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Nvidia Announces Financial Results For Third Quarter Fiscal 2016

The following excerpt is from the company's SEC filing.

Record revenue of $1.305 billion, up 7 percent from a year ago, up 13 percent sequentially

GAAP operating income of $245 million, up 15 percent from a year ago

Quarterly cash dividend raised 18 percent to $0.115 per share. Company to return $1 billion to shareholders in fiscal 2017

NVIDIA (NASDAQ: NVDA) today reported record revenue for the third quarter ended October 25, 2015, of $1.305 billion, up 7 percent from $1.225 billion a year earlier, and up 13 percent from $1.153 billion in the previous quarter.

GAAP earnings per diluted share for th e quarter were $0.44, up 42 percent from $0.31 a year earlier and up from $0.05 in the previous quarter. Non-GAAP earnings per diluted share were $0.46, up 18 percent from $0.39 a year earlier, and up 35 percent from $0.34 in the previous quarter.

“Our record revenue highlights NVIDIA’s position at the center of forces that are reshaping our industry,” said Jen-Hsun Huang, co-founder and chief executive officer, NVIDIA. “Virtual reality, deep learning, cloud computing and autonomous driving are developing with incredible speed, and we are playing an important role in all of them.

“We continue to make great headway in our strategy of creating specialized visual computing platforms targeted at important growth markets. The opportunities ahead of us have never been more promising,” he said.

Capital Return

During the third quarter, NVIDIA paid $53 million in cash dividends and received an additional 4.6 million shares at the close of the accelerated share repurchase agreement that it had entered into in the previous quarter. As a result, the company has returned an aggregate of $604 million to shareholders in the first nine months of the fiscal year. The company intends to return $800 million to shareholders in fiscal 2016.

For fiscal 2017, NVIDIA intends to return approximately $1.0 billion to shareholders through ongoing quarterly cash dividends and share repurchases.

The company announced an 18 percent increase in its quarterly cash dividend to $0.115 per share from $0.0975 per share. NVIDIA will pay this next quarterly cash dividend on December 14, 2015, to all shareholders of record on November 20, 2015.

GAAP Quarterly Financial Comparison

($ in millions except earnings per share)

Q3 FY16

Q2 FY16

Q3 FY15

Revenue

$1,305

$1,153

$1,225

up 13%

Gross margin

up 130 bps

up 110 bps

Operating expenses

down 12%

Operating income

up 222%

up 15%

Net income

up 846%

up 42%

Diluted earnings per share

up 780%

Non-GAAP Quarterly Financial Comparison

down 10 bps

up 100 bps

up 33%

up 17%

up 34%

up 16%

up 35%

up 18%

NVIDIA’s outlook for the fourth quarter of fiscal 2016 is as follows:

Revenue is expected to be $1.30 billion, plus or minus two percent.

GAAP and non-GAAP gross margins are expected to be 56.7 percent and 57.0 percent, respectively, plus or minus 50 basis points.

GAAP operating expenses are expected to be approximately $503 million. Non-GAAP operating expenses are expected to be approximately $445 million.

GAAP and non-GAAP tax rates for the fourth quarter of fiscal 2016 are expected to be 20 percent, plus or minus one percent.

The above GAAP outlook amounts exclude restructuring charges, which are expected to be in the range of $25 million to $35 million, in the fourth quarter of fiscal 2016.

Capital expenditures are expected to be approximately $20 million to $30 million.

Third Quarter Fiscal 2016 Highlights

During the third quarter, NVIDIA achieved progress in each of its platforms.

Gaming:

Introduced the

GeForce® GTX 950 GPU

, designed to play the latest games with processing power that rivals any console.

NVIDIA GameWorks™ VR

a software development kit for creating gaming experiences on virtual reality-ready desktops and notebooks.

Launched

GeForce NOW™

, allowing players to instantly stream titles from the cloud to their SHIELD device.

Extended

SHIELD™ Android TV

into key European markets.

Professional Visualization:

Enabled professional designers to bring virtual reality to applications, with the launch of

NVIDIA DesignWorks™ VR

Datacenter:

Unveiled the next generation of its virtualized graphics platform

NVIDIA GRID™ 2.0

which delivers even the...


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