•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

SANTA CLARA, Calif.—Nov. 21, 2023―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.

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.

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

•Third-quarter revenue was a record $14.51 billion, up 41% from the previous quarter and up 279% from a year ago.

•Announced NVIDIA HGX™ H200 with the new NVIDIA H200 Tensor Core GPU, the first GPU with HBM3e memory, with systems expected to be available in the second quarter of next year.

•Introduced an AI foundry service — with NVIDIA AI Foundation Models, NVIDIA NeMo™ framework and NVIDIA DGX™ Cloud AI supercomputing — to accelerate the development and tuning of custom generative AI applications, first available on Microsoft Azure, with SAP and Amdocs among the first customers.

•Announced that the NVIDIA Spectrum-X™ Ethernet networking platform for AI will be integrated into servers from Dell Technologies, Hewlett Packard Enterprise and Lenovo in the first quarter of next year.

•Announced that NVIDIA GH200 Grace Hopper Superchips, including a new quad configuration, will power more than 40 new supercomputers, including the JUPITER system at Jülich Supercomputing Centre and Isambard-AI at the University of Bristol.

•Made advances with global cloud service providers:

◦Google Cloud Platform made generally available new A3 instances powered by NVIDIA H100 Tensor Core GPUs and NVIDIA AI Enterprise software in Google Cloud Marketplace.

◦Microsoft Azure will be offering customers access to NVIDIA Omniverse™ Cloud Services for accelerating automotive digitalization, as well as new instances featuring NVL H100 Tensor Core GPUs and H100 with confidential computing, with H200 GPUs coming next year.

◦Oracle Cloud Infrastructure made NVIDIA DGX Cloud and NVIDIA AI Enterprise software available in Oracle Cloud Marketplace.

•Partnered with a range of leading companies on AI initiatives, including Amdocs, Dropbox, Foxconn, Genentech (member of Roche Group), Infosys, Lenovo, Reliance Industries, Scaleway and Tata Group.

•Announced record-setting performance in the latest two sets of MLPerf benchmarks for inference and training, with the NVIDIA Eos AI supercomputer training a GPT-3 model 3x faster than the previous record.

•Announced growing worldwide support for the NVIDIA® CUDA® Quantum platform, including new efforts in Israel, the Netherlands, the U.K. and the U.S.

•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.

•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.

•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.

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

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.

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.

Since its founding in 1993, NVIDIA (NASDAQ: NVDA) has been a pioneer in accelerated computing. The company’s invention of the GPU in 1999 sparked the growth of the PC gaming market, redefined computer graphics, ignited the era of modern AI and is fueling industrial digitalization across markets. NVIDIA is now a full-stack computing company with data-center-scale offerings that are reshaping industry. More information at https://nvidianews.nvidia.com/.

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Certain statements in this press release including, but not limited to, statements as to: the broad industry platform transition from general-purpose to accelerated computing and generative AI and the next waves starting to build; nations and regional CSPs investing in AI clouds to serve local demand, enterprise software companies adding AI copilots and assistants to their platforms, and enterprises creating custom AI to automate the world’s largest industries; NVIDIA GPUs, CPUs, networking, AI foundry services and NVIDIA AI Enterprise software as growth engines for generative AI; the era of generative AI taking off; the NVIDIA AI foundry service accelerating the development and tuning of custom generative AI applications; the usage of NVIDIA GH200 Superchips in supercomputers globally; NVIDIA’s next quarterly cash dividend; NVIDIA’s financial outlook and expected tax rates for the fourth quarter of fiscal 2024; the benefits, impact, performance, features and availability of NVIDIA’s products and technologies, including the NVIDIA HGX H200, NVIDIA H200 Tensor Core GPU, NVIDIA AI Foundation Models, NVIDIA NeMo, NVIDIA GH200 Grace Hopper Superchip, NVIDIA AI Enterprise, NVIDIA Omniverse, NVIDIA Spectrum-X, NVIDIA RTX workstations, NVIDIA RTX 6000 Ada GPU, NVIDIA Omniverse Enterprise software, NVIDIA H100 Tensor Core GPU, NVIDIA DGX Cloud AI, GeForce NOW, NVIDIA CUDA Quantum platform, DLSS, DLSS 3.5 Ray Reconstruction, NVIDIA DRIVE Hyperion, NVIDIA DRIVE Thor, TensorRT-LLM, NVIDIA ConnectX; the benefits and impact of NVIDIA’s partnerships with Amdocs, Dropbox, Foxconn, Genentech, Infosys, Lenovo, Reliance Industries, Scaleway and Tata Group; growing support for NVIDIA CUDA Quantum platform; and the usage of NVIDIA Omniverse by Mercedes-Benz are forward-looking statements that are subject to risks and uncertainties that could cause results to be materially different than expectations. 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 or demands; changes in industry standards and interfaces; and unexpected loss of performance of our products or technologies when integrated into systems, as well as other factors detailed from time to time in the most recent reports NVIDIA files with the Securities and Exchange Commission, or SEC, including, but not limited to, its annual report on Form 10-K and quarterly reports on Form 10-Q. Copies of reports filed with the SEC are posted on the company’s website and are available from NVIDIA without charge.

These forward-looking statements are not guarantees of future performance and speak only as of the date hereof, and, except as required by law, NVIDIA disclaims any obligation to update these forward-looking statements to reflect future events or circumstances.

© 2023 NVIDIA Corporation. All rights reserved. NVIDIA, the NVIDIA logo, GeForce NOW, NVIDIA CUDA, NVIDIA DGX, NVIDIA DRIVE Hyperion, NVIDIA DRIVE Thor, NVIDIA Grace Hopper, NVIDIA HGX, NVIDIA NeMo, NVIDIA Omniverse, NVIDIA RTX, NVIDIA Spectrum-X and TensorRT are trademarks and/or registered trademarks of NVIDIA Corporation in the U.S. and/or other countries. Other company and product names may be trademarks of the respective companies with which they are associated. Features, pricing, availability, and specifications are subject to change without notice.

(In millions, except per share data)

(Unaudited)

									Three Months Ended												Nine Months Ended
									October 29, 2023						October 30, 2022						October 29, 2023						October 30, 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

                            

We specialize in markets where our computing platforms can provide tremendous acceleration for applications. These platforms incorporate processors, interconnects, software, algorithms, systems, and services to deliver unique value. Our platforms address four large markets where our expertise is critical: Data Center, Gaming, Professional Visualization, and Automotive.

Revenue was $18.12 billion, up 206% from a year ago and up 34% sequentially.

Data Center revenue was a record, up 279% from a year ago and up 41% sequentially. Strong sales of the NVIDIA HGX platform were driven by global demand for the training and inferencing of large language models, recommendation engines, and generative AI applications. Data Center compute grew 324% from a year ago and 38% sequentially, largely reflecting the strong ramp of our Hopper GPU architecture-based HGX platform from cloud service providers (CSPs), including GPU-specialized CSPs; consumer internet companies; and enterprises. Our sales of Ampere GPU architecture-based Data Center products were significant but declined sequentially, as we approach the tail end of this architecture. We recognized initial revenue on the ramp of our L40S GPU and the GH200 Grace Hopper Superchip for a broad range of customers. CSPs drove roughly half of Data Center revenue, while consumer internet companies and enterprises comprised approximately the other half. Networking was up 155% from a year ago and up 52% sequentially, almost entirely due to strong growth in InfiniBand infrastructure to support our HGX platform.

On October 17, 2023, the U.S. government (USG) announced new and updated licensing requirements effective in our fourth quarter of fiscal 2024 for exports to China and Country Groups D1, D4, and D5 (including but not limited to Saudi Arabia, the United Arab Emirates, and Vietnam, but excluding Israel) of our products exceeding certain performance thresholds, including A100, A800, H100, H800, L4, L40, L40S and RTX 4090. The licensing requirements also apply to the export of products exceeding certain performance thresholds to a party headquartered in, or with an ultimate parent headquartered in, Country Group D5, including China. On October 23, 2023, the USG informed us the licensing requirements were effective immediately for shipments of our A100, A800, H100, H800, and L40S products. These licensing requirements did not have a meaningful impact on our revenue in the third quarter of fiscal 2024 as they were announced near the end of the fiscal quarter and we had additional demand from customers outside of the named country groups. Our sales to China and other affected destinations, derived from products that are now subject to licensing requirements, have consistently contributed approximately 20-25% of Data Center revenue over the past few quarters. We expect that our sales to these destinations will decline significantly in the fourth quarter of fiscal 2024, though we believe the decline will be more than offset by strong growth in other regions.

Gaming revenue was up 81% from a year ago and up 15% sequentially. Strong year-on-year growth reflects higher sell-in to partners following normalization of channel inventory levels. Sequential growth reflects strong demand for our GeForce RTX 40 Series GPUs for back-to-school and the start of the holiday season.

Professional Visualization revenue was up 108% from a year ago and up 10% sequentially. The year-on-year increase reflects higher sell-in to partners following normalization of channel inventory levels. The sequential increase was primarily due to stronger enterprise workstation demand and the ramp of notebook workstations based on the Ada Lovelace GPU architecture.

Automotive revenue was up 4% from a year ago and up 3% sequentially. The year-on-year increase primarily reflects growth in sales of auto cockpit solutions and self-driving platforms. The sequential increase was driven by sales of self-driving platforms.

GAAP and non-GAAP gross margins increased significantly from a year ago and sequentially, driven by improved product mix from Data Center revenue growth and lower net inventory provisions and related charges.

In the third quarter of fiscal 2024, provisions for inventory and related charges were $681 million. Sales of previously reserved inventory or settlements of excess inventory purchase obligations resulted in a provision release of $239 million, primarily from Ampere GPU architecture products. The net inventory provisions were $442 million and the unfavorable effect on our gross margin was 2.4 percentage points.

In the third quarter of fiscal 2023, provisions for inventory and related charges were $702 million. Sales of previously reserved inventory or settlements of excess inventory purchase obligations resulted in a provision release of $21 million. The net inventory provisions were $681 million and the unfavorable effect on our gross margin was 11.5 percentage points.

GAAP operating expenses were up 16% from a year ago and up 12% sequentially, driven by compensation and benefits, including stock-based compensation, primarily reflecting growth in employees and compensation increases.

Non-GAAP operating expenses were up 13% from a year ago and up 10% sequentially, primarily reflecting growth in employees and compensation increases.

We are monitoring the impact of the geopolitical conflict in and around Israel on our operations, including the health and safety of our approximately 3,400 employees in the region who primarily support the research and development, operations, and sales and marketing of our networking products. Our operating expenses in the third quarter of fiscal 2024 include expenses for financial support to impacted employees and charitable activity.

GAAP other income and expense (OI&E) includes interest income, interest expense, gains and losses from non-affiliated investments and other. Non-GAAP OI&E excludes the gains or losses from non-affiliated investments and the portion of interest expense from the amortization of the debt discount.

Interest income was $234 million, up from a year ago and sequentially, reflecting higher cash and investments and higher yields. Net losses from non-affiliated investments were $69 million, driven predominantly by mark-to-market losses from publicly traded equity investments.

GAAP effective tax rate was 12.2%, which reflects tax benefits from the foreign-derived intangible income deduction, stock-based compensation, a resolution of an Internal Revenue Service audit, and the U.S. federal research tax credit. Non-GAAP effective tax rate was 14.6%.

Cash, cash equivalents and marketable securities were $18.28 billion, up from $13.14 billion a year ago and $16.02 billion a quarter ago. The increases primarily reflect higher revenue partially offset by taxes paid and stock repurchases.

Accounts receivable was $8.31 billion with days sales outstanding (DSO) of 42, with the DSO decline from prior periods due to the linearity of shipments. Accounts receivable was reduced by approximately $570 million from customer payments received prior to the invoice due date.

Inventory was $4.78 billion with days sales of inventory (DSI) of 92. Purchase commitments and obligations for inventory and manufacturing capacity were $17.11 billion and prepaid supply agreements were $3.67 billion. Other non-inventory purchase obligations were $4.43 billion which includes $3.60 billion of multi-year cloud service agreements, primarily to support our research and development efforts.

Cash flow from operating activities was $7.33 billion, up from $392 million a year ago and $6.35 billion a quarter ago, driven by higher revenue partially offset by higher cash tax payments. We paid $4.35 billion in cash taxes in the third quarter of fiscal 2024, largely for previously deferred federal income tax payments related to the disaster relief made available by the IRS for certain California taxpayers.

Depreciation and amortization expense was $372 million, including amortization of acquisition-related intangible assets. Starting in fiscal 2024, we extended the useful lives of most of our servers, storage, and network equipment from three years to a range of four to five years, and assembly and test equipment from five to seven years. This change in useful lives drove a favorable impact to operating expenses of $24 million and to cost of revenue of $17 million in the third quarter.

During the third quarter, we utilized cash of $3.91 billion towards shareholder returns, including $3.81 billion in share repurchases and $99 million in cash dividends.

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.

___________________________

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. In order 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.

Certain statements in this CFO Commentary including, but not limited to, statements as to: our computing platforms providing tremendous acceleration for applications and delivering unique value; markets where our expertise is critical; our expected sales to China and other affected destinations declining significantly in the fourth quarter, and our belief that the decline will be more than offset by strong growth in other regions; and our financial outlook and expected tax rates for the fourth quarter of fiscal 2024 are forward-looking statements that are subject to risks and uncertainties that could cause results to be materially different than expectations. 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 or demands; changes in industry standards and interfaces; and unexpected loss of performance of our products or technologies when integrated into systems; as well as other factors detailed from time to time in the most recent reports NVIDIA files with the Securities and Exchange Commission, or SEC, including, but not limited to, its annual report on Form 10-K and quarterly reports on Form 10-Q. Copies of reports filed with the SEC are posted on the company’s website and are available from NVIDIA without charge. These forward-looking statements are not guarantees of future performance and speak only as of the date hereof, and, except as required by law, NVIDIA disclaims any obligation to update these forward-looking statements to reflect future events or circumstances.

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© 2023 NVIDIA Corporation. All rights reserved. NVIDIA and the NVIDIA logo are trademarks and/or registered trademarks of NVIDIA Corporation in the U.S. and/or other countries. Other company and product names may be trademarks of the respective companies with which they are associated. Features, pricing, availability, and specifications are subject to change without notice.