01—Abstract
Summary
Summary of the 10-Q filed May 22, 2013. Cited figures are marked; the original filing is the authoritative source.
NVIDIA Corporation reported solid financial results for the first quarter of fiscal year 2014, driven by a significant increase in its GPU business segment.
Revenue grew by 3.2% year-over-year to $954.7 milliona, with the GPU business segment showing robust growth of 8.2%. This segment benefited from strong sales of high-end GeForce products and continued traction in Tesla compute solutions. Conversely, the Tegra Processor business experienced a notable decline of 22.2% in revenue, primarily due to the winding down of older processor generations.
Despite this, the company's overall profitability improved, with net income increasing to $77.9 millionb from $60.4 million in the prior year, leading to a higher diluted EPS of $0.13. NVIDIA also demonstrated a commitment to shareholder returns, initiating a quarterly dividend and continuing its share repurchase program, including a significant accelerated share repurchase agreement entered into in May 2013.
02—Key points
Key Highlights
- Revenue increased by 3.2% to $954.7 million compared to the prior year's first quarter.
- The GPU business segment revenue grew by 8.2% to $785.6 million, driven by higher-end products and design wins.
- Tegra Processor business revenue declined by 22.2% to $103.1 million, reflecting a shift away from older processors.
- Net income rose significantly to $77.9 million from $60.4 million in the same period last year.
- Diluted Earnings Per Share (EPS) improved to $0.13 from $0.10 in the prior year.
- The company initiated a quarterly cash dividend of $0.075 per share.
- NVIDIA returned capital to shareholders through $100 million in share repurchases and $46.3 million in dividends during the quarter, and announced a $750 million accelerated share repurchase agreement post-quarter.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in Q1 FY2014, NVIDIA Corp kept $0.08.
- Revenue$954.7M100.0%
- Cost of revenue−$436.2M45.7%
- Gross profit$518.6M54.3%
- Operating costs−$435.8M45.6%
- Operating income$82.8M8.7%
- Interest, other & tax−$4.9M0.5%
- Net income$77.9M8.2%
04—Financials
Financial Highlights
Figures from 10-QQ1 FY2014filed May 22, 2013Financial Statements
Q1 FY2014 against Q1 FY2013
| Line item | Q1 FY2014Q1 FY2013 | Change |
|---|---|---|
| Revenue | $954.74M$924.88M | +3.2% |
| Cost of Revenue | $436.17M$461.51M | −5.5% |
| Gross Profit | $518.57M$463.36M | +11.9% |
| R&D Expenses | $327.16M$283.90M | +15.2% |
| SG&A Expenses | $108.63M$106.64M | +1.9% |
| Operating Expenses | $435.79M$390.54M | +11.6% |
| Operating Income | $82.78M$72.83M | +13.7% |
| Interest Expense | $853K— | — |
| Net Income | $77.89M$60.44M | +28.9% |
| EPS (Basic) | $0.00$0.00 | +30.0% |
| EPS (Diluted) | $0.00$0.00 | +30.0% |
| Shares Outstanding (Basic) | 24.67B24.63B | +0.2% |
| Shares Outstanding (Diluted) | 24.77B24.95B | −0.7% |
05—Questions
Frequently Asked Questions
What drove the revenue growth in the first quarter of fiscal year 2014?
Revenue growth was primarily driven by an 8.2% increase in the GPU business segment, which benefited from strong sales of high-end GeForce products and continued traction in Tesla compute solutions. The overall revenue increased by 3.2% to $954.7 million.
Why did the Tegra Processor business revenue decline?
The Tegra Processor business revenue decreased by 22.2% to $103.1 million. This decline was mainly due to lower sales of older Tegra 2 and Tegra 3 processors as customers phased out products using them. It also reflects reduced revenue from embedded products and game console licenses/royalties.
How did NVIDIA return capital to shareholders during this quarter?
NVIDIA initiated a quarterly cash dividend of $0.075 per share. In the first quarter of fiscal year 2014, the company repurchased $100 million of its common stock and paid $46.3 million in dividends. Additionally, subsequent to the quarter, on May 14, 2013, NVIDIA entered into an accelerated share repurchase agreement to repurchase $750 million of its common stock.
What is the outlook for gross margin?
NVIDIA expects its gross margin for the second quarter of fiscal year 2014 to be relatively consistent with the first quarter of fiscal year 2014, which was 54.3%. The company noted that gross margin can vary depending on product mix.
06—Continue