NVIDIA Announces Financial Results for Fourth Quarter and Fiscal

NVIDIA Announces Financial Results for Fourth Quarter and Fiscal 2018

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

		Three Months Ended									Twelve Months Ended
		January 28,			October 29,			January 29,			January 28,			January 29,
			2018			2017			2017			2018			2017

GAAP gross profit		$	1,801		$	1,569		$	1,303		$	5,822		$	4,063
GAAP gross margin			61.9	%		59.5	%		60.0	%		59.9	%		58.8	%
	Stock-based compensation expense (A)		7			6			4			21			15
	Legal settlement costs		1			-			-			1			10
Non-GAAP gross profit		$	1,809		$	1,575		$	1,307		$	5,844		$	4,088
Non-GAAP gross margin			62.1	%		59.7	%		60.2	%		60.2	%		59.2	%

GAAP operating expenses		$	728		$	674		$	570		$	2,612		$	2,129
	Stock-based compensation expense (A)		(119	)		(101	)		(68	)		(370	)		(233	)
	Acquisition-related costs (B)		(2	)		(3	)		(4	)		(13	)		(16	)
	Contributions		-			-			-			(2	)		(4	)
	Legal settlement costs		-			-			-			-			(6	)
	Restructuring and other charges		-			-			-			-			(3	)
Non-GAAP operating expenses		$	607		$	570		$	498		$	2,227		$	1,867

GAAP income from operations		$	1,073		$	895		$	733		$	3,210		$	1,934
	Total impact of non-GAAP adjustments to income from operations		129			110			76			407			287
Non-GAAP income from operations		$	1,202		$	1,005		$	809		$	3,617		$	2,221

GAAP other income (expense)		$	5		$	1		$	(7	)	$	(14	)	$	(29	)
	Gains from non-affiliated investments		(2	)		-			(1	)		(2	)		(4	)
	Debt-related costs (C)		2			1			6			20			21
	Interest expense related to amortization of debt discount		-			-			4			3			25
Non-GAAP other income (expense)		$	5		$	2		$	2		$	7		$	13

GAAP net income		$	1,118		$	838		$	655		$	3,047		$	1,666
	Total pre-tax impact of non-GAAP adjustments		129			111			85			428			329
	Income tax impact of non-GAAP adjustments (D)		(33	)		(116	)		(36	)		(257	)		(144	)
	Provisional tax benefit from income tax reform		(133	)		-			-			(133	)		-
Non-GAAP net income		$	1,081		$	833		$	704		$	3,085		$	1,851

Diluted net income per share
	GAAP	$	1.78		$	1.33		$	0.99		$	4.82		$	2.57
	Non-GAAP	$	1.72		$	1.33		$	1.13		$	4.92		$	3.06

Weighted average shares used in diluted net income per share computation
	GAAP		628			628			660			632			649
	Anti-dilution impact from note hedge (E)		(1	)		(2	)		(36	)		(5	)		(44	)
	Non-GAAP		627			626			624			627			605

GAAP net cash provided by operating activities		$	1,358		$	1,157		$	721		$	3,502		$	1,672
	Purchase of property and equipment and intangible assets		(416	)		(69	)		(52	)		(593	)		(176	)
Free cash flow		$	942		$	1,088		$	669		$	2,909		$	1,496



(A) Stock-based compensation consists of the following:		Three Months Ended									Twelve Months Ended
		January 28,			October 29,			January 29,			January 28,			January 29,
			2018			2017			2017			2018			2017
	Cost of revenue	$	7		$	6		$	4		$	21		$	15
	Research and development	$	73		$	61		$	40		$	219		$	135
	Sales, general and administrative	$	46		$	40		$	27		$	151		$	98

(B) Consists of amortization of acquisition-related intangible assets and compensation charges.

(C) Consists of loss on early debt conversions and termination of interest rate swap.

(D) 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).

(E) 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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