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NVIDIA CORP Quarterly Report for Q2 Ended Jul 31, 2016

Filing Date
Filed August 23, 2016
Period End
July 31, 2016
Security
NVDA
In the record · 2016–202610-K1110-Q328-K110

NVDA filed 11 annual reports (10-K), 32 quarterly reports (10-Q) and 110 current reports (8-K) between 2016 and 2026.

  1. Leadership change8-K · May ’18May ’18
  2. Deal closed8-K · Jul ’20Jul ’20
  3. Leadership change8-K · Jun ’22Jun ’22
  4. Material agreement8-K · Aug ’26Aug ’26

01—Abstract

Summary

Summary of the 10-Q filed August 23, 2016. Cited figures are marked; the original filing is the authoritative source.

NVIDIA Corporation (NVDA) reported strong financial results for the second quarter of fiscal year 2017, ending July 30, 2016.

Revenue surged by 24% year-over-year to $1.43 billiona, driven by robust performance in the GPU segment, particularly in gaming, datacenter, and professional visualization markets. The Tegra Processor business also showed significant growth, up 30% year-over-year, fueled by automotive applications. Profitability saw a dramatic improvement, with net income increasing by 873% to $253 million, or $0.40 per diluted share.

This substantial growth was attributed to strong revenue gains, improved gross margins (57.9%b), and a significant reduction in operating expenses compared to the prior year, which had included substantial restructuring charges. The company continued its commitment to returning capital to shareholders, repurchasing shares and paying dividends.

02—Key points

Key Highlights

  1. Revenue increased 24% year-over-year to $1.43 billion, driven by strong GPU and Tegra segment performance.
  2. Net income dramatically increased by 873% year-over-year to $253 million.
  3. Diluted EPS grew to $0.40 from $0.05 in the prior year's comparable quarter.
  4. Gross margin improved to 57.9% from 55.0% year-over-year, indicating improved pricing power and product mix.
  5. Operating expenses decreased by 9% year-over-year, largely due to lower restructuring charges compared to the prior year.
  6. The GPU business saw a 25% revenue increase, with significant growth in Gaming, Datacenter, and Professional Visualization.
  7. Tegra Processor business revenue increased by 30%, driven by automotive systems.

03—Questions

Frequently Asked Questions

  1. What were the main drivers of NVIDIA's revenue growth in this quarter?

    Revenue growth was primarily driven by strong demand in the GPU segment, particularly for gaming (GeForce), datacenter applications (Tesla), and professional visualization (Quadro). The Tegra Processor business also contributed significantly, with notable growth in automotive systems.

  2. How did NVIDIA's profitability change compared to the previous year?

    Profitability saw a substantial improvement. Net income grew by 873% to $253 million, and diluted earnings per share increased to $0.40 from $0.05 in the comparable prior-year period. This was a result of strong revenue growth outpacing operating expense increases and improved gross margins.

  3. What is the status of NVIDIA's convertible debt?

    NVIDIA has outstanding 1.00% Convertible Senior Notes due 2018. During the quarter, the Notes were convertible at the holders' option, and the company received conversion notices for an aggregate of $229 million in principal amount, with settlements expected in the next quarter. The company manages potential dilution through convertible note hedge and warrant transactions.

  4. What is NVIDIA's strategy regarding capital return to shareholders?

    NVIDIA is actively returning capital to shareholders through share repurchases and cash dividends. The company completed an accelerated share repurchase (ASR) of $500 million and intends to return approximately $1.00 billion to shareholders in fiscal year 2017 through a combination of repurchases and dividends.

04—Continue

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