NVIDIA Announces Financial Results for Second Quarter Fiscal 2021

NVIDIA’s outlook for the third quarter of fiscal 2021 is as follows:

  • Revenue is expected to be $4.40 billion, plus or minus 2 percent.
  • GAAP and non-GAAP gross margins are expected to be 62.5 percent and 65.5 percent, respectively, plus or minus 50 basis points.
  • GAAP and non-GAAP operating expenses are expected to be approximately $1.54 billion and $1.09 billion, respectively.
  • GAAP and non-GAAP other income and expense are both expected to be an expense of approximately $55 million.
  • GAAP and non-GAAP tax rates are both expected to be 8 percent, plus or minus 1 percent, excluding any discrete items. GAAP discrete items include excess tax benefits or deficiencies related to stock-based compensation, which are expected to generate variability on a quarter by quarter basis.

Highlights

Since its previous earnings report, NVIDIA has achieved progress in these areas:

Data Center

  • Second-quarter revenue, which included Mellanox, was $1.75 billion, up 54 percent from the previous quarter and up 167 percent from a year earlier.
  • Announced, together with the world’s leading server makers, more than 50 NVIDIA® A100-powered systems to tackle the most complex challenges in AI, data science and scientific computing.
  • Powered eight of the top 10, and two-thirds of the total systems, on the latest TOP500 list of the world’s fastest supercomputers. This includes NVIDIA Selene, an NVIDIA DGX SuperPOD™ system, which ranked No. 7 on the list and was No. 2 on the Green500 list.
  • Set 16 AI performance records on the latest MLPerf benchmarks, eight on a per-chip basis based on the A100 Tensor Core GPU and eight “at scale” using the DGX A100 SuperPOD system.
  • Made the NVIDIA A100 Tensor Core GPU available on Google Cloud just over a month after its introduction.
  • Provided CUDA GPU-acceleration for Apache Spark, the world’s most popular data analytics application, through the general availability release of Spark 3.0.
  • Unveiled the NVIDIA Mellanox® UFM Cyber-AI Platform, which minimizes downtime in supercomputing data centers by detecting security threats and operational issues and predicting network failures.

Gaming

  • Second-quarter revenue was $1.65 billion, up 24 percent from the previous quarter and up 26 percent from a year earlier.
  • Ramped 100+ new GeForce laptops to deliver outstanding performance to students, creators and gamers across a range of price points.
  • Announced a range of games now supporting NVIDIA RTX ray tracing and DLSS AI super resolution, including, Justice, Cyberpunk 2077 and Death Stranding. Introduced new worlds for Minecraft with RTX
  • Expanded GeForce NOW™ to Chromebooks, enabling millions of users to play games in the cloud.
  • Announced that Square Enix is adding its extensive catalog to GeForce NOW, including franchises such as Deus Ex and Just Cause, plus Shadow of the Tomb Raider, which returned with RTX On.

Professional Visualization

  • Second-quarter revenue was $203 million, down 34 percent from the previous quarter and down 30 percent from a year earlier.
  • Launched with Acer, Dell, Lenovo and Microsoft new mobile workstations for professional creators, based on NVIDIA Quadro® graphics. Powered new AI features in the latest releases of Substance Alchemist and Blender, improving material creation and incorporating AI denoising.
  • Announced that NVIDIA RTX™ has been implemented in the latest application releases from Foundry, Chaos Group and Redshift by Maxon, giving creators access to faster ray tracing and accelerated performance.
  • Released NVIDIA Quadro View™, the latest application in the NVIDIA Quadro Experience platform, which aids in streamlining workflows with a suite of desktop management tools.

Automotive

  • Second-quarter revenue was $111 million, down 28 percent from the previous quarter and down 47 percent from a year earlier.
  • Announced with Mercedes-Benz that the carmaker is integrating into every vehicle in its lineup, beginning in 2024, a new software-defined vehicle architecture that is perpetually upgradeable and built on the NVIDIA DRIVE AV autonomous driving software and NVIDIA AGX Orin™ AV computer.

CFO Commentary
Commentary on the quarter by Colette Kress, NVIDIA’s executive vice president and chief financial officer, is available at http://investor.nvidia.com/.

Conference Call and Webcast Information

NVIDIA will conduct a conference call with analysts and investors to discuss its second quarter fiscal 2021 financial results and current financial prospects today at 2 p.m. Pacific time (5 p.m. Eastern time). A live webcast (listen-only mode) of the conference call will be accessible at NVIDIA’s investor relations website, http://investor.nvidia.com. The webcast will be recorded and available for replay until NVIDIA’s conference call to discuss its financial results for its third quarter of fiscal 2021.

Non-GAAP Measures

To supplement NVIDIA’s condensed consolidated financial statements presented in accordance with GAAP, the company uses non-GAAP measures of certain components of financial performance. These non-GAAP measures include non-GAAP gross profit, non-GAAP gross margin, non-GAAP operating expenses, non-GAAP income from operations, non-GAAP other income (expense), net, non-GAAP income tax expense, non-GAAP net income, non-GAAP net income, or earnings, per diluted share, and free cash flow. In order for NVIDIA’s investors to be better able to compare its current results with those of previous periods, the company has shown a reconciliation of GAAP to non-GAAP financial measures. These reconciliations adjust the related GAAP financial measures to exclude stock-based compensation expense, acquisition-related and other costs, legal settlement costs, losses from non-affiliated investments, interest expense related to amortization of debt discount, and the associated tax impact of these items, where applicable. Free cash flow is calculated as GAAP net cash provided by operating activities less purchase of property and equipment and intangible assets. NVIDIA believes the presentation of its non-GAAP financial measures enhances the user’s overall understanding of the company’s historical financial performance. The presentation of the company’s non-GAAP financial measures is not meant to be considered in isolation or as a substitute for the company’s financial results prepared in accordance with GAAP, and the company’s non-GAAP measures may be different from non-GAAP measures used by other companies.

 

NVIDIA CORPORATION
 CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In millions, except per share data)
(Unaudited)
               
  Three Months Ended   Six Months Ended
  July 26,   July 28,   July 26,   July 28,
    2020       2019       2020       2019  
               
Revenue $ 3,866     $ 2,579     $ 6,946     $ 4,799  
Cost of revenue   1,591       1,038       2,667       1,962  
Gross profit   2,275       1,541       4,279       2,837  
Operating expenses                  
Research and development   997       704       1,732       1,379  
Sales, general and administrative   627       266       920       529  
Total operating expenses   1,624       970       2,652       1,908  
Income from operations   651       571       1,627       929  
Interest income   13       47       44       92  
Interest expense   (54 )     (13 )     (78 )     (27 )
Other, net   (1 )     1       (2 )     1  
Other income (expense), net   (42 )     35       (36 )     66  
Income before income tax   609       606       1,591       995  
Income tax expense (benefit)   (13 )     54       52       48  
Net income $ 622     $ 552     $ 1,539     $ 947  
               
Net income per share:              
Basic $ 1.01     $ 0.91     $ 2.50     $ 1.56  
Diluted $ 0.99     $ 0.90     $ 2.47     $ 1.54  
               
Weighted average shares used in per share computation:            
Basic   616       609       615       608  
Diluted   626       616       624       616  
                               

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