NVIDIA CORPORATION
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RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES
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(In millions, except per share data) |
(Unaudited) |
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Three Months Ended
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April 29, | |
January 28, | |
April 30, |
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2018 | |
2018 | |
2017 |
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GAAP gross profit | | $ | 2,068 | | | $ | 1,801 | | | $ | 1,150 | |
GAAP gross margin | | 64.5 | % | | | 61.9 | % | | | 59.4 | % |
| Stock-based compensation expense (A) | | 8 | | | | 7 | | | | 4 | |
| Legal settlement costs | | - | | | | 1 | | | | - | |
Non-GAAP gross profit | $ | 2,076 | | | $ | 1,809 | | | $ | 1,154 | |
Non-GAAP gross margin | | 64.7 | % | | | 62.1 | % | | | 59.6 | % |
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GAAP operating expenses | $ | 773 | | | $ | 728 | | | $ | 596 | |
| Stock-based compensation expense (A) | | | (121 | ) | | | (119 | ) | | | (73 | ) |
| Acquisition-related costs (B) | | (2 | ) | | | (2 | ) | | | (4 | ) |
| Legal settlement costs | | (2 | ) | | | - | | | | - | |
| Contributions | | | - | | | | - | | | | (2 | ) |
Non-GAAP operating expenses | $ | 648 | | | $ | 607 | | | $ | 517 | |
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GAAP income from operations | $ | 1,295 | | | $ | 1,073 | | | $ | 554 | |
| Total impact of non-GAAP adjustments to income from operations | | 133 | | | | 129 | | | | 83 | |
Non-GAAP income from operations | $ | 1,428 | | | $ | 1,202 | | | $ | 637 | |
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GAAP other income (expense) | $ | 16 | | | $ | 5 | | | $ | (18 | ) |
| Gains from non-affiliated investments (C) | | (6 | ) | | | (2 | ) | | | - | |
| Interest expense related to amortization of debt discount | | 1 | | | | - | | | | 2 | |
| Debt-related costs (D) | | - | | | | 2 | | | | 14 | |
Non-GAAP other income (expense) | $ | 11 | | | $ | 5 | | | $ | (2 | ) |
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GAAP net income | | $ | 1,244 | | | $ | 1,118 | | | $ | 507 | |
| Total pre-tax impact of non-GAAP adjustments | | 128 | | | | 129 | | | | 99 | |
| Income tax impact of non-GAAP adjustments (E) | | (87 | ) | | | (33 | ) | | | (73 | ) |
| Provisional tax benefit from income tax reform | | - | | | | (133 | ) | | | - | |
Non-GAAP net income | $ | 1,285 | | | $ | 1,081 | | | $ | 533 | |
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Diluted net income per share | | | | | |
| GAAP | | $ | 1.98 | | | $ | 1.78 | | | $ | 0.79 | |
| Non-GAAP | | $ | 2.05 | | | $ | 1.72 | | | $ | 0.85 | |
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Weighted average shares used in diluted net income per share computation | | | | | |
| GAAP | | | 627 | | | | 628 | | | | 641 | |
| Anti-dilution impact from note hedge (F) | | | (1 | ) | | | (1 | ) | | | (14 | ) |
| Non-GAAP | | | 626 | | | | 627 | | | | 627 | |
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GAAP net cash provided by operating activities | $ | 1,445 | | | $ | 1,358 | | | $ | 282 | |
| Purchase of property and equipment and intangible assets | | (118 | ) | | | (416 | ) | | | (53 | ) |
Free cash flow | | $ | 1,327 | | | $ | 942 | | | $ | 229 | |
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(A) Stock-based compensation consists of the following: |
Three Months Ended |
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April 29, |
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January 28, |
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April 30, |
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2018 |
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2018 |
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2017 |
| Cost of revenue | | $ | 8 | | | $ | 7 | | | $ | 4 | |
| Research and development | | $ | 74 | | | $ | 73 | | | $ | 41 | |
| Sales, general and administrative | | $ | 47 | | | $ | 46 | | | $ | 31 | |
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(B) Consists of amortization of acquisition-related intangible assets and compensation charges. |
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(C) Consists of realized and unrealized gains from non-affiliated investments. |
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(D) Consists of loss on early debt conversions and termination of interest rate swap. |
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(E) 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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(F) 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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