01—Abstract
Summary
Summary of the 10-K filed March 17, 2016. Cited figures are marked; the original filing is the authoritative source.
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 billiona, 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.
02—Key points
Key Highlights
- Revenue increased by 7% to $5.01 billion in fiscal year 2016, driven by a strong GPU segment.
- GPU revenue grew 9%, fueled by demand for GeForce GPUs in gaming and Tesla GPUs in datacenters.
- Tegra Processor revenue saw a 3% decline, but automotive applications showed strong growth (up nearly 75%).
- The company returned $800 million to shareholders in FY16 through dividends and share repurchases, with plans to return $1 billion in FY17.
- Significant R&D investment continued, with a focus on artificial intelligence, deep learning, and autonomous driving technologies.
- NVIDIA is actively managing its intellectual property and pursuing licensing and development contracts.
- The company ended the fiscal year with $5.04 billion in cash, cash equivalents, and marketable securities, indicating a strong liquidity position.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2016, NVIDIA Corp kept $0.12.
- Revenue$5.01B100.0%
- Cost of revenue−$2.20B43.9%
- Gross profit$2.81B56.1%
- Operating costs−$2.06B41.2%
- Operating income$747.0M14.9%
- Interest, other & tax−$133.0M2.7%
- Net income$614.0M12.3%
Where FY2016 revenue went
$5.01B- Cost of revenue: $2.20B, 44% of revenue
- R&D: $1.33B, 27% of revenue
- Net income: $614.0M, 12% of revenue
- SG&A: $602.0M, 12% of revenue
- Other operating costs: $131.0M, 2.6% of revenue
- Interest, other & tax: $133.0M, 2.7% of revenue
Kept 12% as net income
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2016filed March 17, 2016Financial Statements
FY2016 against FY2015
| Line item | FY2016FY2015 | Change |
|---|---|---|
| Revenue | $5.01B$4.68B | +7.0% |
| Cost of Revenue | $2.20B$2.08B | +5.6% |
| Gross Profit | $2.81B$2.60B | +8.2% |
| R&D Expenses | $1.33B$1.36B | −2.1% |
| SG&A Expenses | $602.00M$480.00M | +25.4% |
| Operating Expenses | $2.06B$1.84B | +12.2% |
| Operating Income | $747.00M$759.00M | −1.6% |
| Interest Expense | $47.00M$46.00M | +2.2% |
| Net Income | $614.00M$631.00M | −2.7% |
| EPS (Basic) | $0.03$0.03 | −0.9% |
| EPS (Diluted) | $0.03$0.03 | −3.6% |
| Shares Outstanding (Basic) | 21.72B22.08B | −1.6% |
| Shares Outstanding (Diluted) | 22.76B22.52B | +1.1% |
05—Questions
Frequently Asked Questions
What were NVIDIA's primary revenue drivers in fiscal year 2016?
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.
How is NVIDIA returning capital to shareholders?
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.
What are NVIDIA's key areas of strategic focus and investment?
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.
What are the main risks NVIDIA faces as outlined in the 10-K?
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.
06—Continue