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INVESTOR PRESENTATIONQ2 FY2021August 24, 2020
Except for the historical information contained herein, certain matters in this presentation including, but not limited to, statements as to: our financialposition; our markets; the performance, benefits, abilities and impact of our products and technology; NVIDIA continuing to win new business; ourpartnerships; the impact of COVID-19 and our response; our use of cash; NVIDIA’s financial outlook for the third quarter of fiscal 2021, including the impact ofMellanox; our operating expenses for fiscal 2021; the benefits and impact of the Mellanox acquisition; our growth drivers; the users and customers of ourproducts and us reaching them; our financial policy; future revenue growth; our opportunities in existing and new markets; the TAM for our products; andperformance in our financial metrics are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Theseforward-looking statements and any other forward-looking statements that go beyond historical facts that are made in this presentation are subject to risksand uncertainties that may cause actual results to differ materially. Important factors that could cause actual results to differ materially include: globaleconomic conditions; our reliance on third parties to manufacture, assemble, package and test our products; the impact of technological development andcompetition; development of new products and technologies or enhancements to our existing product and technologies; market acceptance of our products orour partners' products; design, manufacturing or software defects; changes in consumer preferences and demands; changes in industry standards andinterfaces; unexpected loss of performance of our products or technologies when integrated into systems and other factors.NVIDIA has based these forward-looking statements largely on its current expectations and projections about future events and trends that it believes mayaffect its financial condition, results of operations, business strategy, short-term and long-term business operations and objectives, and financial needs. Theseforward-looking statements are subject to a number of risks and uncertainties, and you should not rely upon the forward-looking statements as predictions offuture events. The future events and trends discussed in this presentation may not occur and actual results could differ materially and adversely from thoseanticipated or implied in the forward-looking statements. Although NVIDIA believes that the expectations reflected in the forward-looking statements arereasonable, the company cannot guarantee that future results, levels of activity, performance, achievements or events and circumstances reflected in theforward-looking statements will occur. Except as required by law, NVIDIA disclaims any obligation to update these forward-looking statements to reflect futureevents or circumstances. For a complete discussion of factors that could materially affect our financial results and operations, please refer to the reports wefile from time to time with the SEC, including our Annual Report on Form 10-K and quarterly reports on Form 10-Q. Copies of reports we file with the SEC areposted on our website and are available from NVIDIA without charge.NVIDIA uses certain non-GAAP measures in this presentation including non-GAAP gross margin, non-GAAP operating margin, non-GAAP net income, non-GAAPoperating income, non-GAAP diluted earnings per share, non-GAAP operating expenses, non-GAAP other income (expense), net, free cash flow, and adjustedEBITDA. NVIDIA believes the presentation of its non-GAAP financial measures enhances investors' overall understanding of the company's historical financialperformance. 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'sfinancial results prepared in accordance with GAAP, and the company's non-GAAP measures may be different from non-GAAP measures used by othercompanies. Further information relevant to the interpretation of non-GAAP financial measures, and reconciliations of these non-GAAP financial measures tothe most comparable GAAP measures, may be found in the slide titled “Reconciliation of Non-GAAP to GAAP Financial Measures”.2
CONTENTQ2 FY2021 Earnings SummaryKey Announcements This QuarterNVIDIA OverviewFinancialsNon-GAAP to GAAP Reconciliation3
Q2 FY21EARNINGS SUMMARY4
“The world is confronting COVID-19, one of thegreatest challenges in human history.“We owe our thanks to those on the front linesof this crisis: first responders, healthcareworkers, and service providers who inspire usevery day with their bravery and selflessness.“At NVIDIA, we closed our nearly 60 officesaround the world. We continue to paycontractors their full wages despite reducedstaffing needs in our facilities. We gaveemployees raises early to put a little moremoney in their hands. Paying it forward,our employees have donated more than 10 million to help their communities.”Jensen2020 Annual Meeting of Stockholders5
HIGHLIGHTSRecord Data Center revenue and exceptional strength in GamingTotal revenue up 50% y/y to 3.87B, ahead of outlook of 3.65BData Center up 167% y/y to a record 1.75B; Gaming up 26% y/y to 1.65BMellanox growth accelerated in its first quarter as part of NVIDIA; contributed 14% of totalrevenueNVIDA computing adoption is acceleratingCumulative CUDA GPUs shipped reach 1 billionNVIDIA developers reach 2 million: took 10 years to reach 1st million, 2 years for 2nd millionAmpere GPU architecture launch kicks off major new product cycleAmpere GPU is our biggest ever generational leap: performance up to 20X vs VoltaStrong Hyperscale demand drives early ramp; Vertical Industries ramp still ahead6
Q2 FY2021 FINANCIAL SUMMARY4,000 3,8663,500GAAP80.0%Non-GAAPQ2 FY21Y/YQ/QQ2 FY21Y/YQ/QRevenue 3,866 50% 26% 3,866 50% 26%Gross Margin58.8%-100 bps-630 bps66.0% 590 bps 20 bpsOperating Income 651 14%-33% 1,516 89% 26%Net Income 622 13%-32% 1,366 79% 22%Diluted EPS 0.99 10%-33% 2.18 76% 21%Cash Flow from Ops 1,566 67% 72% 1,566 67% 72%75.0% 3,0143,000 2,57964.1%2,500 3,105 55.0%Q2FY20Q3FY20Q4FY20Revenue(M)Q1FY21Non-GAAP GMQ2FY21No difference between GAAP and Non-GAAP Cash Flow from Operations and Revenue7
GAMINGRevenue ( M)Highlights24% q/q and26% y/y 1,800 1,659 1,654 1,600 1,491 1,400 1,339 1,313Broad-based upside across regions,products, channelsAfter closing down at the outset of thepandemic, stores and iCafes have largelyreopened and demand has picked up;online sales continue to thriveGaming’s growth amidst the pandemichighlights its emergence as a leading formof entertainment worldwide 1,200 1,000Gaming laptop demand very strong;ramped 100 new laptops from OEMs 800 600Q2FY20Q3FY20Q4FY20Q1FY21Q2FY21NVIDIA’s GeForce NOW cloud gamingservice extends support to Chromebooks –joining PCs, Macs and Android devices8
DATA CENTERRevenue ( M)Highlights54% q/q and167% y/y 1,752 1,800Both compute and networking within DataCenter set a record, with acceleratingyear-on-year growth 1,600We launched our new Ampere GPUarchitecture – greatest generational leap 1,400A100 has been widely adopted by allmajor server vendors and cloud serviceproviders 1,141 1,200 968 1,000 800 655NVIDIA set 16 records, sweeping allcategories for commercially availablesolutions in the latest MLPerf benchmark 726 600 400Q2FY20Q3FY20Q4FY20Q1FY21Q2FY21The latest TOP500 list showed that 8 ofthe world’s top 10 supercomputers useNVIDIA GPUs and/or networking9
PROFESSIONAL VISUALIZATIONRevenue ( M) 350 324HighlightsSales were hurt by lower enterprisedemand amid the closure of many officesaround the world as a result of thepandemic 331 307 29134% q/q and30% y/y 203Initiatives by enterprises to enableremote workers drove demand for virtualand cloud-based graphics solutionsvGPU bookings accelerated, increasing 60percent year on year 0Q2FY20Q3FY20Q4FY20Q1FY21Q2FY21Despite NT challenges, we are winningnew business in areas such as Healthcare including Siemens, Philips, and GeneralElectric - and the Public Sector10
AUTOMOTIVERevenue ( M)Highlights 250Impact of the pandemic was lesspronounced than our outlook for a 40%q/q decline, as auto production started torecover after bottoming in April 209 162 163 15528% q/q and47% y/y 111 0Q2FY20Q3FY20Q4FY20Q1FY21Q2FY21Announced a landmark partnership withMercedes-Benz which, starting in 2024,will launch software-defined, intelligentvehicles across its entire fleet, using endto-end NVIDIA technologyThe Mercedes-Benz announcement istransformative for NVIDIA’s evolvingbusiness model as the software content ofour platforms grows, positioning us tobuild a recurring revenue stream11
SOURCES & USES OF CASHCash Flow from Operations ( M)Highlights 2,200 2,000 1,80072% q/q and67% y/y 1,640 1,600 1,566 1,465 1,400Returned 99M to shareholders in theform of dividendsInvested 217M in capex 1,200 1,000Funded Mellanox acquisition withapproximately 7B in cash 936 909Ended quarter with 11.0B in gross cashand 7.0B in debt, 4.0B of net cash 800 600 400 200 0Q2FY20Q3FY20Q4FY20Q1FY21Q2FY21Gross cash is defined as cash/cash equivalents & marketable securities.Debt is defined as principal value of debt.Net cash is defined as gross cash less debt.12
Q3 FY2021 OUTLOOKRevenue – 4.40 billion, plus or minus two percentWe expect Gaming to be up just over 25 percent sequentially, with Data Center up in the low-to-midsingle digits percent sequentially. We expect both Pro Vis and Auto to be at a similar level as in Q2.Gross Margin – 62.5% GAAP and 65.5% non-GAAP, plus or minus 50 basis pointsOperating Expense – Approximately 1.54 billion GAAP and 1.09 billion non-GAAPOther Income & Expense – net expense of 55 million for both GAAP and non-GAAPTax Rate – GAAP and non-GAAP both eight percent, plus or minus one percent, excludingdiscrete itemsCapital Expenditure – approximately 225 to 250 million13
KEY ANNOUNCEMENTSTHIS QUARTER14
“NVIDIA-plus-Mellanox will remain atthe front of the pack developinghardware technology that underpinsthe AI movement for some time.”NVIDIA acquired industry-leading high-performance networking companyMellanox in April 2020New NVIDIA has a much larger scale in cloud data centersIsrael becomes major NVIDIA design centerMOTLEY FOOL15
ANNOUNCING NVIDIA A100GREATEST GENERATIONAL LEAP — 20X VOLTA54B xtors 826mm2 TSMC 7N 40GB Samsung HBM2 3rd gen Tensor Core GPU 600 GB/s NVLink16
ANNOUNCINGNVIDIA A100 LIGHTHOUSECUSTOMERSElastic Data Center Accelerator Choice ofIndustry LeadersCLOUDSYSTEMS
NVIDIA AMPERE GPUS COME TO GOOGLE CLOUDA100 has come to the cloud faster than any NVIDIA GPU inhistoryA100 boosts training and inference computing performance by20x over its predecessors and can power a broad range ofcompute-intensive applications, including AI training andinference, data analytics, scientific computing, genomics,edge video analytics, 5G services, and moreGoogle’s Accelerator-Optimized VM (A2) providesbreakthrough performance for every size workload
NVIDIA ACCELERATES WORLD’S FASTEST SUPERCOMPUTERSHighlights from International Supercomputing Conference June 20208 of world’s 10 fastest supercomputers run NVIDIA GPUs, networking, or both (TOP500.org), including the #1 systemin the US and EuropeNVIDIA’s Selene debuts as fastest industrial supercomputer in the US, and #7 on the TOP500 list overall, the onlytop 100 system to crack the 20 gigaflops/watt barrierSystems using NVIDIA GPUs are pulling away from the pack: they’re nearly 3x more power-efficient than systemswithout NVIDIA GPUs, measured in gigaflops/watt350NVIDIA Accelerates Majority ofTop500 Systems762505GF/W30020015043100250100ISC17NVIDIA GPUsISC18ISC19Mellanox NetworkingNVIDIA GPU Systems are3x More EfficientISC17ISC18non-NVIDIA AverageISC19NVIDIA Average19
SELENEDGX SuperPOD Deployment#1 on MLPerf for commercially available systems#7 on TOP500 (27.6 PetaFLOPS HPL)#2 on Green500 (20.5 GigaFLOPS/watt)Fastest Industrial System in U.S. — 1 ExaFLOPS AIBuilt w/ NVIDIA DGX SuperPOD Arch in 3 WeeksNVIDIA DGX A100 and NVIDIA Mellanox IBNVIDIA’s decade of AI experienceConfiguration:2,240 NVIDIA A100 Tensor Core GPUs280 NVIDIA DGX A100 systems494 Mellanox 200G HDR IB switches7 PB of all-flash storage20
NVIDIA WINS BENCHMARK FOR AI TRAININGSets 16 Records in MLPerf July 2020What is MLPerf?MLPerf July 2020 – AI TrainingThe industry’s first and only objectivestandard for measuring machine learningperformanceNVIDIA set 16 records, sweeping allcategories for commercially availablesolutionsConsortium of over 70 universities andcompanies, including Google, Intel, Baiduand NVIDIA, founded in 2018NVIDIA was the only company to fieldcommercially available products for allthe testsNVIDIA won all prior MLPerf benchmarks,including for training in Dec. 2018 andJuly 2019, and for inference Nov. 2019NVIDIA won all 8 categories for both “atscale” (with DGX SuperPOD) and “perchip” (with A100) performance21
NVIDIA DGX SUPERPOD SETS ALL 8 AT SCALE AIRECORDSUnder 18 Minutes To Train Each MLPerf BenchmarkTime to Train (Lower is Better)Commercially Available Solutions0.6 (480 A100)XXTranslation (Non-recurrent) TransformerNVIDIA A100NVIDIA V1000.7 (1024 A100)Google TPUv3XXTranslation (Recurrent) GNMTHuawei Ascend0.8 (1840 A100)Image Classification ResNet-50 v.1.528.7 (16 TPUv3)0.8 (1024 A100)XXObject Detection (Light Weight) SSD56.7(16 TPUv3)0.8 (2048 A100)NLP BERTX3.3 (8 A100)XXRecommendation DLRM10.5 (256 A100)XXObject Detection (Heavy Weight) Mask R-CNN17.1 (1792 A100)XXReinforcement Learning MiniGo0510152025303540Time to Train (Minutes)X No result submittedMLPerf 0.7 Performance comparison at Max Scale. Max scale used for NVIDIA A100, NVIDIA V100, TPUv3 and Huawei Ascend for all applicable benchmarks. MLPerf ID at Scale: :Transformer: 0.7-30, 0.7-52 , GNMT: 0.7-34, 0.7-54, ResNet-50 v1.5:220.7-37, 0.7-55,0.7-1, 0.7-3, SSD: 0.7-33, 0.7-53, BERT: 0.7-38, 0.7-56, 0.7-1, DLRM: 0.7-17, 0.7-43, Mask R-CNN: 0.7-28, 0.7-48, MiniGo: 0.7-36, 0.7-51 MLPerf name and logo are trademarks. See www.mlperf.org for more information.
NVIDIA A100 SETS ALL 8 PER CHIP AI PERFORMANCERECORDSRelative SpeedupCommercially Available Solutions3xSpeedup Over 0X1.0X1.0X1.0X1.0X1.0X1.0X0.9X0.7XX0xImage ClassificationResNet-50 v.1.5X XNLPBERTObject Detection (HeavyWeight)Mask R-CNNX XXXReinforcement LearningMiniGoHuawei AscendTPUv3XXObject Detection (LightWeight)SSDV100A100Translation (Recurrent)GNMTX XTranslation(Non-recurrent)TransformerX XRecommendationDLRMX No result submittedPer Chip Performance arrived at by comparing performance at same scale when possible and normalizing it to a single chip. 8 chip scale: V100, A100 Mask R-CNN, MiniGo, SSD, GNMT, Transformer. 16 chip scale: V100, A100, TPUv3 for ResNet-50 v1.5 and BERT. 51223chip scale: Huawei Ascend 910 for ResNet-50. DLRM compared 8 A100 and 16 V100. Submission IDs: ResNet-50 v1.5: 0.7-3, 0.7-1, 0.7-44, 0.7-18, 0.7-21, 0.7-15 BERT: 0.7-1, 0.7-45, 0.7-22 , Mask R-CNN: 0.7-40, 0.7-19, MiniGo: 0.7-41, 0.7-20, SSD: 0.7-40,0.7-19,GNMT: 0.7-40, 0.7-19, Transformer: 0.7-40, 0.7-19, DLRM: 0.7-43, 0.7-17 MLPerf name and logo are trademarks. See www.mlperf.org for more information.
GPU-ACCELERATED APACHE SPARK 3.0Built on Foundations of RAPIDSNVIDIA accelerates Spark, the world’s leadingdata analytics platform used by more than 500kdata scientists and 16k enterprises worldwideSpark 3.0Makes end-to-end acceleration of the entiredata science workload possible for the firsttime, unlocking new marketsData PreparationModel TrainingSparkXGBoost TensorFlow PyTorchRAPIDS Accelerator for Apache SparkThe performance gains in Spark 3.0 enable datascientists to train models with larger datasetsand retrain models more frequently, enhancingmodel accuracyUsing NVIDIA-accelerated Spark 3.0, Adobeachieved a 7x performance improvement and90% cost savingsDataSourcesGPU Powered ClusterSpark OrchestratedNow Available on Leading Cloud Analytics Platforms24
MERCEDES-BENZ & NVIDIA TO JOIN FORCES FOR SOFTWARE-DEFINEDVEHICLES ACROSS NEXT-GEN FLEETSoftware-Defined, Upgradeable Computing Architecture High-end NVIDIA DRIVE AGX Orin platform (200TOPS) and sensors standard in every next-genvehicle Complete NVIDIA DRIVE Software stack Full address-to-address autopilot, valet parkingand more future applications still to be imaginedBacked by Teams of AI and Software Engineers Perpetually upgradeable machine receivescontinuous improvement through OTA for MercedesBenz vehicles New safety and convenience features continuallyroll out across future Mercedes-Benz fleetUnlocks New Disruptive Business Models Customers to purchase features and services at POSand throughout Mercedes-Benz vehicles' life cycle Mercedes-Benz customer joy and value increasethroughout vehicle’ life cycle“ MERCEDES-BENZ AND NVIDIASIGN A DEAL TO MAKE CARSMORE LIKE IPHONES”BARRON’S25
BMW SELECTS NVIDIA ISAACPLATFORM TO REDEFINEFACTORY LOGISTICSBMW Group announced it is redefining factorylogistics with NVIDIA’s Isaac robotics platformIsaac SDK provides a comprehensive set oftools, libraries, reference robot applications,pre-trained DNN algorithms and transferlearning toolkit to adapt the deep neuralnetworks to different robotsRobot fleets powered by Isaac on NVIDIA EGXwill automate manufacturing26
NVIDIA OVERVIEW27
NVIDIA — A COMPUTING PLATFORM COMPANYHeadquarters:Headcount:Santa Clara, CA17,500NVIDIA pioneered accelerated computing to help solve the most challenging computational problems. The approach is broadly recognized asthe way to advance computing as Moore’s law ends and AI lifts off. NVIDIA’s platform is installed in several hundred million computers, isavailable in every cloud and from every server maker, powers 333 of the TOP500 supercomputers, and boasts 2 million developers.28
NVIDIA AT A GLANCEAccelerated Computing PioneerBrief HistoryRevenue by Market Platform1993: Founded by Jensen Huang, Chris Malachowsky, and Curtis Priem 11.7B1999: IPO on NASDAQ at 12 (prior to 4 stock splits, now 12:1) 9.7BGaming 4.8B2001: Xbox win; fastest semiconductor company to reach 1B in sales2006: Unveils CUDA architecture, expanding to scientific computing 6.9B 10.9BData Center 6.9B 5.0BProViz2009: Inaugural GPU Technology Conference (GTC)2016: Introduces first products for AI and autonomous drivingRecognitionsAutoFY16FY17FY18FY19FY20F1H20 F1H21From Chip Vendor to Computing PlatformHarvard Business Review’s The CEO 100Fortune’s Best Places to WorkGAMINGHPCHealthcareSmartCity/IOTPRO VIZAITransportationRoboticsCUDA-XCUDAMIT Tech Review’s 50 Smartest CompaniesFortune’s World’s Most Admired CompaniesForbes JUST 100 Best Corporate CitizensDow Jones Sustainability IndexOEM/IPARCHITECTURE1999GM 30% 2014GM 50% SYSTEMSDATA CENTERF1H21GM 60% 29
GROWTH DRIVERSGamingAIAR/VRSelf-driving Cars30
OUR CORE BUSINESSESFY20 Revenue 5.52B,3-year CAGR of 11%FY20 Revenue of 2.98B,3-year CAGR of 53%FY20 Revenue of 1.21B,3-year CAGR of 13%FY20 Revenue of 700M,3-year CAGR of 13%Strong market position andtechnology leadershipLeader in deep learning/AI –used by all major cloudcomputing providers andthousands of enterprises90% market share ingraphics for workstationsCurrent revenue drivenlargely by infotainmentDiversified end markets,e.g. media & entertainment,architecture, engineering &construction, public sectorFuture growth expected tobe driven largely byAutonomous Vehicle (AV)solution offering fullhardware & software stackCompounded long-term unitand ASP growth200M gamers on ourplatformStrong Gaming ecosystemMultiple secular growthdrivers: expanding populationof gamers, eSports, VR, risingproduction value of games,gaming and prosumer laptopsGaming51% of FY20 RevLeader in HPC - in 8 of thetop 10 and 2/3rds of the top500 fastest supercomputersMultiple secular growthdrivers: fast growingadoption of AI in every majorindustry; rising computeneeds unmet by conventionalapproaches such as x86CPUs; Mellanox networkingData Center27% of FY20 RevStrong software ecosystemMultiple secular growthdrivers: expanding creative& design workflows, mobileworkstations, rising adoptionof AR/VR across industriesProfessional Visualization11% of FY20 RevLarge secular growthopportunity: autonomousvehicles estimated to drivea 25B TAM for the AVcomputing stack by 2025Automotive6% of FY20 RevASP Average Selling Price. Gamers are defined as consumers who purchase our GPUs to play video games. 200M gamers on our platform as of August 2020. FY20 ended 1/26/2020. 31
STRONG, PROFITABLE GROWTHF1H21F1H16177Revenue4 46Operating Margin12,00080%10,00070%438,00054Gross Margin57%59%60%62%63%RevenueGross Margin8,00085%7,0006,00060%Operating a CenterProVizAutoOEM / IPGamingData CenterProVizAutoOEM / IPBusiness Mix ained Profitability(showing non-GAAP margins)Refer to Appendix for reconciliation of Non-GAAP measures32
WHY ACCELERATED COMPUTING?Advancing Computing in the Post-Moore’s Law EraThe world’s demand for computing powercontinues to grow exponentially, yet CPUs areno longer keeping up as Moore’s Law has ended.NVIDIA pioneered GPU-accelerated computingto solve this challenge.Optimizing across the entire stack — from siliconto software — allows NVIDIA to advance computingin the post-Moore’s Law era for large andimportant markets:Gaming, Pro Viz, High Performance Computing(HPC), AI, Cloud, Transportation, Healthcare,Robotics, and the Internet of Things (IOT).107GPU PERFORMANCE105CPU PERFORMANCE1031980199020002010202033
WORLD LEADER IN ACCELERATED COMPUTINGOur Four Market Platforms & Key BrandsGamingGeForce GPUs for PC GamersData CenterDGX/HGX/EGX for HPC/AI computeMellanox for networkingProfessional VisualizationQuadro for WorkstationsAutoDRIVE for Autonomous Vehicles34
GAMINGGeForce - The World’s Largest Gaming Platform 6,24618% CAGR 5,518 5,513 4,060#1 in PC gaming with morethan 3X the revenue of theother major GPU vendorExpanding the market withgaming laptops and cloudgaming 2,818Powering the NintendoSwitch consoleFY16FY17FY18FY19Revenue ( M)FY20Highlights200M Gamers on GeForce35
DATA CENTERHigh Performance Computing (HPC) and AINVIDIA Share of New Top500 Systems2.0M72%CAGR 2,932 2,98367%1.5M 1,93241%1M34%24% 830500K6% 19SC20In 8 of top 10 SupercomputersWorldwide; #1 in US and Europe2020SC20 Results Include MLNXRevenue ( M)Registered NVIDIA DevelopersEvery Major Cloud Provider90% Share of Acceleratorsin Supercomputing36
PROFESSIONAL VISUALIZATIONWorkstation GraphicsAcceleratedRendering 1,21213% CAGR 1,130Simulation 934 750Foundryand Sci VizAR/VRDataScienceVirtualWorkstations 835RemingtonFY16FY17FY18FY19Revenue ( M)FY2050 ApplicationsUnlocking New Markets40M Designers and Creatives37
AUTOInfotainment and Autonomous Vehicles8022% CAGR 700 64176TOYOTA7060 558 4875042VOLVO40 S-BENZCarsTrucksTier 1sRobotaxisMappingSensorsZFSoftwareXPENGRevenue ( M)NVIDIA DRIVE PartnersStrong Partnership / Ecosystem38
LARGE AND DIVERSE CUSTOMER BASEReaching Hundreds of Millions of End Users Through Hundreds of CustomersReaching 200M PC gamersCloudEvery Major PC OEM/ODMHPCORNLSummitEvery Major Graphics CardManufacturerLLNLSierra40M Designers/CreativesPizDaintABCIVertical Industry20M Enterprise UsersGamingData CenterPro VisualizationAutoLargest Customer 11% of Total Revenue Over Past 3 Fiscal Years39
FINANCIALS40
ANNUAL REVENUE BY MARKET PLATFORMGaming 6,246 2,932 2,983FY19FY2019FY20FY2020 5,518 mm mm 5,513Data Center 4,060 2,818 1,932 830 020FY16FY2016FY17FY2017Pro VisualizationAuto 750FY2016FY16FY2017FY17 1,212 934 mm mm 1,130 835FY2018FY18FY18FY2018FY2019FY19FY2020FY20 487 558 641 700 Y20FY202041
ANNUAL CASH & CASH FLOW METRICSOPERATING CASH FLOWADJUSTED EBITDA (NON-GAAP) 4,662 3,803 4,761 4,110 mm mm 2,392 1,305FY16FY2016 Y2020 3,502 3,743FY2018FY18FY2019FY19 1,672FY2017FY17FREE CASH FLOWCASH BALANCE 4,272 1,089FY16 3,143 1,496FY17 10,897 mm mm 2,909FY18FY2020FY20FY19FY20 6,798 7,108 7,422FY17FY2017FY18FY2018FY19FY2019 5,037FY16FY2016FY20FY2020Cash balance is defined as cash and cash equivalents plus marketable securities42
CONSERVATIVE FINANCIAL POLICYKey Credit MetricsFinancial Policy HighlightsHistorical Debt / Adjusted EBITDACommitment to maintain ourhistorically modest leverage,consistent with investment gradecredit ratings1.4FY20Revenue 10.92BAdjusted EBITDA 4.11BFree Cash Flow 4.27BDisciplined capital return policyCash & Cash Equivalents andMarketable Securities 10.90BPrincipal Value of Debt 2.00BNet Cash 8.90BSolid balance sheet withsubstantial liquidity, and positivenet cash positionDisciplined approach to M&APrincipal Value of Debt / Adjusted rce: SEC filings and public disclosures1 Adjusted EBITDA and Free Cash Flow are Non-GAAP measures. Refer to Appendix for reconciliation of Non-GAAP measures2 Net Cash is defined as Cash & Cash Equivalents and Marketable Securities less principal value of debt43
NVIDIA’S COMMITMENT TO ESGCreating a Leading WorkplaceTackling Climate ChangeNVIDIA GPUs are 20 to 25 timesmore energy efficient thantraditional CPU servers for AIworkloads.44
“NVIDIA GPUs POWER SIX OUT OF THETEN MOST ENERGY-EFFICIENTMACHINES ON THE TOP500”HPCWIREAccelerated computing is the way forward forpowerful & efficient supercomputersNVIDIA GPUs and/or InfiniBand power 8 of top10 systems on latest TOP500 listFastest systems in U.S., Europe & China45
RECONCILIATION OF NON-GAAPTO GAAP FINANCIAL MEASURES46
RECONCILIATION OF NON-GAAP TO GAAP FINANCIALMEASURES( IN MILLIONS)NON-GAAPOPERATING INCOME(A)GAAP DEPRECIATION& AMORTIZATIONAMORTIZATION OFACQUISITIONRELATEDINTANGIBLESFY 2016 1,125197(17) 1,305FY 2017 2,221187(16) 2,392FY 2018 3,617199(13) 3,803FY 2019 4,407262(7) 4,662FY 2020 3,735381(6) 4,110ADJUSTED EBITDAA. Refer to Appendix herein for reconciliation of Non-GAAP operating income to GAAP operating income47
RECONCILIATION OF NON-GAAP TO GAAP FINANCIALMEASURES (CONTD.)A.B.C.D.( NSATION(A)PRODUCTWARRANTY(B)ACQUISITIONRELATED ANDOTHER COSTS(C)FY 2016 1,125(205)(20)(22)(131) 747FY 2017 2,221(248)—(16)(23) 1,934FY 2018 3,617(391)—(13)(3) 3,210FY 2019 4,407(557)—(2)(44) 3,804FY 2020 3,735(844)—(30)(15) 2,846OTHER(D)GAAPOPERATINGINCOMEStock-based compensation charge was allocated to cost of goods sold, research and development expense, and sales, general and administrative expenseConsists of warranty charge associated with a product recallConsists of amortization of acquisition-related intangible assets, transaction costs, compensation charges, other credits related to acquisitions, and other costsComprises of legal settlement costs, contributions, and restructuring and other charges48
RECONCILIATION OF NON-GAAP TO GAAP FINANCIALMEASURES IONCOMPENSATIONRELATED AND(A)OTHER COSTS (B)OTHER(C)GAAPOPERATINGINCOME1H FY20 1,358(401)(15)(13) 9291H FY21 2,721(598)(479)(17) 1,627A. Stock-based compensation charge was allocated to cost of goods sold, research and development expense, and sales, general and administrative expenseB. Consists of amortization of intangible assets, inventory step-up, transaction costs, and certain compensation chargesC. Comprises of legal settlement costs49
RECONCILIATION OF NON-GAAP TO GAAP FINANCIALMEASURES (A)Revenue 3,866Gross profitRELATED ITEMSAND OTHERCOSTS (B)OTHER(C)TAX IMPACT OFADJUSTMENTSGAAP———— 3,866 2,551(14)(245)(17)— 2,275Gross margin66.0%(0.4)(6.3)(0.5)—58.8%Research and development expense 7662283—— 997Sales, general and administrativeexpense 269132226—— 627Operating expense 1,035360229—— 1,624Operating income 1,516(374)(474)(17)— 651Net income 1,366(374)(474)(20)124 622Diluted EPS 2.18(0.60)(0.76)(0.03)0.20 0.99( IN MILLIONS)Q2 FY2021A. Stock-based compensation charge was allocated to cost of goods sold, research and development expense, and sales, general and administrative expenseB. Primarily consists of amortization of intangible assets, inventory step-up, transaction costs, and certain compensation chargesC. Comprises of legal settlement costs, losses from non-affiliated investments, and interest expense related to amortization of debt discount50
RECONCILIATION OF NON-GAAP TO GAAP FINANCIALMEASURES (CONTD.)NON-GAAP TY (B)OTHER(C)GAAP GROSSMARGINFY 201656.8%(0.3)(0.4)—56.1%FY 201759.2%(0.2)—(0.2)58.8%FY 201860.2%(0.3)——59.9%FY 201961.7%(0.2)—(0.3)61.2%FY 202062.5%(0.4)—(0.1)62.0%A. Stock-based compensation charge was allocated to cost of goods soldB. Consists of warranty charge associated with a product recallC. Consists of legal settlement costs51
RECONCILIATION OF NON-GAAP TO GAAP FINANCIALMEASURES (CONTD.)NON-GAAPGROSS MARGINSTOCK-BASEDCOMPENSATION(A)ACQUISITIONRELATED ITEMSAND OTHERCOSTS (B)OTHER(C)GAAP GROSSMARGINQ2 FY202060.1%(0.3)——59.8%Q3 FY202064.1%(0.5)——63.6%Q4 FY202065.4%(0.4)—(0.1)64.9%Q1 FY202165.8%(0.7)——65.1%Q2 FY202166.0%(0.4)(6.3)(0.5)58.8%A. Stock-based compensation charge was allocated to cost of goods soldB. Consists of amortization of intangible assets and inventory step-upC. Consists of legal settlement costs52
RECONCILIATION OF NON-GAAP TO GAAP FINANCIALMEASURES (CONTD.)NON-GAAPGROSS MARGINSTOCK-BASEDCOMPENSATION(A)ACQUISITION
INVESTOR PRESENTATION Q2 FY2021 August 24, 2020. 2 . Q2 FY2021 FINANCIAL SUMMARY GAAP Non-GAAP Q2 FY21 Y/Y Q/Q Q2 FY21 Y/Y Q/Q . will launch software-defined, intelligent vehicles across its entire fleet, using end-to-end NVIDIA technology The Mercedes-Benz announcement is
