01—Abstract
Summary
Summary of the 10-Q filed November 14, 2019. Cited figures are marked; the original filing is the authoritative source.
NVIDIA Corporation reported its fiscal third quarter 2020 results, with revenue of $3.01 billiona, a decrease of 5% year-over-year, but an increase of 17% sequentially.
Net income was $899 millionb, down 27% year-over-year but up 63% sequentially, resulting in diluted EPS of $1.45. The company's gross margin improved significantly to 63.6% year-over-year, driven by better margins on GeForce GPUs. Operating expenses increased due to investments in R&D and SG&A.
The company continues to invest heavily in Research and Development, with R&D expenses up 18% year-over-year. NVIDIA is also progressing with its planned acquisition of Mellanox Technologies, Ltd. for approximately $6.9 billionc, expecting the deal to close in early 2020, subject to regulatory approvals. NVIDIA also reaffirmed its commitment to returning capital to shareholders, with approximately $2.01 billion remaining to be returned through share repurchases and dividends.
02—Key points
Key Highlights
- Revenue for the third quarter of fiscal year 2020 was $3.01 billion, a 5% decrease year-over-year, but a 17% increase sequentially.
- Net income for the quarter was $899 million, down 27% year-over-year but up 63% sequentially, with diluted EPS of $1.45.
- Gross margin improved to 63.6% from 60.4% in the prior year's quarter, primarily due to improved margins on GeForce GPUs.
- Operating expenses increased by 15% year-over-year, driven by higher R&D and SG&A costs, reflecting investments in growth areas.
- The acquisition of Mellanox Technologies, Ltd. for $6.9 billion is progressing, with an expected closing in early calendar year 2020.
- NVIDIA generated strong operating cash flow of $3.3 billion for the first nine months of fiscal year 2020.
- The company plans to return approximately $2.01 billion to shareholders through share repurchases and dividends.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in Q3 FY2020, NVIDIA Corp kept $0.30.
- Revenue$3.01B100.0%
- Cost of revenue−$1.10B36.4%
- Gross profit$1.92B63.6%
- Operating costs−$989.0M32.8%
- Operating income$927.0M30.8%
- Interest, other & tax−$28.0M0.9%
- Net income$899.0M29.8%
04—Financials
Financial Highlights
Figures from 10-QQ3 FY2020filed November 14, 2019Financial Statements
Q3 FY2020 against Q3 FY2019
| Line item | Q3 FY2020Q3 FY2019 | Change |
|---|---|---|
| Revenue | $3.01B$3.18B | −5.2% |
| Cost of Revenue | $1.10B$1.26B | −12.9% |
| Gross Profit | $1.92B$1.92B | −0.3% |
| R&D Expenses | $712.00M$605.00M | +17.7% |
| SG&A Expenses | $277.00M$258.00M | +7.4% |
| Operating Expenses | $989.00M$863.00M | +14.6% |
| Operating Income | $927.00M$1.06B | −12.4% |
| Interest Expense | $13.00M$15.00M | −13.3% |
| Net Income | $899.00M$1.23B | −26.9% |
| EPS (Basic) | $0.04$0.05 | −27.2% |
| EPS (Diluted) | $0.04$0.05 | −26.4% |
| Shares Outstanding (Basic) | 24.40B24.36B | +0.2% |
| Shares Outstanding (Diluted) | 24.72B25.00B | −1.1% |
05—Questions
Frequently Asked Questions
What was NVIDIA's revenue performance in Q3 FY2020 compared to the previous year?
NVIDIA's revenue for the third quarter of fiscal year 2020 was $3.01 billion, representing a 5% decrease compared to $3.18 billion in the same quarter of the previous year. However, sequentially, revenue increased by 17% from the second quarter of fiscal year 2020.
How did NVIDIA's profitability change year-over-year?
Net income decreased by 27% year-over-year to $899 million, and diluted earnings per share (EPS) fell to $1.45 from $1.97. This decline was attributed to lower revenue and higher operating expenses, although gross margins saw an improvement.
What is the status of the Mellanox acquisition?
NVIDIA entered into an agreement to acquire Mellanox Technologies for approximately $6.9 billion. The acquisition has received approval from Mellanox shareholders and regulatory bodies in the US and Mexico. NVIDIA is currently engaged with regulators in Europe and China and anticipates closing the acquisition in early calendar year 2020.
How is NVIDIA returning capital to shareholders?
NVIDIA is committed to returning capital to shareholders and has approximately $2.01 billion remaining to be returned by the end of fiscal year 2020, through a combination of share repurchases and cash dividends. The company expects to suspend share repurchases prior to the close of the Mellanox acquisition.
06—Continue