NVIDIA Announces Financial Results for Second Quarter Fiscal 2022

  • Record revenue of $6.51 billion, up 68 percent from a year earlier
  • Record Gaming revenue of $3.06 billion, up 85 percent from a year earlier
  • Record Data Center revenue of $2.37 billion, up 35 percent from a year earlier

NVIDIA (NASDAQ: NVDA) today reported record revenue for the second quarter ended August 1, 2021, of $6.51 billion, up 68 percent from a year earlier and up 15 percent from the previous quarter, with record revenue from the company’s Gaming, Data Center and Professional Visualization platforms.

GAAP earnings per diluted share for the quarter were $0.94, up 276 percent from a year ago and up 24 percent from the previous quarter. Non-GAAP earnings per diluted share were $1.04, up 89 percent from a year ago and up 14 percent from the previous quarter.

“NVIDIA’s pioneering work in accelerated computing continues to advance graphics, scientific computing and AI,” said Jensen Huang, founder and CEO of NVIDIA.

“Enabled by the NVIDIA platform, developers are creating the most impactful technologies of our time – from natural language understanding and recommender systems, to autonomous vehicles and logistic centers, to digital biology and climate science, to metaverse worlds that obey the laws of physics.

“This quarter, we launched NVIDIA Base Command and Fleet Command to develop, deploy, scale and orchestrate the AI workloads that run on the NVIDIA AI Enterprise software suite. With our new enterprise software, wide range of NVIDIA-powered systems and global network of system and integration partners, we can accelerate the world’s largest industries racing to benefit from the transformative power of AI.

“We are thrilled to have launched NVIDIA Omniverse, a simulation platform nearly five years in the making that runs physically realistic virtual worlds and connects to other digital platforms. We imagine engineers, designers and even autonomous machines connecting to Omniverse to create digital twins and industrial metaverses,” he said.

NVIDIA paid quarterly cash dividends of $100 million in the second quarter. It will pay its next quarterly cash dividend of $0.04 per share on September 23, 2021, to all shareholders of record on September 1, 2021.

On July 19, 2021, the company completed a four-for-one split of its common stock in the form of a stock dividend to shareholders of record as of June 21, 2021. All share and per share amounts presented have been retroactively adjusted to reflect the stock split.

Q2 Fiscal 2022 Summary

GAAP
($ in millions, except earnings per share) Q2 FY22 Q1 FY22 Q2 FY21 Q/Q Y/Y
Revenue $ 6,507   $ 5,661   $ 3,866   Up 15% Up 68%
Gross margin   64.8 %   64.1 %   58.8 % Up 70 bps Up 600 bps
Operating expenses $ 1,771   $ 1,673   $ 1,624   Up 6% Up 9%
Operating income $ 2,444   $ 1,956   $ 651   Up 25% Up 275%
Net income $ 2,374   $ 1,912   $ 622   Up 24% Up 282%
Diluted earnings per share $ 0.94   $ 0.76   $ 0.25   Up 24% Up 276%
Non-GAAP
($ in millions, except earnings per share) Q2 FY22 Q1 FY22 Q2 FY21 Q/Q Y/Y
Revenue $ 6,507   $ 5,661   $ 3,866   Up 15% Up 68%
Gross margin   66.7 %   66.2 %   66.0 % Up 50 bps Up 70 bps
Operating expenses $ 1,266   $ 1,189   $ 1,035   Up 6% Up 22%
Operating income $ 3,071   $ 2,557   $ 1,516   Up 20% Up 103%
Net income $ 2,623   $ 2,313   $ 1,366   Up 13% Up 92%
Diluted earnings per share $ 1.04   $ 0.91   $ 0.55   Up 14% Up 89%

NVIDIA’s outlook for the third quarter of fiscal 2022 is as follows:

  • Revenue is expected to be $6.80 billion, plus or minus 2 percent.
  • GAAP and non-GAAP gross margins are expected to be 65.2 percent and 67.0 percent, respectively, plus or minus 50 basis points.
  • GAAP and non-GAAP operating expenses are expected to be approximately $1.96 billion and $1.37 billion, respectively.
  • GAAP and non-GAAP other income and expense are both expected to be an expense of approximately $60 million, excluding gains and losses on equity securities.
  • GAAP and non-GAAP tax rates are both expected to be 11 percent, plus or minus 1 percent, excluding any discrete items such as excess tax benefits or deficiencies related to stock-based compensation.

Highlights

NVIDIA achieved progress since its previous earnings announcement in these areas:

Gaming

Data Center

Professional Visualization

  • Second-quarter revenue was a record $519 million, up 156 percent from a year earlier and up 40 percent from the previous quarter.
  • Expanded NVIDIA Omniverse™, the world’s first 3D, real-time simulation and collaboration platform, through new integrations with Blender and Adobe, applications used by millions of users.
  • Launched the NVIDIA RTX A2000, which brings RTX to the volume segment of the desktop workstation market and enables a range of new form factors from backs of displays to edge devices.

Automotive

  • Second-quarter revenue was $152 million, up 37 percent from a year earlier and down 1 percent from the previous quarter.
  • Announced that self-driving startup AutoX’s Gen5 robotaxi platform uses NVIDIA DRIVE® to achieve level 4 autonomy.
  • Collaborated with autonomous trucking company Plus on plans to provide Amazon with at least 1,000 self-driving systems, which are powered by NVIDIA DRIVE.
  • Announced that autonomous trucking platform startup Embark is using NVIDIA DRIVE to create systems for Freightliner, Navistar International, PACCAR and Volvo.

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

Conference Call and Webcast Information
NVIDIA will conduct a conference call with analysts and investors to discuss its second quarter 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, https://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 2022.

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 net income, non-GAAP net income, or earnings, per diluted share, and free cash flow. 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, IP-related costs, gains and losses from non-affiliated investments, mark to market adjustments of our publicly traded equity securities, interest expense related to amortization of debt discount, the associated tax impact of these items where applicable, and domestication tax benefit. Free cash flow is calculated as GAAP net cash provided by operating activities less both purchases of property and equipment and intangible assets and principal payments on 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  
      August 1,   July 26,   August 1,   July 26,  
      2021   2020   2021   2020  
                     
Revenue $ 6,507     $ 3,866     $ 12,168     $ 6,946    
Cost of revenue   2,292       1,591       4,324       2,667    
Gross profit   4,215       2,275       7,844       4,279    
Operating expenses                
  Research and development   1,245       997       2,398       1,732    
  Sales, general and administrative   526       627       1,046       920    
    Total operating expenses   1,771       1,624       3,444       2,652    
Income from operations   2,444       651       4,400       1,627    
  Interest income   6       13       13       44    
  Interest expense   (60 )     (54 )     (113 )     (78 )  
  Other, net   4       (1 )     138       (2 )  
    Other income (expense), net   (50 )     (42 )     38       (36 )  
Income before income tax   2,394       609       4,438       1,591    
Income tax expense (benefit)   20       (13 )     153       52    
Net income $ 2,374     $ 622     $ 4,285     $ 1,539    
                     
Net income per share (A):                
  Basic $ 0.95     $ 0.25     $ 1.72     $ 0.63    
  Diluted $ 0.94     $ 0.25     $ 1.69     $ 0.62    
                     
Weighted average shares used in per share computation (A):              
  Basic   2,493       2,464       2,489       2,460    
  Diluted   2,532       2,504       2,529       2,496    
                     
(A) Reflects a four-for-one stock split on July 19, 2021.  
NVIDIA CORPORATION  
CONDENSED CONSOLIDATED BALANCE SHEETS  
(In millions)  
(Unaudited)  
               
               
        August 1,   January 31,  
        2021   2021  
ASSETS          
               
Current assets:          
  Cash, cash equivalents and marketable securities   $ 19,654   $ 11,561  
  Accounts receivable, net     3,586     2,429  
  Inventories     2,114     1,826  
  Prepaid expenses and other current assets     452     239  
    Total current assets     25,806     16,055  
               
Property and equipment, net     2,364     2,149  
Operating lease assets     801     707  
Goodwill     4,193     4,193  
Intangible assets, net     2,478     2,737  
Deferred income tax assets     958     806  
Other assets     2,050     2,144  
    Total assets   $ 38,650   $ 28,791  
               
LIABILITIES AND SHAREHOLDERS’ EQUITY  
               
Current liabilities:          
  Accounts payable   $ 1,474   $ 1,201  
  Accrued and other current liabilities     1,974     1,725  
  Short-term debt     1,000     999  
    Total current liabilities     4,448     3,925  
               
Long-term debt     10,943     5,964  
Long-term operating lease liabilities     716     634  
Other long-term liabilities     1,396     1,375  
    Total liabilities     17,503     11,898  
               
Shareholders’ equity     21,147     16,893  
    Total liabilities and shareholders’ equity   $ 38,650   $ 28,791  
NVIDIA CORPORATION  
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS  
(In millions)  
(Unaudited)  
                     
                     
      Three Months Ended   Six Months Ended  
      August 1,   July 26,   August 1,   July 26,  
      2021   2020   2021   2020  
                     
Cash flows from operating activities:                
Net income $ 2,374     $ 622     $ 4,285     $ 1,539    
Adjustments to reconcile net income to net cash                
provided by operating activities:                
  Stock-based compensation expense   465       374       894       598    
  Depreciation and amortization   286       404       567       511    
  Deferred income taxes   (185 )     (80 )     (161 )     (64 )  
  (Gains) losses on investments in non affiliates, net   1       2       (133 )     5    
  Other   18       (10 )     16       (10 )  
Changes in operating assets and liabilities, net of acquisitions:                
  Accounts receivable   (563 )     44       (1,157 )     (205 )  
  Inventories   (123 )     54       (282 )     (97 )  
  Prepaid expenses and other assets   16       42       18       34    
  Accounts payable   209       (8 )     279       63    
  Accrued and other current liabilities   133       112       132       81    
  Other long-term liabilities   51       10       98       21    
Net cash provided by operating activities   2,682       1,566       4,556       2,476    
Cash flows from investing activities:                
  Proceeds from maturities of marketable securities   2,096       1,032       5,236       1,032    
  Proceeds from sales of marketable securities   347       258       705       259    
  Purchases of marketable securities   (4,798 )     (7,425 )     (9,268 )     (8,286 )  
  Purchases related to property and equipment and intangible assets     (183 )     (217 )     (481 )     (372 )  
  Investments and other, net   5       –       3       (7 )  
  Acquisitions, net of cash acquired   –       (7,137 )     –       (7,171 )  
Net cash used in investing activities   (2,533 )     (13,489 )     (3,805 )     (14,545 )  
Cash flows from financing activities:                
  Issuance of debt, net of issuance costs   4,985       (8 )     4,985       4,971    
  Proceeds related to employee stock plans   2       6       128       94    
  Payments related to tax on restricted stock units   (365 )     (196 )     (843 )     (418 )  
  Dividends paid   (100 )     (99 )     (198 )     (197 )  
  Principal payments on property and equipment   (21 )     –       (40 )     –    
  Other   –       –       (2 )     (3 )  
Net cash provided by (used in) financing activities   4,501       (297 )     4,030       4,447    
Change in cash and cash equivalents   4,650       (12,220 )     4,781       (7,622 )  
Cash and cash equivalents at beginning of period   978       15,494       847       10,896    
Cash and cash equivalents at end of period $ 5,628     $ 3,274     $ 5,628     $ 3,274    
  NVIDIA CORPORATION  
  RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES  
  (In millions, except per share data)  
  (Unaudited)  
                       
        Three Months Ended   Six Months Ended  
        August 1,   May 2,   July 26,   August 1,   July 26,  
        2021   2021   2020   2021   2020  
                           
  GAAP gross profit $ 4,215     $ 3,629     $ 2,275     $ 7,844     $ 4,279    
  GAAP gross margin   64.8 %     64.1 %     58.8 %     64.5 %     61.6 %  
  Acquisition-related and other costs (A)   86       87       245       173       246    
  Stock-based compensation expense (B)   32       25       14       57       35    
  IP-related costs     4       5       17       9       17    
  Non-GAAP gross profit $ 4,337     $ 3,746     $ 2,551     $ 8,083     $ 4,577    
  Non-GAAP gross margin   66.7 %     66.2 %     66.0 %     66.4 %     65.9 %  
                           
  GAAP operating expenses $ 1,771     $ 1,673     $ 1,624     $ 3,444     $ 2,652    
  Stock-based compensation expense (B)   (433 )     (404 )     (360 )     (837 )     (563 )  
  Acquisition-related and other costs (A)   (72 )     (80 )     (229 )     (152 )     (233 )  
  Non-GAAP operating expenses $ 1,266     $ 1,189     $ 1,035     $ 2,455     $ 1,856    
                           
  GAAP income from operations $ 2,444     $ 1,956     $ 651     $ 4,400     $ 1,627    
  Total impact of non-GAAP adjustments to income from operations   627       601       865       1,228       1,094    
  Non-GAAP income from operations $ 3,071     $ 2,557     $ 1,516     $ 5,628     $ 2,721    
                           
  GAAP other income (expense), net $ (50 )   $ 88     $ (42 )   $ 38     $ (36 )  
  (Gains) losses from non-affiliated investments   –       (134 )     2       (133 )     5    
  Interest expense related to amortization of debt discount   1       1       1       2       1    
  Non-GAAP other income (expense), net $ (49 )   $ (45 )   $ (39 )   $ (93 )   $ (30 )  
                           
  GAAP net income   $ 2,374     $ 1,912     $ 622     $ 4,285     $ 1,539    
  Total pre-tax impact of non-GAAP adjustments   628       468       868       1,097       1,100    
  Income tax impact of non-GAAP adjustments (C)   (127 )     (67 )     (124 )     (194 )     (153 )  
  Domestication tax benefit   (252 )     –       –       (252 )     –    
  Non-GAAP net income $ 2,623     $ 2,313     $ 1,366     $ 4,936     $ 2,486    
                           
  Diluted net income per share (D)                    
  GAAP   $ 0.94     $ 0.76     $ 0.25     $ 1.69     $ 0.62    
  Non-GAAP   $ 1.04     $ 0.91     $ 0.55     $ 1.95     $ 1.00    
                           
  Weighted average shares used in diluted net income per share computation (D)       2,532       2,528       2,504       2,529       2,496    
                           
  GAAP net cash provided by operating activities $ 2,682     $ 1,874     $ 1,566     $ 4,556     $ 2,476    
  Purchases related to property and equipment and intangible assets   (183 )     (298 )     (217 )     (481 )     (372 )  
  Principal payments on property and equipment   (21 )     (19 )     –       (40 )     –    
  Free cash flow   $ 2,478     $ 1,557     $ 1,349     $ 4,035     $ 2,104    
     
                           
  (A) Acquisition-related and other costs primarily include amortization of intangible assets, inventory step-up, transaction costs, and certain compensation charges presented as follows:  
        Three Months Ended   Six Months Ended  
        August 1,   May 2,   July 26,   August 1,   July 26,  
        2021   2021   2020   2021   2020  
  Cost of revenue $ 86     $ 87     $ 245     $ 173     $ 246    
  Research and development $ 1     $ 1     $ 3     $ 4     $ 5    
  Sales, general and administrative $ 71     $ 79     $ 226     $ 148     $ 228    
                           
  (B) Stock-based compensation consists of the following:        
        Three Months Ended   Six Months Ended  
        August 1,   May 2,   July 26,   August 1,   July 26,  
        2021   2021   2020   2021   2020  
  Cost of revenue $ 32     $ 25     $ 14     $ 57     $ 35    
  Research and development $ 297     $ 276     $ 228     $ 573     $ 362    
  Sales, general and administrative $ 136     $ 128     $ 132     $ 264     $ 201    
                           
  (C) Income tax impact of non-GAAP adjustments, including the recognition of excess tax benefits or deficiencies related to stock-based compensation under GAAP accounting standard (ASU 2016-09).  
                           
  (D) Reflects a four-for-one stock split on July 19, 2021.  
NVIDIA CORPORATION  
RECONCILIATION OF GAAP TO NON-GAAP OUTLOOK  
       
   
    Q3 FY2022
Outlook		  
    ($ in millions)  
       
GAAP gross margin   65.2 %  
  Impact of stock-based compensation expense, acquisition-related costs, and other costs   1.8 %  
Non-GAAP gross margin   67.0 %  
       
GAAP operating expenses $ 1,960    
  Stock-based compensation expense, acquisition-related costs, and other costs   (590 )  
Non-GAAP operating expenses $ 1,370    
       

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