NVIDIA Announces Financial Results for Third Quarter Fiscal 2020

November 15, 2019

Nov. 15, 2019 — NVIDIA today reported revenue for the third quarter ended Oct. 27, 2019, of $3.01 billion compared with $3.18 billion a year earlier and $2.58 billion in the previous quarter.

GAAP earnings per diluted share for the quarter were $1.45, compared with $1.97 a year ago and $0.90 in the previous quarter. Non-GAAP earnings per diluted share were $1.78, compared with $1.84 a year earlier and $1.24 in the previous quarter.

“Our gaming business and demand from hyperscale customers powered Q3’s results,“ said Jensen Huang, founder and CEO of NVIDIA. “The realism of computer graphics is taking a giant leap forward with NVIDIA RTX.

“This quarter, we have laid the foundation for where AI will ultimately make the greatest impact. We extended our reach beyond the cloud, to the edge, where GPU-accelerated 5G, AI and IoT will revolutionize the world’s largest industries. We see strong data center growth ahead, driven by the rise of conversational AI and inference.”

NVIDIA will pay its next quarterly cash dividend of $0.16 per share on Dec. 20, 2019, to all shareholders of record on Nov. 29, 2019.

The company will return to repurchasing its stock after closing the acquisition of Mellanox Technologies, Ltd.  Although discussions with the European Union and China regulatory bodies are progressing and closing the acquisition is possible by the end of this calendar year, the company believes the closing will likely occur in the early part of calendar 2020.

Q3 Fiscal 2020 Summary

GAAP
($ in millions, except
earnings per share)
Q3 FY20 Q2 FY20 Q3 FY19 Q/Q Y/Y
Revenue $3,014 $2,579 $3,181 Up 17% Down 5%
Gross margin 63.6% 59.8% 60.4% Up 380 bps Up 320 bps
Operating expenses $989 $970 $863 Up 2% Up 15%
Operating income $927 $571 $1,058 Up 62% Down 12%
Net income $899 $552 $1,230 Up 63% Down 27%
Diluted earnings per share $1.45 $0.90 $1.97 Up 61% Down 26%

 

Non-GAAP
($ in millions, except
earnings per share)
Q3 FY20 Q2 FY20 Q3 FY19 Q/Q Y/Y
Revenue $3,014 $2,579 $3,181 Up 17% Down 5%
Gross margin 64.1% 60.1% 61.0% Up 400 bps Up 310 bps
Operating expenses $774 $749 $730 Up 3% Up 6%
Operating income $1,156 $802 $1,210 Up 44% Down 4%
Net income $1,103 $762 $1,151 Up 45% Down 4%
Diluted earnings per share $1.78 $1.24 $1.84 Up 44% Down 3%

NVIDIA’s outlook for the fourth quarter of fiscal 2020 does not include any contribution from the pending acquisition of Mellanox and is as follows:

  • Revenue is expected to be $2.95 billion, plus or minus 2 percent. Strong sequential growth is expected in Data Center, offset by a seasonal decline in GeForce® notebook GPUs and SoC modules for gaming platforms.
  • GAAP and non-GAAP gross margins are expected to be 64.1 percent and 64.5 percent, respectively, plus or minus 50 basis points.
  • GAAP and non-GAAP operating expenses are expected to be approximately $1.02 billion and $805 million, respectively.
  • GAAP and non-GAAP other income and expense are both expected to be income of approximately $25 million.
  • GAAP and non-GAAP tax rates are both expected to be 9 percent, plus or minus 1 percent, excluding any discrete items.  GAAP discrete items include excess tax benefits or deficiencies related to stock-based compensation, which are expected to generate variability on a quarter by quarter basis.

Highlights

Since the end of the second quarter of fiscal 2020, NVIDIA has achieved progress in these areas:

Gaming

  • Announced with Microsoft that Minecraft, the world’s most popular computer game, will feature ray tracing.
  • Announced SUPER versions of GeForce GTX GPUs with GeForce GTX 1650 SUPER, and GeForce GTX 1660 SUPER, successor to GeForce GTX 1060, the world’s best-selling GPU.
  • Introduced the RTX Broadcast Engine, which uses the AI capabilities of GeForce RTX GPUs to enable virtual greenscreens, filters and AR effects in livestreaming.
  • Announced two new models of the SHIELD TV streaming media player, which bring unmatched levels of home entertainment, gaming and AI capabilities to the living room.
  • Expanded the reach of GeForce NOW game streaming, with the service announced by Taiwan Mobile and Russia’s Rostelcom with GFN.ru, which joined Korea’s LG U+ and Japan’s SoftBank.

Data Center

  • Launched the NVIDIA® EGX Intelligent Edge Computing Platform to bring accelerated AI to retail, manufacturing, telecommunications, logistics and other industries, with Walmart, BMW, NTT East, Procter & Gamble and Samsung Electronics among early adopters.
  • Collaborated with Microsoft to provide an optimized hybrid-cloud platform combining Microsoft Azure software with NVIDIA EGX powered by NVIDIA T4 GPUs to address edge-computing demand.
  • Entered the 5G telecom market, enabling telcos to build high-performing, efficient, virtualized 5G radio access networks using GPUs, in collaboration with Ericsson.
  • Announced a collaboration with Red Hat to deliver software-defined 5G RAN using Red Hat OpenShift and GPU-accelerated servers.
  • Won the first inference benchmark, MLPerf Inference 0.5, measuring AI workload performance in data centers and at the edge.
  • Partnered with VMware to accelerate VMware Cloud on AWS using NVIDIA T4 GPUs and introduced the new NVIDIA vComputeServer software for enterprises to run AI workloads on GPU servers in virtualized environments.
  • Announced that the United States Postal Service will use NVIDIA AI technology to improve its package data-processing efficiency.

Professional Visualization

  • Announced that more than 40 creative and design applications, including three from Adobe — Adobe Dimension, Substance Alchemist and Premiere Pro — are now accelerated by RTX technology.

Edge Computing

  • Introduced Jetson Xavier NX, the world’s smallest, most powerful AI supercomputer for robotic and embedded computing devices at the edge.

CFO Commentary

Commentary on the quarter by Colette Kress, NVIDIA’s executive vice president and chief financial officer, is available at https://investor.nvidia.com/home/default.aspx.

Conference Call and Webcast Information

NVIDIA will conduct a conference call with analysts and investors to discuss its third quarter fiscal 2020 financial results and current financial prospects today at 2:30 p.m. Pacific time (5:30 p.m. Eastern time). A live webcast (listen-only mode) of the conference call will be accessible at NVIDIA’s investor relations website, https://investor.nvidia.com/home/default.aspx. The webcast will be recorded and available for replay until NVIDIA’s conference call to discuss its financial results for its fourth quarter of fiscal 2020.

Non-GAAP Measures

To supplement NVIDIA’s Condensed Consolidated Statements of Income and Condensed Consolidated Balance Sheets presented in accordance with GAAP, the company uses non-GAAP measures of certain components of financial performance. These non-GAAP measures include non-GAAP gross profit, non-GAAP gross margin, non-GAAP operating expenses, non-GAAP income from operations, non-GAAP other income (expense), non-GAAP income tax expense, non-GAAP net income, non-GAAP net income, or earnings, per diluted share, non-GAAP diluted shares, and free cash flow. In order for NVIDIA’s investors to be better able to compare its current results with those of previous periods, the company has shown a reconciliation of GAAP to non-GAAP financial measures. These reconciliations adjust the related GAAP financial measures to exclude stock-based compensation expense, legal settlement costs, restructuring and other, acquisition-related and other costs, gains and losses from non-affiliated investments, interest expense related to amortization of debt discount, and the associated tax impact of these items, where applicable. Free cash flow is calculated as GAAP net cash provided by operating activities less purchase of property and equipment and intangible assets. NVIDIA believes the presentation of its non-GAAP financial measures enhances the user’s overall understanding of the company’s historical financial performance. The presentation of the company’s non-GAAP financial measures is not meant to be considered in isolation or as a substitute for the company’s financial results prepared in accordance with GAAP, and the company’s non-GAAP measures may be different from non-GAAP measures used by other companies.

NVIDIA CORPORATION
 CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In millions, except per share data)
(Unaudited)
Three Months Ended Nine Months Ended
October 27, October 28, October 27, October 28,
2019 2018 2019 2018
Revenue $ 3,014 $ 3,181 $ 7,813 $ 9,511
Cost of revenue 1,098 1,260 3,060 3,547
Gross profit 1,916 1,921 4,753 5,964
Operating expenses
Research and development 712 605 2,091 1,729
Sales, general and administrative 277 258 806 725
Total operating expenses 989 863 2,897 2,454
Income from operations 927 1,058 1,856 3,510
Interest income 45 37 137 94
Interest expense (13 ) (15 ) (39 ) (44 )
Other, net 1 12
Total other income (expense) 32 23 98 62
Income before income tax 959 1,081 1,954 3,572
Income tax expense (benefit) 60 (149 ) 109 (3 )
Net income $ 899 $ 1,230 $ 1,845 $ 3,575
Net income per share:
Basic $ 1.47 $ 2.02 $ 3.03 $ 5.88
Diluted $ 1.45 $ 1.97 $ 2.99 $ 5.71
Weighted average shares used in per share computation:
Basic 610 609 609 608
Diluted 618 625 617 626

 

NVIDIA CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(In millions)
(Unaudited)
October 27, January 27,
2019 2019
ASSETS
Current assets:
Cash, cash equivalents and marketable securities $ 9,769 $ 7,422
Accounts receivable, net 1,455 1,424
Inventories 1,047 1,575
Prepaid expenses and other current assets 149 136
Total current assets 12,420 10,557
Property and equipment, net 1,517 1,404
Operating lease assets 527
Goodwill 618 618
Intangible assets, net 43 45
Deferred income tax assets 569 560
Other assets 116 108
Total assets $ 15,810 $ 13,292
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Accounts payable $ 591 $ 511
Accrued and other current liabilities 884 818
Total current liabilities 1,475 1,329
Long-term debt 1,990 1,988
Long-term operating lease liabilities 469
Other long-term liabilities 662 633
Total liabilities 4,596 3,950
Shareholders’ equity 11,214 9,342
Total liabilities and shareholders’ equity $ 15,810 $ 13,292

 

NVIDIA CORPORATION
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES
(In millions, except per share data)
(Unaudited)
Three Months Ended Nine Months Ended
October 27, July 28, October 28, October 27, October 28,
2019 2019 2018 2019 2018
GAAP gross profit $ 1,916 $ 1,541 $ 1,921 $ 4,753 $ 5,964
  GAAP gross margin 63.6 % 59.8 % 60.4 % 60.8 % 62.7 %
Stock-based compensation expense (A) 15 8 5 27 21
Legal settlement costs 2 14 11 14
Non-GAAP gross profit $ 1,931 $ 1,551 $ 1,940 $ 4,791 $ 5,999
  Non-GAAP gross margin 64.1 % 60.1 % 61.0 % 61.3 % 63.1 %
GAAP operating expenses $ 989 $ 970 $ 863 $ 2,897 $ 2,454
Stock-based compensation expense (A) (208 ) (216 ) (135 ) (597 ) (379 )
Acquisition-related and other costs (7 ) (5 ) (1 ) (22 ) (5 )
Legal settlement costs (1 ) (2 ) (3 )
Restructuring and other 4 4
Non-GAAP operating expenses $ 774 $ 749 $ 730 $ 2,276 $ 2,071
GAAP income from operations $ 927 $ 571 $ 1,058 $ 1,856 $ 3,510
Total impact of non-GAAP adjustments to income from operations 229 231 152 659 418
Non-GAAP income from operations $ 1,156 $ 802 $ 1,210 $ 2,515 $ 3,928
GAAP other income (expense) $ 32 $ 35 $ 23 $ 98 $ 62
Losses (Gains) from non-affiliated investments (2 ) 1 (11 )
Interest expense related to amortization of debt discount 1 1 1
Non-GAAP other income (expense) $ 33 $ 35 $ 21 $ 100 $ 52
GAAP net income $ 899 $ 552 $ 1,230 $ 1,845 $ 3,575
Total pre-tax impact of non-GAAP adjustments 230 231 150 660 409
Income tax impact of non-GAAP adjustments (B) (26 ) (21 ) (91 ) (97 ) (199 )
Tax benefit from income tax reform (138 ) (138 )
Non-GAAP net income $ 1,103 $ 762 $ 1,151 $ 2,408 $ 3,647
Diluted net income per share
GAAP $ 1.45 $ 0.90 $ 1.97 $ 2.99 $ 5.71
Non-GAAP $ 1.78 $ 1.24 $ 1.84 $ 3.90 $ 5.83
Weighted average shares used in diluted net income per share computation 618 616 625 617 626
GAAP net cash provided by operating activities $ 1,640 $ 936 $ 487 $ 3,296 $ 2,845
Purchase of property and equipment and intangible assets (104 ) (113 ) (150 ) (344 ) (397 )
Free cash flow $ 1,536 $ 823 $ 337 $ 2,952 $ 2,448
(A) Stock-based compensation consists of the following: Three Months Ended Nine Months Ended
October 27, July 28, October 28, October 27, October 28,
2019 2019 2018 2019 2018
Cost of revenue $ 15 $ 8 $ 5 $ 27 $ 21
Research and development $ 141 $ 145 $ 88 $ 400 $ 237
Sales, general and administrative $ 67 $ 71 $ 47 $ 197 $ 142
(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).

 

NVIDIA CORPORATION
RECONCILIATION OF GAAP TO NON-GAAP OUTLOOK
Q4 FY2020
Outlook
GAAP gross margin 64.1 %
Impact of stock-based compensation expense 0.4 %
Non-GAAP gross margin 64.5 %
Q4 FY2020
Outlook
(In millions)
GAAP operating expenses $ 1,015
Stock-based compensation expense, acquisition-related costs, and other costs (210 )
Non-GAAP operating expenses $ 805

About NVIDIA

NVIDIA’s invention of the GPU in 1999 sparked the growth of the PC gaming market, redefined modern computer graphics and revolutionized parallel computing. More recently, GPU deep learning ignited modern AI ― the next era of computing ― with the GPU acting as the brain of computers, robots and self-driving cars that can perceive and understand the world. More information at https://nvidianews.nvidia.com/.


Source: NVIDIA 

Subscribe to HPCwire's Weekly Update!

Be the most informed person in the room! Stay ahead of the tech trends with industy updates delivered to you every week!

Focused on ‘Silicon TAM,’ Intel Puts Gary Patton, Former GlobalFoundries CTO, in Charge of Design Enablement

December 12, 2019

Change within Intel’s upper management – and to its company mission – has continued as a published report has disclosed that chip technology heavyweight Gary Patton, GlobalFoundries’ CTO and R&D SVP as well a Read more…

By Doug Black

Quantum Bits: Rigetti Debuts New Gates, D-Wave Cuts NEC Deal, AWS Jumps into the Quantum Pool

December 12, 2019

There’s been flurry of significant news in the quantum computing world. Yesterday, Rigetti introduced a new family of gates that reduces circuit depth required on some problems and D-Wave struck a deal with NEC to coll Read more…

By John Russell

How Formula 1 Used Cloud HPC to Build the Next Generation of Racing

December 12, 2019

Formula 1, Rob Smedley explained, is maybe the biggest racing spectacle in the world, with five hundred million fans tuning in for every race. Smedley, a chief engineer with Formula 1’s performance engineering and anal Read more…

By Oliver Peckham

RPI Powers Up ‘AiMOS’ AI Supercomputer

December 11, 2019

Designed to push the frontiers of computing chip and systems performance optimized for AI workloads, an 8 petaflops (Linpack) IBM Power9-based supercomputer has been unveiled in upstate New York that will be used by IBM Read more…

By Doug Black

At SC19: Developing a Digital Twin

December 11, 2019

In the not too distant future, we can expect to see our skies filled with unmanned aerial vehicles (UAVs) delivering packages, maybe even people, from location to location. In such a world, there will also be a digital twin for each UAV in the fleet: a virtual model that will follow the UAV through its existence, evolving with time. Read more…

By Aaron Dubrow

AWS Solution Channel

Making High Performance Computing Affordable and Accessible for Small and Medium Businesses with HPC on AWS

High performance computing (HPC) brings a powerful set of tools to a broad range of industries, helping to drive innovation and boost revenue in finance, genomics, oil and gas extraction, and other fields. Read more…

IBM Accelerated Insights

GPU Scheduling and Resource Accounting: The Key to an Efficient AI Data Center

[Connect with LSF users and learn new skills in the IBM Spectrum LSF User Community!]

GPUs are the new CPUs

GPUs have become a staple technology in modern HPC and AI data centers. Read more…

Supercomputers Help Predict Carbon Dioxide Levels

December 10, 2019

The Earth’s terrestrial ecosystems – its lands, forests, jungles and so on – are crucial “sinks” for atmospheric carbon, holding nearly 30 percent of our annual CO2 emissions as they breathe in the carbon-rich Read more…

By Oliver Peckham

Focused on ‘Silicon TAM,’ Intel Puts Gary Patton, Former GlobalFoundries CTO, in Charge of Design Enablement

December 12, 2019

Change within Intel’s upper management – and to its company mission – has continued as a published report has disclosed that chip technology heavyweight G Read more…

By Doug Black

RPI Powers Up ‘AiMOS’ AI Supercomputer

December 11, 2019

Designed to push the frontiers of computing chip and systems performance optimized for AI workloads, an 8 petaflops (Linpack) IBM Power9-based supercomputer has Read more…

By Doug Black

At SC19: Developing a Digital Twin

December 11, 2019

In the not too distant future, we can expect to see our skies filled with unmanned aerial vehicles (UAVs) delivering packages, maybe even people, from location to location. In such a world, there will also be a digital twin for each UAV in the fleet: a virtual model that will follow the UAV through its existence, evolving with time. Read more…

By Aaron Dubrow

Intel’s Jim Clarke on its New Cryo-controller and why Intel isn’t Late to the Quantum Party

December 9, 2019

Intel today introduced the ‘first-of-its-kind’ cryo-controller chip for quantum computing and previewed a cryo-prober tool for characterizing quantum proces Read more…

By John Russell

On the Spack Track @SC19

December 5, 2019

At the annual supercomputing conference, SC19 in Denver, Colorado, there were Spack events each day of the conference. As a reflection of its grassroots heritage, nine sessions were planned by more than a dozen thought leaders from seven organizations, including three U.S. national Department of Energy (DOE) laboratories and Sylabs... Read more…

By Elizabeth Leake

Intel’s New Hyderabad Design Center Targets Exascale Era Technologies

December 3, 2019

Intel's Raja Koduri was in India this week to help launch a new 300,000 square foot design and engineering center in Hyderabad, which will focus on advanced com Read more…

By Tiffany Trader

AWS Debuts 7nm 2nd-Gen Graviton Arm Processor

December 3, 2019

The “x86 Big Bang,” in which market dominance of the venerable Intel CPU has exploded into fragments of processor options suited to varying workloads, has n Read more…

By Doug Black

Ride on the Wild Side – Squyres SC19 Mars Rovers Keynote

December 2, 2019

Reminding us of the deep and enabling connection between HPC and modern science is an important part of the SC Conference mission. And yes, HPC is a science its Read more…

By John Russell

Using AI to Solve One of the Most Prevailing Problems in CFD

October 17, 2019

How can artificial intelligence (AI) and high-performance computing (HPC) solve mesh generation, one of the most commonly referenced problems in computational engineering? A new study has set out to answer this question and create an industry-first AI-mesh application... Read more…

By James Sharpe

D-Wave’s Path to 5000 Qubits; Google’s Quantum Supremacy Claim

September 24, 2019

On the heels of IBM’s quantum news last week come two more quantum items. D-Wave Systems today announced the name of its forthcoming 5000-qubit system, Advantage (yes the name choice isn’t serendipity), at its user conference being held this week in Newport, RI. Read more…

By John Russell

DARPA Looks to Propel Parallelism

September 4, 2019

As Moore’s law runs out of steam, new programming approaches are being pursued with the goal of greater hardware performance with less coding. The Defense Advanced Projects Research Agency is launching a new programming effort aimed at leveraging the benefits of massive distributed parallelism with less sweat. Read more…

By George Leopold

Ayar Labs to Demo Photonics Chiplet in FPGA Package at Hot Chips

August 19, 2019

Silicon startup Ayar Labs continues to gain momentum with its DARPA-backed optical chiplet technology that puts advanced electronics and optics on the same chip Read more…

By Tiffany Trader

SC19: IBM Changes Its HPC-AI Game Plan

November 25, 2019

It’s probably fair to say IBM is known for big bets. Summit supercomputer – a big win. Red Hat acquisition – looking like a big win. OpenPOWER and Power processors – jury’s out? At SC19, long-time IBMer Dave Turek sketched out a different kind of bet for Big Blue – a small ball strategy, if you’ll forgive the baseball analogy... Read more…

By John Russell

Cray, Fujitsu Both Bringing Fujitsu A64FX-based Supercomputers to Market in 2020

November 12, 2019

The number of top-tier HPC systems makers has shrunk due to a steady march of M&A activity, but there is increased diversity and choice of processing compon Read more…

By Tiffany Trader

Crystal Ball Gazing: IBM’s Vision for the Future of Computing

October 14, 2019

Dario Gil, IBM’s relatively new director of research, painted a intriguing portrait of the future of computing along with a rough idea of how IBM thinks we’ Read more…

By John Russell

Intel Debuts New GPU – Ponte Vecchio – and Outlines Aspirations for oneAPI

November 17, 2019

Intel today revealed a few more details about its forthcoming Xe line of GPUs – the top SKU is named Ponte Vecchio and will be used in Aurora, the first plann Read more…

By John Russell

Leading Solution Providers

SC 2019 Virtual Booth Video Tour

AMD
AMD
CEJN
CJEN
ONE STOP SYSTEMS
ONE STOP SYSTEMS
PANASAS
PANASAS
SIX NINES IT
SIX NINES IT
VERNE GLOBAL
VERNE GLOBAL
WEKAIO
WEKAIO

Kubernetes, Containers and HPC

September 19, 2019

Software containers and Kubernetes are important tools for building, deploying, running and managing modern enterprise applications at scale and delivering enterprise software faster and more reliably to the end user — while using resources more efficiently and reducing costs. Read more…

By Daniel Gruber, Burak Yenier and Wolfgang Gentzsch, UberCloud

Dell Ramps Up HPC Testing of AMD Rome Processors

October 21, 2019

Dell Technologies is wading deeper into the AMD-based systems market with a growing evaluation program for the latest Epyc (Rome) microprocessors from AMD. In a Read more…

By John Russell

Cray Wins NNSA-Livermore ‘El Capitan’ Exascale Contract

August 13, 2019

Cray has won the bid to build the first exascale supercomputer for the National Nuclear Security Administration (NNSA) and Lawrence Livermore National Laborator Read more…

By Tiffany Trader

SC19: Welcome to Denver

November 17, 2019

A significant swath of the HPC community has come to Denver for SC19, which began today (Sunday) with a rich technical program. As is customary, the ribbon cutt Read more…

By Tiffany Trader

When Dense Matrix Representations Beat Sparse

September 9, 2019

In our world filled with unintended consequences, it turns out that saving memory space to help deal with GPU limitations, knowing it introduces performance pen Read more…

By James Reinders

Cerebras to Supply DOE with Wafer-Scale AI Supercomputing Technology

September 17, 2019

Cerebras Systems, which debuted its wafer-scale AI silicon at Hot Chips last month, has entered into a multi-year partnership with Argonne National Laboratory and Lawrence Livermore National Laboratory as part of a larger collaboration with the U.S. Department of Energy... Read more…

By Tiffany Trader

With the Help of HPC, Astronomers Prepare to Deflect a Real Asteroid

September 26, 2019

For years, NASA has been running simulations of asteroid impacts to understand the risks (and likelihoods) of asteroids colliding with Earth. Now, NASA and the European Space Agency (ESA) are preparing for the next, crucial step in planetary defense against asteroid impacts: physically deflecting a real asteroid. Read more…

By Oliver Peckham

Jensen Huang’s SC19 – Fast Cars, a Strong Arm, and Aiming for the Cloud(s)

November 20, 2019

We’ve come to expect Nvidia CEO Jensen Huang’s annual SC keynote to contain stunning graphics and lively bravado (with plenty of examples) in support of GPU Read more…

By John Russell

  • arrow
  • Click Here for More Headlines
  • arrow
Do NOT follow this link or you will be banned from the site!
Share This