01—Abstract
Summary
Summary of the 10-Q filed November 18, 2015. Cited figures are marked; the original filing is the authoritative source.
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%a 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 billionb, 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 millionc 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.
02—Key points
Key Highlights
- Revenue increased 7% year-over-year to $1.305 billion, primarily driven by a 12% increase in the GPU business.
- The GPU business benefited from strong demand for high-end GeForce gaming GPUs, with revenue up 40% in this category.
- Net income rose to $246 million ($0.44 diluted EPS) from $173 million ($0.31 diluted EPS) in the prior year's quarter.
- The Tegra Processor business saw a 23% revenue decline due to a significant drop in smartphone and tablet sales, though automotive applications showed growth.
- NVIDIA completed a $400 million accelerated share repurchase program, repurchasing 18 million shares.
- The company paid $53 million in cash dividends in the quarter and announced an 18% increase in its quarterly dividend.
- Restructuring and other charges of $8 million were recorded related to the wind-down of Icera modem operations.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in Q3 FY2016, NVIDIA Corp kept $0.19.
- Revenue$1.30B100.0%
- Cost of revenue−$572.0M43.8%
- Gross profit$733.0M56.2%
- Operating costs−$488.0M37.4%
- Operating income$245.0M18.8%
- Interest, other & tax$2.0M0.2%
- Net income$247.0M18.9%
04—Financials
Financial Highlights
Figures from 10-QQ3 FY2016filed November 18, 2015Financial Statements
Q3 FY2016 against Q3 FY2015
| Line item | Q3 FY2016Q3 FY2015 | Change |
|---|---|---|
| Revenue | $1.30B$1.23B | +6.5% |
| Cost of Revenue | $572.00M$548.00M | +4.4% |
| Gross Profit | $733.00M$677.00M | +8.3% |
| R&D Expenses | $329.00M$340.00M | −3.2% |
| SG&A Expenses | $152.00M$123.00M | +23.6% |
| Operating Expenses | $489.00M$463.00M | +5.6% |
| Operating Income | $245.00M$213.00M | +15.0% |
| Interest Expense | $12.00M$11.00M | +9.1% |
| Net Income | $247.00M$173.00M | +42.8% |
| EPS (Basic) | $0.01$0.01 | +40.6% |
| EPS (Diluted) | $0.01$0.01 | +41.9% |
| Shares Outstanding (Basic) | 21.68B21.92B | −1.1% |
| Shares Outstanding (Diluted) | 22.60B22.32B | +1.3% |
05—Questions
Frequently Asked Questions
What was NVIDIA's revenue and profitability for the quarter?
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.
How did the GPU and Tegra businesses perform?
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.
What is NVIDIA doing to return capital to shareholders?
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.
Are there any significant legal issues or restructuring activities impacting NVIDIA?
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.
06—Continue