What is the primary reason for this amended 10-Q filing?

This amended 10-Q/A filing is primarily to report restated financial statements resulting from the identification of stock option accounting errors. The company used incorrect measurement dates for certain stock option grants between fiscal years 2000 and 2004, leading to the need for retrospective adjustments to stock-based compensation expense.

What is the financial impact of the stock option restatement?

The company identified approximately $127.4 million in aggregate non-cash stock-based compensation charges, net of tax effects, related to these measurement date errors through fiscal year 2006. While these are non-cash charges, they have been recorded in the restated financial statements, impacting historical net income and retained earnings.

Did the acquisitions of ULi Electronics and Hybrid Graphics significantly impact the financials for this quarter?

The company stated that the pro forma results of operations for both the ULi Electronics and Hybrid Graphics acquisitions were not presented because their effects were not considered material to the overall financial statements for this quarter. However, these acquisitions did contribute to an increase in goodwill and intangible assets on the balance sheet.

How has stock-based compensation expense changed following the adoption of SFAS No. 123(R)?

NVIDIA adopted SFAS No. 123(R) effective January 30, 2006. This resulted in increased stock-based compensation expense in the current quarter ($22.2 million in stock-based compensation expense) compared to prior periods when APB No. 25 was applied. The company also changed the classification of excess tax benefits from stock-based compensation from operating activities to financing activities.

NVDA 10-Q Quarterly Report Q1 FY2007 — Revenue, Net Income, EPS

01—Abstract

Summary

Summary of the 10-Q/A filed November 29, 2006. Cited figures are marked; the original filing is the authoritative source.

NVIDIA Corporation's (NVDA) amended quarterly report for the period ending April 30, 2006, primarily addresses restatements related to stock option accounting errors.

The company identified that it had used incorrect measurement dates for stock option grants between fiscal years 2000 and 2004, leading to the recognition of $127.4 million^a in aggregate non-cash stock-based compensation charges, net of tax effects. These adjustments have been reflected in the restated financial statements for historical periods and impact the current quarter's reporting. Despite these accounting adjustments, the core business performance shows revenue growth, with an increase from $583.8 million in Q1 FY2005 to $681.8 million in Q1 FY2006.

Operating income also saw a healthy increase, driven by strong gross profit and controlled operating expenses. The company also completed two acquisitions during the quarter: ULi Electronics, Inc. and Hybrid Graphics Ltd., aimed at strengthening its platform solutions and embedded graphics software capabilities, respectively. Investors should note the significant goodwill and intangible assets added through these acquisitions.

02—Key points

Key Highlights

Revenue increased to $681.8 million for the three months ended April 30, 2006, up from $583.8 million in the same period last year.
Gross profit grew to $288.7 million, an increase from $209.9 million year-over-year, indicating improved profitability on sales.
Operating income rose to $101.5 million from $78.8 million year-over-year, demonstrating strong operational leverage.
The company restated historical financial statements due to stock option accounting errors, resulting in $127.4 million in aggregate non-cash stock-based compensation charges, net of tax.
Acquired ULi Electronics, Inc. for approximately $53.1 million and Hybrid Graphics Ltd. for approximately $36.7 million to bolster platform solutions and embedded graphics software.
Total assets increased significantly, partly due to the acquisitions, with goodwill rising to $204.6 million from $145.3 million.
Diluted EPS was $0.24 for the quarter, an increase from $0.18 in the prior year, despite the accounting restatements.

03—Questions

Frequently Asked Questions

What is the primary reason for this amended 10-Q filing?
This amended 10-Q/A filing is primarily to report restated financial statements resulting from the identification of stock option accounting errors. The company used incorrect measurement dates for certain stock option grants between fiscal years 2000 and 2004, leading to the need for retrospective adjustments to stock-based compensation expense.
What is the financial impact of the stock option restatement?
The company identified approximately $127.4 million in aggregate non-cash stock-based compensation charges, net of tax effects, related to these measurement date errors through fiscal year 2006. While these are non-cash charges, they have been recorded in the restated financial statements, impacting historical net income and retained earnings.
Did the acquisitions of ULi Electronics and Hybrid Graphics significantly impact the financials for this quarter?
The company stated that the pro forma results of operations for both the ULi Electronics and Hybrid Graphics acquisitions were not presented because their effects were not considered material to the overall financial statements for this quarter. However, these acquisitions did contribute to an increase in goodwill and intangible assets on the balance sheet.
How has stock-based compensation expense changed following the adoption of SFAS No. 123(R)?
NVIDIA adopted SFAS No. 123(R) effective January 30, 2006. This resulted in increased stock-based compensation expense in the current quarter ($22.2 million in stock-based compensation expense) compared to prior periods when APB No. 25 was applied. The company also changed the classification of excess tax benefits from stock-based compensation from operating activities to financing activities.

04—Continue

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