10-KPeriod: FY2016

NVIDIA CORP Annual Report, Year Ended Jan 31, 2016

Filed March 17, 2016For Securities:NVDA

Summary

NVIDIA Corporation's 2016 10-K filing highlights a year of strategic growth and product innovation. The company, a leader in visual computing, reported a 7% increase in revenue to $5.01 billion, driven by strong performance in its GPU segment, which saw a 9% increase driven by GeForce GPUs for gaming and Tesla products for data centers. Despite a slight dip in Tegra Processor revenue, the company saw significant growth in automotive applications for this segment. NVIDIA continued to invest heavily in research and development, focusing on key growth areas like artificial intelligence, virtual reality, and autonomous vehicles. The company also demonstrated a commitment to returning capital to shareholders, increasing its quarterly cash dividend and continuing its share repurchase program. While facing competitive pressures and the complexities of a fabless manufacturing model, NVIDIA's strategic focus on innovation and its expanding market presence in gaming, professional visualization, datacenter, and automotive sectors position it for continued future development.

Financial Highlights

56 data points
Beta

Revenue

$5.01B

56.1% Gross Margin

Net Income

$614.00M

12.3% Net Margin

EPS (Diluted)

$0.03

Total Assets

$7.37B

Cash & Equivalents

$596.00M

Free Cash Flow

$1.18B

Financial Statements
Beta
Revenue$5.01B
Cost of Revenue$2.20B
Gross Profit$2.81B
R&D Expenses$1.33B
SG&A Expenses$602.00M
Operating Expenses$2.06B
Operating Income$747.00M
Interest Expense$47.00M
Net Income$614.00M
EPS (Basic)$0.03
EPS (Diluted)$0.03
Shares Outstanding (Basic)21.72B
Shares Outstanding (Diluted)22.76B

Key Highlights

  • 1Revenue increased by 7% to $5.01 billion in fiscal year 2016, driven by a strong GPU segment.
  • 2GPU revenue grew 9%, fueled by demand for GeForce GPUs in gaming and Tesla GPUs in datacenters.
  • 3Tegra Processor revenue saw a 3% decline, but automotive applications showed strong growth (up nearly 75%).
  • 4The company returned $800 million to shareholders in FY16 through dividends and share repurchases, with plans to return $1 billion in FY17.
  • 5Significant R&D investment continued, with a focus on artificial intelligence, deep learning, and autonomous driving technologies.
  • 6NVIDIA is actively managing its intellectual property and pursuing licensing and development contracts.
  • 7The company ended the fiscal year with $5.04 billion in cash, cash equivalents, and marketable securities, indicating a strong liquidity position.

Frequently Asked Questions

NVIDIA's primary revenue driver was its GPU business, which accounted for the majority of its revenue. Specifically, sales of GeForce GPUs for gaming and Tesla GPUs for datacenter applications showed significant growth. The Tegra Processor business also contributed, with notable growth in the automotive sector.

NVIDIA returned capital to shareholders through a combination of increasing its quarterly cash dividend and executing its share repurchase program. In fiscal year 2016, the company returned $800 million and planned to return approximately $1 billion in fiscal year 2017.

NVIDIA is strategically focused on several key growth areas, including artificial intelligence, deep learning, virtual reality, and autonomous vehicles. The company is investing heavily in research and development to advance its technologies in these sectors.

Key risks highlighted include intense competition in its target markets, the need to successfully transition to new business models and markets, potential reliance on a limited number of customers, dependence on third-party manufacturers, and the cyclical nature of the semiconductor industry. Intellectual property protection and potential litigation are also significant concerns.