- Revenue up 17 percent quarter-on-quarter to $776.5 million - GAAP net loss of $105.3 million, or $0.19 cents per share - Non-GAAP net income of $37.7 million, or $0.07 cents per share - GAAP gross margin of 20.2 percent; non-GAAP gross margin of 36.3 percent
On a GAAP basis, the company recorded a net loss of $105.3 million, or $0.19 per share, compared with a net loss of $120.9 million, or $0.22 per share a year ago. Reflected in these results is a net charge of $119.1 million related to the weak die/packaging set used in certain previous-generation chips that the company had initially identified and provided for in its prior fiscal year. On a non-GAAP basis excluding this item, and stock-based compensation as well as their associated tax impact net income was $37.7 million, or $0.07 per diluted share, compared with $74.5 million, or $0.13 per diluted share, a year earlier.
Quarterly Results Highlights ($in millions except Q2 2010 Q1 2010 Q2 2009 per share data) Revenue $776.5 $664.2 $892.7 GAAP: Gross margin 20.2% 28.6% 16.8% Net income (loss) ($105.3) ($201.3) ($120.9) Income (loss) per share ($0.19) ($0.37) ($0.22) Non-GAAP: (1) Gross margin 36.3% 30.6% 39.1% Net income (loss) $37.7 ($46.7) $74.5 Income (loss) per share $0.07 ($0.09) $0.13 ----------------- ----- ------ ----- (1) See Non-GAAP Measures for an explanation of these figures.
"NVIDIA's business is recovering. Product demand is improving, and our strategic investments are leading to new growth," said Jen-Hsun Huang, president and chief executive officer, NVIDIA. "Our two newest businesses began to ship meaningful amounts of product this past quarter and show significant promise. Tesla, the industry's first GPU for general-purpose high performance computing, achieved its highest-ever quarterly revenue. And Tegra, our ultra low-power computer-on-a-chip, is making exciting progress in the market for mobile and embedded devices. Our new businesses are positioned to benefit from the rise of mobile and cloud computing."
NVIDIA's second quarter results were impacted by an additional net charge of approximately $119.1 million to cover costs related to a weak die/packaging material set that was used in certain versions of its previous-generation chips. Although the number of units impacted by this issue remains consistent with the company's initial estimates a year ago, the cost of remediation and repair of impacted systems has been higher than originally anticipated. In July 2008, a $196.0 million reserve was accrued for the purpose of supporting our affected customers around the world. The weak die/package material combination is not used in any products currently in production.
GAAP net loss for the six months ended July 26, 2009 was $306.6 million, or $0.56 per share, compared to a net income of $55.9 million, or $0.09 per diluted share for the six months ended July 27, 2008. Non-GAAP net loss for the six months ended July 26, 2009, which excludes the net charge related to the weak die/packaging material set that was used in certain versions of our previous generation chips, a non-recurring charge of $140.2 million in connection with a previously announced cash tender offer to purchase employee stock options, stock-based compensation charges, and their associated tax impact, was $8.9 million, or $0.02 per share, compared to a net income of $286.2 million, or $0.49 per diluted share for the six months ended July 27, 2008.
NVIDIA expects revenue in the third quarter ending October 25, 2009, to be up 5 to 7 percent over the second quarter.
Second Quarter Fiscal 2010 and Recent Highlights:
-- Free cash flow was a positive $117.5 million during the quarter, with cash, cash equivalents and marketable securities ending at $1.47 billion. -- NVIDIA delivered its first 40nm GPUs to customers in the second quarter. -- The NVIDIA((R)) ION((TM)) platform was awarded "Best Choice" - and 21 design wins disclosed - at Computex 2009. Nine are already shipping, with a further 12 to ship in the third quarter. Five more wins have been disclosed since Computex. -- NVIDIA started ramping up volume shipments of the Tegra((TM)) computer-on-a-chip. Microsoft's Zune HD was revealed to be based on Tegra. -- Quadro((R)) Plex SVS was launched. SVS is a scalable visual computing platform for professionals who interact with 3D models and analyze large volumes of data. -- For Quadro, NVIDIA launched the NVIDIA(R) Optix(TM) ray tracing engine, part of a suite of application acceleration engines for software developers. The suite also includes engines for managing 3D data and scenes, scaling performance across multiple GPUs and real-time modeling of hyper-realistic physical and environmental affects. -- Tesla((TM)) computing solution products are now carried by HP and Supermicro, joining a global list of OEMs including Cray, Dell, HP Lenovo, SGI and Sun. -- NVIDIA CUDA((TM)) architecture now accelerates AMBER, one of the most popular molecular dynamics codes, with more than 60,000 users worldwide. AMBER is up to 50 times faster when run on a GPU than a CPU. -- In the financial industry, Numerix and CompatibL announced CUDA support for new counterparty risk application, and achieved an 18X speedup. -- NVIDIA and Adobe announced GPU acceleration for the Flash player, bringing Internet video to a new class of low-power PCs and Internet devices.