01—Abstract
Summary
Summary of the 10-K filed March 13, 2012. Cited figures are marked; the original filing is the authoritative source.
NVIDIA Corporation's 2012 10-K filing reveals a company strategically positioning itself beyond its traditional PC graphics roots.
The report highlights significant growth in its Consumer Products Business (CPB), largely driven by the Tegra mobile processor and the acquisition of Icera. The company is actively investing in research and development for next-generation architectures like Kepler and Tegra 3, aiming to maintain technological leadership. Financially, NVIDIA demonstrated strong revenue growth, with a notable increase in gross margin compared to the previous year.
This improvement was attributed to a favorable product mix, increased unit sales, and the absence of significant product defect charges that impacted prior periods. The company also boasts a robust cash position, providing flexibility for continued investment and potential strategic acquisitions. Despite facing intense competition and various risk factors inherent in the semiconductor industry, NVIDIA appears to be navigating these challenges effectively, with a clear focus on expanding its presence in mobile computing and high-performance computing markets.
02—Key points
Key Highlights
- Revenue increased by 12.8% to $4.00 billion in fiscal year 2012, driven by growth in the GPU, Professional Solutions, and Consumer Products businesses.
- Gross margin improved significantly to 51.4% in fiscal year 2012, up from 39.8% in fiscal year 2011, primarily due to a richer product mix and cost efficiencies.
- The Consumer Products Business (CPB) saw substantial revenue growth of 199.2%, largely fueled by Tegra 2 sales in mobile and embedded products.
- NVIDIA acquired Icera, Inc. for $352.2 million, strengthening its position in the mobile baseband processor market.
- The company launched Tegra 3, the world's first quad-core mobile computing chip, showcasing innovation in the mobile space.
- R&D expenses increased by 18.1% to $1.00 billion, reflecting continued investment in future technologies such as Kepler and Tegra 3.
- NVIDIA settled its long-standing patent disputes with Intel, including a significant cross-licensing agreement valued at $1.5 billion.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2012, NVIDIA Corp kept $0.15.
- Revenue$4.00B100.0%
- Cost of revenue−$1.94B48.6%
- Gross profit$2.06B51.4%
- Operating costs−$1.41B35.2%
- Operating income$648.3M16.2%
- Interest, other & tax−$67.2M1.7%
- Net income$581.1M14.5%
Where FY2012 revenue went
$4.00B- Cost of revenue: $1.94B, 49% of revenue
- R&D: $1.00B, 25% of revenue
- Net income: $581.1M, 15% of revenue
- SG&A: $405.6M, 10% of revenue
- Interest, other & tax: $67.2M, 1.7% of revenue
Kept 15% as net incomeInterest, other & tax $67.2M · 1.7%
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2012filed March 13, 2012Financial Statements
FY2012 against FY2011
| Line item | FY2012FY2011 | Change |
|---|---|---|
| Revenue | $4.00B$3.54B | +12.8% |
| Cost of Revenue | $1.94B$2.13B | −9.0% |
| Gross Profit | $2.06B$1.41B | +45.9% |
| R&D Expenses | $1.00B$848.83M | +18.1% |
| SG&A Expenses | $405.61M$361.51M | +12.2% |
| Operating Expenses | $1.41B$1.15B | +22.1% |
| Operating Income | $648.30M$255.75M | +153.5% |
| Interest Expense | $3.09M$3.13M | −1.2% |
| Net Income | $581.09M$253.15M | +129.5% |
| EPS (Basic) | $0.02$0.01 | +118.2% |
| EPS (Diluted) | $0.02$0.01 | +118.6% |
| Shares Outstanding (Basic) | 24.15B23.01B | +4.9% |
| Shares Outstanding (Diluted) | 24.65B23.55B | +4.7% |
05—Questions
Frequently Asked Questions
What were NVIDIA's main business segments in fiscal year 2012?
NVIDIA operated under three primary financial reporting segments: the GPU Business (including GeForce and Quadro products), the Professional Solutions Business (PSB, including Quadro and Tesla products), and the Consumer Products Business (CPB, including Tegra mobile processors and Icera baseband processors).
How did NVIDIA's revenue perform in fiscal year 2012?
NVIDIA's revenue increased by 12.8% to $4.00 billion in fiscal year 2012 compared to $3.54 billion in fiscal year 2011. This growth was driven by increases across all three business segments, with particularly strong performance in the Consumer Products Business due to Tegra 2 and the Icera acquisition.
What were the key drivers for the improvement in NVIDIA's gross margin?
NVIDIA's gross margin improved substantially to 51.4% in fiscal year 2012 from 39.8% in fiscal year 2011. This improvement was attributed to a richer product mix in desktop and notebook GPUs, higher unit sales, cost efficiencies, the absence of significant product defect charges that impacted the prior year, and the inclusion of revenue from the Intel cross-licensing agreement.
What significant acquisitions or strategic agreements did NVIDIA undertake?
NVIDIA completed the acquisition of Icera, Inc., a mobile baseband processor innovator, for $352.2 million. Additionally, they entered into a significant six-year cross-licensing agreement with Intel, which included a settlement of all outstanding legal disputes and a $1.5 billion payment to NVIDIA.
What are the primary risks highlighted in the filing?
Key risks include intense competition from established players like AMD and Intel, dependence on third-party foundries for manufacturing, the need for continuous product innovation, potential supply chain disruptions, and risks associated with product defects and litigation, such as the previously disclosed issues with certain GPU products.
06—Continue