Nvidia announces financial results for third quarter fiscal 2024

Via Nvidia

Nov 22, 2023

  • Record revenue of $18.12 billion, up 34% from Q2, up 206% from year ago
  • Record Data Center revenue of $14.51 billion, up 41% from Q2, up 279% from year ago

NVIDIA (NASDAQ: NVDA) today reported revenue for the third quarter ended October 29, 2023, of $18.12 billion, up 206% from a year ago and up 34% from the previous quarter.

GAAP earnings per diluted share for the quarter were $3.71, up more than 12x from a year ago and up 50% from the previous quarter. Non-GAAP earnings per diluted share were $4.02, up nearly 6x from a year ago and up 49% from the previous quarter.

“Our strong growth reflects the broad industry platform transition from general-purpose to accelerated computing and generative AI,” said Jensen Huang, founder and CEO of NVIDIA.

“Large language model startups, consumer internet companies and global cloud service providers were the first movers, and the next waves are starting to build. Nations and regional CSPs are investing in AI clouds to serve local demand, enterprise software companies are adding AI copilots and assistants to their platforms, and enterprises are creating custom AI to automate the world’s largest industries.

“NVIDIA GPUs, CPUs, networking, AI foundry services and NVIDIA AI Enterprise software are all growth engines in full throttle. The era of generative AI is taking off,” he said.

NVIDIA will pay its next quarterly cash dividend of $0.04 per share on December 28, 2023, to all shareholders of record on December 6, 2023.

Q3 Fiscal 2024 Summary

GAAP
($ in millions, except earnings
per share)
Q3 FY24 Q2 FY24 Q3 FY23 Q/Q Y/Y
Revenue $18,120 $13,507 $5,931 Up 34% Up 206%
Gross margin 74.0% 70.1% 53.6% Up 3.9 pts Up 20.4 pts
Operating expenses $2,983 $2,662 $2,576 Up 12% Up 16%
Operating income $10,417 $6,800 $601 Up 53% Up 1,633%
Net income $9,243 $6,188 $680 Up 49% Up 1,259%
Diluted earnings per share $3.71 $2.48 $0.27 Up 50% Up 1,274%

 

Non-GAAP
($ in millions, except earnings
per share)
Q3 FY24 Q2 FY24 Q3 FY23 Q/Q Y/Y
Revenue $18,120 $13,507 $5,931 Up 34% Up 206%
Gross margin 75.0% 71.2% 56.1% Up 3.8 pts Up 18.9 pts
Operating expenses $2,026 $1,838 $1,793 Up 10% Up 13%
Operating income $11,557 $7,776 $1,536 Up 49% Up 652%
Net income $10,020 $6,740 $1,456 Up 49% Up 588%
Diluted earnings per share $4.02 $2.70 $0.58 Up 49% Up 593%
           

Outlook
NVIDIA’s outlook for the fourth quarter of fiscal 2024 is as follows:

  • Revenue is expected to be $20.00 billion, plus or minus 2%.
  • GAAP and non-GAAP gross margins are expected to be 74.5% and 75.5%, respectively, plus or minus 50 basis points.
  • GAAP and non-GAAP operating expenses are expected to be approximately $3.17 billion and $2.20 billion, respectively.
  • GAAP and non-GAAP other income and expense are expected to be an income of approximately $200 million, excluding gains and losses from non-affiliated investments.
  • GAAP and non-GAAP tax rates are expected to be 15.0%, plus or minus 1%, excluding any discrete items.

Highlights

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

Data Center

Gaming

  • Third-quarter revenue was $2.86 billion, up 15% from the previous quarter and up 81% from a year ago. 
  • Launched DLSS 3.5 Ray Reconstruction, which creates high-quality ray-traced images for intensive ray-traced games and apps, including Alan Wake 2 and Cyberpunk 2077
  • Released TensorRT-LLM™ for Windows, speeding on-device LLM inference by up to 4x. 
  • Added 56 DLSS games and over 15 Reflex games, bringing the total number of RTX games and applications to over 475. 
  • Surpassed 1,700 games on GeForce NOW™, including launches of Alan Wake 2, Baldur’s Gate 3, Cyberpunk 2077: Phantom Liberty, Forza Motorsport and Starfield.

Professional Visualization

  • Third-quarter revenue was $416 million, up 10% from the previous quarter and up 108% from a year ago.
  • Announced that Mercedes-Benz is using NVIDIA Omniverse to create digital twins to help plan, design, build and operate its manufacturing and assembly facilities around the world.
  • Announced a new line of desktop workstations with NVIDIA RTX™ 6000 Ada Generation GPUs and NVIDIA ConnectX® smart interface cards for training smaller AI models, fine-tuning models and running inference locally.

Automotive

  • Third-quarter revenue was $261 million, up 3% from the previous quarter and up 4% from a year ago.
  • Furthered its collaboration with Foxconn to develop next-generation electric vehicles for the global market, using the next-generation NVIDIA DRIVE Hyperion™ platform and NVIDIA DRIVE Thor™ system-on-a-chip.

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 third quarter fiscal 2024 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 fourth quarter and fiscal 2024.

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 acquisition termination costs, stock-based compensation expense, acquisition-related and other costs, IP-related costs, other, gains and losses from non-affiliated investments, interest expense related to amortization of debt discount, and the associated tax impact of these items where applicable. 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   Nine Months Ended
      October 29,   October 30,   October 29,   October 30,
       2023     2022     2023     2022 
                   
Revenue $ 18,120     $ 5,931     $ 38,819     $ 20,923  
Cost of revenue   4,720       2,754       11,309       9,400  
Gross profit   13,400       3,177       27,510       11,523  
                   
Operating expenses              
  Research and development   2,294       1,945       6,210       5,387  
  Sales, general and administrative   689       631       1,942       1,815  
  Acquisition termination cost   -       -       -       1,353  
    Total operating expenses   2,983       2,576       8,152       8,555  
                   
Operating Income   10,417       601       19,358       2,968  
  Interest income   234       88       572       152  
  Interest expense   (63 )     (65 )     (194 )     (198 )
  Other, net   (66 )     (11 )     (24 )     (29 )
    Other income (expense), net   105       12       354       (75 )
                   
Income before income tax   10,522       613       19,712       2,893  
Income tax expense (benefit)   1,279       (67 )     2,237       (61 )
Net income $ 9,243     $ 680     $ 17,475     $ 2,954  
                   
Net income per share:              
  Basic $ 3.75     $ 0.27     $ 7.07     $ 1.18  
  Diluted $ 3.71     $ 0.27     $ 7.01     $ 1.17  
                   
Weighted average shares used in per share computation:              
  Basic   2,468       2,483       2,470       2,495  
  Diluted   2,494       2,499       2,494       2,517  
                   

 

NVIDIA CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(In millions)
(Unaudited)
             
             
        October 29,   January 29,
         2023    2023
ASSETS        
             
Current assets:        
  Cash, cash equivalents and marketable securities   $ 18,281   $ 13,296
  Accounts receivable, net     8,309     3,827
  Inventories     4,779     5,159
  Prepaid expenses and other current assets     1,289     791
    Total current assets     32,658     23,073
             
Property and equipment, net     3,844     3,807
Operating lease assets     1,316     1,038
Goodwill     4,430     4,372
Intangible assets, net     1,251     1,676
Deferred income tax assets     5,982     3,396
Other assets     4,667     3,820
    Total assets   $ 54,148   $ 41,182
             
LIABILITIES AND SHAREHOLDERS’ EQUITY
             
Current liabilities:        
  Accounts payable   $ 2,380   $ 1,193
  Accrued and other current liabilities     5,472     4,120
  Short-term debt     1,249     1,250
    Total current liabilities     9,101     6,563
             
Long-term debt     8,457     9,703
Long-term operating lease liabilities     1,091     902
Other long-term liabilities     2,234     1,913
    Total liabilities     20,883     19,081
             
Shareholders’ equity     33,265     22,101
    Total liabilities and shareholders’ equity   $ 54,148   $ 41,182
             

 

NVIDIA CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In millions)
(Unaudited)
                   
                   
      Three Months Ended   Nine Months Ended
      October 29,   October 30,   October 29,   October 30,
       2023     2022     2023     2022 
                   
Cash flows from operating activities:              
Net income $ 9,243     $ 680     $ 17,475     $ 2,954  
Adjustments to reconcile net income to net cash              
provided by operating activities:              
  Stock based compensation expense   979       745       2,555       1,971  
  Depreciation and amortization   372       406       1,121       1,118  
  Losses on investments in non-affiliates, net   69       11       24       35  
  Deferred income taxes   (529 )     (532 )     (2,411 )     (1,517 )
  Acquisition termination cost   -       -       -       1,353  
  Other   (66 )     (45 )     (170 )     (27 )
Changes in operating assets and liabilities, net of acquisitions:              
  Accounts receivable   (1,243 )     410       (4,482 )     (258 )
  Inventories   (457 )     (563 )     405       (1,848 )
  Prepaid expenses and other assets   254       247       (337 )     (1,307 )
  Accounts payable   461       (917 )     1,250       (358 )
  Accrued liabilities and other current liabilities   (1,722 )     (92 )     953       1,175  
  Other long-term liabilities   (28 )     42       208       102  
Net cash provided by operating activities   7,333       392       16,591       3,393  
Cash flows from investing activities:              
  Proceeds from maturities of marketable securities   2,891       5,809       8,001       16,792  
  Proceeds from sales of marketable securities   -       75       -       1,806  
  Purchases of marketable securities   (5,345 )     (2,188 )     (10,688 )     (9,764 )
  Purchase related to property and equipment and intangible assets   (278 )     (530 )     (815 )     (1,324 )
  Acquisitions, net of cash acquired   -       -       (83 )     (49 )
  Investments in non-affiliates and other, net   (437 )     (18 )     (872 )     (83 )
Net cash provided by (used in) investing activities   (3,169 )     3,148       (4,457 )     7,378  
Cash flows from financing activities:              
  Proceeds related to employee stock plans   156       143       403       349  
  Payments related to repurchases of common stock   (3,806 )     (3,485 )     (6,874 )     (8,826 )
  Repayment of debt   -       -       (1,250 )     -  
  Payments related to tax on restricted stock units   (764 )     (294 )     (1,942 )     (1,131 )
  Dividends paid   (99 )     (100 )     (296 )     (300 )
  Principal payments on property and equipment and intangible assets   (13 )     (18 )     (44 )     (54 )
  Other   (1 )     1       (1 )     1  
Net cash used in financing activities   (4,527 )     (3,753 )     (10,004 )     (9,961 )
Change in cash, cash equivalents, and restricted cash   (363 )     (213 )     2,130       810  
Cash, cash equivalents, and restricted cash at beginning of period   5,882       3,013       3,389       1,990  
Cash, cash equivalents, and restricted cash at end of period $ 5,519     $ 2,800     $ 5,519     $ 2,800  
                   
Supplemental disclosure of cash flow information:              
  Cash paid for income taxes, net $ 4,348     $ 264     $ 4,676     $ 1,372  
                   

 

  NVIDIA CORPORATION
  RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES
  (In millions, except per share data)
  (Unaudited)
                     
        Three Months Ended   Nine Months Ended
        October 29,   July 30,   October 30,   October 29,   October 30,
         2023     2023     2022     2023     2022 
                         
  GAAP gross profit $ 13,400     $ 9,462     $ 3,177     $ 27,510     $ 11,523  
   GAAP gross margin   74.0 %     70.1 %     53.6 %     70.9 %     55.1 %
    Acquisition-related and other costs (A)   119       119       120       358       335  
    Stock-based compensation expense (B)   38       31       32       96       108  
    IP-related costs   26       2       -       36       -  
  Non-GAAP gross profit $ 13,583     $ 9,614     $ 3,329     $ 28,000     $ 11,966  
   Non-GAAP gross margin   75.0 %     71.2 %     56.1 %     72.1 %     57.2 %
                         
   GAAP operating expenses $ 2,983     $ 2,662     $ 2,576     $ 8,152     $ 8,555  
    Stock-based compensation expense (B)   (941 )     (811 )     (713 )     (2,459 )     (1,863 )
    Acquisition-related and other costs (A)   (16 )     (18 )     (54 )     (88 )     (164 )
    Acquisition termination cost   -       -       -       -       (1,353 )
    Other (C)     -       5       (16 )     10       (25 )
  Non-GAAP operating expenses $ 2,026     $ 1,838     $ 1,793     $ 5,615     $ 5,150  
                         
  GAAP operating income $ 10,417     $ 6,800     $ 601     $ 19,358     $ 2,968  
    Total impact of non-GAAP adjustments to operating income   1,140       976       935       3,027       3,848  
  Non-GAAP operating income $ 11,557     $ 7,776     $ 1,536     $ 22,385     $ 6,816  
                         
  GAAP other income (expense), net $ 105     $ 181     $ 12     $ 354     $ (75 )
    (Gains) losses from non-affiliated investments   69       (62 )     11       23       36  
    Interest expense related to amortization of debt discount   1       1       1       3       3  
  Non-GAAP other income (expense), net $ 175     $ 120     $ 24     $ 380     $ (36 )
                         
  GAAP net income $ 9,243     $ 6,188     $ 680     $ 17,475     $ 2,954  
    Total pre-tax impact of non-GAAP adjustments   1,210       915       947       3,053       3,887  
    Income tax impact of non-GAAP adjustments (D)   (433 )     (363 )     (171 )     (1,055 )     (649 )
  Non-GAAP net income $ 10,020     $ 6,740     $ 1,456     $ 19,473     $ 6,192  
                         
  Diluted net income per share                  
    GAAP   $ 3.71     $ 2.48     $ 0.27     $ 7.01     $ 1.17  
    Non-GAAP   $ 4.02     $ 2.70     $ 0.58     $ 7.81     $ 2.46  
                         
  Weighted average shares used in diluted net income per share computation   2,494       2,499       2,499       2,494       2,517  
                         
  GAAP net cash provided by operating activities $ 7,333     $ 6,348     $ 392     $ 16,591     $ 3,393  
    Purchases related to property and equipment and intangible assets   (278 )     (289 )     (530 )     (815 )     (1,324 )
    Principal payments on property and equipment and intangible assets   (13 )     (11 )     (18 )     (44 )     (54 )
  Free cash flow   $ 7,042     $ 6,048     $ (156 )   $ 15,732     $ 2,015  
                         
   
                         
  (A) Acquisition-related and other costs are comprised of amortization of intangible assets and transaction costs, and are included in the following line items:
        Three Months Ended   Nine Months Ended
        October 29,   July 30,   October 30,   October 29,   October 30,
          2023       2023       2022       2023       2022  
    Cost of revenue $ 119     $ 119     $ 120     $ 358     $ 335  
    Research and development $ 12     $ 12     $ 10     $ 37     $ 29  
    Sales, general and administrative $ 4     $ 6     $ 44     $ 51     $ 135  
                         
  (B) Stock-based compensation consists of the following:     
        Three Months Ended   Nine Months Ended
        October 29,   July 30,   October 30,   October 29,   October 30,
          2023       2023       2022       2023       2022  
    Cost of revenue $ 38     $ 31     $ 32     $ 96     $ 108  
    Research and development $ 701     $ 600     $ 530     $ 1,826     $ 1,365  
    Sales, general and administrative $ 240     $ 211     $ 183     $ 633     $ 498  
                         
  (C) Other consists of costs related to Russia branch office closure, assets held for sale related adjustments, legal settlement costs, and contributions.
                         
  (D) 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).
                                             
         
NVIDIA CORPORATION
RECONCILIATION OF GAAP TO NON-GAAP OUTLOOK
     
 
    Q4
FY2024
Outlook
    ($ in millions)
     
GAAP gross margin   74.5 %
  Impact of stock-based compensation expense, acquisition-related costs, and other costs   1.0 %
Non-GAAP gross margin   75.5 %
     
GAAP operating expenses $ 3,165  
  Stock-based compensation expense, acquisition-related costs, and other costs   (965 )
Non-GAAP operating expenses $ 2,200  
     
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