01—Abstract
Summary
Summary of the 10-Q filed May 23, 2012. Cited figures are marked; the original filing is the authoritative source.
NVIDIA Corporation reported revenue of $924.9 milliona for the first quarter of fiscal year 2013, a decrease of 3.9% compared to $962.0 million in the prior year.
This decline was primarily driven by a 9.1%b decrease in the GPU business, attributed to supply shortages of their new Kepler architecture and a shift to lower-margin mainstream products, along with a decrease in media and communications processor sales. Despite the overall revenue dip, the Professional Solutions Business (PSB) saw a 5.4% increase, and the Consumer Products Business (CPB) grew by 8.1%, driven by embedded entertainment products and anticipated growth in Tegra 3 products. Operating expenses increased significantly due to higher R&D spending, up 22.6%, driven by headcount growth and development for new technologies like Kepler.
Net income decreased to $60.4 millionc from $135.2 million in the prior year, resulting in a diluted EPS of $0.10 compared to $0.22. The company maintained a strong liquidity position with $3.13 billion in cash, cash equivalents, and marketable securities. NVIDIA's strategic focus remains on new product development, including the Kepler architecture and Tegra processors, alongside managing supply chain constraints and competitive pressures.
02—Key points
Key Highlights
- Revenue decreased by 3.9% year-over-year to $924.9 million, primarily due to softness in the GPU segment.
- Research and Development (R&D) expenses increased by 22.6% to $283.9 million, reflecting investments in new technologies like the Kepler architecture.
- Net income declined significantly to $60.4 million, from $135.2 million in the prior year, resulting in a diluted EPS of $0.10.
- The Professional Solutions Business (PSB) and Consumer Products Business (CPB) showed revenue growth of 5.4% and 8.1% respectively.
- The company maintained a robust cash position, with $3.13 billion in cash, cash equivalents, and marketable securities.
- The company launched its new Kepler GPU architecture and saw initial shipments of Tegra 3 phones.
- Gross margin slightly decreased to 50.1% from 50.4% due to a less favorable product mix in the desktop GPU business.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in Q1 FY2013, NVIDIA Corp kept $0.07.
- Revenue$924.9M100.0%
- Cost of revenue−$461.5M49.9%
- Gross profit$463.4M50.1%
- Operating costs−$390.5M42.2%
- Operating income$72.8M7.9%
- Interest, other & tax−$12.4M1.3%
- Net income$60.4M6.5%
04—Financials
Financial Highlights
Figures from 10-QQ1 FY2013filed May 23, 2012Financial Statements
| Revenue | $924.88M |
| Cost of Revenue | $461.51M |
| Gross Profit | $463.36M |
| R&D Expenses | $283.90M |
| SG&A Expenses | $106.64M |
| Operating Expenses | $390.54M |
| Operating Income | $72.83M |
| Net Income | $60.44M |
| EPS (Basic) | $0.00 |
| EPS (Diluted) | $0.00 |
| Shares Outstanding (Basic) | 24.63B |
| Shares Outstanding (Diluted) | 24.95B |
05—Questions
Frequently Asked Questions
What is the primary reason for the year-over-year revenue decline?
The primary reason for the year-over-year revenue decline was a 9.1% decrease in the GPU business revenue. This was attributed to a supply shortage of NVIDIA's new 28nm Kepler products, which impacted high-end desktop GPU sales, and a decrease in media and communications processor sales as these chipsets approach end-of-life.
Why did Research and Development (R&D) expenses increase so significantly?
R&D expenses increased by 22.6% primarily due to growth in headcount and associated compensation and benefits, as well as increased development costs related to the ramp-up for the launch of the new Kepler 28nm technology. Amortization of new hardware and licenses, along with acquisition-related costs for Icera, also contributed to the increase.
What is the company's liquidity position?
NVIDIA maintained a strong liquidity position, with $3.13 billion in cash, cash equivalents, and marketable securities as of April 29, 2012. This reflects a slight increase from the previous quarter and provides ample resources for operations and strategic investments.
What are the key product developments highlighted in this report?
The report highlights the launch of NVIDIA's new Kepler GPU architecture with products like the GeForce GTX 670 and GTX 680. It also notes the refresh of notebook GPUs with the GeForce 600M series and the launch of the first Tegra 3 phones, such as the HTC One X, indicating continued focus on innovation in both PC graphics and mobile processors.
06—Continue