01—Abstract
Summary
Summary of the 10-Q filed November 22, 2011. Cited figures are marked; the original filing is the authoritative source.
NVIDIA Corporation reported strong financial results for the third quarter and the first nine months of fiscal year 2012, ending October 30, 2011.
Revenue saw a significant increase of 26.3% year-over-year in the third quarter, reaching $1.07 billiona, driven by robust performance in the GPU and Consumer Products Business (CPB) segments. For the nine-month period, revenue grew 14.6% to $3.04 billion. Net income for the third quarter more than doubled to $178.3 million, or $0.29 per diluted share, compared to $84.9 million, or $0.15 per diluted share, in the prior year.
The company's strategic investments in visual, high-performance, and mobile computing are showing positive results, particularly with the strong growth in the Tegra-based CPB segment. The company also benefited from a significant license revenue from its agreement with Intel. NVIDIA's financial health remains strong with substantial cash reserves and a positive cash flow from operations.
02—Key points
Key Highlights
- Revenue increased by 26.3% to $1.07 billion in Q3 FY2012 compared to Q3 FY2011.
- Net income more than doubled to $178.3 million in Q3 FY2012, with diluted EPS of $0.29.
- Significant growth in the Consumer Products Business (CPB) segment, primarily driven by Tegra products.
- Inclusion of $66.0 million in license revenue from the Intel agreement contributed to the GPU business's performance.
- Strong gross margin improvement to 52.2% in Q3 FY2012, up from 46.5% in Q3 FY2011, aided by the Intel license and product mix.
- Acquisition of Icera, Inc. completed for $352.2 million to strengthen mobile computing capabilities.
- Operating cash flow was robust at $498.6 million for the first nine months of FY2012.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in Q3 FY2012, NVIDIA Corp kept $0.17.
- Revenue$1.07B100.0%
- Cost of revenue−$509.5M47.8%
- Gross profit$556.7M52.2%
- Operating costs−$359.6M33.7%
- Operating income$197.1M18.5%
- Interest, other & tax−$18.8M1.8%
- Net income$178.3M16.7%
04—Financials
Financial Highlights
Figures from 10-QQ3 FY2012filed November 22, 2011Financial Statements
Q3 FY2012 against Q3 FY2011
| Line item | Q3 FY2012Q3 FY2011 | Change |
|---|---|---|
| Revenue | $1.07B$843.91M | +26.3% |
| Cost of Revenue | $509.46M$451.85M | +12.8% |
| Gross Profit | $556.72M$392.06M | +42.0% |
| R&D Expenses | $256.50M$204.53M | +25.4% |
| SG&A Expenses | $103.13M$83.75M | +23.1% |
| Operating Expenses | $359.63M$288.28M | +24.7% |
| Operating Income | $197.09M$103.78M | +89.9% |
| Net Income | $178.27M$84.86M | +110.1% |
| EPS (Basic) | $0.01$0.00 | +93.3% |
| EPS (Diluted) | $0.01$0.00 | +93.3% |
| Shares Outstanding (Basic) | 24.28B23.09B | +5.2% |
| Shares Outstanding (Diluted) | 24.54B23.31B | +5.3% |
05—Questions
Frequently Asked Questions
What drove the significant revenue growth in the third quarter?
The revenue growth was primarily driven by a 26.3% increase year-over-year, fueled by strong performance in the GPU and Consumer Products Business (CPB) segments. The CPB segment saw substantial growth due to higher unit shipments of Tegra 2 products in smartphones and tablets. Additionally, license revenue from the agreement with Intel contributed to the GPU business's performance.
How did NVIDIA's profitability change compared to the previous year?
NVIDIA experienced a significant improvement in profitability. Net income more than doubled to $178.3 million in the third quarter of fiscal year 2012, up from $84.9 million in the same period last year. This translated to diluted earnings per share of $0.29, up from $0.15.
What is the strategic importance of the Icera acquisition?
NVIDIA completed the acquisition of Icera, Inc. for $352.2 million. Icera specializes in baseband processors for 3G and 4G cellular phones and tablets. This acquisition is strategically important for NVIDIA as it aims to accelerate and enhance its application processor offerings for mobile devices, such as smartphones and tablets, thereby strengthening its position in the mobile computing market.
How is NVIDIA managing its liquidity and investments?
NVIDIA maintains a strong liquidity position with $2.75 billion in cash, cash equivalents, and marketable securities as of October 30, 2011. The company's investment portfolio is managed according to a policy focused on top-tier investment grade securities and diversification. Operating activities provided robust cash flow, ensuring sufficient resources for operations and capital expenditures. The company did not record any impairment charges on its investment portfolio during the period.
06—Continue