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NVIDIA Announces Financial Results for Third Quarter Fiscal 2018

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  • Record revenue of $2.64 billion, up 32 percent from a year ago
  • Record GAAP EPS of $1.33, up 60 percent from a year ago 
  • Growth across all platforms
  • Quarterly cash dividend raised 7 percent to $0.15 per share. Company intends to return $1.25 billion to shareholders in fiscal 2019

SANTA CLARA, Calif., Nov. 09, 2017 (GLOBE NEWSWIRE) -- NVIDIA (NASDAQ:NVDA) today reported record revenue for the third quarter ended October 29, 2017, of $2.64 billion, up 32 percent from $2.00 billion a year earlier, and up 18 percent from $2.23 billion in the previous quarter, with growth across all its platforms.

GAAP earnings per diluted share for the quarter were a record $1.33, up 60 percent from $0.83 a year ago and up 45 percent from $0.92 in the previous quarter. Non-GAAP earnings per diluted share were $1.33, also a record, up 41 percent from $0.94 a year earlier and up 32 percent from $1.01 in the previous quarter. 

"We had a great quarter across all of our growth drivers," said Jensen Huang, founder and chief executive officer of NVIDIA. "Industries across the world are accelerating their adoption of AI.

"Our Volta GPU has been embraced by every major internet and cloud service provider and computer maker. Our new TensorRT inference acceleration platform opens us to growth in hyperscale datacenters. GeForce and Nintendo Switch are tapped into the strongest growth dynamics of gaming. And our new DRIVE PX Pegasus for robotaxis has been adopted by companies around the world. We are well positioned for continued growth," he said.

Capital Return

During the first nine months of fiscal 2018, NVIDIA returned to shareholders $909 million in share repurchases and $250 million in cash dividends. As a result, the company returned an aggregate of $1.16 billion to shareholders in the first nine months of the fiscal year. The company intends to return $1.25 billion to shareholders in fiscal 2018.

For fiscal 2019, NVIDIA intends to return $1.25 billion to shareholders through ongoing quarterly cash dividends and share repurchases. The company announced a 7 percent increase in its quarterly cash dividend to $0.15 per share from $0.14 per share, to be paid with its next quarterly cash dividend on December 15, 2017, to all shareholders of record on November 24, 2017. 

Q3 FY2018 Summary

GAAP
($ in millions except earnings per share) Q3 FY18 Q2 FY18 Q3 FY17 Q/Q Y/Y
Revenue $ 2,636   $ 2,230   $ 2,004   Up 18% Up 32%
Gross margin   59.5 %   58.4 %   59.0 % Up 110 bps Up 50 bps
Operating expenses $ 674   $ 614   $ 544   Up 10% Up 24%
Operating income $ 895   $ 688   $ 639   Up 30% Up 40%
Net income $ 838   $ 583   $ 542   Up 44% Up 55%
Diluted earnings per share $ 1.33   $ 0.92   $ 0.83   Up 45% Up 60%


Non-GAAP
($ in millions except earnings per share) Q3 FY18 Q2 FY18 Q3 FY17 Q/Q Y/Y
Revenue $ 2,636   $ 2,230   $ 2,004   Up 18% Up 32%
Gross margin   59.7 %   58.6 %   59.2 % Up 110 bps Up 50 bps
Operating expenses $ 570   $ 533   $ 478   Up 7% Up 19%
Operating income $ 1,005   $ 773   $ 708   Up 30% Up 42%
Net income $ 833   $ 638   $ 570   Up 31% Up 46%
Diluted earnings per share $ 1.33   $ 1.01   $ 0.94   Up 32% Up 41%
                       

NVIDIA's outlook for the fourth quarter of fiscal 2018 is as follows:

  • Revenue is expected to be $2.65 billion, plus or minus two percent.
     
  • GAAP and non-GAAP gross margins are expected to be 59.7 percent and 60.0 percent, respectively, plus or minus 50 basis points.
     
  • GAAP and non-GAAP operating expenses are expected to be approximately $722 million and $600 million, respectively.
     
  • GAAP and non-GAAP other income and expense are both expected to be nominal.
     
  • GAAP and non-GAAP tax rates are both expected to be 17.5 percent, plus or minus one percent, excluding any discrete items. GAAP discrete items include excess tax benefits or deficiencies related to stock-based compensation, which the company expects to generate variability on a quarter by quarter basis.

Third Quarter Fiscal 2018 Highlights
During the third quarter, NVIDIA achieved progress in these areas:  

Datacenter

Gaming

Professional Visualization

Automotive

  • Announced NVIDIA DRIVE™ PX Pegasus, the world's first auto-grade AI computer designed to enable a new class of driverless robotaxis without steering wheels, pedals or mirrors.

Autonomous Machines/AI Edge Computing

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 third quarter fiscal 2018 financial results and current financial prospects today at 2 p.m. Pacific time (5 p.m. Eastern time). To listen to the conference call, dial (877) 223-3864 in the United States or (574) 990-1377 internationally, and provide the following conference ID: 96232617. A live webcast (listen-only mode) of the conference call will be accessible at NVIDIA's investor relations website, http://investor.nvidia.com, and at www.streetevents.com. The webcast will be recorded and available for replay until NVIDIA's conference call to discuss its financial results for its fourth quarter and fiscal 2018.

Non-GAAP Measures
To supplement NVIDIA's Condensed Consolidated Statements of Income and Condensed Consolidated Balance Sheets 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), non-GAAP income tax expense, non-GAAP net income, non-GAAP net income, or earnings, per diluted share, non-GAAP diluted shares, 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, legal settlement costs, acquisition-related costs, contributions, restructuring and other charges, gains from non-affiliated investments, interest expense related to amortization of debt discount, loss on ear

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