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1、UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington,D.C.20549FORM 10-QQUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)OF THE SECURITIES EXCHANGE ACT OF 1934For the quarterly period ended July 30,2023ORTRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)OF THE SECURITIES EXCHANGE ACT OF 1934Commis
2、sion file number:0-23985NVIDIA CORPORATION(Exact name of registrant as specified in its charter)Delaware94-3177549(State or other jurisdiction of(I.R.S.Employerincorporation or organization)Identification No.)2788 San Tomas Expressway,Santa Clara,California95051(Address of principal executive office
3、s)(Zip Code)(408)486-2000(Registrants telephone number,including area code)N/A(Former name,former address and former fiscal year if changed since last report)Securities registered pursuant to Section 12(b)of the Act:Title of each classTrading Symbol(s)Name of each exchange on which registeredCommon
4、Stock,$0.001 par value per shareNVDAThe Nasdaq Global Select MarketIndicate by check mark whether the registrant(1)has filed all reports required to be filed by Section 13 or 15(d)of the Securities Exchange Act of 1934 duringthe preceding 12 months(or for such shorter period that the registrant was
5、required to file such reports),and(2)has been subject to such filing requirements forthe past 90 days.Yes No Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 ofRegulation S-T(232.405 of this chapter)d
6、uring the preceding 12 months(or for such shorter period that the registrant was required to submit such files).Yes No Indicate by check mark whether the registrant is a large accelerated filer,an accelerated filer,a non-accelerated filer,a smaller reporting company,or anemerging growth company.See
7、the definitions of“large accelerated filer,”“accelerated filer,”“smaller reporting company,”and emerging growth company inRule 12b-2 of the Exchange Act.Large accelerated filerAccelerated filerNon-accelerated filerSmaller reporting companyEmerging growth companyIf an emerging growth company,indicate
8、 by check mark if the registrant has elected not to use the extended transition period for complying with any new orrevised financial accounting standards provided pursuant to Section 13(a)of the Exchange Act.Indicate by check mark whether the registrant is a shell company(as defined in Rule 12b-2 o
9、f the Exchange Act).Yes No The number of shares of common stock,$0.001 par value,outstanding as of August 18,2023,was 2.47 billion.NVIDIA CORPORATIONFORM 10-QFOR THE QUARTER ENDED JULY 30,2023TABLE OF CONTENTS Page PART I:FINANCIAL INFORMATION Item 1.Financial Statements(Unaudited)a)Condensed Consol
10、idated Statements of Income for the three and six months ended July 30,2023 and July 31,20223b)Condensed Consolidated Statements of Comprehensive Income for the three and six months ended July 30,2023and July 31,20224 c)Condensed Consolidated Balance Sheets as of July 30,2023 and January 29,20235d)C
11、ondensed Consolidated Statements of Shareholders Equity for the three and six months ended July 30,2023and July 31,20226 e)Condensed Consolidated Statements of Cash Flows for the six months ended July 30,2023 and July 31,20228 f)Notes to Condensed Consolidated Financial Statements9Item 2.Managements
12、 Discussion and Analysis of Financial Condition and Results of Operations25Item 3.Quantitative and Qualitative Disclosures About Market Risk34Item 4.Controls and Procedures34 PART II:OTHER INFORMATION Item 1.Legal Proceedings34Item 1A.Risk Factors35Item 2.Unregistered Sales of Equity Securities and
13、Use of Proceeds45Item 5.Other Information45Item 6.Exhibits46Signature 47WHERE YOU CAN FIND MORE INFORMATIONInvestors and others should note that we announce material financial information to our investors using our investor relations website,pressreleases,SEC filings and public conference calls and
14、webcasts.We also use the following social media channels as a means of disclosinginformation about the company,our products,our planned financial and other announcements and attendance at upcoming investor and industryconferences,and other matters,and for complying with our disclosure obligations un
15、der Regulation FD:NVIDIA Company Blog(http:/)NVIDIA LinkedIn Page(http:/ Facebook Page(https:/ Instagram Page(https:/ Twitter Account(https:/ addition,investors and others can view NVIDIA videos on YouTube(https:/www.YouT information we post through these social media channels may be deemed material
16、.Accordingly,investors should monitor these accountsand the blog,in addition to following our press releases,SEC filings and public conference calls and webcasts.This list may be updated fromtime to time.The information we post through these channels is not a part of this Quarterly Report on Form 10
17、-Q.These channels may beupdated from time to time on NVIDIAs investor relations website.2PART I.FINANCIAL INFORMATIONITEM 1.FINANCIAL STATEMENTS(UNAUDITED)NVIDIA CORPORATION AND SUBSIDIARIESCONDENSED CONSOLIDATED STATEMENTS OF INCOME(In millions,except per share data)(Unaudited)Three Months EndedSix
18、 Months Ended July 30,July 31,July 30,July 31,2023202220232022Revenue$13,507$6,704$20,699$14,992 Cost of revenue4,045 3,789 6,589 6,646 Gross profit9,462 2,915 14,110 8,346 Operating expenses Research and development2,040 1,824 3,916 3,443 Sales,general and administrative622 592 1,253 1,183 Acquisit
19、ion termination cost 1,353 Total operating expenses2,662 2,416 5,169 5,979 Operating income6,800 499 8,941 2,367 Interest income187 46 338 64 Interest expense(65)(65)(131)(132)Other,net59(5)42(19)Other income(expense),net181(24)249(87)Income before income tax6,981 475 9,190 2,280 Income tax expense(
20、benefit)793(181)958 6 Net income$6,188$656$8,232$2,274 Net income per share:Basic$2.50$0.26$3.33$0.91 Diluted$2.48$0.26$3.30$0.90 Weighted average shares used in per share computation:Basic2,473 2,495 2,472 2,500 Diluted2,499 2,516 2,495 2,526 See accompanying Notes to Condensed Consolidated Financi
21、al Statements.3NVIDIA CORPORATION AND SUBSIDIARIESCONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME(In millions)(Unaudited)Three Months EndedSix Months Ended July 30,July 31,July 30,July 31,2023202220232022 Net income$6,188$656$8,232$2,274 Other comprehensive loss,net of taxAvailable-for-sal
22、e securities:Net change in realized gain(loss)(11)(12)7(35)Reclassification adjustments for net realized gain included in netincome 1 1 Net change in unrealized gain(loss)(11)(11)7(34)Cash flow hedges:Net unrealized gain(loss)22(2)8(30)Reclassification adjustments for net realized loss included in n
23、etincome(12)(13)(23)(15)Net change in unrealized gain(loss)10(15)(15)(45)Other comprehensive loss,net of tax(1)(26)(8)(79)Total comprehensive income$6,187$630$8,224$2,195 See accompanying Notes to Condensed Consolidated Financial Statements.4NVIDIA CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED
24、 BALANCE SHEETS(In millions)(Unaudited)July 30,January 29,20232023ASSETSCurrent assets:Cash and cash equivalents$5,783$3,389 Marketable securities10,240 9,907 Accounts receivable,net7,066 3,827 Inventories4,319 5,159 Prepaid expenses and other current assets1,389 791 Total current assets28,797 23,07
25、3 Property and equipment,net3,799 3,807 Operating lease assets1,235 1,038 Goodwill4,430 4,372 Intangible assets,net1,395 1,676 Deferred income tax assets5,398 3,396 Other assets4,501 3,820 Total assets$49,555$41,182 LIABILITIES AND SHAREHOLDERS EQUITY Current liabilities:Accounts payable$1,929$1,193
26、 Accrued and other current liabilities7,156 4,120 Short-term debt1,249 1,250 Total current liabilities10,334 6,563 Long-term debt8,456 9,703 Long-term operating lease liabilities1,041 902 Other long-term liabilities2,223 1,913 Total liabilities22,054 19,081 Commitments and contingencies-see Note 13S
27、hareholders equity:Preferred stock Common stock2 2 Additional paid-in capital12,629 11,971 Accumulated other comprehensive loss(51)(43)Retained earnings14,921 10,171 Total shareholders equity27,501 22,101 Total liabilities and shareholders equity$49,555$41,182 See accompanying Notes to Condensed Con
28、solidated Financial Statements.5NVIDIA CORPORATION AND SUBSIDIARIESCONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS EQUITYFOR THE THREE MONTHS ENDED JULY 30,2023 AND JULY 31,2022(Unaudited)Common StockOutstandingAdditionalPaid-in CapitalAccumulated OtherComprehensive LossRetainedEarningsTotalShareh
29、oldersEquity(In millions,except per share data)SharesAmountBalances,April 30,20232,473$2$12,453$(50)$12,115$24,520 Net income 6,188 6,188 Other comprehensive loss (1)(1)Issuance of common stock from stock plans 5 1 1 Tax withholding related to vesting of restricted stock units(1)(672)(672)Shares rep
30、urchased(8)(1)(3,283)(3,284)Cash dividends declared and paid($0.04 per common share)(99)(99)Stock-based compensation 848 848 Balances,July 30,20232,469$2$12,629$(51)$14,921$27,501 Balances,May 1,20222,504$3$10,623$(64)$15,758$26,320 Net income 656 656 Other comprehensive loss (26)(26)Issuance of com
31、mon stock from stock plans 6 1 1 Tax withholding related to vesting of restricted stock units(2)(299)(299)Shares repurchased(19)(1)(1)(3,343)(3,345)Cash dividends declared and paid($0.04 per common share)(100)(100)Stock-based compensation 644 644 Balances,July 31,20222,489$2$10,968$(90)$12,971$23,85
32、1 See accompanying Notes to Condensed Consolidated Financial Statements.6NVIDIA CORPORATION AND SUBSIDIARIESCONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS EQUITYFOR THE SIX MONTHS ENDED JULY 30,2023 AND JULY 31,2022(Unaudited)Common StockOutstandingAdditionalPaid-inCapitalAccumulated OtherCompreh
33、ensive LossRetainedEarningsTotalShareholdersEquity(In millions,except per share data)SharesAmountBalances,January 29,20232,466$2$11,971$(43)$10,171$22,101 Net income 8,232 8,232 Other comprehensive loss (8)(8)Issuance of common stock from stock plans 14 247 247 Tax withholding related to vesting of
34、restricted stock units(3)(1,179)(1,179)Shares repurchased(8)(1)(3,283)(3,284)Cash dividends declared and paid($0.08 per common share)(199)(199)Stock-based compensation 1,591 1,591 Balances,July 30,20232,469$2$12,629$(51)$14,921$27,501 Balances,January 30,20222,506$3$10,385$(11)$16,235$26,612 Net inc
35、ome 2,274 2,274 Other comprehensive loss (79)(79)Issuance of common stock from stock plans 15 205 205 Tax withholding related to vesting of restricted stock units(4)(837)(837)Shares repurchased(28)(1)(2)(5,338)(5,341)Cash dividends declared and paid($0.08 per common share)(200)(200)Stock-based compe
36、nsation 1,217 1,217 Balances,July 31,20222,489$2$10,968$(90)$12,971$23,851 See accompanying Notes to Condensed Consolidated Financial Statements.7NVIDIA CORPORATION AND SUBSIDIARIESCONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS(In millions)(Unaudited)Six Months EndedJuly 30,July 31,20232022Cash flo
37、ws from operating activities:Net income$8,232$2,274 Adjustments to reconcile net income to net cash provided by operating activities:Stock-based compensation expense1,576 1,226 Depreciation and amortization749 712(Gains)losses on investments in non-affiliates,net(45)24 Deferred income taxes(1,881)(9
38、85)Acquisition termination cost 1,353 Other(102)18 Changes in operating assets and liabilities,net of acquisitions:Accounts receivable(3,239)(668)Inventories861(1,285)Prepaid expenses and other assets(592)(1,554)Accounts payable789 559 Accrued and other current liabilities2,675 1,267 Other long-term
39、 liabilities236 60 Net cash provided by operating activities9,259 3,001 Cash flows from investing activities:Proceeds from maturities of marketable securities5,111 10,983 Proceeds from sales of marketable securities 1,731 Purchases of marketable securities(5,343)(7,576)Purchases related to property
40、and equipment and intangible assets(537)(794)Acquisitions,net of cash acquired(83)(49)Investments and other,net(435)(65)Net cash provided by(used in)investing activities(1,287)4,230 Cash flows from financing activities:Proceeds related to employee stock plans247 205 Payments related to repurchases o
41、f common stock(3,067)(5,341)Repayment of debt(1,250)Payments related to tax on restricted stock units(1,179)(837)Dividends paid(199)(200)Principal payments on property and equipment and intangible assets(31)(36)Other 1 Net cash used in financing activities(5,479)(6,208)Change in cash,cash equivalent
42、s,and restricted cash2,493 1,023 Cash,cash equivalents,and restricted cash at beginning of period3,389 1,990 Cash,cash equivalents,and restricted cash at end of period$5,882$3,013 Reconciliation of cash,cash equivalents,and restricted cash to the Condensed Consolidated Balance Sheet:Cash and cash eq
43、uivalents$5,783$3,013 Restricted cash,included in prepaid expenses and other current assets99 Total cash,cash equivalents,and restricted cash$5,882$3,013 Supplemental disclosure of cash flow information:Cash paid for income taxes,net$328$1,108 See accompanying Notes to Condensed Consolidated Financi
44、al Statements.8NVIDIA CORPORATION AND SUBSIDIARIESNOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(Unaudited)Note 1-Summary of Significant Accounting PoliciesBasis of PresentationThe accompanying unaudited condensed consolidated financial statements were prepared in accordance with accounting pr
45、inciples generallyaccepted in the United States of America,or U.S.GAAP,for interim financial information and with the instructions to Form 10-Q and Article 10 ofSecurities and Exchange Commission,or SEC,Regulation S-X.The January 29,2023 consolidated balance sheet was derived from our auditedconsoli
46、dated financial statements included in our Annual Report on Form 10-K for the fiscal year ended January 29,2023,as filed with the SEC,but does not include all disclosures required by U.S.GAAP.In the opinion of management,all adjustments,consisting only of normal recurringadjustments considered neces
47、sary for a fair statement of results of operations and financial position,have been included.The results for theinterim periods presented are not necessarily indicative of the results expected for any future period.The following information should be read inconjunction with the audited consolidated
48、financial statements and notes thereto included in our Annual Report on Form 10-K for the fiscal yearended January 29,2023.Significant Accounting PoliciesThere have been no material changes to our significant accounting policies disclosed in Note 1-Organization and Summary of SignificantAccounting P
49、olicies,of the Notes to the Consolidated Financial Statements included in our Annual Report on Form 10-K for the fiscal year endedJanuary 29,2023.Fiscal YearWe operate on a 52-or 53-week year,ending on the last Sunday in January.Fiscal years 2024 and 2023 are both 52-week years.The secondquarters of
50、 fiscal years 2024 and 2023 were both 13-week quarters.ReclassificationsCertain prior fiscal year balances have been reclassified to conform to the current fiscal year presentation.Principles of ConsolidationOur condensed consolidated financial statements include the accounts of NVIDIA Corporation a
51、nd our wholly-owned subsidiaries.Allintercompany balances and transactions have been eliminated in consolidation.Use of EstimatesThe preparation of financial statements in conformity with U.S.GAAP requires management to make estimates and assumptions that affect thereported amounts of assets and lia
52、bilities and disclosures of contingent assets and liabilities at the date of the financial statements and thereported amounts of revenue and expenses during the reporting period.Actual results could differ materially from our estimates.On an on-goingbasis,we evaluate our estimates,including those re
53、lated to revenue recognition,cash equivalents and marketable securities,accountsreceivable,inventories,income taxes,goodwill,stock-based compensation,litigation,investigation and settlement costs,restructuring and othercharges,property,plant,and equipment,and other contingencies.These estimates are
54、based on historical facts and various other assumptionsthat we believe are reasonable.In February 2023,we completed an assessment of the useful lives of our property,plant,and equipment.Based on advances in technology andusage rate,we increased the estimated useful life of a majority of our server,s
55、torage,and network equipment from three to a range of four tofive years,and our assembly and test equipment from five to seven years.This change in accounting estimate became effective at the beginningof fiscal year 2024.Based on the carrying amounts of a majority of our server,storage,network,and a
56、ssembly and test equipment,net,in useas of the end of fiscal year 2023,the effect of this change in estimate for the three months ended July 30,2023 was a benefit of$5 million and$28 million for cost of revenue and operating expenses,respectively,which resulted in an increase in operating income of$
57、33 million and netincome of$27 million after tax,or$0.01 per both basic and diluted share.The effect of this change in estimate for the first half of fiscal year 2024was a benefit of$7 million and$59 million for9NVIDIA CORPORATION AND SUBSIDIARIESNOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(
58、Continued)(Unaudited)cost of revenue and operating expenses,respectively,which resulted in an increase in operating income of$66 million and net income of$55 million after tax,or$0.02 per both basic and diluted share.Note 2-Business CombinationTermination of the Arm Share Purchase AgreementIn Februa
59、ry 2022,NVIDIA and SoftBank Group Corp,or SoftBank,announced the termination of the Share Purchase Agreement wherebyNVIDIA would have acquired Arm Limited,or Arm,from SoftBank.The parties agreed to terminate due to significant regulatory challengespreventing the completion of the transaction.We reco
60、rded an acquisition termination cost of$1.35 billion in fiscal year 2023 reflecting the write-off of the prepayment provided at signing.Note 3-LeasesOur lease obligations primarily consist of operating leases for our headquarters complex,domestic and international office facilities,and datacenter sp
61、ace,with lease periods expiring between fiscal years 2024 and 2035.Future minimum lease payments under our non-cancelable operating leases as of July 30,2023 are as follows:Operating LeaseObligations(In millions)Fiscal Year:2024(excluding first half of fiscal year 2024)$134 2025249 2026227 2027211 2
62、028191 2029 and thereafter415 Total1,427 Less imputed interest178 Present value of net future minimum lease payments1,249 Less short-term operating lease liabilities208 Long-term operating lease liabilities$1,041 In addition,we have operating leases,primarily for our data centers,that are expected t
63、o commence between the third quarter of fiscal year2024 and the end of fiscal year 2025 with lease terms of 3 to 8 years for$205 million.Operating lease expenses were$67 million and$47 million for the second quarter of fiscal years 2024 and 2023,respectively,and$126 millionand$90 million for the fir
64、st half of fiscal years 2024 and 2023,respectively.Short-term and variable lease expenses for the second quarter andfirst half of fiscal years 2024 and 2023 were not significant.10NVIDIA CORPORATION AND SUBSIDIARIESNOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(Continued)(Unaudited)Other infor
65、mation related to leases was as follows:Six Months EndedJuly 30,2023July 31,2022(In millions)Supplemental cash flows information Operating cash flows used for operating leases$135$91 Operating lease assets obtained in exchange for lease obligations$299$98 As of July 30,2023,our operating leases had
66、a weighted average remaining lease term of 6.5 years and a weighted average discount rate of3.47%.As of January 29,2023,our operating leases had a weighted average remaining lease term of 6.8 years and a weighted averagediscount rate of 3.21%.Note 4-Stock-Based CompensationOur stock-based compensati
67、on expense is associated with restricted stock units,or RSUs,performance stock units that are based on ourcorporate financial performance targets,or PSUs,performance stock units that are based on market conditions,or market-based PSUs,and ouremployee stock purchase plan,or ESPP.Our Condensed Consoli
68、dated Statements of Income include stock-based compensation expense,net of amounts allocated to inventory,asfollows:Three Months EndedSix Months Ended July 30,2023July 31,2022July 30,2023July 31,2022(In millions)Cost of revenue$31$38$58$76 Research and development600 452 1,124 836 Sales,general and
69、administrative211 159 394 315 Total$842$649$1,576$1,227 Equity Award ActivityThe following is a summary of our equity award transactions under our equity incentive plans:RSUs,PSUs,and Market-based PSUs Outstanding Number of SharesWeighted Average Grant-Date FairValue Per Share(In millions,except per
70、 share data)Balances,January 29,202345$158.45 Granted13$359.70 Vested restricted stock(11)$127.12 Canceled and forfeited(1)$194.70 Balances,July 30,202346$219.47 As of July 30,2023,there was$9.69 billion of aggregate unearned stock-based compensation expense.This amount is expected to berecognized o
71、ver a weighted average period of 2.7 years for RSUs,PSUs,and market-based PSUs,and 1.0 year for ESPP.11NVIDIA CORPORATION AND SUBSIDIARIESNOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(Continued)(Unaudited)Note 5 Net Income Per ShareThe following is a reconciliation of the denominator of the b
72、asic and diluted net income per share computations for the periods presented:Three Months EndedSix Months EndedJuly 30,July 31,July 30,July 31,2023202220232022(In millions,except per share data)Numerator:Net income$6,188$656$8,232$2,274 Denominator:Basic weighted average shares2,473 2,495 2,472 2,50
73、0 Dilutive impact of outstanding equity awards26 21 23 26 Diluted weighted average shares2,499 2,516 2,495 2,526 Net income per share:Basic(1)$2.50$0.26$3.33$0.91 Diluted(2)$2.48$0.26$3.30$0.90 Equity awards excluded from diluted net income pershare because their effect would have been anti-dilutive
74、10 33 14 25(1)Calculated as net income divided by basic weighted average shares.(2)Calculated as net income divided by diluted weighted average shares.Note 6 Income TaxesIncome tax was an expense of$793 million and$958 million for the second quarter and first half of fiscal year 2024,respectively,a
75、benefit of$181 million for the second quarter of fiscal year 2023,and an expense of$6 million for the first half of fiscal year 2023.The income tax as apercentage of income before income tax was an expense of 11.4%and 10.4%for the second quarter and first half of fiscal year 2024,respectively,a bene
76、fit of 38.0%for the second quarter of fiscal year 2023,and an expense of 0.3%for the first half of fiscal year 2023.The increase in the effective tax rate was primarily due to a decreased impact of tax benefits from the foreign-derived intangible incomededuction,stock-based compensation,and the U.S.
77、federal research tax credit,relative to the increase in income before income tax.Our effective tax rates for the first half of fiscal years 2024 and 2023 were lower than the U.S.federal statutory rate of 21%due to tax benefitsfrom the foreign-derived intangible income deduction,stock-based compensat
78、ion and the U.S.federal research tax credit.For the first half of fiscal year 2024,there were no material changes to our tax years that remain subject to examination by major taxjurisdictions.We are currently under examination by the Internal Revenue Service for our fiscal years 2018 and 2019.Additi
79、onally,there havebeen no material changes to our unrecognized tax benefits and any related interest or penalties since the fiscal year ended January 29,2023.While we believe that we have adequately provided for all uncertain tax positions,or tax positions where we believe it is not more-likely-than-
80、notthat the position will be sustained upon review,amounts asserted by tax authorities could be greater or less than our accrued position.Accordingly,our provisions on federal,state and foreign tax related matters to be recorded in the future may change as revised estimates aremade or the underlying
81、 matters are settled or otherwise resolved with the respective tax authorities.As of July 30,2023,we do not believe thatour estimates,as otherwise provided for,on such tax positions will significantly increase or decrease within the next 12 months.12NVIDIA CORPORATION AND SUBSIDIARIESNOTES TO CONDEN
82、SED CONSOLIDATED FINANCIAL STATEMENTS(Continued)(Unaudited)Note 7-Cash Equivalents and Marketable Securities Our cash equivalents and marketable securities related to debt securities are classified as“available-for-sale”debt securities.The following is a summary of cash equivalents and marketable se
83、curities:July 30,2023AmortizedCostUnrealizedGainUnrealizedLossEstimatedFair ValueReported as CashEquivalentsMarketableSecurities(In millions)Corporate debt securities$5,990$1$(13)$5,978$2,149$3,829 Debt securities issued by the U.S.Treasury3,716 (31)3,685 3,685 Debt securities issued by U.S.governme
84、nt agencies2,903 (4)2,899 647 2,252 Money market funds2,348 2,348 2,348 Certificates of deposit690 690 265 425 Foreign government bonds248 248 199 49 Total$15,895$1$(48)$15,848$5,608$10,240 January 29,2023AmortizedCostUnrealizedGainUnrealizedLossEstimatedFair ValueReported as CashEquivalentsMarketab
85、leSecurities(In millions)Corporate debt securities$4,809$(12)$4,797$1,087$3,710 Debt securities issued by the U.S.Treasury4,185 1(44)4,142 4,142 Debt securities issued by U.S.government agencies1,836 (2)1,834 50 1,784 Money market funds1,777 1,777 1,777 Certificates of deposit365 365 134 231 Foreign
86、 government bonds140 140 100 40 Total$13,112$1$(58)$13,055$3,148$9,907 13NVIDIA CORPORATION AND SUBSIDIARIESNOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(Continued)(Unaudited)The following tables provide the breakdown of unrealized losses,aggregated by investment category and length of time t
87、hat individual securitieshave been in a continuous loss position:July 30,2023 Less than 12 Months12 Months or GreaterTotal Estimated FairValueGrossUnrealizedLossEstimated FairValueGrossUnrealizedLossEstimated FairValueGrossUnrealizedLoss(In millions)Debt securities issued by the U.S.Treasury$1,595$(
88、16)$1,375$(15)$2,970$(31)Corporate debt securities1,379(9)802(4)2,181(13)Debt securities issued by U.S.government agencies2,223(4)2,223(4)Total$5,197$(29)$2,177$(19)$7,374$(48)January 29,2023 Less than 12 Months12 Months or GreaterTotal Estimated FairValueGrossUnrealizedLossEstimated FairValueGrossU
89、nrealizedLossEstimated FairValueGrossUnrealizedLoss(In millions)Debt securities issued by the U.S.Treasury$2,444$(21)$1,172$(23)$3,616$(44)Corporate debt securities1,188(7)696(5)1,884(12)Debt securities issued by U.S.government agencies1,307(2)1,307(2)Total$4,939$(30)$1,868$(28)$6,807$(58)The gross
90、unrealized losses are related to fixed income securities,driven primarily by changes in interest rates.Net realized gains and losseswere not significant for all periods presented.The amortized cost and estimated fair value of cash equivalents and marketable securities are shown below by contractual
91、maturity.July 30,2023January 29,2023Amortized CostEstimated FairValueAmortized CostEstimated FairValue(In millions)Less than one year$12,613$12,592$9,738$9,708 Due in 1-5 years3,282 3,256 3,374 3,347 Total$15,895$15,848$13,112$13,055 Restricted cash was$99 million as of July 30,2023 and primarily re
92、presented amounts due to employees.14NVIDIA CORPORATION AND SUBSIDIARIESNOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(Continued)(Unaudited)Note 8 Fair Value of Financial Assets and LiabilitiesThe fair values of our financial assets and liabilities are determined using quoted market prices of
93、identical assets or quoted market prices ofsimilar assets from active markets.We review fair value hierarchy classification on a quarterly basis.Fair Value atPricingCategoryJuly 30,2023January 29,2023(In millions)AssetsCash equivalents and marketable securities:Money market fundsLevel 1$2,348$1,777
94、Corporate debt securitiesLevel 2$5,978$4,797 Debt securities issued by the U.S.TreasuryLevel 2$3,685$4,142 Debt securities issued by U.S.government agenciesLevel 2$2,899$1,834 Certificates of depositLevel 2$690$365 Foreign government bondsLevel 2$248$140 Other assets(Investments in non-affiliated en
95、tities):Publicly-held equity securitiesLevel 1$124$11 Privately-held equity securitiesLevel 3$676$288 Liabilities(1)0.309%Notes Due 2023Level 2$1,230 0.584%Notes Due 2024Level 2$1,199$1,185 3.20%Notes Due 2026Level 2$959$966 1.55%Notes Due 2028Level 2$1,089$1,099 2.85%Notes Due 2030Level 2$1,355$1,3
96、64 2.00%Notes Due 2031Level 2$1,042$1,044 3.50%Notes Due 2040Level 2$848$870 3.50%Notes Due 2050Level 2$1,609$1,637 3.70%Notes Due 2060Level 2$406$410(1)These liabilities are carried on our Condensed Consolidated Balance Sheets at their original issuance value,net of unamortized debt discount and is
97、suance costs.15NVIDIA CORPORATION AND SUBSIDIARIESNOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(Continued)(Unaudited)Note 9-Amortizable Intangible Assets and GoodwillThe components of our amortizable intangible assets are as follows:July 30,2023January 29,2023 GrossCarryingAmountAccumulatedAm
98、ortizationNet CarryingAmountGrossCarryingAmountAccumulatedAmortizationNet CarryingAmount(In millions)Acquisition-relatedintangible assets$2,642$(1,448)$1,194$3,093$(1,614)$1,479 Patents and licensedtechnology453(252)201 446(249)197 Total intangible assets$3,095$(1,700)$1,395$3,539$(1,863)$1,676 Amor
99、tization expense associated with intangible assets was$146 million and$327 million for the second quarter and first half of fiscal year2024,respectively,and$182 million and$336 million for the second quarter and first half of fiscal year 2023,respectively.The following table outlines the estimated f
100、uture amortization expense related to the net carrying amount of intangible assets as of July 30,2023:Future Amortization Expense(In millions)Fiscal Year:2024(excluding first half of fiscal year 2024)$288 2025554 2026259 2027149 202836 2029 and thereafter109 Total$1,395 In the first half of fiscal y
101、ear 2024,goodwill increased by$58 million from an acquisition,and was assigned to our Compute&Networkingsegment.Note 10-Balance Sheet Components Certain balance sheet components are as follows:July 30,January 29,20232023Inventories(1):(In millions)Raw materials$1,632$2,430 Work in-process1,058 466 F
102、inished goods1,629 2,263 Total inventories$4,319$5,159(1)During the second quarter of fiscal years 2024 and 2023,we recorded an inventory provision of approximately$343 million and$570 million,respectively,in cost of revenue.16NVIDIA CORPORATION AND SUBSIDIARIESNOTES TO CONDENSED CONSOLIDATED FINANC
103、IAL STATEMENTS(Continued)(Unaudited)July 30,January 29,20232023Other Assets:(In millions)Prepaid supply and capacity agreements(1)$3,008$2,989 Investments in non-affiliated entities800 299 Prepaid royalties375 387 Prepaid cloud services170 23 Other148 122 Total other assets$4,501$3,820(1)As of July
104、30,2023 and January 29,2023,there were$799 million and$458 million of short-term prepaid supply and capacity agreements included in Prepaid expenses andother current assets,respectively.July 30,January 29,20232023Accrued and Other Current Liabilities:(In millions)Taxes payable$2,803$467 Customer pro
105、gram accruals1,482 1,196 Excess inventory purchase obligations(1)870 954 Accrued payroll and related expenses642 530 Deferred revenue(2)421 354 Unsettled share repurchases217 Operating leases208 176 Product warranty and return provisions168 108 Licenses and royalties144 149 Other201 186 Total accrue
106、d and other current liabilities$7,156$4,120(1)During the second quarter of fiscal years 2024 and 2023,we recorded an expense of approximately$232 million and$650 million,respectively,in cost of revenue for inventorypurchase obligations in excess of our current demand projections,and cancellation and
107、 underutilization penalties.(2)Deferred revenue primarily includes customer advances and deferrals related to license and development arrangements,support for hardware and software,and cloudservices.July 30,January 29,20232023Other Long-Term Liabilities:(In millions)Income tax payable(1)$1,350$1,204
108、 Deferred income tax373 247 Deferred revenue(2)308 218 Licenses payable127 181 Other65 63 Total other long-term liabilities$2,223$1,913(1)Income tax payable is comprised of the long-term portion of the one-time transition tax payable,unrecognized tax benefits,and related interest and penalties.(2)De
109、ferred revenue primarily includes deferrals related to support for hardware and software.17NVIDIA CORPORATION AND SUBSIDIARIESNOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(Continued)(Unaudited)Deferred RevenueThe following table shows the changes in deferred revenue during the first half of f
110、iscal years 2024 and 2023:July 30,July 31,20232022(In millions)Balance at beginning of period$572$502 Deferred revenue additions during the period713 399 Revenue recognized during the period(556)(341)Balance at end of period$729$560 Revenue allocated to remaining performance obligations,which includ
111、es deferred revenue and amounts that will be invoiced and recognized asrevenue in future periods,was$717 million as of July 30,2023.We expect to recognize approximately 44%of this revenue over the next twelvemonths and the remainder thereafter.This excludes revenue related to performance obligations
112、 for contracts with a length of one year or less.Note 11-Derivative Financial InstrumentsWe enter into foreign currency forward contracts to mitigate the impact of foreign currency exchange rate movements on our operatingexpenses.These contracts are designated as cash flow hedges for hedge accountin
113、g treatment.Gains or losses on the contracts are recordedin accumulated other comprehensive income or loss and reclassified to operating expense when the related operating expenses are recognizedin earnings or ineffectiveness should occur.We also enter into foreign currency forward contracts to miti
114、gate the impact of foreign currency movements on monetary assets and liabilitiesthat are denominated in currencies other than the U.S.dollar.These forward contracts were not designated for hedge accounting treatment.Therefore,the change in fair value of these contracts is recorded in other income or
115、 expense and offsets the change in fair value of the hedgedforeign currency denominated monetary assets and liabilities,which is also recorded in other income or expense.The table below presents the notional value of our foreign currency forward contracts outstanding:July 30,2023January 29,2023(In m
116、illions)Designated as cash flow hedges$1,138$1,128 Non-designated hedges$367$366 The unrealized gains and losses or fair value of our foreign currency forward contracts was not significant as of July 30,2023 and January 29,2023.As of July 30,2023,all designated foreign currency forward contracts mat
117、ure within 18 months.The expected realized gains and losses deferredinto accumulated other comprehensive income or loss related to foreign currency forward contracts within the next twelve months was notsignificant.During the first half of fiscal years 2024 and 2023,the impact of derivative financia
118、l instruments designated for hedge accounting treatment onother comprehensive income or loss was not significant and all such instruments were determined to be highly effective.18NVIDIA CORPORATION AND SUBSIDIARIESNOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(Continued)(Unaudited)Note 12-Debt
119、Long-Term DebtThe carrying value of our outstanding notes,the calendar year of maturity,and the associated interest rates were as follows:Carrying Value atExpectedRemaining Term(years)EffectiveInterest RateJuly 30,2023January 29,2023(In millions)0.309%Notes Due 20230.41%$1,250 0.584%Notes Due 20240.
120、90.66%1,250 1,250 3.20%Notes Due 20263.13.31%1,000 1,000 1.55%Notes Due 20284.91.64%1,250 1,250 2.85%Notes Due 20306.72.93%1,500 1,500 2.00%Notes Due 20317.92.09%1,250 1,250 3.50%Notes Due 204016.73.54%1,000 1,000 3.50%Notes Due 205026.73.54%2,000 2,000 3.70%Notes Due 206036.73.73%500 500 Unamortize
121、d debt discount and issuance costs(45)(47)Net carrying amount9,705 10,953 Less short-term portion(1,249)(1,250)Total long-term portion$8,456$9,703 All our notes are unsecured senior obligations.All existing and future liabilities of our subsidiaries will be effectively senior to the notes.Ournotes p
122、ay interest semi-annually.We may redeem each of our notes prior to maturity,subject to a make-whole premium as defined in theapplicable form of note.On June 15,2023,we repaid the 0.309%Notes Due 2023.As of July 30,2023,we were in compliance with the required covenants,which are non-financial in natu
123、re,under the outstanding notes.Commercial PaperWe have a$575 million commercial paper program to support general corporate purposes.As of July 30,2023,we had not issued anycommercial paper.Note 13-Commitments and ContingenciesPurchase ObligationsOur purchase obligations reflect our commitments to pu
124、rchase components used to manufacture our products,including long-term supply andcapacity agreements,certain software and technology licenses,other goods and services and long-lived assets.As of July 30,2023,we had outstanding inventory purchase and long-term supply and capacity obligations totaling
125、$11.15 billion.During thenormal course of business,to manage manufacturing lead times and help ensure adequate supply,we enter into agreements with contractmanufacturers that allow them to procure inventory based upon criteria as defined by us,and in certain instances,these agreements allow usthe op
126、tion to cancel,reschedule,and adjust our requirements based on our business needs prior to firm orders being19NVIDIA CORPORATION AND SUBSIDIARIESNOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(Continued)(Unaudited)placed,but these changes may result in the payment of costs incurred through the
127、date of cancellation.Other non-inventory purchaseobligations of$4.31 billion include$3.50 billion of multi-year cloud service agreements.Total future purchase commitments as of July 30,2023 are as follows:Commitments(In millions)Fiscal Year:2024(excluding first half of fiscal year 2024)$8,439 20253,
128、960 2026957 2027999 2028637 2029 and thereafter468 Total$15,460 Accrual for Product Warranty LiabilitiesThe estimated amount of product warranty liabilities was$115 million and$82 million as of July 30,2023 and January 29,2023,respectively.The estimated product returns and estimated product warranty
129、 activity consisted of the following:Three Months EndedSix Months EndedJuly 30,2023July 31,2022July 30,2023July 31,2022(In millions)Balance at beginning of period$77$55$82$46 Additions4212255138Utilization(4)(9)(22)(16)Balance at end of period$115$168$115$168 In connection with certain agreements th
130、at we have entered in the past,we have provided indemnities for matters such as tax,product,andemployee liabilities.We have included intellectual property indemnification provisions in our technology-related agreements with third parties.Maximum potential future payments cannot be estimated because
131、many of these agreements do not have a maximum stated liability.We havenot recorded any liability in our Condensed Consolidated Financial Statements for such indemnifications.LitigationSecurities Class Action and Derivative LawsuitsThe plaintiffs in the putative securities class action lawsuit,capti
132、oned 4:18-cv-07669-HSG,initially filed on December 21,2018 in the UnitedStates District Court for the Northern District of California,and titled In Re NVIDIA Corporation Securities Litigation,filed an amended complainton May 13,2020.The amended complaint asserted that NVIDIA and certain NVIDIA execu
133、tives violated Section 10(b)of the SecuritiesExchange Act of 1934,as amended,or the Exchange Act,and SEC Rule 10b-5,by making materially false or misleading statements related tochannel inventory and the impact of cryptocurrency mining on GPU demand between May 10,2017 and November 14,2018.Plaintiff
134、s alsoalleged that the NVIDIA executives who they named as defendants violated Section 20(a)of the Exchange Act.Plaintiffs sought classcertification,an award of unspecified compensatory damages,an award of reasonable costs and expenses,including attorneys fees and expertfees,and further relief as th
135、e Court may deem just and proper.On March 2,2021,the district court granted NVIDIAs motion to dismiss thecomplaint without leave to amend,entered judgment in favor of NVIDIA and closed the case.On March 30,2021,plaintiffs filed an appeal fromjudgment20NVIDIA CORPORATION AND SUBSIDIARIESNOTES TO COND
136、ENSED CONSOLIDATED FINANCIAL STATEMENTS(Continued)(Unaudited)in the United States Court of Appeals for the Ninth Circuit,case number 21-15604.On August 25,2023,a majority of a three-judge Ninth Circuitpanel affirmed in part and reversed in part the district courts dismissal of the case,with a third
137、judge dissenting on the basis that the districtcourt did not err in dismissing the case.The putative derivative lawsuit pending in the United States District Court for the Northern District of California,captioned 4:19-cv-00341-HSG,initially filed January 18,2019 and titled In re NVIDIA Corporation
138、Consolidated Derivative Litigation,was stayed pending resolution of theplaintiffs appeal in the In Re NVIDIA Corporation Securities Litigation action.On February 22,2022,the court administratively closed the case,but stated that it would reopen the case once the appeal in the In Re NVIDIA Corporatio
139、n Securities Litigation action is resolved.The lawsuitasserts claims,purportedly on behalf of us,against certain officers and directors of the Company for breach of fiduciary duty,unjust enrichment,waste of corporate assets,and violations of Sections 14(a),10(b),and 20(a)of the Exchange Act based on
140、 the dissemination of allegedly falseand misleading statements related to channel inventory and the impact of cryptocurrency mining on GPU demand.The plaintiffs are seekingunspecified damages and other relief,including reforms and improvements to NVIDIAs corporate governance and internal procedures.
141、The putative derivative actions initially filed September 24,2019 and pending in the United States District Court for the District of Delaware,Lipchitz v.Huang,et al.(Case No.1:19-cv-01795-UNA)and Nelson v.Huang,et.al.(Case No.1:19-cv-01798-UNA),remain stayed pendingresolution of the plaintiffs appe
142、al in the In Re NVIDIA Corporation Securities Litigation action.The lawsuits assert claims,purportedly on behalfof us,against certain officers and directors of the Company for breach of fiduciary duty,unjust enrichment,insider trading,misappropriation ofinformation,corporate waste and violations of
143、Sections 14(a),10(b),and 20(a)of the Exchange Act based on the dissemination of allegedlyfalse,and misleading statements related to channel inventory and the impact of cryptocurrency mining on GPU demand.The plaintiffs seekunspecified damages and other relief,including disgorgement of profits from t
144、he sale of NVIDIA stock and unspecified corporate governancemeasures.Accounting for Loss ContingenciesAs of July 30,2023,we have not recorded any accrual for contingent liabilities associated with the legal proceedings described above based onour belief that liabilities,while possible,are not probab
145、le.Further,except as specifically described above,any possible loss or range of loss inthese matters cannot be reasonably estimated at this time.We are engaged in legal actions not described above arising in the ordinary course ofbusiness and,while there can be no assurance of favorable outcomes,we
146、believe that the ultimate outcome of these actions will not have amaterial adverse effect on our operating results,liquidity or financial position.Note 14-Shareholders Equity Capital Return Program During the second quarter and first half of fiscal year 2024,we repurchased 7.5 million shares of our
147、common stock for$3.28 billion.During thesecond quarter and first half of fiscal year 2023,we repurchased 19 million and 28 million shares for$3.35 billion and$5.34 billion,respectively.Since the inception of our share repurchase program through July 30,2023,we have repurchased an aggregate of 1.11 b
148、illion shares for a totalcost of$20.40 billion.As of July 30,2023,we were authorized,subject to certain specifications,to repurchase shares of our common stock up to$3.95 billion.On August 21,2023,our Board of Directors approved an increase to our share repurchase program of an additional$25.00 bill
149、ion,without expiration.From July 31,2023 through August 24,2023,we repurchased 2 million shares for$998 million pursuant to a Rule 10b5-1trading plan.As of August 24,2023,a total of$27.95 billion was available for repurchase.Our share repurchase program aims to offset dilutionfrom shares issued to e
150、mployees.We may pursue additional share repurchases as we weigh market factors and other investment opportunities.During the second quarter and first half of fiscal year 2024,we paid$99 million and$199 million in cash dividends to our shareholders,respectively.During the second quarter and first hal
151、f of fiscal year 2023,we paid$100 million and$200 million in cash dividends to ourshareholders,respectively.Our cash dividend program and the payment of future cash dividends under that program are subject to our Board ofDirectors21NVIDIA CORPORATION AND SUBSIDIARIESNOTES TO CONDENSED CONSOLIDATED F
152、INANCIAL STATEMENTS(Continued)(Unaudited)continuing determination that the dividend program and the declaration of dividends thereunder are in the best interests of our shareholders.Note 15-Segment InformationOur Chief Executive Officer,who is considered to be our chief operating decision maker,or C
153、ODM,reviews financial information presented onan operating segment basis for purposes of making decisions and assessing financial performance.The Compute&Networking segment includes our Data Center accelerated computing platform;networking;automotive artificial intelligence,orAI,Cockpit,autonomous d
154、riving development agreements,and autonomous vehicle solutions;electric vehicle computing platforms;Jetson forrobotics and other embedded platforms;NVIDIA AI Enterprise and other software;and cryptocurrency mining processors,or CMP.The Graphics segment includes GeForce GPUs for gaming and PCs,the Ge
155、Force NOW game streaming service and related infrastructure,andsolutions for gaming platforms;Quadro/NVIDIA RTX GPUs for enterprise workstation graphics;virtual GPU software for cloud-based visual andvirtual computing;automotive platforms for infotainment systems;and Omniverse Enterprise software fo
156、r building and operating 3D internetapplications.Operating results by segment include costs or expenses that are directly attributable to each segment,and costs or expenses that are leveragedacross our unified architecture and therefore allocated between our two segments.The“All Other”category inclu
157、des the expenses that our CODM does not assign to either Compute&Networking or Graphics for purposes ofmaking operating decisions or assessing financial performance.The expenses include stock-based compensation expense,acquisition-relatedand other costs,corporate infrastructure and support costs,acq
158、uisition termination cost,intellectual property related,or IP-related and legalsettlement costs,contributions,and other non-recurring charges and benefits that our CODM deems to be enterprise in nature.Our CODM does not review any information regarding total assets on a reportable segment basis.Depr
159、eciation and amortization expensedirectly attributable to each reportable segment is included in operating results for each segment.However,our CODM does not evaluatedepreciation and amortization expense by operating segment and,therefore,it is not separately presented.There is no intersegment reven
160、ue.The accounting policies for segment reporting are the same as for our consolidated financial statements.The table below presents details of ourreportable segments and the“All Other”category.22NVIDIA CORPORATION AND SUBSIDIARIESNOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(Continued)(Unaudi
161、ted)Compute&NetworkingGraphicsAll OtherConsolidated(In millions)Three Months Ended July 30,2023 Revenue$10,402$3,105$13,507 Operating income(loss)$6,728$1,211$(1,139)$6,800 Three Months Ended July 31,2022 Revenue$3,907$2,797$6,704 Operating income(loss)$816$657$(974)$499 Six Months Ended July 30,202
162、3Revenue$14,862$5,837$20,699 Operating income(loss)$8,887$2,258$(2,204)$8,941 Six Months Ended July 31,2022Revenue$7,579$7,413$14,992 Operating income(loss)$2,422$3,133$(3,188)$2,367 Three Months EndedSix Months EndedJuly 30,2023July 31,2022July 30,2023July 31,2022(In millions)Reconciling items incl
163、uded in All Other category:Stock-based compensation expense$(842)$(649)$(1,576)$(1,227)Unallocated cost of revenue and operating expenses(163)(148)(317)(275)Acquisition-related and other costs(137)(175)(311)(324)IP-related and legal settlement costs(2)(10)(7)Acquisition termination cost (1,353)Contr
164、ibutions(2)(2)Other5 10 Total$(1,139)$(974)$(2,204)$(3,188)Revenue by geographic region is allocated to individual countries based on the billing location of the customer.End customer location may bedifferent than our customers billing location.The following table23NVIDIA CORPORATION AND SUBSIDIARIE
165、SNOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(Continued)(Unaudited)summarizes information pertaining to our revenue from customers based on the invoicing address by geographic regions:Three Months EndedSix Months EndedJuly 30,July 31,July 30,July 31,2023202220232022(In millions)Revenue:Unite
166、d States$6,043$1,988$8,428$3,921 Taiwan2,839 1,204 4,635 3,981 China(including Hong Kong)2,740 1,602 4,330 3,683 Other countries1,885 1,910 3,306 3,407 Total revenue$13,507$6,704$20,699$14,992 One data center distributor customer represented approximately 17%and 13%of total revenue for the second qu
167、arter and first half of fiscal year2024,respectively,and was attributable to the Compute&Networking segment.There were no customers with 10%or more of total revenue forthe second quarter and first half of fiscal year 2023.A large cloud service provider,or CSP,which primarily purchases indirectly thr
168、ough multiple system integrators and distributors,is estimated torepresent approximately 22%and 19%of total revenue for the second quarter and first half of fiscal year 2024,respectively,and was attributableto our Compute&Networking segment.Two customers accounted for 16%and 13%of our accounts recei
169、vable balance as of July 30,2023.Two customers accounted for 14%and11%of our accounts receivable balance as of January 29,2023.The following table summarizes information pertaining to our revenue by each of the specialized markets we serve:Three Months EndedSix Months EndedJuly 30,July 31,July 30,Ju
170、ly 31,2023202220232022(In millions)Revenue:Data Center$10,323$3,806$14,607$7,556 Gaming2,486 2,042 4,726 5,662 Professional Visualization379 496 674 1,118 Automotive253 220 549 358 OEM and Other66 140 143 298 Total revenue$13,507$6,704$20,699$14,992 24ITEM 2.MANAGEMENTS DISCUSSION AND ANALYSIS OF FI
171、NANCIAL CONDITION AND RESULTS OF OPERATIONSForward-Looking Statements This Quarterly Report on Form 10-Q contains forward-looking statements which are based on our managements beliefs and assumptions andon information currently available to our management.In some cases,you can identify forward-looki
172、ng statements by terms such as“may,”“will,”“should,”“could,”“goal,”“would,”“expect,”“plan,”“anticipate,”“believe,”“estimate,”“project,”“predict,”“potential”and similar expressionsintended to identify forward-looking statements.These statements involve known and unknown risks,uncertainties and other
173、factors,which maycause our actual results,performance,time frames or achievements to be materially different from any future results,performance,time framesor achievements expressed or implied by the forward-looking statements.We discuss many of these risks,uncertainties and other factors in thisQua
174、rterly Report on Form 10-Q and our Annual Report on Form 10-K for the fiscal year ended January 29,2023 in greater detail under theheading“Risk Factors”of such reports.Given these risks,uncertainties and other factors,you should not place undue reliance on these forward-looking statements.Also,these
175、 forward-looking statements represent our estimates and assumptions only as of the date of this filing.You shouldread this Quarterly Report on Form 10-Q completely and with the understanding that our actual future results may be materially different fromwhat we expect.We hereby qualify our forward-l
176、ooking statements by these cautionary statements.Except as required by law,we assume noobligation to update these forward-looking statements publicly,or to update the reasons actual results could differ materially from thoseanticipated in these forward-looking statements,even if new information beco
177、mes available in the future.All references to“NVIDIA,”“we,”“us,”“our”or the“Company”mean NVIDIA Corporation and its subsidiaries.2023 NVIDIA Corporation.All rights reserved.The following discussion and analysis of our financial condition and results of operations shouldbe read in conjunction with th
178、e risk factors set forth in Item 1A.“Risk Factors”of our Annual Report on Form 10-K for the fiscal year endedJanuary 29,2023 and Part II,Item 1A.“Risk Factors”of this Quarterly Report on Form 10-Q and our Condensed Consolidated FinancialStatements and related Notes thereto,as well as other cautionar
179、y statements and risks described elsewhere in this Quarterly Report on Form10-Q and our other filings with the SEC,before deciding to purchase or sell shares of our common stock.OverviewOur Company and Our BusinessesSince our founding in 1993,NVIDIA has been a pioneer in accelerated computing.Our in
180、vention of the GPU in 1999 has sparked the growth ofthe PC gaming market,redefined computer graphics,ignited the era of modern AI and has fueled industrial digitalization across markets.NVIDIAis now a full-stack computing company with data-center-scale offerings that are reshaping industry.Our two o
181、perating segments are Compute&Networking and Graphics,as described in Note 15 of the Notes to Condensed ConsolidatedFinancial Statements.Headquartered in Santa Clara,California,NVIDIA was incorporated in California in April 1993 and reincorporated in Delaware in April 1998.Recent Developments,Future
182、 Objectives and ChallengesDemand and Supply,Product Transitions,and New Products and Business ModelsDemand for our data center systems and products has surged over the last two quarters and our demand visibility extends into next year.Inorder to meet this demand,we have increased our purchase obliga
183、tions with existing suppliers,added new suppliers and entered into prepaidsupply and capacity agreements.These increased purchase volumes and number of suppliers may create more supply chain complexity andexecution risk.We expect our supply to increase each quarter through next year.We have entered
184、and expect to continue to enter into supplierand capacity arrangements.Product transitions are complex as we often ship both new and prior architecture products simultaneously and we and our channel partnersprepare to ship and support new products.We are in various stages of transitioning the archit
185、ecture of our Data Center,ProfessionalVisualization,and Gaming products.Qualification time for new products,customers anticipating product transitions and channel partners25reducing channel inventory of prior architectures ahead of new product introductions can create reductions or volatility in our
186、 revenue.Inaddition,the bring up of new product architectures is complex due to functionality challenges and quality concerns not identified in manufacturingtesting.These product quality issues may incur costs,increase our warranty costs,and delay further production of our architecture.While wehave
187、managed prior product transitions and have previously sold multiple product architectures at the same time,these transitions are difficult,may impair our ability to predict demand and impact our supply mix,and we may incur additional costs.We build technology and products for use cases and applicati
188、ons that may be new or may not yet exist such as our Omniverse platform,third-party large language models,and generative AI models.We have recently begun offering enterprise customers NVIDIA DGX cloud servicesdirectly and through our network of partners,which includes cloud-based infrastructure and
189、software and services for training and deploying AImodels,and NVIDIA AI Foundations for customizable pretrained AI models.Our demand estimates for new use cases,applications,and servicescan be incorrect and create volatility in our revenue or supply levels,and we may not be able to generate signific
190、ant revenue from these usecases,applications,and services.New technologies such as generative AI models have emerged,and while they have driven increased demandfor Data Center compute infrastructure,the long-term trajectory is unknown.Global TradeDuring the third quarter of fiscal year 2023,the U.S.
191、government,or the USG,announced license requirements that,with certain exceptions,impact exports to China(including Hong Kong and Macau)and Russia of our A100 and H100 integrated circuits,DGX or any other systems orboards which incorporate A100 or H100 integrated circuits.During the second quarter o
192、f fiscal year 2024,the USG informed us of an additionallicensing requirement for a subset of A100 and H100 products destined to certain customers and other regions,including some countries in theMiddle East.We have sold alternative products in China not subject to the license requirements,such as ou
193、r A800 or H800 offerings.Given the strength of demand for our products worldwide,we do not anticipate that additional export restrictions,if adopted,would have animmediate material impact on our financial results.However,over the long term,our results and competitive position may be harmed,and wemay
194、 be effectively excluded from all or part of the China market if there are further changes in the USGs export controls,if customers in Chinado not want to purchase our alternative product offerings,if customers purchase product from competitors,if customers develop their owninternal solution,if the
195、USG does not grant licenses in a timely manner or denies licenses to significant customers,or if we incur significanttransition costs.While we work to enhance the resiliency and redundancy of our supply chain,which is currently concentrated in the Asia-Pacific,includingChina,Hong Kong,Korea and Taiw
196、an,new export controls or changes to existing export controls could negatively impact our business.Macroeconomic FactorsMacroeconomic factors,includinginflation,increased interest rates,significant capital market volatility,global supply chain constraints and globaleconomic and geopolitical developm
197、ents,may have direct and indirect impacts on our results of operations.While difficult to isolate and quantify,these macroeconomic factors can impact our supply chain and manufacturing costs,employee wages,costs for capital equipment and value ofour investments.Our product and solution pricing strat
198、egy generally does not fluctuate with short-term changes in our costs.Within our supplychain,we continuously manage product availability and costs with our vendors.26Second Quarter of Fiscal Year 2024 SummaryThree Months Ended July 30,2023April 30,2023July 31,2022Quarter-over-QuarterChangeYear-over-
199、YearChange($in millions,except per share data)Revenue$13,507$7,192$6,704 88%101%Gross margin70.1%64.6%43.5%5.5 pts26.6 ptsOperating expenses$2,662$2,508$2,416 6%10%Operating income$6,800$2,140$499 218%1,263%Net income$6,188$2,043$656 203%843%Net income per diluted share$2.48$0.82$0.26 202%854%We spe
200、cialize in markets where our computing platforms can provide tremendous acceleration for applications.These platforms incorporateprocessors,interconnects,software,algorithms,systems,and services to deliver unique value.Our platforms address four large markets whereour expertise is critical:Data Cent
201、er,Gaming,Professional Visualization,and Automotive.Revenue for the second quarter of fiscal year 2024 was$13.51 billion,up 101%from a year ago and up 88%sequentially.Data Center revenue was up 171%from a year ago and up 141%sequentially,led by CSPs and large consumer internet companies.Strongdemand
202、 for the NVIDIA HGX platform based on our Hopper and Ampere GPU architectures was primarily driven by the development of largelanguage models and generative AI.Data Center Compute grew 195%from a year ago and 157%sequentially,largely reflecting the strong rampof our Hopper-based HGX platform.Network
203、ing was up 94%from a year ago and up 85%sequentially,primarily on strong growth in InfiniBandinfrastructure to support our HGX platform.In the second quarter of fiscal year 2024,CSPs represented slightly more than half of our estimatedData Center end demand,with large consumer internet companies bei
204、ng the next largest end demand,followed by enterprise and highperformance computing.Gaming revenue was up 22%from a year ago and up 11%sequentially,primarily reflecting demand for our GeForce RTX 40 Series GPUsbased on the NVIDIA Ada Lovelace architecture following normalization of channel inventory
205、 levels.Professional Visualization revenue was down 24%from a year ago and up 28%sequentially.The year-on-year decrease primarily reflects lowersell-in to partners following normalization of channel inventory levels.The sequential increase was primarily due to stronger enterpriseworkstation demand a
206、nd the ramp of NVIDIA RTX products based on the Ada Lovelace Architecture.Automotive revenue was up 15%from a year ago and down 15%sequentially.The year-on-year increase was primarily driven by sales of self-driving platforms.The sequential decrease primarily reflects lower overall auto demand,parti
207、cularly in China.Gross margin increased from a year ago and sequentially,primarily reflecting growth in Data Center sales.The year-on-year increase alsoreflects the impact on the year-ago gross margin from$1.34 billion in inventory provisions and related charges.Operating expenses were up 10%from a
208、year ago and up 6%sequentially,primarily driven by compensation and benefits,including stock-basedcompensation,reflecting growth in employees and compensation increases.Market Platform HighlightsData Center revenue for the second quarter of fiscal year 2024 was$10.32 billion,up 171%from a year ago.W
209、e announced that the NVIDIAGH200 Grace Hopper Superchip is available in the third quarter of fiscal year 2024;announced the NVIDIA L40S GPU-a universal data centerprocessor for compute-intensive applications,including AI training and inference,is available now;unveiled the NVIDIA MGX server referenc
210、edesign;announced NVIDIA Spectrum-X,an accelerated networking platform for AI;and partnered with a27range of companies on AI initiatives,including ServiceNow,Accenture,VMware,Snowflake,WPP,SoftBank,and Hugging Face.Gaming revenue for the second quarter of fiscal year 2024 was$2.49 billion,up 22%from
211、 a year ago.We began shipping the GeForce RTX4060 family of GPUs;and announced NVIDIA Avatar Cloud Engine for Games,a custom AI model foundry service using AI-powered naturallanguage interactions to transform games.Professional Visualization revenue for the second quarter of fiscal year 2024 was$379
212、 million,down 24%from a year ago.We announced newNVIDIA RTX GPUs for desktop workstations based on the Ada Lovelace architecture;and a major release of the NVIDIA Omniverse platform.Automotive revenue for the second quarter of fiscal year 2024 was$253 million,up 15%from a year ago.We announced that
213、NVIDIA DRIVEOrin is powering the new XPENG G6 Coupe SUVs;and announced a partnership with MediaTek,which will develop mainstream automotivesystems on chips for global OEMs integrating a new NVIDIA GPU chiplet IP for AI and graphics.Financial Information by Business Segment and Geographic DataRefer t
214、o Note 15 of the Notes to Condensed Consolidated Financial Statements for disclosure regarding segment information.Critical Accounting Policies and EstimatesRefer to Part II,Item 7,Critical Accounting Policies and Estimates of our Annual Report on Form 10-K for the fiscal year ended January 29,2023.
215、There have been no material changes to our Critical Accounting Policies and Estimates.Results of OperationsThe following table sets forth,for the periods indicated,certain items in our Condensed Consolidated Statements of Income expressed as apercentage of revenue.Three Months EndedSix Months Ended
216、July 30,2023July 31,2022July 30,2023July 31,2022Revenue100.0%100.0%100.0%100.0%Cost of revenue29.9 56.5 31.8 44.3 Gross profit70.1 43.5 68.2 55.7 Operating expenses Research and development15.1 27.2 18.9 23.0 Sales,general and administrative4.7 8.8 6.1 7.9 Acquisition termination cost 9.0 Total oper
217、ating expenses19.8 36.0 25.0 39.9 Operating income50.3 7.5 43.2 15.8 Interest income1.4 0.7 1.6 0.4 Interest expense(0.5)(1.0)(0.6)(0.9)Other,net0.4(0.1)0.2(0.1)Other income(expense),net1.3(0.4)1.2(0.6)Income before income tax51.6 7.1 44.4 15.2 Income tax expense(benefit)5.9(2.7)4.6 Net income45.7%9
218、.8%39.8%15.2%28RevenueRevenue for the second quarter and first half of fiscal year 2024 was$13.51 billion and$20.70 billion,up 101%and 38%,respectively.Revenue by Reportable SegmentsThree Months EndedSix Months Ended July 30,2023July 31,2022$Change%ChangeJuly 30,2023July 31,2022$Change%Change($in mi
219、llions)Compute&Networking$10,402$3,907$6,495 166%$14,862$7,579$7,283 96%Graphics3,105 2,797 308 11%5,837 7,413(1,576)(21)%Total$13,507$6,704$6,803 101%$20,699$14,992$5,707 38%Compute&Networking-The increase in the second quarter and first half of fiscal year 2024 compared to the second quarter and f
220、irst half offiscal year 2023 was primarily due to higher Data Center revenue.Compute GPUs grew 208%year-on-year and 112%compared to the first halfof fiscal year 2023 led by demand for NVIDIA HGX platform based on our Hopper and Ampere GPU architecture for large language models andgenerative AI.Netwo
221、rking was up 94%year-on-year and 63%compared to the first half of last year driven primarily by strong growth inInfiniBand infrastructure to support our HGX platform.Graphics-The increase in the second quarter of fiscal year 2024 compared to the second quarter of fiscal year 2023 primarily reflects
222、growth inGaming GPUs related to the demand for our GeForce RTX 40 Series GPUs based on the NVIDIA Ada Lovelace architecture followingnormalization of channel inventory levels.The decrease in the first half of fiscal year 2024 compared to the first half of fiscal year 2023 primarilyreflects 16%lower
223、Gaming GPU sales and 36%lower Professional Visualization GPU sales,due to lower sell-in to partners followingnormalization of channel inventory levels.Concentration of Revenue Revenue by geographic region is allocated to countries based on the billed location even if the revenue may be attributable
224、to end customers ina different location.Revenue from sales to customers outside of the United States accounted for 55%and 59%of total revenue for the secondquarter and first half of fiscal year 2024,respectively,and 70%and 74%of total revenue for the second quarter and first half of fiscal year 2023
225、,respectively.The increase in revenue to the United States for the second quarter and first half of fiscal year 2024 was primarily due to higherU.S.-based Data Center end demand.Our customer and partner network incorporates original equipment manufacturers,original device manufacturers,system builde
226、rs,systemintegrators,add-in board manufacturers,retailers/distributors,independent software vendors,internet and CSPs,automotive manufacturers andtier-1 automotive suppliers,mapping companies,start-ups,and other ecosystem participants.One data center distributor customer representedapproximately 17%
227、and 13%of total revenue for the second quarter and first half of fiscal year 2024,respectively,and was attributable to theCompute&Networking segment.There were no customers with 10%or more of total revenue for the second quarter and first half of fiscal year2023.A large CSP,which primarily purchases
228、 indirectly through multiple system integrators and distributors,is estimated to represent approximately22%and 19%of total revenue for the second quarter and first half of fiscal year 2024,respectively,and was attributable to our Compute&Networking segment.Our estimated Compute&Networking end custom
229、er demand is concentrated among several large CSPs and consumerinternet companies.Most of these large companies do not purchase directly from us but often purchase through multiple system integrators,distributors,and channel partners.We expect this concentration trend will continue.Gross MarginOur o
230、verall gross margin increased to 70.1%and 68.2%for the second quarter and first half of fiscal year 2024,respectively,from 43.5%and55.7%for the second quarter and first half of fiscal year 2023,respectively.The increase in the second quarter and first half of fiscal year 2024compared to second quart
231、er and first half of fiscal year 2023 was primarily due to higher revenue from Compute GPUs of 208%and 112%,respectively,and lower inventory provisions.29Provisions for inventory and excess inventory purchase obligations totaled$576 million and$709 million for the second quarter and first half offis
232、cal year 2024,respectively.Sales of inventory that was previously written off or down,or settlements of excess inventory purchase obligations,totaled$84 million and$134 million for the second quarter and first half of fiscal year 2024,respectively.As a result,the overall net effect on ourgross margi
233、n was an unfavorable impact of 3.6%and 2.8%in the second quarter and first half of fiscal year 2024,respectively.Provisions for inventory and excess inventory purchase obligations totaled$1.22 billion and$1.31 billion for the second quarter and first half offiscal year 2023,respectively.Sales of inv
234、entory that was previously written off or down,or settlements of excess inventory purchase obligations,totaled$23 million and$38 million for the second quarter and first half of fiscal year 2023,respectively.As a result,the overall net effect on ourgross margin was an unfavorable impact of 17.8%and
235、8.5%in the second quarter and first half of fiscal year 2023,respectively.Operating Expenses Three Months EndedSix Months Ended July 30,2023July 31,2022$Change%ChangeJuly 30,2023July 31,2022$Change%Change($in millions)Research and developmentexpenses$2,040$1,824$216 12%$3,916$3,443$473 14%of net rev
236、enue15.1%27.2%18.9%23.0%Sales,general and administrativeexpenses622 592 30 5%1,253 1,183 70 6%of net revenue4.7%8.8%6.1%7.9%Acquisition termination cost%1,353(1,353)(100)%of net revenue%9.0%Total operating expenses$2,662$2,416$246 10%$5,169$5,979$(810)(14)%of net revenue19.8%36.0%25.0%39.9%The incre
237、ases in research and development expenses and sales,general and administrative expenses for the second quarter and first half offiscal year 2024 were primarily driven by compensation and benefits,including stock-based compensation,reflecting employee growth andcompensation increases.Acquisition term
238、ination costWe recorded an acquisition termination cost related to the Arm transaction of$1.35 billion in fiscal year 2023 reflecting the write-off of theprepayment provided at signing.Operating IncomeOperating income for the second quarter and first half of fiscal year 2024 was$6.80 billion and$8.9
239、4 billion,respectively,up 1,263%and 278%from a year ago,respectively.Operating income by Reportable SegmentsThree Months EndedSix Months EndedJuly 30,2023July 31,2022$Change%ChangeJuly 30,2023July 31,2022$Change%Change($in millions)Compute&Networking$6,728$816$5,912 725%$8,887$2,422$6,465 267%Graphi
240、cs1,211 657 554 84%2,258 3,133(875)(28)%All Other(1,139)(974)(165)17%(2,204)(3,188)984(31)%Total$6,800$499$6,301 1,263%$8,941$2,367$6,574 278%30Compute&Networking Segment operating income increased during the second quarter and first half of fiscal year 2024 compared to thesecond quarter and first h
241、alf of fiscal year 2023 primarily due to higher revenues.Graphics-Segment operating income increased during the second quarter of fiscal year 2024 compared to the second quarter of fiscal year2023 primarily due to higher revenues of 11%.Segment operating income was also impacted by inventory provisi
242、ons which were$81 million inthe second quarter of fiscal year 2024 compared to$396 million in the second quarter of fiscal year 2023.Segment operating income decreasedduring the first half of fiscal year 2024 compared to the first half of fiscal year 2023 primarily due to lower revenues of 21%.Segme
243、nt operatingincome was also impacted by inventory provisions which were$125 million in the first half of fiscal year 2024 compared to$416 million in thefirst half of fiscal year 2023.All Other expenses increased during the second quarter of fiscal year 2024 compared to the second quarter of fiscal y
244、ear 2023 primarily due tohigher stock-based compensation expense.All Other expenses decreased during the first half of fiscal year 2024 compared to the first half offiscal year 2023 primarily due to an acquisition termination cost of$1.35 billion related to the Arm transaction in the prior year.Othe
245、r Income(Expense),NetThree Months EndedSix Months Ended July 30,2023July 31,2022$ChangeJuly 30,2023July 31,2022$Change($in millions)Interest income$187$46$141$338$64$274 Interest expense(65)(65)(131)(132)1 Other,net59(5)64 42(19)61 Other income(expense),net$181$(24)$205$249$(87)$336 Interest income
246、consists of interest earned on cash,cash equivalents and marketable securities.The increase in interest income was primarilydue to higher yields earned on our investments.Interest expense is primarily comprised of coupon interest and debt discount amortization related to our notes.Other,net,consists
247、 primarily of realized or unrealized gains and losses from investments in non-affiliated entities and the impact of changes inforeign currency rates.Change in other,net,compared to the second quarter and first half of fiscal year 2023 was primarily driven by mark-to-market gains from publicly traded
248、 equity investments.Income TaxesIncome tax was an expense of$793 million and$958 million for the second quarter and first half of fiscal year 2024,respectively,a benefit of$181 million for the second quarter of fiscal year 2023,and an expense of$6 million for the first half of fiscal year 2023.The i
249、ncome tax as apercentage of income before income tax was an expense of 11.4%and 10.4%for the second quarter and first half of fiscal year 2024,respectively,a benefit of 38.0%for the second quarter of fiscal year 2023,and an expense of 0.3%for the first half of fiscal year 2023.The increase in the ef
250、fective tax rate was primarily due to a decreased impact of tax benefits from the foreign-derived intangible incomededuction,stock-based compensation,and the U.S.federal research tax credit,relative to the increase in income before income tax.31Liquidity and Capital Resources July 30,2023January 29,
251、2023(In millions)Cash and cash equivalents$5,783$3,389 Marketable securities10,240 9,907 Cash,cash equivalents and marketable securities$16,023$13,296 Six Months EndedJuly 30,2023July 31,2022(In millions)Net cash provided by operating activities$9,259$3,001 Net cash provided by(used in)investing act
252、ivities$(1,287)$4,230 Net cash used in financing activities$(5,479)$(6,208)As of July 30,2023,we had$16.02 billion in cash,cash equivalents,and marketable securities,an increase of$2.73 billion from the end of fiscalyear 2023.Our investment policy requires the purchase of highly rated fixed income s
253、ecurities,the diversification of investment types and creditexposures,and certain maturity limits on our portfolio.Cash provided by operating activities increased in the first half of fiscal year 2024 compared to the first half of fiscal year 2023,primarily due tohigher revenue and lower inventory,p
254、artially offset by higher accounts receivable.Accounts receivable in the second quarter of fiscal year 2024benefited by approximately$1.25 billion from customer payments received ahead of the invoice due date.Cash used in investing activities increased in the first half of fiscal year 2024 compared
255、to the first half of fiscal year 2023,primarily driven bylower marketable securities sales and maturities,partially offset by lower purchases of marketable securities.Cash used in financing activities decreased in the first half of fiscal year 2024 compared to the first half of fiscal year 2023,whic
256、h primarilyreflects lower share repurchases partially offset by a debt repayment in the second quarter of fiscal year 2024.LiquidityOur primary sources of liquidity are our cash,cash equivalents,and marketable securities,and the cash generated by our operations.As ofJuly 30,2023,we had$16.02 billion
257、 in cash,cash equivalents,and marketable securities.Our marketable securities consist of debt securitiesissued by the USG and its agencies,highly rated corporations and financial institutions,and foreign government entities,as well as certificates ofdeposit issued by highly rated financial instituti
258、ons.These marketable securities are primarily denominated in U.S.dollars.Refer to Note 7 of theNotes to Condensed Consolidated Financial Statements for additional information.We believe that we have sufficient liquidity to meet ouroperating requirements for at least the next twelve months,and for th
259、e foreseeable future,including our debt obligations,future supplyobligations and vendor and supplier prepayments.We continuously evaluate our liquidity and capital resources,including our access to externalcapital,to ensure we can finance future capital requirements.Except for approximately$1.38 bil
260、lion of cash,cash equivalents,and marketable securities held outside the U.S.for which we have not accruedany related foreign or state taxes if we repatriate these amounts to the U.S.,substantially all of our cash,cash equivalents and marketablesecurities held outside of the U.S.as of July 30,2023 a
261、re available for use in the U.S.without incurring additional U.S.federal income taxes.Weexpect to pay approximately$3.81 billion in cash taxes in the third quarter of fiscal year 2024 as we had previously deferred our federal incometax payments due to the disaster relief made available by the Intern
262、al Revenue Service for certain California taxpayers.Primarily based upon increased cash tax payments,we expect that our cash flow from operations will decline in the third quarter of fiscal year2024 compared to the second quarter of fiscal year 2024.32Capital Return to ShareholdersDuring the second
263、quarter and first half of fiscal year 2024,we returned$3.28 billion in share repurchases and$99 million and$199 million,respectively,in cash dividends.From July 31,2023 through August 24,2023,we repurchased 2 million shares for$998 million pursuant to aRule 10b5-1 trading plan.Our cash dividend prog
264、ram and the payment of future cash dividends under that program are subject to the continuing determination by ourBoard of Directors that the dividend program and the declaration of dividends thereunder are in the best interests of our shareholders.As of July 30,2023,we were authorized,subject to ce
265、rtain specifications,to repurchase additional shares of our common stock up to$3.95billion.On August 21,2023,our Board of Directors approved an increase to our share repurchase program of an additional$25.00 billion,without expiration.As of August 24,2023,a total of$27.95 billion was available for r
266、epurchase.Our share repurchase program aims to offsetdilution from shares issued to employees.We may pursue additional share repurchases as we weigh market factors and other investmentopportunities.We plan to continue share repurchases this fiscal year.The U.S.Inflation Reduction Act of 2022 was ena
267、cted on August 16,2022 and requires a 1%excise tax on certain share repurchases in excessof shares issued for employee compensation made after December 31,2022.We do not expect this provision to have a material effect on ourconsolidated financial statements.Outstanding Indebtedness and Commercial Pa
268、perOur aggregate debt maturities as of July 30,2023,by year payable,are as follows:July 30,2023(In millions)Due in one year$1,250 Due in one to five years2,250 Due in five to ten years2,750 Due in greater than ten years3,500 Unamortized debt discount and issuance costs(45)Net carrying amount9,705 Le
269、ss short-term portion(1,249)Total long-term portion$8,456 We have a$575 million commercial paper program to support general corporate purposes.As of July 30,2023,we had not issued anycommercial paper.Material Cash Requirements and Other ObligationsWe have unrecognized tax benefits of$1.25 billion,wh
270、ich includes related interest and penalties of$128 million recorded in non-current incometax payable as of July 30,2023.We are unable to reasonably estimate the timing of any potential tax liability,interest payments,or penalties inindividual years due to uncertainties in the underlying income tax p
271、ositions and the timing of the effective settlement of such tax positions.Weare currently under examination by the Internal Revenue Service for our fiscal years 2018 and 2019.Refer to Note 6 of the Notes to CondensedConsolidated Financial Statements for further information.Other than the contractual
272、 obligations described above,there were no material changes outside the ordinary course of business in ourcontractual obligations from those disclosed in our Annual Report on Form 10-K for the fiscal year ended January 29,2023.Refer to Item 7,“Managements Discussion and Analysis of Financial Conditi
273、on and Results of Operations-Liquidity and Capital Resources”in our AnnualReport on Form 10-K for the fiscal year ended January 29,2023 for a description of our contractual obligations.For a description of ouroperating lease obligations,long-term debt,and purchase obligations,refer to Note 3,Note 12
274、,and Note 13 of the Notes to CondensedConsolidated Financial Statements,respectively.33Climate ChangeTo date,there has been no material impact to our results of operations associated with global sustainability regulations,compliance,costs fromsourcing renewable energy or climate-related business tre
275、nds.Adoption of New and Recently Issued Accounting PronouncementsThere has been no adoption of any new and recently issued accounting pronouncements.ITEM 3.QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKInvestment and Interest Rate RiskFinancial market risks related to investment and inte
276、rest rate risk are described in Part II,Item 7A,“Quantitative and Qualitative DisclosuresAbout Market Risk”in our Annual Report on Form 10-K for the fiscal year ended January 29,2023.As of July 30,2023,there have been nomaterial changes to the financial market risks described as of January 29,2023.F
277、oreign Exchange Rate RiskThe impact of foreign currency transactions related to foreign exchange rate risk is described in Part II,Item 7A,“Quantitative and QualitativeDisclosures About Market Risk”in our Annual Report on Form 10-K for the fiscal year ended January 29,2023.As of July 30,2023,there h
278、avebeen no material changes to the foreign exchange rate risks described as of January 29,2023.ITEM 4.CONTROLS AND PROCEDURESControls and ProceduresDisclosure Controls and ProceduresBased on their evaluation as of July 30,2023,our management,including our Chief Executive Officer and Chief Financial
279、Officer,has concludedthat our disclosure controls and procedures(as defined in Exchange Act Rule 13a-15(e)and 15d-15(e)were effective to provide reasonableassurance.Changes in Internal Control Over Financial ReportingThere were no changes that occurred during the second quarter of fiscal year 2024 t
280、hat have materially affected,or are reasonably likely tomaterially affect,our internal control over financial reporting.In fiscal year 2022,we began an upgrade of our enterprise resource planning,orERP,system,which will update much of our existing core financial systems.The ERP system is designed to
281、 accurately maintain our financialrecords used to report operating results.The upgrade will occur in phases.We will continue to evaluate each quarter whether there are changesthat materially affect our internal control over financial reporting.Inherent Limitations on Effectiveness of ControlsOur man
282、agement,including our Chief Executive Officer and Chief Financial Officer,does not expect that our disclosure controls and proceduresor our internal controls,will prevent all error and all fraud.A control system,no matter how well conceived and operated,can provide onlyreasonable,not absolute,assura
283、nce that the objectives of the control system are met.Further,the design of a control system must reflect thefact that there are resource constraints,and the benefits of controls must be considered relative to their costs.Because of the inherent limitationsin all control systems,no evaluation of con
284、trols can provide absolute assurance that all control issues and instances of fraud,if any,withinNVIDIA have been detected.PART II.OTHER INFORMATIONITEM 1.LEGAL PROCEEDINGSRefer to Part I,Item 1,Note 13 of the Notes to Condensed Consolidated Financial Statements for a discussion of significant devel
285、opments in ourlegal proceedings since January 29,2023.Also refer to Item 3,“Legal Proceedings”in our Annual Report on Form 10-K for the fiscal year endedJanuary 29,2023 for a prior discussion of our legal proceedings.34ITEM 1A.RISK FACTORSOther than the risk factors listed below,there have been no m
286、aterial changes from the risk factors previously described under Item 1A of ourAnnual Report on Form 10-K for the fiscal year ended January 29,2023 and Item 1A of our Quarterly Report on Form 10-Q for the fiscal quarterended April 30,2023.Purchasing or owning NVIDIA common stock involves investment
287、risks including,but not limited to,the risks described in Item 1A of our AnnualReport on Form 10-K for the fiscal year ended January 29,2023,in Item 1A of our Quarterly Report on Form 10-Q for the fiscal quarter endedApril 30,2023,and below.Additionally,any one of those risks could harm our business
288、,financial condition and results of operations orreputation,which could cause our stock price to decline.Additional risks,trends and uncertainties not presently known to us or that we currentlybelieve are immaterial may also harm our business,financial condition,results of operations or reputation.F
289、ailure to meet the evolving needs of our industry and markets may adversely impact our financial results.Our accelerated computing platforms experience rapid changes in technology,customer requirements,competitive products,and industrystandards.Our success depends on our ability to:timely identify i
290、ndustry changes,adapt our strategies,and develop new or enhance and maintain existing products and technologies thatmeet the evolving needs of these markets,including due to unexpected changes in industry standards or disruptive technologicalinnovation that could render our products incompatible wit
291、h products developed by other companies;develop or acquire new products and technologies through investments in research and development;launch new offerings with new business models including software,services and cloud solutions,as well as software-,infrastructure-,orplatform-as-a-service solution
292、s;expand the ecosystem for our products and technologies;meet evolving and prevailing customer and industry safety,security,reliability expectations,and compliance standards;manage product and software lifecycles to maintain customer and end user satisfaction;develop,acquire,and maintain the interna
293、l and external infrastructure needed to scale our business,including acquisition integrations,customer support,e-commerce,IP licensing capabilities and cloud service capacity;andcomplete technical,financial,operational,compliance,sales and marketing investments for the above activities.We have inves
294、ted in research and development in markets where we have a limited operating history,which may not produce meaningfulrevenue for several years,if at all.If we fail to develop or monetize new products and technologies,or if they do not become widely adopted,ourfinancial results could be adversely aff
295、ected.Obtaining design wins may involve a lengthy process and depend on our ability to anticipate andprovide features and functionality that customers will demand.They also do not guarantee revenue.Failure to obtain a design win may preventus from obtaining future design wins in subsequent generatio
296、ns.We cannot ensure that the products and technologies we bring to market willprovide value to our customers and partners.If we fail any of these key success criteria,our financial results may be harmed.We have recently begun offering enterprise customers NVIDIA DGX cloud services directly and throu
297、gh our network of partners,which includescloud-based infrastructure and software and services for training and deploying AI models,and NVIDIA AI Foundations for customizablepretrained AI models.We have partnered with CSPs to host these software and services in their data centers,and we entered and m
298、ay continueto enter into multi-year cloud service agreements to support these offerings and our research and development activities.The timing andavailability of these cloud services has changed and may continue to change,impacting our revenue,expenses and development timelines.NVIDIA DGX cloud serv
299、ices may not be successful and will take time,resources and investment.We also offer or plan to offer standalonesoftware35solutions including NVIDIA AI Enterprise,NVIDIA Omniverse,NVIDIA DRIVE,and several other software solutions.These new business modelsor strategies may not be successful and we ma
300、y fail to sell any meaningful standalone software or services.We may incur significant costs andmay not achieve any significant revenue from these offerings.Failure to estimate customer demand properly has led and could lead to mismatches between supply and demand.We use third parties to manufacture
301、 and assemble our products,and we have had and may in the future have long manufacturing lead times.We are not provided guaranteed wafer,component and capacity supply,and our supply deliveries and production may be non-linear within aquarter or year.If our estimates of customer demand are ultimately
302、 inaccurate,as we have experienced in the past,there could be a significantmismatch between supply and demand.This mismatch has resulted in both product shortages and excess inventory,has varied across ourmarket platforms,and has significantly harmed our financial results.We build finished products
303、and maintain inventory in advance of anticipated demand.While we have in the past entered and may in the futureenter into long-term supply and capacity commitments,we may not be able to secure sufficient commitments for capacity to address ourbusiness needs or our long-term demand expectations may c
304、hange.Additionally,our ability to sell certain products has been and could beimpeded if components from third parties that are necessary for the finished product are not available.This risk may increase as a result of ourplatform strategy.In periods of shortages impacting the semiconductor industry
305、and/or limited supply or capacity in our supply chain,the leadtimes on our orders may be extended.We have previously experienced extended lead times of more than 12 months.We have paid premiumsand provided deposits to secure future supply and capacity,which have increased our product costs and may c
306、ontinue to do so.We may nothave the ability to reduce our supply commitments at the same rate or at all if our revenue declines.Many additional factors have caused and/or could in the future cause us to either underestimate or overestimate our customers future demandfor our products,or otherwise cau
307、se a mismatch between supply and demand for our products and impact the timing and volume of our revenue,including:competing technologies and competitor product releases and announcements;changes in business and economic conditions resulting in decreased end demand;sudden or sustained government loc
308、kdowns or actions to control case spread of global or local health issues;rapidly changing technology or customer requirements;time to market;new product introductions and transitions resulting in less demand for existing products;new or unexpected end use cases;increase in demand for competitive pr
309、oducts,including competitive actions;business decisions made by third parties;the demand for accelerated or AI-related cloud services,including our own software and NVIDIA DGX cloud services;changes that impact the ecosystem for the architectures underlying our products and technologies;the demand f
310、or our products relating to cryptocurrency mining,our Omniverse platform,third-party large language models andgenerative AI models;orgovernment actions or changes in governmental policies,such as increased restrictions on gaming usage.Demand for our data center systems and products has surged over t
311、he last two quarters and our demand visibility extends into next year.Inorder to meet this demand,we have increased our purchase obligations36with existing suppliers,added new suppliers,and entered into prepaid supply and capacity agreements.These increased purchase volumes andnumber of suppliers ma
312、y create more supply chain complexity and execution risk.We expect our supply to increase each quarter through nextyear.We have entered and expect to continue to enter into supplier and capacity arrangements.We may incur inventory provisions orimpairments if our inventory or supply and capacity comm
313、itments are impacted by changes in demand for our products.Our customer orders and longer-term demand estimates may change or may not be correct,as we have experienced in the past.Producttransitions are complex and can impact our revenue as we often ship both new and prior architecture products simu
314、ltaneously and we and ourchannel partners prepare to ship and support new products.Our architecture transitions of Data Center,Professional Visualization,and Gamingproducts may impair our ability to predict demand and impact our supply mix.Qualification time for new products,customers anticipating p
315、roducttransitions and channel partners reducing channel inventory of prior architectures ahead of new product introductions can create reductions orvolatility in our revenue.We have experienced and may in the future experience reduced demand for current generation architectures whencustomers anticip
316、ate transitions,and we may be unable to sell multiple product architectures at the same time for current and future architecturetransitions.If we are unable to execute our architectural transitions as planned for any reason,our financial results may be negatively impacted.In addition,the bring up of
317、 new product architectures is complex due to functionality challenges and quality concerns not identified inmanufacturing testing.These product quality issues may incur costs,increase our warranty costs,and delay further production of ourarchitecture.While we have managed prior product transitions a
318、nd have previously sold multiple product architectures at the same time,thesetransitions are difficult,and we may incur additional costs.We sell most of our products through channel partners,who sell to distributors,retailers,and/or end customers.As a result,the decisions madeby our channel partners
319、,distributors,retailers,and in response to changing market conditions and changes in end user demand for our productshave impacted and could in the future continue to impact our ability to properly forecast demand,particularly as they are based on estimatesprovided by various downstream parties.If w
320、e underestimate our customers future demand for our products,our foundry partners may not have adequate lead-time or capacity toincrease production and we may not be able to obtain sufficient inventory to fill orders on a timely basis.Even if we are able to increaseproduction levels to meet customer
321、 demand,we may not be able to do so in a timely manner,or our contract manufacturers may experiencesupply constraints.If we cannot procure sufficient supply to meet demand or otherwise fail to fulfill our customers orders on a timely basis,or atall,our customer relationships could be damaged,we coul
322、d lose revenue and market share and our reputation could be harmed.Additionally,since some of our products are part of a complex data center buildout,supply constraints or availability issues with respect to any onecomponent have had and may have a broader revenue impact.If we overestimate our custo
323、mers future demand for our products,or if customers cancel or defer orders or choose to purchase from ourcompetitors,we may not be able to reduce our inventory or other contractual purchase commitments.In the past,we have experienced areduction in average selling prices,including due to channel pric
324、ing programs that we have implemented and may continue to implement,as aresult of our overestimation of future demand,and we may need to continue these reductions.We have had to increase prices for certain of ourproducts as a result of our suppliers increase in prices,and we may need to continue to
325、do so for other products in the future.We have alsowritten-down our inventory,incurred cancellation penalties,and recorded impairments.These impacts were amplified by our placement of non-cancellable and non-returnable purchasing terms,well in advance of our historical lead times and could be exacer
326、bated if we need to makechanges to the design of future products.The risk of these impacts has increased and may continue to increase as our purchase obligations andprepaids have grown and are expected to continue to grow and become a greater portion of our total supply.All of these factors may nega
327、tivelyimpact our gross margins and financial results.We build technology and products for use cases and applications that may be new or may not yet exist,such as NVIDIA DGX cloud services,ourOmniverse platform,third-party large language models and generative AI models.Our demand estimates for new us
328、e cases,applications,andservices can be incorrect and create volatility in our revenue or supply levels,and we may not be able to generate significant revenue from theseuse cases,applications,and services.New technologies such as generative AI models have emerged,and while they have driven increased
329、demand for Data Center compute infrastructure,the long-term trajectory is37unknown.Because our products may be used in multiple use cases and applications,it is difficult for us to estimate with any reasonable degreeof precision the impact of generative AI models on our reported revenue or forecaste
330、d demand.Additionally,we expect to start shipping our CPUproduct offerings,the Grace CPU and Grace Hopper Superchips,in the third quarter of fiscal year 2024.Our ability to adequately predict ourCPU demand may create volatility in our revenue or supply levels.Challenges in estimating demand could be
331、come more pronounced or volatile in the future on both a global and regional basis.Extended leadtimes may occur if we experience other supply constraints caused by natural disasters,pandemics or other events.In addition,geopoliticaltensions,such as those involving Taiwan and China,which comprise a s
332、ignificant portion of our revenue and where we have suppliers,contractmanufacturers,and assembly partners who are critical to our supply continuity,could have a material adverse impact on us.The use of our GPUs other than that for which they were designed and marketed,including new and unexpected us
333、e cases,has impacted andcan in the future impact demand for our products,including by leading to inconsistent spikes and drops in demand.For example,several yearsago,our Gaming GPUs began to be used for mining digital currencies such as Ethereum.It is difficult for us to estimate with any reasonabledegree of precision the past or current impact of cryptocurrency mining,or forecast the future impac