10-QPeriod: Q3 FY2020

NVIDIA CORP Quarterly Report for Q3 Ended Oct 27, 2019

Filed November 14, 2019For Securities:NVDA

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.

Financial Highlights

55 data points
Beta

Revenue

$3.01B

63.6% Gross Margin

Net Income

$899.00M

29.8% Net Margin

EPS (Diluted)

$0.04

Total Assets

$15.81B

Cash & Equivalents

$9.77B

Free Cash Flow

$1.54B

Financial Statements
Beta
Revenue$3.01B
Cost of Revenue$1.10B
Gross Profit$1.92B
R&D Expenses$712.00M
SG&A Expenses$277.00M
Operating Expenses$989.00M
Operating Income$927.00M
Interest Expense$13.00M
Net Income$899.00M
EPS (Basic)$0.04
EPS (Diluted)$0.04
Shares Outstanding (Basic)24.40B
Shares Outstanding (Diluted)24.72B

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.

Frequently Asked Questions

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.

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.

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.

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.