nvidia financial highlights presentation: annual investors day, march 25, 2014

13
Colette Kress, EVP & CFO ANNUAL INVESTOR DAY

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Colette M. Kress, EVP & CFO of NVIDIA, shared these financial highlights with attendees of NVIDIA's Annual Investor Day on March 25, 2014.

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Page 1: NVIDIA Financial Highlights Presentation: Annual Investors Day, March 25, 2014

Colette Kress, EVP & CFO

ANNUAL INVESTOR DAY

Page 2: NVIDIA Financial Highlights Presentation: Annual Investors Day, March 25, 2014

Financial Highlights

Revenue growing faster than overall market

Strength in overall business provides foundation for higher

growth opportunities

Gross margin expansion

Strong cash flow generation enables:

Leverage investment

Focus on regular capital return

Page 3: NVIDIA Financial Highlights Presentation: Annual Investors Day, March 25, 2014

0

1,000

2,000

3,000

4,000

0

100

200

300

400

FY2011 FY2012 FY2013 FY2014

Calendar 2010 - 2013 PC Revenue From Gartner Data GPU Revenue, Ex-MCP Chipset

GPU Growth in a Challenging Market

GEFORCE GAMING GPUs

15%

WORKSTATIONS

10%

TESLA

37%

MAINSTREAM OEM

10%

PC Revenue

(Billions) Overall NVIDIA GPU

Revenue (Millions)

OVERALL NVIDIA GPU

7%

9% CAGR

Page 4: NVIDIA Financial Highlights Presentation: Annual Investors Day, March 25, 2014

0

1,000

2,000

3,000

4,000

FY10 FY14

0

300

600

900

1,200

FY10 FY14

NVIDIA PC Gaming/OEM/Workstation NVIDIA High Growth Businesses

Executing on Growth Drivers

CAGR CAGR

Millions

9% 67% 13%

Workstations

9% PC Gaming &

OEM

100%+ Licensing

48% Tegra

64% DC/Cloud

Page 5: NVIDIA Financial Highlights Presentation: Annual Investors Day, March 25, 2014

$3.3 $3.5

$4.0

$4.3 $4.1

39%

55%

30 %

40 %

50 %

60 %

$1

$2

$3

$4

$5

$6

FY2010 FY2011 FY2012 FY2013 FY2014

Revenue Gross Margin

Gross Margin

Expansion

Drivers ASPs for visual computing

Expansion to new high-

margin verticals:

Tesla and GRID

Ongoing focus on costs

Gross Margin is a Non-GAAP measure

Billions

Page 6: NVIDIA Financial Highlights Presentation: Annual Investors Day, March 25, 2014

Leveraged Investments $1.6B

Unified

Architecture

GeForce

Quadro

Tesla

GRID

Tegra

Auto

75% 25%

Page 7: NVIDIA Financial Highlights Presentation: Annual Investors Day, March 25, 2014

$835 $824

$909

$676

$488

$-

$250

$500

$750

$1,000

FY14FY13FY12FY11FY10

Robust Cash Flow Generation

Millions

Page 8: NVIDIA Financial Highlights Presentation: Annual Investors Day, March 25, 2014

$1.73

$2.49

$3.13

$3.73

$3.32

$0.0

$0.5

$1.0

$1.5

$2.0

$2.5

$3.0

$3.5

$4.0

$4.5

$5.0

FY10 FY11 FY12 FY13 FY14

Foreign Cash US Cash

Cash Balance Significant Liquidity and Low Leverage

Billions

Debt

Page 9: NVIDIA Financial Highlights Presentation: Annual Investors Day, March 25, 2014

$147

$1,069 $1,000

$-

$300

$600

$900

$1,200

FY12 FY13 FY14 FY15

Capital Return

Millions

Shares Outstanding

Millions

Dividend

Shares Repurchase

Capital return to shareholders

ASR

612 617

568

$500

$550

$600

$650

$700

FY12 FY13 FY14

Capital Return Strategy to Drive

Shareholder Value

Regular and consistent return of

capital over time

Increased quarterly dividend 13%

from $0.075/sh to $0.085/sh

Intend to return $1.0B in capital

to shareholders in FY15 with

dividends and share repurchases

Increased share repurchase

authorization to ~$1.3B through FY16

Share repurchase/ dividend

Page 10: NVIDIA Financial Highlights Presentation: Annual Investors Day, March 25, 2014

Key Takeaways

Durable and high-margin growth through vertical

market leadership and diversification to drive

consistent and regular capital return

Strong balance sheet and significant liquidity

Focus on OPEX: Unified architecture leverages IP

investments

Page 11: NVIDIA Financial Highlights Presentation: Annual Investors Day, March 25, 2014

Appendix

Page 12: NVIDIA Financial Highlights Presentation: Annual Investors Day, March 25, 2014

RECONCILIATION OF NON-GAAP TO GAAP FINANCIAL MEASURES

Non-GAAP Stock-based compensation

(a)

Net warranty charges

(b)

Other (c)

GAAP

FY2010 Gross margin 39.0% (0.7) (2.9) — 35.4%

FY2011 Gross margin 45.1% (0.2) (5.1) — 39.8%

FY2012 Gross margin 51.9% (0.3) — (0.1) 51.5%

FY2013 Gross margin 52.3% (0.3) — — 52.0%

FY2014 Gross margin 55.1% (0.3) 0.2 (0.1) 54.9%

Footnotes (a) In addition to our historical practice of excluding stock-based compensation, during FY10, the Company completed a tender offer to purchase outstanding stock

options which resulted in a charge of $140.2 million. This charge was allocated to cost of goods sold of $11.4 million which resulted in 0.3% impact to gross margin.

(b) Consists of charges for the weak die/packaging material set that was used in certain versions of our previous generation chips and the release of the remaining warranty reserve balance as of January 26, 2014.

(c) Comprised of a legal settlement charge.

Page 13: NVIDIA Financial Highlights Presentation: Annual Investors Day, March 25, 2014

RECONCILIATION OF NON-GAAP TO GAAP FINANCIAL MEASURES

FY2010 FY2011 FY2012 FY2013 FY2014

Graphics Processing Unit (GPU) excluding chipset revenue $2,298 $2,659 $2,990 $3,228 $3,454

Chipset revenue 872 687 197 24 14

GPU revenue $3,170 $3,346 $3,187 $3,252 $3,468

Non-GAAP Stock-based compensation

Acquisition-related items

(a)

Other (b)

GAAP

FY2014 Operating expense $1,610 126 32 4 $1,772

Footnotes (a) Consists of amortization of acquisition-related intangible assets ,transaction costs, compensation charges and other credits related to the acquisitions. (b) Comprised of intangible asset write-off, restructuring charge, and legal settlement costs, net of credits.

(in millions)