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

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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.

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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  • 1. Colette Kress, EVP & CFO ANNUAL INVESTOR DAY
  • 2. 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
  • 3. 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
  • 4. 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
  • 5. $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
  • 6. Leveraged Investments $1.6B Unified Architecture GeForce Quadro Tesla GRID Tegra Auto 75% 25%
  • 7. $835 $824 $909 $676 $488 $- $250 $500 $750 $1,000 FY14FY13FY12FY11FY10 Robust Cash Flow Generation Millions
  • 8. $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
  • 9. $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
  • 10. 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
  • 11. Appendix
  • 12. 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.
  • 13. 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)