NVIDIA Reports Financial Results for Third Quarter Fiscal Year 2010
NVIDIA Corp. (NASDAQ: NVDA) yesterday reported revenue of $903.2 million for the third quarter of fiscal 2010 ended Oct. 25, 2009, up 16 percent from the previous quarter and up slightly from $897.7 million reported in the same period a year earlier. This means that NVIDIA’s fiscal third-quarter profit jumped nearly 75%, helped by higher margins and strong demand for their graphics cards which they were somewhat unable to fulfill.
NVIDIA’s shares climbed 7.3% to $13.17 in after-hours trading. NVIDIA’s performance far exceeded their expectations and as they continue to predict the next fourth-quarter revenue above analyst estimates. Looking further ahead, CEO Jen-Hsun Huang (aka Jensen) said he is expecting “Q1 to be a pretty exciting quarter for us because we just have so many new products.”
On a GAAP basis, the company recorded net income of $107.6 million, or $0.19 per diluted share, compared with net income of $61.7 million, or $0.11 per diluted share a year ago. Third quarter GAAP results included a benefit to operating income of $25.1 million related to insurance reimbursements received during the quarter. On a non-GAAP basis — excluding the insurance reimbursements and stock-based compensation, as well as their associated tax impact — net income was $110.3 million, or $0.19 per diluted share, compared with $111.4 million, or $0.20 per diluted share, a year earlier.
Quarterly Results Highlights
($ in millions except per share data) Q3 FY2010 Q2 FY2010 Q3 FY2009
Revenue $ 903.2 $ 776.5 $ 897.7
GAAP:
Gross margin 43.4% 20.2% 41.0%
Net income (loss) $ 107.6 ($ 105.3) $ 61.7
Income (loss) per share $ 0.19 ($ 0.19) $ 0.11
Non-GAAP: (1)
Gross margin 41.0% 36.3% 41.9%
Net income $ 110.3 $ 37.7 $ 111.4
Income per share $ 0.19 $ 0.07 $ 0.20
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(1) See Non-GAAP Measures for an explanation of these figures.
“We continued to make progress in the third quarter with healthy market demand across the board,” said Jen-Hsun Huang, president and chief executive officer, NVIDIA. “Revenue was up from a year ago, with improvement in each of our PC, professional solutions and consumer businesses. It’s great to see us shipping orders with our Tegra mobile-computing solution, and growing enthusiasm for our Tesla platform for parallel computing in the server and cloud-computing markets.”
Gross margin, on a GAAP basis, increased to 43.4 percent from 20.2 percent in the previous quarter and 41.0 percent a year earlier. On a non-GAAP basis, gross margin was 41.0 percent, up 4.7 points from the 36.3 percent reported in the previous quarter but slightly off from 41.9 percent a year earlier.
GAAP net loss for the nine months ended Oct. 25, 2009 was $199.1 million, or $0.36 per share, compared to a net income of $117.6 million, or $0.20 per diluted share for the nine months ended Oct. 26, 2008. Non-GAAP net income for the nine months ended Oct. 25, 2009, which excludes a $93.9 million net charge related to the weak die/packaging material set that was used in certain versions of our previous generation chips, a non-recurring charge of $140.2 million in connection with a cash tender offer to purchase employee stock options, stock-based compensation charges, and their associated tax impact, was $101.4 million, or $0.18 per diluted share, compared to a net income of $397.7 million, or $0.68 per diluted share for the nine months ended Oct. 26, 2008.
Outlook
The outlook for the fourth quarter of fiscal 2010 is as follows:
-- Revenue is expected to be up slightly, approximately 2 percent, from the third quarter. -- GAAP gross margin is expected to be in the range of 40 to 42 percent. -- GAAP operating expenses are expected to be approximately $305 million.
Third Quarter Fiscal 2010 and Recent Highlights:
-- First major Tegra(TM) devices shipped: Microsoft's Zune HD and the Samsung M1. -- Held first ever GPU Technology Conference, which was 50% oversubscribed, with 1,500 attendees from 40 countries. More than 200 technical sessions were conducted, and presentations were made by 60 emerging companies that utilize the graphics processing unit (GPU). -- Introduced the next generation CUDA(TM) GPU architecture, codenamed "Fermi." The Fermi architecture is the foundation for the world's first computational GPUs, delivering breakthroughs in both graphics and parallel computing. -- Oak Ridge National Laboratory announced plans to use Fermi to build a new supercomputer, which is designed to be the world's fastest. -- Launched the industry's first development environment for massively parallel computing. The tool, code-named "Nexus," is integrated into Microsoft Visual Studio, so that developers will be able to use Visual Studio and C++ to write applications that leverage Fermi GPUs. -- Launched NVIDIA(R) RealityServer(R), a powerful combination of GPUs and software that streams interactive, photorealistic 3D applications to any web connected PC, laptop, netbook or smart phone. -- Adobe's new Flash Player 10.1 will be accelerated by GeForce(R), NVIDIA ION(TM) and Tegra(TM) products, helping to bring uncompromised browsing of rich Web content to netbooks, smartphones and smartbooks.
Conference Call and Web Cast Information
NVIDIA conducted a conference call with analysts and investors to discuss its third quarter fiscal 2010 financial results and current financial prospects yesterday at 2:00 p.m. Pacific Time (5:00 p.m. Eastern Time). The Web cast was recorded and is available for replay until the company’s conference call to discuss its financial results for its fourth quarter fiscal 2010.
You can listen to it here or if you prefer, a transcript is available here and NVIDIA’s complete news release is here.
Mark Poppin
ABT Senior Editor
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