01—Abstract
Summary
Summary of the 10-K filed March 16, 2011. Cited figures are marked; the original filing is the authoritative source.
NVIDIA Corporation's 2011 10-K filing highlights a year of significant product development and strategic positioning.
The company, a pioneer in GPUs, is investing heavily in visual computing, high-performance computing (HPC), and mobile computing. Key product launches include the Fermi architecture for their GeForce and Quadro lines, enhancing performance in gaming and professional applications, and the introduction of NVIDIA Optimus technology for notebooks, which intelligently switches between discrete and integrated graphics to balance performance and battery life. The mobile computing segment shows promise with the ramp-up of Tegra 2 processor shipments, driven by the growing adoption of Android.
Strategic partnerships with automotive manufacturers like Volkswagen, Audi, and BMW signal a push into the in-car infotainment systems market. Financially, NVIDIA saw revenue growth and a return to profitability compared to the previous year, bolstered by a significant legal settlement with Intel that provided a $57 milliona benefit. The company maintains a strong balance sheet with substantial cash reserves, enabling continued investment in research and development.
02—Key points
Key Highlights
- NVIDIA launched its Fermi architecture across GeForce and Quadro product lines, delivering significant performance improvements in gaming and professional visualization applications.
- The introduction of NVIDIA Optimus technology for notebooks aims to enhance battery life by intelligently switching between discrete and integrated graphics.
- The Consumer Products Business (CPB) saw growth, with Tegra 2 processor shipments ramping up, particularly in tablets and smartphones, driven by Android adoption.
- NVIDIA is expanding into the automotive sector, with partnerships secured for in-car infotainment systems with Volkswagen, Audi, and BMW.
- A significant positive development was the patent cross-licensing agreement with Intel, settling all outstanding legal disputes and providing NVIDIA with a $1.5 billion payment over six years, with a $57 million benefit recognized in the current fiscal year for the settlement portion.
- The company reported a return to profitability, with revenue increasing by 7% year-over-year, driven by strong performance in the Professional Solutions Business (PSB) and growth in CPB.
- NVIDIA continued to invest heavily in R&D, focusing on developing multiple generations of GPUs and advanced technologies to maintain its market leadership.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2011, NVIDIA Corp kept $0.07.
- Revenue$3.54B100.0%
- Cost of revenue−$2.13B60.2%
- Gross profit$1.41B39.8%
- Operating costs−$1.15B32.5%
- Operating income$255.7M7.2%
- Interest, other & tax−$2.6M0.1%
- Net income$253.1M7.1%
Where FY2011 revenue went
$3.54B- Cost of revenue: $2.13B, 60% of revenue
- R&D: $848.8M, 24% of revenue
- Net income: $253.1M, 7.1% of revenue
- SG&A: $361.5M, 10% of revenue
Kept 7.1% as net income
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2011filed March 16, 2011Financial Statements
FY2011 against FY2010
| Line item | FY2011FY2010 | Change |
|---|---|---|
| Revenue | $3.54B$3.33B | +6.5% |
| Cost of Revenue | $2.13B$2.15B | −0.7% |
| Gross Profit | $1.41B$1.18B | +19.7% |
| R&D Expenses | $848.83M$908.85M | −6.6% |
| SG&A Expenses | $361.51M$367.02M | −1.5% |
| Operating Expenses | $1.15B$1.28B | −9.6% |
| Operating Income | $255.75M-$98.94M | +358.5% |
| Interest Expense | $3.13M$3.32M | −5.8% |
| Net Income | $253.15M-$67.99M | +472.3% |
| EPS (Basic) | $0.01$-0.00 | +466.7% |
| EPS (Diluted) | $0.01$-0.00 | +458.3% |
| Shares Outstanding (Basic) | 23.01B21.98B | +4.7% |
| Shares Outstanding (Diluted) | 23.55B21.98B | +7.1% |
05—Questions
Frequently Asked Questions
What are NVIDIA's primary business segments and strategic focus areas?
NVIDIA operates with three primary financial reporting segments: GPU (Graphics Processing Unit), Professional Solutions Business (PSB), and Consumer Products Business (CPB). The company's strategic focus is on three major areas: visual computing, high-performance computing (HPC), and mobile computing.
What is the significance of the Intel patent cross-licensing agreement?
The January 2011 patent cross-licensing agreement with Intel settled all outstanding legal disputes between the two companies. It also includes a $1.5 billion payment from Intel to NVIDIA over six years, providing a significant financial benefit and de-risking NVIDIA's operations from potential litigation. This agreement allows both companies to license each other's patents within specified limitations.
How is NVIDIA performing in the mobile computing market?
NVIDIA is seeing promising signs in its mobile computing business with its Tegra processors. Shipment volumes for Tegra 2 began to ramp up in late fiscal year 2011, fueled by the adoption of Android-based smartphones and tablets from major manufacturers like Acer, Dell, LG, and Motorola. The company is also making strides in the automotive sector, with plans to integrate next-generation Tegra processors into infotainment systems for Volkswagen, Audi, and BMW vehicles.
What product innovations are driving NVIDIA's visual computing and HPC segments?
In visual computing, NVIDIA launched its Fermi architecture, which significantly enhances performance for its GeForce (consumer) and Quadro (professional) graphics products. This architecture is designed for advanced features like tessellation and improved physics realism. For high-performance computing, the Tesla line of GPU computing products, also benefiting from the Fermi architecture, is gaining traction, as evidenced by its use in supercomputers like Tianhe-1A.
06—Continue