NVIDIA CORP Quarterly Report for Q3 Ended Oct 27, 2019

Summary

NVIDIA Corporation reported its fiscal third quarter 2020 results, with revenue of $3.01 billion, a decrease of 5% year-over-year, but an increase of 17% sequentially. Net income was $899 million, 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 billion, 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.

Key Highlights

• 1Revenue for the third quarter of fiscal year 2020 was $3.01 billion, a 5% decrease year-over-year, but a 17% increase sequentially.
• 2Net income for the quarter was $899 million, down 27% year-over-year but up 63% sequentially, with diluted EPS of $1.45.
• 3Gross margin improved to 63.6% from 60.4% in the prior year's quarter, primarily due to improved margins on GeForce GPUs.
• 4Operating expenses increased by 15% year-over-year, driven by higher R&D and SG&A costs, reflecting investments in growth areas.
• 5The acquisition of Mellanox Technologies, Ltd. for $6.9 billion is progressing, with an expected closing in early calendar year 2020.
• 6NVIDIA generated strong operating cash flow of $3.3 billion for the first nine months of fiscal year 2020.
• 7The company plans to return approximately $2.01 billion to shareholders through share repurchases and dividends.

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