10-QPeriod: Q3 FY2016

NVIDIA CORP Quarterly Report for Q3 Ended Oct 25, 2015

Filed November 18, 2015For Securities:NVDA

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.

Financial Highlights

55 data points
Beta

Revenue

$1.30B

56.2% Gross Margin

Net Income

$247.00M

18.9% Net Margin

EPS (Diluted)

$0.01

Total Assets

$7.17B

Cash & Equivalents

$471.00M

Free Cash Flow

$238.00M

Financial Statements
Beta
Revenue$1.30B
Cost of Revenue$572.00M
Gross Profit$733.00M
R&D Expenses$329.00M
SG&A Expenses$152.00M
Operating Expenses$489.00M
Operating Income$245.00M
Interest Expense$12.00M
Net Income$247.00M
EPS (Basic)$0.01
EPS (Diluted)$0.01
Shares Outstanding (Basic)21.68B
Shares Outstanding (Diluted)22.60B

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.

Frequently Asked Questions

NVIDIA reported revenue of $1.305 billion for the third quarter of fiscal year 2016, a 7% increase compared to $1.225 billion in the same period last year. Net income was $246 million, up from $173 million in the prior year's quarter, with diluted earnings per share of $0.44 compared to $0.31.

The GPU business was the primary growth driver, with revenue increasing by 12% year-over-year to $1.110 billion, largely due to strong demand for high-end GeForce gaming GPUs. The Tegra Processor business experienced a significant decline of 23% in revenue to $129 million, primarily due to decreased sales in the smartphone and tablet markets, although sales for automotive infotainment systems showed growth.

NVIDIA returned capital to shareholders through dividends and share repurchases. In the third quarter, the company paid $53 million in cash dividends and completed a $400 million accelerated share repurchase program, repurchasing 18 million shares. Additionally, NVIDIA announced an 18% increase in its quarterly cash dividend to $0.115 per share.

NVIDIA is involved in ongoing patent litigation with Qualcomm and Samsung. The company also incurred $8 million in restructuring and other charges related to the wind-down of its Icera modem operations during the quarter.