01—Abstract
Summary
Summary of the 10-Q filed May 20, 2009. Cited figures are marked; the original filing is the authoritative source.
NVIDIA Corporation (NVDA) reported its first quarter fiscal year 2010 results, ending April 25, 2009.
The company experienced a significant year-over-year revenue decline of 42%, from $1.15 billion to $664.2 milliona, largely attributed to the economic recession impacting demand across its key segments, particularly the GPU and Professional Solutions businesses. This revenue contraction, coupled with increased operating expenses, led to a substantial net loss of $201.3 million, compared to a net income of $176.8 million in the prior year period. Despite the challenging revenue environment, the company maintained its market leadership in the standalone desktop GPU segment and saw some increased demand in its MCP business for Intel-based platforms and Ion products.
Financially, NVIDIA ended the quarter with a solid cash position, increasing its cash and cash equivalents and marketable securities to $1.34 billionb. A notable event during the quarter was a cash tender offer for certain employee stock options, which resulted in a $140.2 million charge impacting profitability but aimed at reducing future dilution. The company also highlighted ongoing legal proceedings, including the Rambus patent infringement case and various product defect lawsuits, though it expressed confidence in resolving these matters without material impact.
02—Key points
Key Highlights
- Revenue decreased significantly by 42% year-over-year to $664.2 million, driven by a weaker economic climate impacting demand.
- The company reported a net loss of $201.3 million for the quarter, a substantial swing from a net income of $176.8 million in the prior year.
- Operating expenses increased by 35% year-over-year to $420.7 million, largely due to a $140.2 million charge related to a stock option purchase program.
- Despite revenue decline, NVIDIA maintained market leadership in the standalone desktop GPU segment.
- Cash and cash equivalents and marketable securities increased to $1.34 billion, indicating a strong liquidity position.
- The Professional Solutions Business (PSB) experienced a 48% revenue decline due to reduced corporate spending.
- The company incurred a significant charge of $140.2 million due to a cash tender offer to purchase certain out-of-the-money employee stock options.
03—One dollar
Follow one dollar
For each $1.00 of revenue in Q1 FY2010, NVIDIA Corp lost $0.30.
- Revenue$664.2M100.0%
- Cost of revenue−$474.5M71.4%
- Gross profit$189.7M28.6%
- Operating costs−$420.7M63.3%
- Operating income−$231.0M34.8%
- Interest, other & tax$29.6M4.5%
- Net income−$201.3M30.3%
04—Financials
Financial Highlights
Figures from 10-QQ1 FY2010filed May 20, 2009Financial Statements
| Revenue | $664.23M |
| Cost of Revenue | $474.54M |
| Gross Profit | $189.70M |
| R&D Expenses | $301.80M |
| SG&A Expenses | $118.86M |
| Operating Expenses | $420.66M |
| Operating Income | -$230.97M |
| Net Income | -$201.34M |
| EPS (Basic) | $-0.01 |
| EPS (Diluted) | $-0.01 |
| Shares Outstanding (Basic) | 21.69M |
| Shares Outstanding (Diluted) | 21.69M |
05—Questions
Frequently Asked Questions
What was NVIDIA's revenue performance in this quarter compared to the previous year?
NVIDIA's revenue significantly decreased by 42% year-over-year, falling from $1.15 billion in Q1 FY2009 to $664.2 million in Q1 FY2010. This decline was attributed to the economic recession impacting demand across most of its business segments.
What was the primary driver behind the net loss reported this quarter?
The company reported a net loss of $201.3 million, a sharp contrast to the prior year's net income. This loss was primarily driven by the significant revenue decrease and a substantial $140.2 million charge related to a cash tender offer for employee stock options, which accelerated stock-based compensation expenses.
How is NVIDIA's financial health and liquidity?
NVIDIA maintains a strong liquidity position, with cash, cash equivalents, and marketable securities totaling $1.34 billion as of April 26, 2009. This provides the company with financial flexibility to navigate the current economic downturn and fund its operations and strategic initiatives.
What is the status of ongoing legal matters mentioned in the filing?
The filing mentions several ongoing legal proceedings, including patent infringement claims with Rambus, various product defect class action lawsuits, and a licensing dispute with Intel. NVIDIA states it is defending these vigorously and believes the resolution will not have a material adverse impact on its financial condition or results of operations, although these contingencies are noted.
06—Continue