10-QPeriod: Q3 FY2012

NVIDIA CORP Quarterly Report for Q3 Ended Oct 30, 2011

Filed November 22, 2011For Securities:NVDA

Summary

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 billion, 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.

Financial Highlights

51 data points
Beta

Revenue

$1.07B

52.2% Gross Margin

Net Income

$178.27M

16.7% Net Margin

EPS (Diluted)

$0.01

Total Assets

$5.09B

Cash & Equivalents

$566.82M

Free Cash Flow

$264.08M

Financial Statements
Beta
Revenue$1.07B
Cost of Revenue$509.46M
Gross Profit$556.72M
R&D Expenses$256.50M
SG&A Expenses$103.13M
Operating Expenses$359.63M
Operating Income$197.09M
Net Income$178.27M
EPS (Basic)$0.01
EPS (Diluted)$0.01
Shares Outstanding (Basic)24.28B
Shares Outstanding (Diluted)24.54B

Key Highlights

  • 1Revenue increased by 26.3% to $1.07 billion in Q3 FY2012 compared to Q3 FY2011.
  • 2Net income more than doubled to $178.3 million in Q3 FY2012, with diluted EPS of $0.29.
  • 3Significant growth in the Consumer Products Business (CPB) segment, primarily driven by Tegra products.
  • 4Inclusion of $66.0 million in license revenue from the Intel agreement contributed to the GPU business's performance.
  • 5Strong gross margin improvement to 52.2% in Q3 FY2012, up from 46.5% in Q3 FY2011, aided by the Intel license and product mix.
  • 6Acquisition of Icera, Inc. completed for $352.2 million to strengthen mobile computing capabilities.
  • 7Operating cash flow was robust at $498.6 million for the first nine months of FY2012.

Frequently Asked Questions

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.

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.

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.

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.