NVIDIA CORP Quarterly Report for Q3 Ended Oct 25, 2015

Summary

NVIDIA Corporation's Q3 Fiscal Year 2016 report (ending October 25, 2015) showcases a solid performance driven by its core GPU business, which saw a 12% year-over-year revenue increase in the quarter, fueled by strong demand for high-end GeForce GPUs for gaming. While the overall revenue grew 7% to $1.305 billion, the Tegra Processor business experienced a significant decline of 23% due to reduced sales in smartphones and tablets, though automotive infotainment systems showed growth. The company demonstrated improved profitability, with net income rising to $246 million from $173 million in the prior year's comparable quarter, translating to diluted EPS of $0.44. NVIDIA also continued to return capital to shareholders through dividends and share repurchases, including a $400 million accelerated share repurchase program completed in October 2015. Despite facing ongoing patent litigation with competitors, the company expressed confidence in its product pipeline and strategic growth areas, including deep learning and automotive applications.

Key Highlights

• 1Revenue increased 7% year-over-year to $1.305 billion, primarily driven by a 12% increase in the GPU business.
• 2The GPU business benefited from strong demand for high-end GeForce gaming GPUs, with revenue up 40% in this category.
• 3Net income rose to $246 million ($0.44 diluted EPS) from $173 million ($0.31 diluted EPS) in the prior year's quarter.
• 4The Tegra Processor business saw a 23% revenue decline due to a significant drop in smartphone and tablet sales, though automotive applications showed growth.
• 5NVIDIA completed a $400 million accelerated share repurchase program, repurchasing 18 million shares.
• 6The company paid $53 million in cash dividends in the quarter and announced an 18% increase in its quarterly dividend.
• 7Restructuring and other charges of $8 million were recorded related to the wind-down of Icera modem operations.

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