01—Abstract
Summary
Summary of the 10-K filed March 12, 2015. Cited figures are marked; the original filing is the authoritative source.
NVIDIA Corporation's 2015 10-K filing showcases a company at the forefront of visual computing, driving innovation across Gaming, Enterprise, High-Performance Computing (HPC) & Cloud, and Automotive markets.
The company's core strength lies in its Graphics Processing Units (GPUs) and Tegra processors, complemented by significant investment in research and development and a robust patent portfolio. NVIDIA is strategically positioned to capitalize on the increasing demand for accelerated computing and advanced graphics capabilities, as evidenced by its strong performance in the gaming sector and its growing presence in datacenter and automotive applications. Financially, NVIDIA demonstrated revenue growth, driven by its GPU segment, particularly the GeForce line for gaming and Tesla accelerators for HPC.
While the Tegra Processor business saw significant revenue increases, its gross margins were lower. The company also returned capital to shareholders through dividends and share repurchases, underscoring a commitment to shareholder value. However, NVIDIA faces intense competition and risks associated with technological obsolescence, supply chain dependencies, and potential intellectual property disputes, which are key considerations for investors.
02—Key points
Key Highlights
- NVIDIA's business is structured around two core segments: GPU and Tegra Processor, serving key markets including Gaming, Enterprise, HPC & Cloud, and Automotive.
- The company's R&D investment remains substantial, exceeding $1.3 billion in FY2015, highlighting a commitment to technological leadership and innovation.
- GPU segment revenue grew significantly, driven by strong performance in GeForce for gaming and Tesla for accelerated computing in datacenters.
- The Tegra Processor business showed strong revenue growth, largely due to increased adoption in automotive infotainment systems and new SHIELD gaming devices.
- NVIDIA returned approximately $1 billion to shareholders in FY2015 through share repurchases and dividends, signaling a focus on capital return.
- The company operates a fabless manufacturing strategy, relying on third-party suppliers for wafer fabrication, assembly, and testing.
- NVIDIA faces significant competition from established players like AMD and Intel, as well as emerging technology companies.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2015, NVIDIA Corp kept $0.13.
- Revenue$4.68B100.0%
- Cost of revenue−$2.08B44.5%
- Gross profit$2.60B55.5%
- Operating costs−$1.84B39.3%
- Operating income$759.0M16.2%
- Interest, other & tax−$128.0M2.7%
- Net income$631.0M13.5%
Where FY2015 revenue went
$4.68B- Cost of revenue: $2.08B, 44% of revenue
- R&D: $1.36B, 29% of revenue
- Net income: $631.0M, 13% of revenue
- SG&A: $480.0M, 10% of revenue
- Interest, other & tax: $128.0M, 2.7% of revenue
Kept 13% as net income
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2015filed March 12, 2015Financial Statements
FY2015 against FY2014
| Line item | FY2015FY2014 | Change |
|---|---|---|
| Revenue | $4.68B$4.13B | +13.4% |
| Cost of Revenue | $2.08B$1.86B | +11.9% |
| Gross Profit | $2.60B$2.27B | +14.6% |
| R&D Expenses | $1.36B$1.34B | +1.8% |
| SG&A Expenses | $480.00M$436.00M | +10.1% |
| Operating Expenses | $1.84B$1.77B | +3.8% |
| Operating Income | $759.00M$496.00M | +53.0% |
| Interest Expense | $46.00M$10.00M | +360.0% |
| Net Income | $631.00M$440.00M | +43.4% |
| EPS (Basic) | $0.03$0.02 | +52.0% |
| EPS (Diluted) | $0.03$0.02 | +51.4% |
| Shares Outstanding (Basic) | 22.08B23.52B | −6.1% |
| Shares Outstanding (Diluted) | 22.52B23.80B | −5.4% |
05—Questions
Frequently Asked Questions
What are NVIDIA's primary business segments and target markets?
NVIDIA's primary business segments are GPU (Graphics Processing Unit) and Tegra Processor. These segments serve four major markets: Gaming, Enterprise, High Performance Computing (HPC) & Cloud, and Automotive.
How is NVIDIA investing in future growth?
NVIDIA is heavily investing in research and development, with R&D expenses around $1.36 billion in fiscal year 2015. This investment focuses on advancing GPU and Tegra processor architectures, enabling new capabilities in visual computing, AI, and automotive technologies, and expanding its patent portfolio.
What is NVIDIA's strategy for returning capital to shareholders?
NVIDIA actively returns capital to shareholders through a combination of cash dividends and share repurchases. In fiscal year 2015, the company returned approximately $1 billion to shareholders through these methods and announced plans to return approximately $600 million in fiscal year 2016.
What are the key risks and challenges NVIDIA faces?
NVIDIA faces intense competition, risks related to technological changes and obsolescence, reliance on third-party manufacturers, potential product defects, security breaches, and intellectual property disputes. Failure to anticipate market needs or maintain design wins could also negatively impact financial results.
06—Continue