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NVIDIA Reports Financial Results for First Quarter Fiscal Year 2012



--  Revenue increased 8.5 percent to $962.0 million from the previous
--  GAAP net income was $135.2 million, or $0.22 per diluted share.
    Non-GAAP net income was $165.7 million, or $0.27 per diluted share.
--  GAAP gross margin increased to 50.4 percent, a third consecutive
    quarterly record. Non-GAAP gross margin increased to 50.6 percent.

NVIDIA (NASDAQ: NVDA) today reported revenue of $962.0 million for the first quarter of fiscal 2012 ended May 1, 2011, up 8.5 percent from the prior quarter, and down 4.0 percent from $1.0 billion from the same period a year earlier.

On a GAAP basis, the company recorded net income of $135.2 million, or $0.22 per diluted share, for the first quarter of fiscal 2012. That compares with net income of $171.7 million, or $0.29 per diluted share, in the previous quarter, which included a $57.0 million credit to operating expenses related to the legal settlement in connection with a new Intel licensing agreement. In the same period a year earlier, the company had net income of $137.6 million, or $0.23 per diluted share.

On a non-GAAP basis, net income was $165.7 million, or $0.27 per diluted share, for the first quarter of fiscal 2012. That compares with non-GAAP net income of $142.4 million, or $0.24 per diluted share, in the prior quarter, and $169.0 million, $0.29 per diluted share, in the same period a year earlier.

GAAP gross margin was 50.4 percent, a third consecutive record, compared with 48.1 percent in the previous quarter and 45.6 percent in the same period a year earlier. Non-GAAP gross margin was 50.6 percent, compared with 48.3 percent in the prior quarter and 45.7 percent in the same period a year earlier.

                                                 Quarterly Highlights
($ in millions except per share data)      Q1 FY2012  Q4 FY2011  Q1 FY2011
                                           ---------  ---------  ---------
Revenue                                    $   962.0  $   886.4  $ 1,001.8
                                           ---------  ---------  ---------
                                           ---------  ---------  ---------
  Gross margin                                  50.4%      48.1%      45.6%
                                           ---------  ---------  ---------
  Net income                               $   135.2      171.7  $   137.6
                                           ---------  ---------  ---------
  Income per share                         $    0.22  $    0.29  $    0.23
                                           ---------  ---------  ---------
                                           ---------  ---------  ---------
  Gross margin                                  50.6%      48.3%      45.7%
                                           ---------  ---------  ---------
  Net income                               $   165.7  $   142.4  $   169.0
                                           ---------  ---------  ---------
  Income per share                         $    0.27  $    0.24  $    0.29
                                           ---------  ---------  ---------

"Our core GPU businesses are solid, with expanding revenues and margins. And this quarter, our Tegra mobile business took off," said Jen-Hsun Huang, NVIDIA president and chief executive officer. "With the Tegra super chip and the Icera wireless communication processor, we will offer our customers the two most important processors of the mobile computing revolution. We look forward to completing the Icera acquisition shortly."


Excluding the Icera acquisition, the outlook for the second quarter of fiscal 2012 is as follows:

--  Revenue is expected to be up 4 to 6 percent from the first quarter.
--  GAAP gross margin is expected to be 50.5 to 51.5 percent.
--  GAAP operating expenses are expected to be between $332 and $336
--  GAAP tax rate is expected to be 14 to 16 percent.

First Quarter Fiscal 2012 and Recent Highlights:

--  NVIDIA agreed to acquire Icera, a leading innovator of 3G and 4G
    baseband processors for tablets and cell phones.

--  NVIDIA launched the GeForce(R) GTX 590, the world's fastest
    graphics card.

--  NVIDIA launched the GeForce GTX 550 Ti, the best entry-level gaming
    GPU for next generation Intel systems.

--  NVIDIA and its partners launched the market's first Android super
    phones and tablets.  Among them are the Motorola Atrix 4G and LG
    Optimus 2X superphones; as well as tablets like the Acer ICONIA Tab
    A500, Asus Eee Pad Transformer, Dell Streak, LG Optimus Pad and
    G-Slate, and Motorola Xoom. In addition, Samsung and Sony announced
    that their Galaxy Tab 10.1 and Sony S1 and S2 projects, respectively,
    will be using Tegra(TM) 2.

CFO Commentary Commentary on the quarter by Karen Burns, NVIDIA interim chief financial officer, is available at www.nvidia.com/investor.

Conference Call and webcast Information NVIDIA will conduct a conference call with analysts and investors to discuss its first quarter fiscal 2012 financial results and current financial prospects today at 2:00 p.m. Pacific Time (5:00 p.m. Eastern Time). To listen to the call, please dial (706) 679 2572 (ID#: 59360508). A live webcast (listen-only mode) of the conference call will be accessible at the NVIDIA investor relations web site www.nvidia.com/ir and at www.streetevents.com. The webcast will be recorded and available for replay until the company's conference call to discuss its financial results for its second quarter fiscal 2012.

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 tax expense, non-GAAP tax rate, non-GAAP net income, and non-GAAP net income per share. 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, amortization of acquired intangible assets, other acquisition related costs, a non-recurring benefit from a legal settlement, and the associated tax impact of these items, where applicable. 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 our non-GAAP measures may be different from non-GAAP measures used by other companies.

About NVIDIA NVIDIA (NASDAQ: NVDA) awakened the world to the power of computer graphics when it invented the GPU in 1999. Since then, it has consistently set new standards in visual computing with breathtaking, interactive graphics available on devices ranging from tablets and portable media players to notebooks and workstations. NVIDIA's expertise in programmable GPUs has led to breakthroughs in parallel processing which make supercomputing inexpensive and widely accessible. The Company holds more than 1,800 issued patents worldwide, including ones covering designs and insights that are essential to modern computing. For more information, see www.nvidia.com.

Certain statements in this press release including, but not limited to statements as to: the strength of the company's core businesses; the acquisition of Icera; the importance of our Tegra super chip and the Icera wireless communication processor; the company's financial outlook for the second quarter of fiscal 2012; the company's expectations with respect to the use of its Tegra 2 processor; and the effects of the company's patents on modern computing are forward-looking statements that are subject to risks and uncertainties that could cause results to be materially different than expectations. Important factors that could cause actual results to differ materially include: global economic conditions; our reliance on third parties to manufacture, assemble, package and test our products; the impact of technological development and competition; development of faster or more efficient technology; design, manufacturing or software defects; changes in consumer preferences or demands; changes in industry standards and interfaces; unexpected loss of performance of our products or technologies when integrated into systems; the failure of the acquisition of Icera to close; as well as other factors detailed from time to time in the reports NVIDIA files with the Securities and Exchange Commission, or SEC, including its Form 10-K for the fiscal year ended January 30, 2011. Copies of reports filed with the SEC are posted on the company's website and are available from NVIDIA without charge. These forward-looking statements are not guarantees of future performance and speak only as of the date hereof, and, except as required by law, NVIDIA disclaims any obligation to update these forward-looking statements to reflect future events or circumstances.

Copyright 2011 NVIDIA Corporation. All rights reserved. NVIDIA, the NVIDIA logo, GeForce, Tegra and Tesla are trademarks and/or registered trademarks of NVIDIA Corporation in the U.S. and/or other countries. Other company and product names may be trademarks of the respective companies with which they are associated. Features, pricing, availability, and specifications are subject to change without notice.

                            NVIDIA CORPORATION
                  (In thousands, except per share data)
                                                     Three Months Ended
                                                     May 1,       May 2,
                                                      2011         2010
                                                  ------------ ------------
Revenue                                           $    962,039 $  1,001,813
Cost of revenue                                        477,536      545,436
                                                  ------------ ------------
Gross profit                                           484,503      456,377
Operating expenses
   Research and development                            231,524      218,105
   Sales, general and administrative                    98,117       90,879
                                                  ------------ ------------
       Total operating expenses                        329,641      308,984
                                                  ------------ ------------
Operating income                                       154,862      147,393
Interest and other income, net                           1,623        3,332
                                                  ------------ ------------
Income  before income tax expense                      156,485      150,725
Income tax expense                                      21,266       13,131
                                                  ------------ ------------
Net income                                        $    135,219 $    137,594
                                                  ============ ============
Basic net income per share                        $       0.23 $       0.24
                                                  ============ ============
Diluted net income per share                      $       0.22 $       0.23
                                                  ============ ============
Shares used in basic per share computation             594,802      567,183
Shares used in diluted per share computation           613,474      590,997
                            NVIDIA CORPORATION
                              (In thousands)
                                                      May 1,    January 30,
                                                       2011        2011
                                                    ----------- -----------
Current assets:
   Cash, cash equivalents and marketable
    securities                                      $ 2,726,541 $ 2,490,563
   Accounts receivable, net                             343,202     348,770
   Inventories                                          380,964     345,525
   Prepaid expenses and other current assets             46,056      42,092
                                                    ----------- -----------
      Total current assets                            3,496,763   3,226,950
Property and equipment, net                             553,366     568,857
Goodwill                                                369,844     369,844
Intangible assets, net                                  278,761     288,745
Deposits and other assets                                38,010      40,850
                                                    ----------- -----------
      Total assets                                  $ 4,736,744 $ 4,495,246
                                                    =========== ===========
Current liabilities:
   Accounts payable                                   $ 346,295 $   286,138
   Accrued liabilities and other current
    liabilities                                         634,871     656,544
                                                    ----------- -----------
      Total current liabilities                         981,166     942,682
Other long-term liabilities                             284,813     347,713
Capital lease obligations, long term                     22,957      23,389
Stockholders' equity                                  3,447,808   3,181,462
                                                    ----------- -----------
      Total liabilities and stockholders' equity    $ 4,736,744 $ 4,495,246
                                                    =========== ===========
                            NVIDIA CORPORATION
                  (In thousands, except per share data)
                                                Three months ended
                                          May 1,    January 30,   May 2,
                                           2011        2011        2010
                                        ----------  ----------  ----------
GAAP gross profit                       $  484,503  $  426,359  $  456,377
  GAAP gross margin                           50.4%       48.1%       45.6%
    Stock-based compensation expense
     included in cost of revenue (A)         2,477       1,726       1,803
                                        ----------  ----------  ----------
Non-GAAP gross profit                   $  486,980  $  428,085  $  458,180
                                        ==========  ==========  ==========
  Non-GAAP gross margin                       50.6%       48.3%       45.7%
GAAP operating expenses                 $  329,641  $  246,581  $  308,984
    Stock-based compensation expense
     included in operating expense (A)     (29,262)    (23,640)    (23,374)
    Amortization of acquired intangible
     assets                                 (2,296)     (2,295)     (2,296)
    Other acquisition related costs (B)     (1,255)          -           -
    Legal settlement (C)                         -      57,000           -
                                        ----------  ----------  ----------
Non-GAAP operating expenses             $  296,828  $  277,646  $  283,314
                                        ==========  ==========  ==========
GAAP net income                         $  135,219  $  171,651  $  137,594
    Total pre-tax impact of non-GAAP
     adjustments                            35,290     (29,339)     27,473
    Income tax impact of non-GAAP
     adjustments                            (4,796)        117       3,900
                                        ----------  ----------  ----------
Non-GAAP net income                     $  165,713  $  142,429  $  168,967
                                        ==========  ==========  ==========
Diluted net income per share
    GAAP                                $     0.22  $     0.29  $     0.23
                                        ==========  ==========  ==========
    Non-GAAP                            $     0.27  $     0.24  $     0.29
                                        ==========  ==========  ==========
Shares used in diluted net income per
 share computation                         613,474     601,559     590,997
(A) Excludes stock-based compensation
    as follows:                                Three months ended
                                           May 1,   January 30,   May 2,
                                           2011        2011        2010
                                        ----------  ----------  ----------
    Cost of revenue                     $    2,477  $    1,726  $    1,803
    Research and development            $   18,589  $   14,724  $   14,614
    Sales, general and administrative   $   10,673  $    8,916  $    8,760
(B) During the three months ended May 1, 2011, we were in negotiations to
    acquire Icera and subsequently announced the acquisition agreement. In
    connection with this business combination, we incurred other
    acquisition related costs comprised of professional fees and other
    direct expenses.
(C) On January 10, 2011, NVIDIA and Intel entered into a new six-year cross
    licensing agreement and both parties also agreed to settle all
    outstanding legal disputes. For accounting purposes, the fair valued
    benefit prescribed to the settlement portion was $57.0 million.

For further information, contact:
Michael Hara
Investor Relations
NVIDIA Corporation
(408) 486-2511

Robert Sherbin
Corporate Communications
NVIDIA Corporation
(408) 566-5150



"Safe Harbor" Statement under the Private Securities Litigation Reform Act of 1995: Statements in this press release regarding NVIDIA Corporation's business which are not historical facts are "forward-looking statements" that involve risks and uncertainties. For a discussion of such risks and uncertainties, which could cause actual results to differ from those contained in the forward-looking statements, see "Risk Factors" in the Company's Annual Report or Form 10-K for the most recently ended fiscal year.