gtc 2013: nvidia fiscal performance, investments, and opportunities
DESCRIPTION
CEO Jen-Hsun Huang shares record revenues, business growth, and "light every pixel" strategy for 2014. Here, you'll find details about how NVIDIA expands its visual computing technology for enterprises and progresses portable gaming with SHIELD.TRANSCRIPT
Jen-Hsun Huang CEO & Co-Founder, NVIDIA
Safe Harbor
Except for the historical information contained herein, certain matters in this presentation including, but not limited to,
statements as to: our investments and opportunities; our financial results; the performance and benefits of our products
and technologies; our strategies; 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-K for the fiscal year ended January 27, 2013. 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 March 19, 2013, 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.
Achieved record revenues, margins and cash
Grew GPU and Tegra processor businesses
Reached tipping point for GPU-accelerated computing
Introduced Tegra 4 with integrated 4G/LTE
Invented GRID — A new server GPU platform
FY13
Fighting through the Headwinds
360
540
100
350
600
FY12 FY13
50.1% 51.8% 52.9% 52.9%
35%
40%
45%
50%
55%
Q1FY13 Q2FY13 Q3FY13 Q4FY13
4.0 4.3
1.0
2.0
3.0
4.0
5.0
FY12 FY13
3.1
3.7
1.0
2.0
3.0
4.0
FY12 FY13
+50%
Record Revenue
Record Gross Margin
Fiscal 2013 Performance
Based on GAAP Results
+7% +19%
Record Cash
Record Tegra (Smartphones & Tablets)
Millions
Billions
Billions
Consistent Financial Performance % o
f Revenue
Billions
GPU Growth
Record Gross Margin (non-GAAP) Cash Generation
Leveraging R&D for Income Growth (non-GAAP)
Based on non-GAAP Results which excluded stock-based compensation, amortization of acquisition-related intangible assets, other acquisition-related costs, a charge related to a tender offer purchase in fiscal 2010, charges related to the weak die/packaging material set, net of insurance reimbursement, in fiscal years 2011 and 2010,
a legal settlement charge in fiscal 2012, and a contribution expense in fiscal 2013
Billions
2.3
2.7 3.0
3.2
0.5
1.5
2.5
3.5
FY10 FY11 FY12 FY13
39.0%
45.1%
51.9% 52.3%
30%
35%
40%
45%
50%
55%
FY10 FY11 FY12 FY13
8% 14% 21% 20% 31%
31% 31% 33%
61% 55% 48% 47%
0%
25%
50%
75%
100%
FY10 FY11 FY12 FY13
OM% OPEX% COGS%
1.7
2.5
3.1
3.7
0
1
2
3
4
FY10 FY11 FY12 FY13
Strong position in GPU
Leverage GPU, launch GRID into new $5B+ TAM
Engage LTE market with Tegra 4 and 4i — projected to triple to 500Mu/yr by 2017
Tegra traction in mobile, tablets, PC, gaming devices, auto, and embedded
Investment quadruples NVIDIA TAM to $20B+
FY14
New Products New Markets
Gearing Up for Growth
NVIDIA THE VISUAL COMPUTING
COMPANY
LIGHT EVERY PIXEL
TECHNOLOGY PROCESSORS VISUAL COMPUTING APPLIANCE
NVIDIA The Visual Computing Company
A Computing Revolution
1993 1998 2003 2008 2013
OS M
ark
et
Share
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
Source: Gartner, Strategy Analytics
Computing Everywhere
1993 1998 2003 2008 2013 0%
20%
40%
80%
100%
Pro
cess
or
Mark
et
Share
x86 and Cortex Processors Shipped
60%
0
1
2
4
5
3
Pro
cesso
r Ship
ments (B
illions)
Source: Mercury Research, ARM, Internal estimates
Smartphone
Tablets
WinRT PCs
Auto
Gaming Devices
GRID
Tesla
GeForce
Quadro ~$600M
~$1B
~$10B
~$5B
~$1B
~$5B
Investments & Opportunities
INVESTMENT TAM
500M LTE devices (by 2017 – 3X 2013)
200M Android & WinRT tablets
50M cars w/ infotainment & cluster
20M mobile gaming devices
GPU
Tegra
160M enterprise workers @ 8ccu = $20B/4y
50M game subscribers @ 5ccu = $10B/4y
10M designers @ 1ccu = $10B/4y
Smartphones
Tablets
WinRT PCs
Auto
Gaming Devices
GRID
Tesla
GeForce
Quadro ~$600M
~$1B
~$10B
~$5B
~$1B
~$5B
Investments & Opportunities
INVESTMENT TAM
GPU
Tegra
$156M $764M
REVENUES
$2.3B $3.2B
FY10 FY13
GRID
Leveraging our graphics & GPU expertise,
invent new technologies that can extend our
GPUs into servers, datacenters, and
appliances.
Key Components of GRID
GRID VCA Visual Computing Appliance
GRID GPUs
GRID VGX Software
SALES & MARKETING DESIGN SIMULATION COLLABORATION
QUADRO Workstations
TEGRA | GEFORCE Devices
GRID Enterprise Server
GRID VGX
Enterprise Computing Strategy Industry’s most trusted graphics partner | Deep optimization with ISVs
End-to-end visual computing solution
GRID VGX
NVIDIA GRID Enterprise Ecosystem
NVIDIA GRID Visual Computing Appliance
Remote GPU-Accelerated Workspace
GRID available to ALL 16 Concurrent Users
NVIDIA GRID A Visual Computing Appliance
CISCO ROUTER A Networking Appliance
NVIDIA GRID A Visual Computing Appliance
NETAPP NAS A Storage Appliance
NVIDIA GRID VCA
Kepler GPUs (4GB FB ea) 8 16
CPU Threads 16 32
System Memory 192 GB 384 GB
BASE
$24,900 + $2,400/yr SW license
(unlimited devices)
MAX
$39,900 + $4,800/yr SW license
(unlimited devices)
Q1 Q2 Q3 Q4
6 Partners
20 Trials
Production
VDI & OEM partners
Production
75 Trials
GRID VCA & ISVs
Announcement
15 Trials
VAR Program Launch
Production
GRID Milestones
GRID Enterprise
GRID VCA
GRID Gaming
TEGRA
Leveraging our GPU assets & expertise,
invest to be a major player in a world where
“visual computing is everywhere”.
Tegra Firsts
1st Dual Core
1st Honeycomb
1st Game Store — TegraZone
1st Quad Core
1st Battery Saver Core
1st WinRT Tablet
1st Quad Core A15
1st Always-On HDR Camera
1st LTE SDR Modem
2011
2012
2013
LONGEST BATTERY LIFE
DISPLAY FRAME PRISM 2
INNOVATIVE CAMERA
Chimera Architecture
I G C
ENGINE
MEMORY
S
BEST GAMING
BEST PERFORMANCE
4+1
A15 A15
A15 A15
TEGRAZONE
INTEGRATE INDUSTRY LEADING CPU, GPU, CAMERA, LTE MODEM
Mobile Computing Innovation
Tegra 4 Family
Tegra 4 Tegra 4i 5W TDP 1W TDP
Quad CPU A15 4+1 A9 r4 4+1
NVIDIA GPU 72 Core 60 Core
i500 dedicated integrated
CHIMERA Photo
Architecture
Based on these estimates,
even Qualcomm’s best
processor, which is due to
enter production at about the
same time as Tegra 4, won’t
surpass Nvidia in these tests.
“ “
Tegra 4i | 5” 1080p Display | 8mm Thin | 4G LTE
PRISM 2 | DirectTouch | Chimera Camera
SUPERPHONES FOR THE MAINSTREAM
Phoenix Reference Phone Platform
2006 2007 2008 2009 2010 2011 2012 2013
Icera Modem Milestones Certified at 95 carriers in 65 countries | 20M modems shipped to date 1st WinRT LTE multi-mode modem certified at AT&T
i150 i300 i400 i500
HSDPA SoftBank Japan
HSUPA AT&T
HSPA Vodafone Global
HSPA+ T-Mobile US
I500 Sampling
CAT3
CAT4, CA, VoLTE
1st LTE Multimode
AT&T
1st HSPA+ Phones
PROJECT SHIELD
Project SHIELD is a major disruption to
portable game devices, game consoles
and devices like the Apple iPod.
“
”
NVIDIA has built what could be the most
compelling portable game system
in some time.
“
”
TEGRA Best in Graphics — Best for Gaming
Q1 Q2 Q3 Q4 Q1 (2014)
SHIELD
Production
Phones/Tablets
Production
Carrier
Certifications
Begin
Tablets
Production
Carrier
Certifications
Begin
Mainstream
Smartphones
Production
Tegra Milestones
Tegra 4i
Tegra 4
i500
~$600M
~$1B
~$10B
~$5B
~$1B
~$5B
Gearing Up for Growth
INVESTMENT TAM
GPU
Tegra
APPENDIX
Non-GAAP Stock-based
compensation (a)
Acquisition-
related items (b)
Net warranty
charges (c)
Other
(d)
GAAP
FY2010
Revenue $ 3,326 $ - $ - $ - $ - $ 3,326
Cost of goods sold $ 2,030 $ 23 $ - $ 96 $ - $ 2,149
Gross profit $ 1,296 $ (23 ) $ - $ (96 ) $ - $ 1,177
Operating expense $ 1,041 $ 224 $ 13 $ (2 ) $ - $ 1,276
Operating income (loss) $ 255 $ (247 ) $ (13 ) $ (94 ) $ - $ (99 )
FY2011
Revenue $ 3,543 $ - $ - $ - $ - $ 3,543
Cost of goods sold $ 1,945 $ 8 $ - $ 181 $ - $ 2,134
Gross profit $ 1,598 $ (8 ) $ - $ (181 ) $ - $ 1,409
Operating expense $ 1,096 $ 92 $ 9 $ 13 $ (57 ) $ 1,153
Operating income $ 502 $ (100 ) $ (9 ) $ (194 ) $ 57 $ 256
FY2012
Revenue $ 3,998 $ - $ - $ - $ - $ 3,998
Cost of goods sold $ 1,923 $ 11 $ - $ - $ 7 $ 1,941
Gross profit $ 2,075 $ (11 ) $ - $ - $ (7 ) $ 2,057
Operating expense $ 1,246 $ 125 $ 38 $ - $ - $ 1,409
Operating income $ 829 $ (136 ) $ (38 ) $ - $ (7 ) $ 648
RECONCILIATION OF NON-GAAP TO GAAP FINANCIAL MEASURES
$ in millions
Non-GAAP Stock-based
compensation (a)
Acquisition-
related items (b)
Net warranty
charges (c)
Other
(d)
GAAP
FY2013
Revenue $ 4,280 $ - $ - $ - $ - $ 4,280
Cost of goods sold $ 2,043 $ 11 $ - $ - $ - $ 2,054
Gross profit $ 2,237 $ (11 ) $ - $ - $ - $ 2,226
Operating expense $ 1,396 $ 126 $ 36 $ - $ 20 $ 1,578
Operating income $ 841 $ (137 ) $ (36 ) $ - $ (20 ) $ 648
RECONCILIATION OF NON-GAAP TO GAAP FINANCIAL MEASURES
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, research and development
expense, and sales, general and administrative expense, of $11.4 million, $90.5 million and $38.3 million, respectively.
(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.
(d) Other is comprised of legal settlement charges and benefits and the net present value of a charitable contribution.
$ in millions
FY2010 FY2011 FY2012 FY2013
Graphics Processing Unit (GPU) Revenue excluding chipset products $ 2,299 $ 2,659 $ 2,990 $ 3,228
Chipset product revenue $ 872 $ 687 $ 197 $ 24
GPU Revenue $ 3,171 $ 3,346 $ 3,187 $ 3,252
RECONCILIATION OF OTHER FINANCIAL MEASURES
$ in millions