ |
40 |
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$ |
33 |
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$ |
27 |
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$ |
105 |
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$ |
71 |
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(B) Consists of amortization of acquisition-related intangible assets and compensation charges. |
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(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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(D) 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. |
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