2. SAFE HARBOR
Except for the historical information contained herein, certain matters in this presentation including, but not limited to, statements
as to: our strategies, performance, growth drivers, growth, opportunities, leadership, pipelines and design wins; estimates and
forecasts; the expansion of visual computing; value to shareholders and our commitment to capital return; growing markets for our
products; the performance and benefits of our products and technologies; and other predictions and estimates are forward-looking
statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements and any
other forward-looking statements that go beyond historical facts that are made in this presentation are subject to risks and
uncertainties that may cause actual results to differ materially. Important factors that could cause actual results to differ materially
include: global economic conditions; our reliance on third parties to manufacture, assemble, package and test our products; the
impact of technological development and competition; development of new products and technologies or enhancements to our
existing product and technologies; market acceptance of our products or our partners products; design, manufacturing or software
defects; changes in consumer preferences and demands; changes in industry standards and interfaces; unexpected loss of
performance of our products or technologies when integrated into systems and other factors. For a complete discussion of factors
that could materially affect our financial results and operations, please refer to the reports we file from time to time with the SEC,
including our Form 10-Q for the quarterly period ended April 27, 2014. Copies of reports we file with the SEC are posted on our
website and are available from NVIDIA without charge. These forward-looking statements are not guarantees of future performance
and speak only as of July 6, 2014, based on information currently available to us. Except as required by law, NVIDIA disclaims any
obligation to update these forward-looking statements to reflect future events or circumstances.
This presentation contains historical revenue amounts for certain of our product lines and businesses which provides investors with
additional information to supplement the segment reporting information contained in our Form 10-K for the fiscal period ended
January 26, 2014. In addition to U.S. GAAP financials, this presentation includes certain non-GAAP financial measures. These non-
GAAP financial measures are in addition to, and not a substitute for or superior to, measures of financial performance prepared in
accordance with U.S. GAAP. See the Appendix for a reconciliation between each non-GAAP measure and the most comparable GAAP
measure. Where we present non-GAAP financial measures, we generally exclude stock-based compensation, acquisition related
items, net warranty charges, and other income and expense.
Revenue 13% CAGR
Revenue excludes chipset. Non-GAAP GM and EPS, see reconciliation in Appendix.
Record GM % + 1,000 BPS EPS 7% CAGR
GeForce growth is driven by more gamers globally and
games with ever-increasing production value.
Tesla and GRID are cloud GPU platforms that are made
possible by technologies we invented — GPGPU and
virtual GPU. Their growth is driven by enterprise
virtualization and internet service provider adoption
of high performance computing and big data analytics.
Tegra leverages NVIDIA’s visual computing capabilities
for mobile gaming, intelligent cars, robot computer
vision, and mobile devices.
Global PC gaming growing at 12% CAGR
Steam, #1 digital game store, grew to 75M active
accounts (from 65M last Oct)
Tencent, #1 PC game company, grew 23% Q-Q
Huge new titles this fall — Call of Duty, Battlefield,
Assassin’s Creed, Evolve and The Crew
4K monitors need more powerful GPUs — forecasted to
grow from 2M to 12M over next 3 years
Upcoming NVIDIA Maxwell GPU & Intel Grantley start new
GROWTH IN PC
GeForce and Quadro
SOURCE: Core PC gaming 12% CAGR: Newzoo. 4K monitor growth: Display Search.
Google, Facebook, Baidu, Netflix revealed
machine learning efforts on Tesla
15 of “Top 15” most energy-efficient supercomputers in the
world now powered by Tesla (Last year was 10 of “Top 10”)
IBM announced supercomputer with Tesla
VMware announced support for GRID
Broadcom, Cavium, AMCC announced ARM64 CPU
>800 enterprise GRID trials on-going
GROWTH IN CLOUD
Tesla and GRID
SOURCE: “Top 15” in Green500 list, June ‘14.
Tegra K1 is the highest performance mobile processor —
powers Xiaomi’s first tablet
Auto >$100M in FY15, ~$2B win pipeline to ship in next
Google announces new initiatives to extend Android beyond
phones — Tegra K1 featured prominently:
1st 64-bit ARM
1st Android TV
1st Android extensions for gaming (AEP)
1st Tablet with computer vision
1st Android Auto
GROWTH IN MOBILE
1st Android TV
ANDROID BEYOND PHONES — GAMES, TV & CARS
1st 64bit ARM
1st Android Auto1st Tablet with Computer Vision 1-of-2 Chromebook ARM SOCs
“ It would be an understatement to say that apart from Google’s new playthings,
NVIDIA has been ubiquitous at the I/O developer conference as well – with its
Tegra K1 chip seemingly at the heart of all things cool.”
“ It will be exciting to see a new generation of games enabled by more powerful
hardware like NVIDIA’s Tegra K1”
“ NVIDIA has been a pervasive presence at the show, though you mightn’t
noticed… Tegra K1 lies at the center of many of Google’s recent efforts.”
“ A new focus on Android gaming has emerged at Google’s I/O 2014 event, with
Nvidia’s Tegra K1 processor showcasing the raw processing potential of the
next wave of mobile technology.”
“ Google Kicks It Up A Notch and Both NVIDIA and Lenovo Win at Google I/O.”
“ At the Google I/O Keynote, NVIDIA has a central role to play, and as it turns
out, the company’s Tegra K1 will be the powerhouse fueling Google’s recent
“ The Google I/O showcased the close collaboration between Google and NVIDIA,
Tegra K1-powered devices is everywhere on the show floor.”
Augmented Reality HUD
FUTURE CARS NEED VISUAL SUPERCOMPUTERS
Intelligent Driver Assist Driver Interactions
Natural Language ProcessingPhotorealistic Materials High Fidelity Navigation
NVIDIA WINS IN:
ON THE ROAD TODAY: 5.1M cars with NVIDIA
12. Leveraging our GPU assets, we can consistently build the
most advanced mobile processors and capture design wins
— Xiaomi, Google, etc.
We partner with leading wireless, connectivity, and analog
companies — ICERA, EMP, BRCM, INTC, Maxim, TI —
to create differentiated platforms.
And we can license GPU IP to vertically integrated
companies to create specialized mobile products.
GAMING AND AUTO ARE LARGE AND
GROWING MOBILE OPPORTUNITIES.
WHAT ABOUT MOBILE DEVICES?
Q111 Q112 Q113 Q114
GeForce is about PC gaming — global PC gaming is
growing at 12% CAGR.
PC is vibrant because it is an open platform that allows
new business models that are friendly to developers —
League of Legends, DOTA, etc.
PC technology continuously advances to enable new
experiences — 4K displays, Oculus VR, etc.
Gamers are loyal to GeForce because we deliver the
highest quality software and the best gaming experience.
GeForce is rich with software capabilities that are
designed just for gaming — GeForce Experience,
GEFORCE IS GROWING IN THE FACE OF
A SLOWING PC MARKET, COMPETITION
AND CONSOLES. CAN IT CONTINUE?
GeForce market share, calendar quarters: Mercury Research. Core PC gaming 12% CAGR: Newzoo.
625M enterprise users
/20 concurrent users per GPU
*$1750 GRID GPU ASP
/4 enterprise IT refresh rate
= ~$13.7B TAM
ENTERPRISE VIRTUALIZATION IS A
LARGE MARKET. HOW DO WE ESTIMATE
THE SIZE OF THE OPPORTUNITY?
NVIDIA monetizes innovation through product sales and
technology licensing. We expect to see continued
contributions from core and IP licensing in the future. One
of the important elements of our Tegra strategy is licensing
IP to vertically integrated companies. It is difficult to
estimate the mix of product sales to royalties. We expect
significant growth from Tesla, GRID, Tegra, as well as IP
core licensing. Our focus is driving overall earnings growth.
HOW IMPORTANT IS IP LICENSING TO
OUR EARNINGS GROWTH?
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
2006 2007 2008 2009 2010 2011 2012 2013 2014
June July Aug Sept Oct Nov Dec Jan Feb Mar Apr May Jun
PATENT PORTFOLIO GROWTH
% total Top500 performance from GPUs
ANDROID BEYOND PHONES
1st 64-bit ARM
1st Android TV
1st Android for gaming
1st Tablet with computer vision
1st Android Auto
# enterprise trials
NVIDIA has transformed from a PC components business
to a visual computing solutions business where complex
software is a major part of our value.
For example, GRID is possible because of GPU
virtualization software, Tesla is special because of the
CUDA parallel programming architecture and tools, and
GeForce is special because of GameWorks and GeForce
Growth in Tesla, Quadro, GeForce gaming, and GRID will
increase corporate margins.
Growth in Tegra will decrease corporate margins while
Gross Margin is a Non-GAAP measure, see reconciliation in Appendix.
FY'10 FY'11 FY'12 FY'13 FY'14
Revenue Gross Margin
Billions GROSS MARGIN HAS INCREASED TO A
RECORD 55%. WHAT CAN WE EXPECT
17. DRIVING RETURN ON INVESTMENT
Extending into Mobile-Cloud
ENTERING NEW MARKETS EFFICIENTLY LEVERAGING IP
CREATING SHAREHOLDER VALUE
Revenue comparisons Q1 FY15 vs. Q1 FY14. Non-GAAP GM, reconciliation in Appendix.
EXCELLING IN OPERATIONS
GENERATING CASH AND
PC up 14%
Cloud up 29%
Mobile up 42%
1,000 GM basis pts increase since FY′11
$3.7B cash generated since FY'10
$1B allocated for return in FY′15
$0.34/share annual dividend
Long-term commitment to capital return
STRONG CASH GENERATION
Total of $3.7B in last five years
(Operating cash flow)
FY'12 FY'13 FY'14
FY'12 FY'13 FY'14 FY'15
CAPITAL RETURN ENHANCES
SHARES OUTSTANDINGCAPITAL RETURN
21. GROWTH IN LARGE MARKETS
Cash generation in large
Automotive base and
opportunities in gaming
Proven growth and
exposure to cloud &
23. RECONCILIATION OF NON-GAAP TO GAAP FINANCIAL MEASURES
Revenue, excluding chipset $2,856 $4,116
Chipset revenue 687 14
Revenue $3,543 $4,130
24. RECONCILIATION OF NON-GAAP TO GAAP FINANCIAL MEASURES
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%
(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
(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 in FY2014.
(c) Comprised of legal settlement charges.
25. RECONCILIATION OF NON-GAAP TO GAAP FINANCIAL MEASURES
Tax impact of
Revenue $3,543 $- $- $- $- $- $3,543
Gross profit $1,598 $(8) $- $(181) $- $- $1,409
Gross margin 45.1% (0.2)% - (5.1)% - - 39.8%
Operating expense $1,096 $92 $9 $13 $(57) $- $1,153
Operating income $502 $(100) $(9) $(194) $57 $- $256
Net income $476 $(100) $(9) $(194) $57 $23 $253
Shares used in diluted per share
589 - - - - - 589
Diluted net income per share $0.81 $- $- $- $- $- $0.43
26. RECONCILIATION OF NON-GAAP TO GAAP FINANCIAL MEASURES
Revenue $4,130 $- $- $- $- $- $- $4,130
Gross profit $2,274 $(11) $- $8 $(3) $- $- $2,268
Gross margin 55.1% (0.3)% - 0.2% (0.1)% - - 54.9%
Operating expense $1,610 $126 $32 $- $4 $- $- $1,772
Operating income $664 $(137) $(32) $8 $(7) $- $- $496
Net income $588 $(137) $(32) $8 $(7) $(2) $22 $440
Shares used in diluted per share
595 - - - - - - 595
Diluted net income per share $0.99 $- $- $- $- $- $- $0.74
(a) The stock-based compensation charge was allocated to cost of goods sold, research and development expense, and sales, general and administrative expense.
(b) Acquisition-related items are comprised of amortization of acquisition-related intangible assets and other acquisition-related costs such as transaction costs,
compensation charges and restructuring costs relating to the acquisitions.
(c) Net warranty charges are comprised of charges to cost of goods sold related to the weak die/packaging material set that was used in certain versions of our
previous generation chips and a charge to operating expense related to a class action lawsuit settlement, net of insurance reimbursement and reserve releases.
(d) Other is comprised of legal settlement charges and benefits.
(e) Other income and expense is comprised of gain on sale of non-affiliated investments and interest expense related to the debt discount portion of