01—Abstract
Summary
Summary of the 10-K filed March 13, 2014. Cited figures are marked; the original filing is the authoritative source.
NVIDIA Corporation's fiscal year 2014 (ending January 26, 2014) demonstrated resilience in its core GPU business, which saw a 7%a revenue increase driven by strong demand for high-end GeForce GTX GPUs and growth in Tesla and Quadro product lines.
This growth partially offset a significant 48%b decline in the Tegra Processor business revenue, which was impacted by lower sales of older Tegra 3-based products. Despite the revenue dip, the company maintained a healthy gross margin of 54.9%, an improvement from the previous year, attributed to a richer product mix and lower inventory provisions. NVIDIA continued its strategic focus on R&D, increasing expenses by 16% to support the development of next-generation products and technologies.
The company also actively returned capital to shareholders, repurchasing $887.3 millionc in stock and paying $181.3 million in dividends. Financially, NVIDIA maintained a strong liquidity position with over $4.6 billion in cash, cash equivalents, and marketable securities, and took on $1.5 billion in convertible senior notes to fund strategic initiatives and capital returns. The company's outlook remains focused on technological leadership in visual computing, gaming, and expanding into new markets like automotive and smart devices.
02—Key points
Key Highlights
- GPU business revenue increased by 7% to $3.47 billion, driven by high-end GeForce GTX GPUs, Tesla, and Quadro product lines, indicating strength in core markets.
- Tegra Processor business revenue saw a significant 48% decrease, falling to $398 million, primarily due to lower sales of older generation products.
- Gross margin improved to 54.9% from 52.0% in the prior year, reflecting a favorable product mix and reduced inventory provisions.
- Research and development expenses increased by 16% to $1.34 billion, highlighting continued investment in future technologies.
- The company returned $1.07 billion to shareholders through $887.3 million in share repurchases and $181.3 million in dividends.
- NVIDIA ended the fiscal year with a robust cash position of $4.67 billion, bolstered by a $1.5 billion convertible senior note issuance.
- The company is strategically expanding into new markets including automotive and smart devices with its Tegra processors.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2014, NVIDIA Corp kept $0.11.
- Revenue$4.13B100.0%
- Cost of revenue−$1.86B45.1%
- Gross profit$2.27B54.9%
- Operating costs−$1.77B42.9%
- Operating income$496.0M12.0%
- Interest, other & tax−$56.0M1.4%
- Net income$440.0M10.7%
Where FY2014 revenue went
$4.13B- Cost of revenue: $1.86B, 45% of revenue
- R&D: $1.34B, 32% of revenue
- Net income: $440.0M, 11% of revenue
- SG&A: $436.0M, 11% of revenue
- Interest, other & tax: $56.0M, 1.4% of revenue
Kept 11% as net incomeInterest, other & tax $56.0M · 1.4%
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2014filed March 13, 2014Financial Statements
FY2014 against FY2013
| Line item | FY2014FY2013 | Change |
|---|---|---|
| Revenue | $4.13B$4.28B | −3.5% |
| Cost of Revenue | $1.86B$2.05B | −9.3% |
| Gross Profit | $2.27B$2.23B | +1.9% |
| R&D Expenses | $1.34B$1.15B | +16.4% |
| SG&A Expenses | $436.00M$430.82M | +1.2% |
| Operating Expenses | $1.77B$1.58B | +12.3% |
| Operating Income | $496.00M$648.24M | −23.5% |
| Interest Expense | $10.00M$3.29M | +203.6% |
| Net Income | $440.00M$562.54M | −21.8% |
| EPS (Basic) | $0.02$0.02 | −17.6% |
| EPS (Diluted) | $0.02$0.02 | −17.8% |
| Shares Outstanding (Basic) | 23.52B24.77B | −5.1% |
| Shares Outstanding (Diluted) | 23.80B25.00B | −4.8% |
05—Questions
Frequently Asked Questions
What were NVIDIA's primary revenue drivers in fiscal year 2014?
NVIDIA's primary revenue driver was its GPU business, which saw a 7% increase due to strong demand for high-end GeForce GTX GPUs, as well as growth in Tesla (for high-performance computing) and Quadro (for professional workstations) product lines. This growth helped offset a significant decline in the Tegra Processor business.
How did NVIDIA manage its capital and return value to shareholders?
NVIDIA maintained a strong liquidity position with over $4.6 billion in cash, cash equivalents, and marketable securities. The company actively returned capital to shareholders by repurchasing $887.3 million worth of its common stock and paying $181.3 million in cash dividends during fiscal year 2014. A $1.5 billion convertible senior note issuance also provided significant capital.
What challenges did NVIDIA face in fiscal year 2014, particularly in the Tegra Processor segment?
The most significant challenge was the 48% decline in revenue for the Tegra Processor business. This was primarily attributed to lower sales volumes of older generation Tegra 3-based products for smartphones and tablets, as well as reduced sales in embedded products and game console licensing. NVIDIA is working to revitalize this segment with newer products like the Tegra K1.
What is NVIDIA's strategy regarding research and development?
NVIDIA views R&D as crucial for its future success. The company increased its R&D expenses by 16% in fiscal year 2014, focusing on the concurrent development of multiple generations of GPUs and Tegra processors. This investment aims to maintain technological leadership and drive innovation across its target markets, including gaming, design and visualization, HPC, data centers, automotive, and smart devices.
06—Continue