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1、 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington,D.C.20549 FORM 10-Q QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended October 29,2023 OR TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)OF THE SECURITIES EXCHANGE ACT OF
2、 1934 Commission file number:0-23985 NVIDIA CORPORATION(Exact name of registrant as specified in its charter)Delaware 94-3177549(State or other jurisdiction of(I.R.S.Employer incorporation or organization)Identification No.)2788 San Tomas Expressway,Santa Clara,California 95051(Address of principal
3、executive offices)(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 class Trading Symbol(s)Name of each exchange on which
4、registered Common Stock,$0.001 par value per share NVDA The Nasdaq Global Select Market Indicate 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 during the preceding 12 months(or for such shorter period th
5、at the registrant was required to file such reports),and(2)has been subject to such filing requirements for the 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 of Regulation S-T(2
6、32.405 of this chapter)during 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 an eme
7、rging growth company.See the definitions of“large accelerated filer,”“accelerated filer,”“smaller reporting company,”and“emerging growth company”in Rule 12b-2 of the Exchange Act.Large accelerated filer Accelerated filer Non-accelerated filer Smaller reporting company Emerging growth company If an e
8、merging growth company,indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a)of the Exchange Act.Indicate by check mark whether the registrant is a shell co
9、mpany(as defined in Rule 12b-2 of the Exchange Act).Yes No The number of shares of common stock,$0.001 par value,outstanding as of November 17,2023,was 2.47 billion.NVIDIA CORPORATION FORM 10-Q FOR THE QUARTER ENDED OCTOBER 29,2023 TABLE OF CONTENTS Page PART I:FINANCIAL INFORMATION Item 1.Financial
10、 Statements(Unaudited)a)Condensed Consolidated Statements of Income for the three and nine months ended October 29,2023 and October 30,2022 3 b)Condensed Consolidated Statements of Comprehensive Income for the three and nine months ended October 29,2023 and October 30,2022 4 c)Condensed Consolidated
11、 Balance Sheets as of October 29,2023 and January 29,2023 5 d)Condensed Consolidated Statements of Shareholders Equity for the three and nine months ended October 29,2023 and October 30,2022 6 e)Condensed Consolidated Statements of Cash Flows for the nine months ended October 29,2023 and October 30,
12、2022 8 f)Notes to Condensed Consolidated Financial Statements 9 Item 2.Managements Discussion and Analysis of Financial Condition and Results of Operations 25 Item 3.Quantitative and Qualitative Disclosures About Market Risk 35 Item 4.Controls and Procedures 35 PART II:OTHER INFORMATION Item 1.Legal
13、 Proceedings 35 Item 1A.Risk Factors 36 Item 2.Unregistered Sales of Equity Securities,Use of Proceeds,and Issuer Purchases of Equity Securities 45 Item 5.Other Information 46 Item 6.Exhibits 47 Signature 48 WHERE YOU CAN FIND MORE INFORMATION Investors and others should note that we announce materi
14、al financial information to our investors using our investor relations website,press releases,SEC filings and public conference calls and webcasts.We also use the following social media channels as a means of disclosing information about the company,our products,our planned financial and other annou
15、ncements and attendance at upcoming investor and industry conferences,and other matters,and for complying with our disclosure obligations under Regulation FD:NVIDIA Company Blog(http:/)NVIDIA LinkedIn Page(http:/ Facebook Page(https:/ Instagram Page(https:/ Twitter Account(https:/ addition,investors
16、 and others can view NVIDIA videos on YouTube(https:/www.YouT information we post through these social media channels may be deemed material.Accordingly,investors should monitor these accounts and the blog,in addition to following our press releases,SEC filings and public conference calls and webcas
17、ts.This list may be updated from time to time.The information we post through these channels is not a part of this Quarterly Report on Form 10-Q.These channels may be updated from time to time on NVIDIAs investor relations website.2 PART I.FINANCIAL INFORMATION ITEM 1.FINANCIAL STATEMENTS(UNAUDITED)
18、NVIDIA CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF INCOME(In millions,except per share data)(Unaudited)Three Months Ended Nine Months Ended October 29,October 30,October 29,October 30,2023 2022 2023 2022 Revenue$18,120$5,931$38,819$20,923 Cost of revenue 4,720 2,754 11,309 9,40
19、0 Gross profit 13,400 3,177 27,510 11,523 Operating expenses Research and development 2,294 1,945 6,210 5,387 Sales,general and administrative 689 631 1,942 1,815 Acquisition termination cost 1,353 Total operating expenses 2,983 2,576 8,152 8,555 Operating income 10,417 601 19,358 2,968 Interest inc
20、ome 234 88 572 152 Interest expense(63)(65)(194)(198)Other,net(66)(11)(24)(29)Other income(expense),net 105 12 354 (75)Income before income tax 10,522 613 19,712 2,893 Income tax expense(benefit)1,279 (67)2,237 (61)Net income$9,243$680$17,475$2,954 Net income per share:Basic$3.75$0.27$7.07$1.18 Dilu
21、ted$3.71$0.27$7.01$1.17 Weighted average shares used in per share computation:Basic 2,468 2,483 2,470 2,495 Diluted 2,494 2,499 2,494 2,517 See accompanying Notes to Condensed Consolidated Financial Statements.3 NVIDIA CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE I
22、NCOME(In millions)(Unaudited)Three Months Ended Nine Months Ended October 29,October 30,October 29,October 30,2023 2022 2023 2022 Net income$9,243$680$17,475$2,954 Other comprehensive loss,net of tax Available-for-sale securities:Net change in unrealized gain(loss)(18)7 (53)Reclassification adjustme
23、nts for net realized gain included in net income 1 Net change in unrealized gain(loss)(18)7 (52)Cash flow hedges:Net change in unrealized loss(23)(14)(14)(44)Reclassification adjustments for net realized loss included in net income(14)(1)(38)(16)Net change in unrealized loss(37)(15)(52)(60)Other com
24、prehensive loss,net of tax(37)(33)(45)(112)Total comprehensive income$9,206$647$17,430$2,842 See accompanying Notes to Condensed Consolidated Financial Statements.4 NVIDIA CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS(In millions)(Unaudited)October 29,January 29,2023 2023 ASSETS
25、 Current assets:Cash and cash equivalents$5,519$3,389 Marketable securities 12,762 9,907 Accounts receivable,net 8,309 3,827 Inventories 4,779 5,159 Prepaid expenses and other current assets 1,289 791 Total current assets 32,658 23,073 Property and equipment,net 3,844 3,807 Operating lease assets 1,
26、316 1,038 Goodwill 4,430 4,372 Intangible assets,net 1,251 1,676 Deferred income tax assets 5,982 3,396 Other assets 4,667 3,820 Total assets$54,148$41,182 LIABILITIES AND SHAREHOLDERS EQUITY Current liabilities:Accounts payable$2,380$1,193 Accrued and other current liabilities 5,472 4,120 Short-ter
27、m debt 1,249 1,250 Total current liabilities 9,101 6,563 Long-term debt 8,457 9,703 Long-term operating lease liabilities 1,091 902 Other long-term liabilities 2,234 1,913 Total liabilities 20,883 19,081 Commitments and contingencies-see Note 13 Shareholders equity:Preferred stock Common stock 2 2 A
28、dditional paid-in capital 12,991 11,971 Accumulated other comprehensive loss(88)(43)Retained earnings 20,360 10,171 Total shareholders equity 33,265 22,101 Total liabilities and shareholders equity$54,148$41,182 See accompanying Notes to Condensed Consolidated Financial Statements.5 NVIDIA CORPORATI
29、ON AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS EQUITY FOR THE THREE MONTHS ENDED OCTOBER 29,2023 AND OCTOBER 30,2022(Unaudited)Common Stock Outstanding Additional Paid-in Capital Accumulated Other Comprehensive Loss Retained Earnings Total Shareholders Equity(In millions,excep
30、t per share data)Shares Amount Balances,July 30,2023 2,469$2$12,629$(51)$14,921$27,501 Net income 9,243 9,243 Other comprehensive loss (37)(37)Issuance of common stock from stock plans 7 157 157 Tax withholding related to vesting of restricted stock units(2)(764)(764)Shares repurchased(8)(14)(3,705)
31、(3,719)Cash dividends declared and paid($0.04 per common share)(99)(99)Stock-based compensation 983 983 Balances,October 29,2023 2,466$2$12,991$(88)$20,360$33,265 Balances,July 31,2022 2,489$2$10,968$(90)$12,971$23,851 Net income 680 680 Other comprehensive loss (33)(33)Issuance of common stock from
32、 stock plans 9 143 143 Tax withholding related to vesting of restricted stock units(2)(294)(294)Shares repurchased(28)(1)(3,646)(3,647)Cash dividends declared and paid($0.04 per common share)(100)(100)Stock-based compensation 749 749 Balances,October 30,2022 2,468$2$11,565$(123)$9,905$21,349 See acc
33、ompanying Notes to Condensed Consolidated Financial Statements.6 NVIDIA CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS EQUITY FOR THE NINE MONTHS ENDED OCTOBER 29,2023 AND OCTOBER 30,2022(Unaudited)Common Stock Outstanding Additional Paid-in Capital Accumulated Other
34、Comprehensive Loss Retained Earnings Total Shareholders Equity(In millions,except per share data)Shares Amount Balances,January 29,2023 2,466$2$11,971$(43)$10,171$22,101 Net income 17,475 17,475 Other comprehensive loss (45)(45)Issuance of common stock from stock plans 21 403 403 Tax withholding rel
35、ated to vesting of restricted stock units(5)(1,942)(1,942)Shares repurchased(16)(15)(6,990)(7,005)Cash dividends declared and paid($0.12 per common share)(296)(296)Stock-based compensation 2,574 2,574 Balances,October 29,2023 2,466$2$12,991$(88)$20,360$33,265 Balances,January 30,2022 2,506$3$10,385$
36、(11)$16,235$26,612 Net income 2,954 2,954 Other comprehensive loss (112)(112)Issuance of common stock from stock plans 24 349 349 Tax withholding related to vesting of restricted stock units(6)(1,131)(1,131)Shares repurchased(56)(1)(3)(8,984)(8,988)Cash dividends declared and paid($0.12 per common s
37、hare)(300)(300)Stock-based compensation 1,965 1,965 Balances,October 30,2022 2,468$2$11,565$(123)$9,905$21,349 See accompanying Notes to Condensed Consolidated Financial Statements.7 NVIDIA CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS(In millions)(Unaudited)Nine Month
38、s Ended October 29,October 30,2023 2022 Cash flows from operating activities:Net income$17,475$2,954 Adjustments to reconcile net income to net cash provided by operating activities:Stock-based compensation expense 2,555 1,971 Depreciation and amortization 1,121 1,118 Losses on investments in non-af
39、filiates 24 35 Deferred income taxes(2,411)(1,517)Acquisition termination cost 1,353 Other(170)(27)Changes in operating assets and liabilities,net of acquisitions:Accounts receivable(4,482)(258)Inventories 405 (1,848)Prepaid expenses and other assets(337)(1,307)Accounts payable 1,250 (358)Accrued an
40、d other current liabilities 953 1,175 Other long-term liabilities 208 102 Net cash provided by operating activities 16,591 3,393 Cash flows from investing activities:Proceeds from maturities of marketable securities 8,001 16,792 Proceeds from sales of marketable securities 1,806 Purchases of marketa
41、ble securities(10,688)(9,764)Purchases related to property and equipment and intangible assets(815)(1,324)Acquisitions,net of cash acquired(83)(49)Investments in non-affiliates and other,net(872)(83)Net cash provided by(used in)investing activities(4,457)7,378 Cash flows from financing activities:Pr
42、oceeds related to employee stock plans 403 349 Payments related to repurchases of common stock(6,874)(8,826)Repayment of debt(1,250)Payments related to tax on restricted stock units(1,942)(1,131)Dividends paid(296)(300)Principal payments on property and equipment and intangible assets(44)(54)Other(1
43、)1 Net cash used in financing activities(10,004)(9,961)Change in cash,cash equivalents,and restricted cash 2,130 810 Cash,cash equivalents,and restricted cash at beginning of period 3,389 1,990 Cash,cash equivalents,and restricted cash at end of period$5,519$2,800 Supplemental disclosure of cash flo
44、w information:Cash paid for income taxes,net$4,676$1,372 See accompanying Notes to Condensed Consolidated Financial Statements.8 NVIDIA CORPORATION AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(Unaudited)Note 1-Summary of Significant Accounting Policies Basis of Presentation
45、The accompanying unaudited condensed consolidated financial statements were prepared in accordance with accounting principles generally accepted 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 of Securities and Excha
46、nge Commission,or SEC,Regulation S-X.The January 29,2023 consolidated balance sheet was derived from our audited consolidated 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
47、by U.S.GAAP.In the opinion of management,all adjustments,consisting only of normal recurring adjustments considered necessary for a fair statement of results of operations and financial position,have been included.The results for the interim periods presented are not necessarily indicative of the re
48、sults expected for any future period.The following information should be read in conjunction with the audited consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the fiscal year ended January 29,2023.Significant Accounting Policies There have been no ma
49、terial changes to our significant accounting policies disclosed in Note 1-Organization and Summary of Significant Accounting Policies,of the Notes to the Consolidated Financial Statements included in our Annual Report on Form 10-K for the fiscal year ended January 29,2023.Fiscal Year We operate on a
50、 52-or 53-week year,ending on the last Sunday in January.Fiscal years 2024 and 2023 are both 52-week years.The third quarters of fiscal years 2024 and 2023 were both 13-week quarters.Reclassifications Certain prior fiscal year balances have been reclassified to conform to the current fiscal year pre
51、sentation.Principles of Consolidation Our condensed consolidated financial statements include the accounts of NVIDIA Corporation and our wholly-owned subsidiaries.All intercompany balances and transactions have been eliminated in consolidation.Use of Estimates The preparation of financial statements
52、 in conformity with U.S.GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the repor
53、ting period.Actual results could differ materially from our estimates.On an on-going basis,we evaluate our estimates,including those related to revenue recognition,cash equivalents and marketable securities,accounts receivable,inventories,income taxes,goodwill,stock-based compensation,litigation,inv
54、estigation and settlement costs,restructuring and other charges,property,plant,and equipment,and other contingencies.These estimates are based on historical facts and various other assumptions that we believe are reasonable.In February 2023,we completed an assessment of the useful lives of our prope
55、rty,plant,and equipment.Based on advances in technology and usage rate,we increased the estimated useful life of a majority of our server,storage,and network equipment from three to a range of four to five years,and our assembly and test equipment from five to seven years.This change in accounting e
56、stimate became effective at the beginning of fiscal year 2024.Based on the carrying amounts of a majority of our server,storage,network,and assembly and test equipment,net,in use as of the end of fiscal year 2023,the estimated effect of this change for the three months ended October 29,2023 was a be
57、nefit of$17 million and$24 million for cost of revenue and operating expenses,respectively,which resulted in an increase in operating income of$41 million and net income of$36 million after tax,or$0.01 per both basic and diluted share.The estimated effect of this change for the first nine months of
58、fiscal year 2024 was a benefit of$24 million and$83 million 9 NVIDIA CORPORATION AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(Continued)(Unaudited)for cost of revenue and operating expenses,respectively,which resulted in an increase in operating income of$107 million and net
59、 income of$91 million after tax,or$0.04 per both basic and diluted share.Note 2-Business Combination Termination of the Arm Share Purchase Agreement In February 2022,NVIDIA and SoftBank Group Corp,or SoftBank,announced the termination of the Share Purchase Agreement whereby NVIDIA would have acquire
60、d Arm Limited,or Arm,from SoftBank.The parties agreed to terminate due to significant regulatory challenges preventing the completion of the transaction.We recorded an acquisition termination cost of$1.35 billion in fiscal year 2023 reflecting the write-off of the prepayment provided at signing.Note
61、 3-Leases Our lease obligations primarily consist of operating leases for our headquarters complex,domestic and international office facilities,and data center space,with lease periods expiring between fiscal years 2024 and 2035.Future minimum lease payments under our non-cancelable operating leases
62、 as of October 29,2023 are as follows:Operating Lease Obligations (In millions)Fiscal Year:2024(excluding first nine months of fiscal year 2024)$84 2025 269 2026 248 2027 233 2028 220 2029 and thereafter 454 Total 1,508 Less imputed interest 187 Present value of net future minimum lease payments 1,3
63、21 Less short-term operating lease liabilities 230 Long-term operating lease liabilities$1,091 In addition,we have operating leases,primarily for our data centers,that are expected to commence between the fourth quarter of fiscal year 2024 and fiscal year 2025 with lease terms of 3 to 10 years for$9
64、24 million.Operating lease expenses were$69 million and$49 million for the third quarter of fiscal years 2024 and 2023,respectively,and$195 million and$139 million for the first nine months of fiscal years 2024 and 2023,respectively.Short-term and variable lease expenses for the third quarter and fi
65、rst nine months of fiscal years 2024 and 2023 were not significant.10 NVIDIA CORPORATION AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(Continued)(Unaudited)Other information related to leases was as follows:Nine Months Ended October 29,2023 October 30,2022 (In millions)Supple
66、mental cash flows information Operating cash flows used for operating leases$200$134 Operating lease assets obtained in exchange for lease obligations$439$213 As of October 29,2023,our operating leases had a weighted average remaining lease term of 6.3 years and a weighted average discount rate of 3
67、.64%.As of January 29,2023,our operating leases had a weighted average remaining lease term of 6.8 years and a weighted average discount rate of 3.21%.Note 4-Stock-Based Compensation Our stock-based compensation expense is associated with restricted stock units,or RSUs,performance stock units that a
68、re based on our corporate financial performance targets,or PSUs,performance stock units that are based on market conditions,or market-based PSUs,and our employee stock purchase plan,or ESPP.Our Condensed Consolidated Statements of Income include stock-based compensation expense,net of amounts alloca
69、ted to inventory,as follows:Three Months Ended Nine Months Ended October 29,2023 October 30,2022 October 29,2023 October 30,2022 (In millions)Cost of revenue$38$32$96$108 Research and development 701 530 1,826 1,365 Sales,general and administrative 240 183 633 498 Total$979$745$2,555$1,971 Equity Aw
70、ard Activity The following is a summary of our equity award transactions under our equity incentive plans:RSUs,PSUs,and Market-based PSUs Outstanding Number of Shares Weighted Average Grant-Date Fair Value Per Share (In millions,except per share data)Balances,January 29,2023 45$158.45 Granted 13$364
71、.52 Vested(16)$141.02 Canceled and forfeited(1)$201.49 Balances,October 29,2023 41$230.11 As of October 29,2023,there was$9.03 billion of aggregate unearned stock-based compensation expense.This amount is expected to be recognized over a weighted average period of 2.6 years for RSUs,PSUs,and market-
72、based PSUs,and 11 months for ESPP.11 NVIDIA CORPORATION AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(Continued)(Unaudited)Note 5 Net Income Per Share The following is a reconciliation of the denominator of the basic and diluted net income per share computations for the perio
73、ds presented:Three Months Ended Nine Months Ended October 29,October 30,October 29,October 30,2023 2022 2023 2022 (In millions,except per share data)Numerator:Net income$9,243$680$17,475$2,954 Denominator:Basic weighted average shares 2,468 2,483 2,470 2,495 Dilutive impact of outstanding equity awa
74、rds 26 16 24 22 Diluted weighted average shares 2,494 2,499 2,494 2,517 Net income per share:Basic(1)$3.75$0.27$7.07$1.18 Diluted(2)$3.71$0.27$7.01$1.17 Equity awards excluded from diluted net income per share because their effect would have been anti-dilutive 1 36 14 29 (1)Calculated as net income
75、divided by basic weighted average shares.(2)Calculated as net income divided by diluted weighted average shares.Diluted net income per share is computed using the weighted average number of common and potentially dilutive shares outstanding during the period,using the treasury stock method.Any anti-
76、dilutive effect of equity awards outstanding is not included in the computation of diluted net income per share.Note 6 Income Taxes Income tax was an expense of$1.28 billion and$2.24 billion for the third quarter and first nine months of fiscal year 2024,respectively,and a benefit of$67 million and$
77、61 million for the third quarter and first nine months of fiscal year 2023,respectively.Income tax as a percentage of income before income tax was an expense of 12.2%and 11.3%for the third quarter and first nine months of fiscal year 2024,respectively,and a benefit of 10.9%and 2.1%for the third quar
78、ter and first nine months of fiscal year 2023,respectively.During the third quarter of fiscal year 2024,the Internal Revenue Service,or IRS,audit of our federal income tax returns for fiscal years 2018 and 2019 was resolved.We recognized a non-cash net benefit of$145 million,related to this IRS audi
79、t resolution,for effectively settled positions.This benefit consists of a reduction in unrecognized tax benefits of$236 million and related accrued interest of$17 million,net of federal benefit partially offset by additional cash tax payments and reductions in tax attribute carryforwards of$108 mill
80、ion.The effective tax rate increased due to a decreased impact of tax benefits from the foreign-derived intangible income deduction,stock-based compensation,and the U.S.federal research tax credit,relative to the increase in income before income tax.The increase in the effective tax rate was partial
81、ly offset by a benefit due to the IRS audit resolution.Our effective tax rates for the first nine months of fiscal years 2024 and 2023 were lower than the U.S.federal statutory rate of 21%due to tax benefits from the foreign-derived intangible income deduction,stock-based compensation and the U.S.fe
82、deral research tax credit.Our effective tax rate for the first nine months of fiscal year 2024 was additionally benefited by the IRS audit resolution.12 NVIDIA CORPORATION AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(Continued)(Unaudited)Other than the IRS audit resolution,f
83、or the first nine months of fiscal year 2024,there were no material changes to our tax years that remain subject to examination by major tax jurisdictions.Additionally,there have been no other material changes to our unrecognized tax benefits and any related interest or penalties since the fiscal ye
84、ar ended January29,2023.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-not that the position will be sustained upon review,amounts asserted by tax authorities could be greater or less than our accrued pos
85、ition.Accordingly,our provisions on federal,state and foreign tax related matters to be recorded in the future may change as revised estimates are made or the underlying matters are settled or otherwise resolved with the respective tax authorities.As of October29,2023,we do not believe that our esti
86、mates,as otherwise provided for,on such tax positions will significantly increase or decrease within the next 12 months.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
87、 following is a summary of cash equivalents and marketable securities:October 29,2023 Amortized Cost Unrealized Gain Unrealized Loss Estimated Fair Value Reported as Cash Equivalents Marketable Securities (In millions)Corporate debt securities$6,937$1$(20)$6,918$1,714$5,204 Debt securities issued by
88、 the U.S.Treasury 5,075 1 (24)5,052 5,052 Money market funds 3,190 3,190 3,190 Debt securities issued by U.S.government agencies 2,316 (5)2,311 100 2,211 Certificates of deposit 418 418 198 220 Foreign government bonds 175 175 100 75 Total$18,111$2$(49)$18,064$5,302$12,762 January 29,2023 Amortized
89、Cost Unrealized Gain Unrealized Loss Estimated Fair Value Reported as Cash Equivalents Marketable Securities (In millions)Corporate debt securities$4,809$(12)$4,797$1,087$3,710 Debt securities issued by the U.S.Treasury 4,185 1 (44)4,142 4,142 Debt securities issued by U.S.government agencies 1,836
90、(2)1,834 50 1,784 Money market funds 1,777 1,777 1,777 Certificates of deposit 365 365 134 231 Foreign government bonds 140 140 100 40 Total$13,112$1$(58)$13,055$3,148$9,907 13 NVIDIA CORPORATION AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(Continued)(Unaudited)The following
91、 tables provide the breakdown of unrealized losses,aggregated by investment category and length of time that individual securities have been in a continuous loss position:October 29,2023 Less than 12 Months 12 Months or Greater Total Estimated Fair Value Gross Unrealized Loss Estimated Fair Value Gr
92、oss Unrealized Loss Estimated Fair Value Gross Unrealized Loss (In millions)Corporate debt securities$2,773$(16)$852$(4)$3,625$(20)Debt securities issued by the U.S.Treasury 2,098 (12)1,371 (12)3,469 (24)Debt securities issued by U.S.government agencies 1,447 (5)1,447 (5)Total$6,318$(33)$2,223$(16)$
93、8,541$(49)January 29,2023 Less than 12 Months 12 Months or Greater Total Estimated Fair Value Gross Unrealized Loss Estimated Fair Value Gross Unrealized Loss Estimated Fair Value Gross Unrealized Loss (In millions)Debt securities issued by the U.S.Treasury$2,444$(21)$1,172$(23)$3,616$(44)Corporate
94、debt securities 1,188 (7)696 (5)1,884 (12)Debt securities issued by U.S.government agencies 1,307 (2)1,307 (2)Total$4,939$(30)$1,868$(28)$6,807$(58)The gross unrealized losses are related to fixed income securities,driven primarily by changes in interest rates.Net realized gains and losses were not
95、significant for all periods presented.The amortized cost and estimated fair value of cash equivalents and marketable securities are shown below by contractual maturity.October 29,2023 January 29,2023 Amortized Cost Estimated Fair Value Amortized Cost Estimated Fair Value (In millions)Less than one y
96、ear$11,405$11,388$9,738$9,708 Due in 1-5 years 6,706 6,676 3,374 3,347 Total$18,111$18,064$13,112$13,055 14 NVIDIA CORPORATION AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(Continued)(Unaudited)Note 8 Fair Value of Financial Assets and Liabilities The fair values of our finan
97、cial assets and liabilities are determined using quoted market prices of identical assets or quoted market prices of similar assets from active markets.We review fair value hierarchy classification on a quarterly basis.Fair Value at Pricing Category October 29,2023 January 29,2023 (In millions)Asset
98、s Cash equivalents and marketable securities:Money market funds Level 1$3,190$1,777 Corporate debt securities Level 2$6,918$4,797 Debt securities issued by the U.S.Treasury Level 2$5,052$4,142 Debt securities issued by U.S.government agencies Level 2$2,311$1,834 Certificates of deposit Level 2$418$3
99、65 Foreign government bonds Level 2$175$140 Other assets(Investments in non-affiliated entities):Publicly-held equity securities Level 1$153$11 Privately-held equity securities Level 3$1,019$288 Liabilities(1)0.309%Notes Due 2023 Level 2$1,230 0.584%Notes Due 2024 Level 2$1,212$1,185 3.20%Notes Due
100、2026 Level 2$945$966 1.55%Notes Due 2028 Level 2$1,060$1,099 2.85%Notes Due 2030 Level 2$1,289$1,364 2.00%Notes Due 2031 Level 2$981$1,044 3.50%Notes Due 2040 Level 2$756$870 3.50%Notes Due 2050 Level 2$1,388$1,637 3.70%Notes Due 2060 Level 2$342$410 (1)These liabilities are carried on our Condensed
101、 Consolidated Balance Sheets at their original issuance value,net of unamortized debt discount and issuance costs.15 NVIDIA CORPORATION AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(Continued)(Unaudited)Note 9-Amortizable Intangible Assets and Goodwill The components of our a
102、mortizable intangible assets are as follows:October 29,2023 January 29,2023 Gross Carrying Amount Accumulated Amortization Net Carrying Amount Gross Carrying Amount Accumulated Amortization Net Carrying Amount (In millions)Acquisition-related intangible assets$2,642$(1,584)$1,058$3,093$(1,614)$1,479
103、 Patents and licensed technology 450 (257)193 446 (249)197 Total intangible assets$3,092$(1,841)$1,251$3,539$(1,863)$1,676 Amortization expense associated with intangible assets was$144 million and$471 million for the third quarter and first nine months of fiscal year 2024,respectively,and$181 milli
104、on and$518 million for the third quarter and first nine months of fiscal year 2023,respectively.The following table outlines the estimated future amortization expense related to the net carrying amount of intangible assets as of October 29,2023:Future Amortization Expense (In millions)Fiscal Year:20
105、24(excluding first nine months of fiscal year 2024)$143 2025 554 2026 259 2027 149 2028 37 2029 and thereafter 109 Total$1,251 In the first nine months of fiscal year 2024,goodwill increased by$58 million from an acquisition,and was assigned to our Compute&Networking segment.Note 10-Balance Sheet Co
106、mponents Two customers each accounted for 11%of our accounts receivable balance as of October 29,2023.Two customers accounted for 14%and 11%of our accounts receivable balance as of January 29,2023.Certain balance sheet components are as follows:October 29,January 29,2023 2023 Inventories(1):(In mill
107、ions)Raw materials$1,663$2,430 Work in-process 1,338 466 Finished goods 1,778 2,263 Total inventories$4,779$5,159 16 NVIDIA CORPORATION AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(Continued)(Unaudited)(1)During the third quarter of fiscal years 2024 and 2023,we recorded an
108、inventory provision of approximately$208 million and$354 million,respectively,in cost of revenue.October 29,January 29,2023 2023 Other Assets:(In millions)Prepaid supply and capacity agreements(1)$2,927$2,989 Investments in non-affiliated entities 1,172 299 Prepaid royalties 369 387 Prepaid cloud se
109、rvices 60 23 Other 139 122 Total other assets$4,667$3,820 (1)As of October 29,2023 and January 29,2023,there were an additional$743 million and$458 million of short-term prepaid supply and capacity agreements included in Prepaid expenses and other current assets,respectively.October 29,January 29,20
110、23 2023 Accrued and Other Current Liabilities:(In millions)Customer program accruals$1,771$1,196 Excess inventory purchase obligations(1)1,280 954 Accrued payroll and related expenses 516 530 Deferred revenue(2)513 354 Taxes payable 420 467 Product warranty and return provisions 299 108 Operating le
111、ases 230 176 Licenses and royalties 150 149 Unsettled share repurchases 117 Other 176 186 Total accrued and other current liabilities$5,472$4,120 (1)During the third quarter of fiscal years 2024 and 2023,we recorded an expense of approximately$473 million and$348 million,respectively,in cost of reve
112、nue for inventory purchase obligations in excess of our current demand projections,supplier charges and for penalties related to cancellations and underutilization.(2)Deferred revenue primarily includes customer advances and deferrals related to license and development arrangements,support for hardw
113、are and software,and cloud services.October 29,January 29,2023 2023 Other Long-Term Liabilities:(In millions)Income tax payable(1)$1,206$1,204 Deferred revenue(2)425 218 Deferred income tax 424 247 Licenses payable 113 181 Other 66 63 Total other long-term liabilities$2,234$1,913 (1)Income tax payab
114、le is comprised of the long-term portion of the one-time transition tax payable,unrecognized tax benefits,and related interest and penalties.(2)Deferred revenue primarily includes deferrals related to support for hardware and software.17 NVIDIA CORPORATION AND SUBSIDIARIES NOTES TO CONDENSED CONSOLI
115、DATED FINANCIAL STATEMENTS(Continued)(Unaudited)Deferred Revenue The following table shows the changes in deferred revenue during the first nine months of fiscal years 2024 and 2023:October 29,October 30,2023 2022 (In millions)Balance at beginning of period$572$502 Deferred revenue additions during
116、the period 1,269 577 Revenue recognized during the period(903)(528)Balance at end of period$938$551 Revenue allocated to remaining performance obligations,which includes deferred revenue and amounts that will be invoiced and recognized as revenue in future periods,was$896 million as of October 29,20
117、23.We expect to recognize approximately 42%of this revenue over the next twelve months and the remainder thereafter.This excludes revenue related to performance obligations for contracts with a length of one year or less.Note 11-Derivative Financial Instruments We enter into foreign currency forward
118、 contracts to mitigate the impact of foreign currency exchange rate movements on our operating expenses.These contracts are designated as cash flow hedges for hedge accounting treatment.Gains or losses on the contracts are recorded in accumulated other comprehensive income or loss and reclassified t
119、o operating expense when the related operating expenses are recognized in earnings or ineffectiveness should occur.We also enter into foreign currency forward contracts to mitigate the impact of foreign currency movements on monetary assets and liabilities that are denominated in currencies other th
120、an 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 expense and offsets the change in fair value of the hedged foreign currency denominated monetary assets and liabilities,wh
121、ich is also recorded in other income or expense.The table below presents the notional value of our foreign currency forward contracts outstanding:October 29,2023 January 29,2023 (In millions)Designated as cash flow hedges$1,148$1,128 Non-designated hedges$365$366 The unrealized gains and losses or f
122、air value of our foreign currency forward contracts was not significant as of October 29,2023 and January 29,2023.As of October 29,2023,all designated foreign currency forward contracts mature within 18 months.The expected realized gains and losses deferred into accumulated other comprehensive incom
123、e or loss related to foreign currency forward contracts within the next twelve months was not significant.During the first nine months of fiscal years 2024 and 2023,the impact of derivative financial instruments designated for hedge accounting treatment on other comprehensive income or loss was not
124、significant and all such instruments were determined to be highly effective.18 NVIDIA CORPORATION AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(Continued)(Unaudited)Note 12-Debt Long-Term Debt The carrying value of our outstanding notes,the calendar year of maturity,and the a
125、ssociated interest rates were as follows:Carrying Value at Expected Remaining Term(years)Effective Interest Rate October 29,2023 January 29,2023 (In millions)0.309%Notes Due 2023 0.41%$1,250 0.584%Notes Due 2024 0.6 0.66%1,250 1,250 3.20%Notes Due 2026 2.9 3.31%1,000 1,000 1.55%Notes Due 2028 4.6 1.
126、64%1,250 1,250 2.85%Notes Due 2030 6.4 2.93%1,500 1,500 2.00%Notes Due 2031 7.6 2.09%1,250 1,250 3.50%Notes Due 2040 16.4 3.54%1,000 1,000 3.50%Notes Due 2050 26.4 3.54%2,000 2,000 3.70%Notes Due 2060 36.4 3.73%500 500 Unamortized debt discount and issuance costs (44)(47)Net carrying amount 9,706 10
127、,953 Less short-term portion (1,249)(1,250)Total long-term portion$8,457$9,703 All our notes are unsecured senior obligations.All existing and future liabilities of our subsidiaries will be effectively senior to the notes.Our notes pay interest semi-annually.We may redeem each of our notes prior to
128、maturity,subject to a make-whole premium as defined in the applicable form of note.On June 15,2023,we repaid the 0.309%Notes Due 2023.As of October 29,2023,we were in compliance with the required covenants,which are non-financial in nature,under the outstanding notes.Commercial Paper We have a$575 m
129、illion commercial paper program to support general corporate purposes.As of October 29,2023,we had not issued any commercial paper.Note 13-Commitments and Contingencies Purchase Obligations Our purchase obligations reflect our commitments to purchase components used to manufacture our products,inclu
130、ding long-term supply and capacity agreements,certain software and technology licenses,other goods and services and long-lived assets.As of October 29,2023,we had outstanding inventory purchase and long-term supply and capacity obligations totaling$17.11 billion.We enter into agreements with contrac
131、t manufacturers that allow them to procure inventory based upon criteria as defined by us,and in certain instances,these agreements allow us the option to cancel,reschedule,and adjust our requirements based on our business needs prior to firm orders being placed,but these changes may result in the p
132、ayment of costs incurred through the date of 19 NVIDIA CORPORATION AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(Continued)(Unaudited)cancellation.Other non-inventory purchase obligations were$4.43 billion,which includes$3.60 billion of multi-year cloud service agreements,pri
133、marily to support our research and development efforts.Total future purchase commitments as of October 29,2023 are as follows:Commitments (In millions)Fiscal Year:2024(excluding first nine months of fiscal year 2024)$6,499 2025 11,861 2026 1,128 2027 1,038 2028 660 2029 and thereafter 354 Total$21,5
134、40 Accrual for Product Warranty Liabilities The estimated amount of product warranty liabilities was$142 million and$82 million as of October 29,2023 and January 29,2023,respectively.The estimated product returns and estimated product warranty activity consisted of the following:Three Months Ended N
135、ine Months Ended October 29,2023 October 30,2022 October 29,2023 October 30,2022 (In millions)Balance at beginning of period$115$168$82$46 Additions 50 3 105 141 Utilization(23)(67)(45)(83)Balance at end of period$142$104$142$104 We have provided indemnities for matters such as tax,product,and emplo
136、yee liabilities.We have included intellectual property indemnification provisions in our technology-related agreements with third parties.Maximum potential future payments cannot be estimated because many of these agreements do not have a maximum stated liability.We have not recorded any liability i
137、n our Condensed Consolidated Financial Statements for such indemnifications.Litigation Securities Class Action and Derivative Lawsuits The plaintiffs in the putative securities class action lawsuit,captioned 4:18-cv-07669-HSG,initially filed on December 21,2018 in the United States District Court fo
138、r the Northern District of California,and titled In Re NVIDIA Corporation Securities Litigation,filed an amended complaint on May 13,2020.The amended complaint asserted that NVIDIA and certain NVIDIA executives violated Section 10(b)of the Securities Exchange Act of 1934,as amended,or the Exchange A
139、ct,and SEC Rule 10b-5,by making materially false or misleading statements related to channel inventory and the impact of cryptocurrency mining on GPU demand between May 10,2017 and November 14,2018.Plaintiffs also alleged that the NVIDIA executives who they named as defendants violated Section 20(a)
140、of the Exchange Act.Plaintiffs sought class certification,an award of unspecified compensatory damages,an award of reasonable costs and expenses,including attorneys fees and expert fees,and further relief as the Court may deem just and proper.On March 2,2021,the district court granted NVIDIAs motion
141、 to dismiss the complaint without leave to amend,entered judgment in favor of NVIDIA and closed the case.On March 30,2021,plaintiffs filed an appeal from judgment 20 NVIDIA CORPORATION AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(Continued)(Unaudited)in the United States Cou
142、rt of Appeals for the Ninth Circuit,case number 21-15604.On August 25,2023,a majority of a three-judge Ninth Circuit panel affirmed in part and reversed in part the district courts dismissal of the case,with a third judge dissenting on the basis that the district court did not err in dismissing the
143、case.On November 15,2023,the Ninth Circuit denied NVIDIAs petition for rehearing en banc of the Ninth Circuit panels majority decision to reverse in part the dismissal of the case,which NVIDIA had filed on October 10,2023.The putative derivative lawsuit pending in the United States District Court fo
144、r the Northern District of California,captioned 4:19-cv-00341-HSG,initially filed January 18,2019 and titled In re NVIDIA Corporation Consolidated Derivative Litigation,was stayed pending resolution of the plaintiffs appeal in the In Re NVIDIA Corporation Securities Litigation action.On February 22,
145、2022,the court administratively closed the case,but stated that it would reopen the case once the appeal in the In Re NVIDIA Corporation Securities Litigation action is resolved.Following the Ninth Circuits denial of NVIDIAs petition for rehearing on November 15,2023,the parties will meet and confer
146、 regarding the next steps in this derivative matter.The lawsuit asserts 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 Ac
147、t based on the dissemination of allegedly false and misleading statements related to channel inventory and the impact of cryptocurrency mining on GPU demand.The plaintiffs are seeking unspecified damages and other relief,including reforms and improvements to NVIDIAs corporate governance and internal
148、 procedures.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 pending resolution of the pl
149、aintiffs appeal in the In Re NVIDIA Corporation Securities Litigation action.Following the Ninth Circuits denial of NVIDIAs petition for rehearing on November 15,2023,the parties will meet and confer regarding the next steps in these derivative matters.The lawsuits assert claims,purportedly on behal
150、f of us,against certain officers and directors of the Company for breach of fiduciary duty,unjust enrichment,insider trading,misappropriation of information,corporate waste and violations of Sections 14(a),10(b),and 20(a)of the Exchange Act based on the dissemination of allegedly false and misleadin
151、g statements related to channel inventory and the impact of cryptocurrency mining on GPU demand.The plaintiffs seek unspecified damages and other relief,including disgorgement of profits from the sale of NVIDIA stock and unspecified corporate governance measures.Another putative derivative action wa
152、s filed on October 30,2023 in the Court of Chancery of the State of Delaware,captioned Horanic v.Huang,et al.(Case No.2023-1096-KSJM).This lawsuit asserts claims,purportedly on behalf of us,against certain officers and directors of the Company for breach of fiduciary duty and insider trading based o
153、n the dissemination of allegedly false and misleading statements related to channel inventory and the impact of cryptocurrency mining on GPU demand.The plaintiffs seek unspecified damages and other relief,including disgorgement of profits from the sale of NVIDIA stock and reform of unspecified corpo
154、rate governance measures.Accounting for Loss Contingencies As of October 29,2023,we have not recorded any accrual for contingent liabilities associated with the legal proceedings described above based on our belief that liabilities,while possible,are not probable.Further,except as specifically descr
155、ibed above,any possible loss or range of loss in these matters cannot be reasonably estimated at this time.We are engaged in legal actions not described above arising in the ordinary course of business and,while there can be no assurance of favorable outcomes,we believe that the ultimate outcome of
156、these actions will not have a material adverse effect on our operating results,liquidity or financial position.Note 14-Shareholders Equity Capital Return Program During the third quarter and first nine months of fiscal year 2024,we repurchased 8.3 million and 15.9 million shares of our common stock
157、for$3.72 billion and$7.01 billion,respectively.During the third quarter and first nine months of fiscal year 2023,we repurchased 28 million and 56 million shares of our common stock for 21 NVIDIA CORPORATION AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(Continued)(Unaudited)$
158、3.65 billion and$8.99 billion,respectively.In August 2023,our Board of Directors approved an increase to our share repurchase program of an additional$25.00 billion,without expiration.As of October 29,2023,we were authorized,subject to certain specifications,to repurchase additional shares of our co
159、mmon stock up to$25.24 billion.From October 30,2023 through November 17,2023,we repurchased 0.8 million shares for$366 million pursuant to a Rule 10b5-1 trading plan.Our share repurchase program aims to offset dilution from shares issued to employees.We may pursue additional share repurchases as we
160、weigh market factors and other investment opportunities.During the third quarter and first nine months of fiscal year 2024,we paid$99 million and$296 million in cash dividends to our shareholders,respectively.During the third quarter and first nine months of fiscal year 2023,we paid$100 million and$
161、300 million in cash dividends to our shareholders,respectively.Our cash dividend program and the payment of future cash dividends under that program are subject to our Board of Directors continuing determination that the dividend program and the declaration of dividends thereunder are in the best in
162、terests of our shareholders.Note 15-Segment Information Our Chief Executive Officer,who is considered to be our chief operating decision maker,or CODM,reviews financial information presented on an operating segment basis for purposes of making decisions and assessing financial performance.The Comput
163、e&Networking segment includes our Data Center accelerated computing platform;networking;automotive artificial intelligence,or AI,Cockpit,autonomous driving development agreements,and autonomous vehicle solutions;electric vehicle computing platforms;Jetson for robotics and other embedded platforms;NV
164、IDIA AI Enterprise and other software;and DGX Cloud.The Graphics segment includes GeForce GPUs for gaming and PCs,the GeForce NOW game streaming service and related infrastructure,and solutions for gaming platforms;Quadro/NVIDIA RTX GPUs for enterprise workstation graphics;virtual GPU software for c
165、loud-based visual and virtual computing;automotive platforms for infotainment systems;and Omniverse Enterprise software for building and operating 3D internet applications.Operating results by segment include costs or expenses that are directly attributable to each segment,and costs or expenses that
166、 are leveraged across our unified architecture and therefore allocated between our two segments.The“All Other”category includes the expenses that our CODM does not assign to either Compute&Networking or Graphics for purposes of making operating decisions or assessing financial performance.The expens
167、es include stock-based compensation expense,corporate infrastructure and support costs,acquisition-related and other costs,intellectual property related,or IP-related costs,acquisition termination cost,and other non-recurring charges and benefits that our CODM deems to be enterprise in nature.Our CO
168、DM does not review any information regarding total assets on a reportable segment basis.Depreciation and amortization expense directly attributable to each reportable segment is included in operating results for each segment.However,our CODM does not evaluate depreciation and amortization expense by
169、 operating segment and,therefore,it is not separately presented.There is no intersegment revenue.The accounting policies for segment reporting are the same as for our consolidated financial statements.The table below presents details of our reportable segments and the“All Other”category.22 NVIDIA CO
170、RPORATION AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(Continued)(Unaudited)Compute&Networking Graphics All Other Consolidated (In millions)Three Months Ended October 29,2023 Revenue$14,645$3,475$18,120 Operating income(loss)$10,262$1,493$(1,338)$10,417 Three Months Ended Oc
171、tober 30,2022 Revenue$3,816$2,115$5,931 Operating income(loss)$1,086$606$(1,091)$601 Nine Months Ended October 29,2023 Revenue$29,507$9,312$38,819 Operating income(loss)$19,149$3,751$(3,542)$19,358 Nine Months Ended October 30,2022 Revenue$11,395$9,528$20,923 Operating income(loss)$3,509$3,739$(4,28
172、0)$2,968 Three Months Ended Nine Months Ended October 29,2023 October 30,2022 October 29,2023 October 30,2022 (In millions)Reconciling items included in All Other category:Stock-based compensation expense$(979)$(745)$(2,555)$(1,971)Unallocated cost of revenue and operating expenses(198)(156)(515)(43
173、2)Acquisition-related and other costs(135)(174)(446)(499)IP-related costs(26)(36)Acquisition termination cost (1,353)Other (16)10 (25)Total$(1,338)$(1,091)$(3,542)$(4,280)23 NVIDIA CORPORATION AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(Continued)(Unaudited)Revenue by geogr
174、aphic region is designated based upon the billing location of the customer.Revenue by Geographic areas were as follows:Three Months Ended Nine Months Ended October 29,October 30,October 29,October 30,2023 2022 2023 2022 (In millions)Revenue:United States$6,302$2,148$14,730$6,069 Taiwan 4,333 1,153 8
175、,968 5,134 China(including Hong Kong)4,030 1,148 8,360 4,831 Singapore 2,702 536 4,506 1,963 Other countries 753 946 2,255 2,926 Total revenue$18,120$5,931$38,819$20,923 Revenue from sales to customers outside of the United States accounted for 65%and 62%of total revenue for the third quarter and fi
176、rst nine months of fiscal year 2024,respectively,and 64%and 71%of total revenue for the third quarter and first nine months of fiscal year 2023,respectively.The increase in revenue to the United States for the third quarter and first nine months of fiscal year 2024 was primarily due to higher U.S.-b
177、ased Data Center end demand.Sales to one customer,or Customer A,represented 12%of total revenue for the third quarter of fiscal year 2024,and sales to a second customer,or Customer B,represented 11%of total revenue for the first nine months of fiscal year 2024,both of which were attributable to the
178、Compute&Networking segment.In the first nine months of fiscal year 2023,there were no customers with 10%or more of total revenue.In the third quarter of fiscal year 2023,one customer represented 10%of total revenue,primarily attributable to the Compute&Networking segment.The following table summariz
179、es information pertaining to our revenue by each of the specialized markets we serve:Three Months Ended Nine Months Ended October 29,October 30,October 29,October 30,2023 2022 2023 2022 (In millions)Revenue:Data Center$14,514$3,833$29,121$11,389 Gaming 2,856 1,574 7,582 7,236 Professional Visualizat
180、ion 416 200 1,090 1,318 Automotive 261 251 810 609 OEM and Other 73 73 216 371 Total revenue$18,120$5,931$38,819$20,923 24 ITEM 2.MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Forward-Looking Statements This Quarterly Report on Form 10-Q contains forward-lookin
181、g statements which are based on our managements beliefs and assumptions and on information currently available to our management.In some cases,you can identify forward-looking statements by terms such as“may,”“will,”“should,”“could,”“goal,”“would,”“expect,”“plan,”“anticipate,”“believe,”“estimate,”“p
182、roject,”“predict,”“potential”and similar expressions intended to identify forward-looking statements.These statements involve known and unknown risks,uncertainties and other factors,which may cause our actual results,performance,time frames or achievements to be materially different from any future
183、results,performance,time frames or achievements expressed or implied by the forward-looking statements.We discuss many of these risks,uncertainties and other factors in this Quarterly Report on Form 10-Q and our Annual Report on Form 10-K for the fiscal year ended January 29,2023 and in our Quarterl
184、y Reports on Form 10-Q for the fiscal quarters ended April 30,2023 and July 30,2023 in greater detail under the heading“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 forward-looking st
185、atements represent our estimates and assumptions only as of the date of this filing.You should read this Quarterly Report on Form 10-Q completely and with the understanding that our actual future results may be materially different from what we expect.We hereby qualify our forward-looking statements
186、 by these cautionary statements.Except as required by law,we assume no obligation to update these forward-looking statements publicly,or to update the reasons actual results could differ materially from those anticipated in these forward-looking statements,even if new information becomes available i
187、n 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 should be read in conjunction with the risk factors
188、 set forth in this Quarterly Report on Form 10-Q,our Annual Report on Form 10-K for the fiscal year ended January 29,2023,and our Quarterly Reports on Form 10-Q for the fiscal quarters ended April 30,2023 and July 30,2023 under the heading“Risk Factors”of such reports,and our Condensed Consolidated
189、Financial Statements and related Notes thereto,as well as other cautionary statements and risks described elsewhere in this Quarterly Report on Form 10-Q and our other filings with the SEC,before deciding to purchase or sell shares of our common stock.Overview Our Company and Our Businesses Since ou
190、r founding in 1993,NVIDIA has been a pioneer in accelerated computing.Our invention of the GPU in 1999 has sparked the growth of the PC gaming market,redefined computer graphics,ignited the era of modern AI and has fueled industrial digitalization across markets.NVIDIA is now a full-stack computing
191、company with data-center-scale offerings that are reshaping industry.Our two operating segments are Compute&Networking and Graphics,as described in Note 15 of the Notes to Condensed Consolidated Financial Statements.Headquartered in Santa Clara,California,NVIDIA was incorporated in California in Apr
192、il 1993 and reincorporated in Delaware in April 1998.Recent Developments,Future Objectives and Challenges Demand and Supply,Product Transitions,and New Products and Business Models Demand for our data center systems and products has surged over the last three quarters and our demand visibility exten
193、ds into next year.To meet this expected demand,we have increased our purchase obligations with existing suppliers,added new suppliers and entered into prepaid supply and capacity agreements.These increased purchase volumes,the number of suppliers,and the integration of new suppliers into our supply
194、chain may create more supply chain complexity and execution risk.We expect to continue to enter into supplier and capacity arrangements and expect our supply to increase each quarter through next year.We may incur inventory provisions or impairments if our inventory or supply or capacity commitments
195、 exceed demand for our products or demand declines.25 We build finished products and maintain inventory in advance of anticipated demand.While we have entered into long-term supply and capacity commitments,we may not be able to secure sufficient commitments for capacity to address our business needs
196、,or our long-term demand expectations may change.These risks may increase as we shorten our product development cycles or enter new lines of business,which may require us to integrate new suppliers into our supply chain,creating additional supply chain complexity.Product transitions are complex as w
197、e often ship both new and prior architecture products simultaneously and we and our channel partners prepare to ship and support new products.Due to our product introduction cycles,we are almost always in various stages of transitioning the architecture of our Data Center,Professional Visualization,
198、and Gaming products.We will have a broader and faster Data Center product launch cadence to meet a growing and diverse set of AI opportunities.The increased frequency of these transitions may magnify the challenges associated with managing our supply and demand due to long manufacturing lead times.Q
199、ualification time for new products,customers anticipating product transitions and channel partners reducing channel inventory of prior architectures ahead of new product introductions can create reductions or volatility in our revenue.In addition,the bring up of new product architectures is complex
200、due to functionality challenges and quality concerns not identified in manufacturing testing.These product quality issues may incur costs,increase our warranty costs,and delay further production of our architecture.Deployment of new products to customers creates additional challenges due to the comp
201、lexity of our technologies,which has impacted and may in the future impact the timing of customer purchases or otherwise impact our demand.While we have managed prior product transitions and have previously sold multiple product architectures at the same time,these transitions are difficult,may impa
202、ir 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 applications 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
203、 begun offering enterprise customers NVIDIA DGX cloud services directly and through our network of partners,which includes cloud-based infrastructure and software and services for training and deploying AI models,and NVIDIA AI Foundations for customizable pretrained AI models.Our demand estimates fo
204、r new use cases,applications,and services can be incorrect and create volatility in our revenue or supply levels,and we may not be able to generate significant revenue from these use cases,applications,and services.New technologies such as generative AI models have emerged,and while they have driven
205、 increased demand for Data Center compute infrastructure,the long-term trajectory is unknown.Global Trade During the third quarter of fiscal year 2023,the U.S.government,or the USG,announced licensing requirements that,with certain exceptions,impact exports to China(including Hong Kong and Macau)and
206、 Russia of our A100 and H100 integrated circuits,DGX or any other systems or boards which incorporate A100 or H100 integrated circuits.During the second quarter of fiscal year 2024,the USG informed us of an additional licensing requirement for a subset of A100 and H100 products destined to certain c
207、ustomers and other regions,including some countries in the Middle East.On October 17,2023,the USG announced new and updated licensing requirements effective in our fourth quarter of fiscal year 2024 for exports to China and Country Groups D1,D4,and D5(including but not limited to Saudi Arabia,the Un
208、ited Arab Emirates,and Vietnam,but excluding Israel)of our products exceeding certain performance thresholds,including A100,A800,H100,H800,L4,L40,L40S and RTX 4090.The licensing requirements also apply to the export of products exceeding certain performance thresholds to a party headquartered in,or
209、with an ultimate parent headquartered in,Country Group D5,including China.On October 23,2023,the USG informed us the licensing requirements were effective immediately for shipments of our A100,A800,H100,H800,and L40S products.These licensing requirements did not have a meaningful impact on our reven
210、ue in the third quarter of fiscal year 2024 as they were announced near the end of the fiscal quarter and we had additional demand from customers outside of the named country groups.Our sales to China and other affected destinations,derived from products that are now subject to licensing requirement
211、s,have consistently contributed approximately 20-25%of Data Center revenue over the past few quarters.We expect that our sales to these destinations will decline significantly in the fourth quarter of fiscal year 2024,though we believe the decline will be more than offset by strong growth in other r
212、egions.We are working to expand our Data Center product portfolio to offer new regulation-compliant solutions,including those for which the USG does not wish to have any advance notice before each shipment.To the 26 extent that a customer requires products covered by the licensing requirements,we ma
213、y seek a license for the customer but have no assurance that the USG will grant such a license,or that the USG will act on the license application in a timely manner or at all.Our competitive position has been harmed,and our competitive position and future results may be further harmed over the long
214、-term,if there are further changes in the USGs export controls.Given the increasing strategic importance of AI and rising geopolitical tensions,the USG has changed and may again change the export control rules at any time and further subject a wider range of our products to export restrictions and l
215、icensing requirements,negatively impacting our business and financial results.In the event of such change,we may be unable to sell our inventory of such products and may be unable to develop replacement products not subject to the licensing requirements,effectively excluding us from all or part of t
216、he China market,as well as other impacted markets,including the Middle East.Our sales to China will decrease significantly in the fourth quarter of fiscal year 2024.While we work to enhance the resiliency and redundancy of our supply chain,which is currently concentrated in the Asia-Pacific,includin
217、g China,Hong Kong,Korea and Taiwan,new and existing export controls or changes to existing export controls could limit alternative manufacturing locations and negatively impact our business.Macroeconomic Factors Macroeconomic factors,includinginflation,increased interest rates,capital market volatil
218、ity,global supply chain constraints and global economic and geopolitical developments,may have direct and indirect impacts on our results of operations,particularly demand for our products.While difficult to isolate and quantify,these macroeconomic factors can also impact our supply chain and manufa
219、cturing costs,employee wages,costs for capital equipment and value of our investments.Our product and solution pricing strategy generally does not fluctuate with short-term changes in our costs.Within our supply chain,we continuously manage product availability and costs with our vendors.Israel We a
220、re monitoring the impact of the geopolitical conflict in and around Israel on our operations,including the health and safety of our approximately 3,400 employees in the region who primarily support the research and development,operations,and sales and marketing of our networking products.Our operati
221、ng expenses in the third quarter of fiscal year 2024 include expenses for financial support to impacted employees and charitable activity.We believe our global supply chain for our networking products has not experienced any significant impact.Further,in connection with the conflict,a significant nu
222、mber and percentage of our employees have been called-up for active military duty in Israel.Accordingly,some of our employees in Israel may be absent for an extended and indeterminate period,which may cause disruption to our product development or operations.In the third quarter of fiscal year 2024,
223、we did not experience any significant impact or expense to our business;however,if the conflict is extended,it could impact future product development,operations,and revenue or create other uncertainty for our business.Third Quarter of Fiscal Year 2024 Summary Three Months Ended October 29,2023 July
224、 30,2023 October 30,2022 Quarter-over-Quarter Change Year-over-Year Change ($in millions,except per share data)Revenue$18,120$13,507$5,931 34%206%Gross margin 74.0%70.1%53.6%3.9 pts 20.4 pts Operating expenses$2,983$2,662$2,576 12%16%Operating income$10,417$6,800$601 53%1,633%Net income$9,243$6,188$
225、680 49%1,259%Net income per diluted share$3.71$2.48$0.27 50%1,274%We specialize in markets where our computing platforms can provide tremendous acceleration for applications.These platforms incorporate processors,interconnects,software,algorithms,systems,and 27 services to deliver unique value.Our p
226、latforms address four large markets where our expertise is critical:Data Center,Gaming,Professional Visualization,and Automotive.Revenue for the third quarter of fiscal year 2024 was$18.12 billion,up 206%from a year ago and up 34%sequentially.Data Center revenue was up 279%from a year ago and up 41%
227、sequentially.Strong sales of the NVIDIA HGX platform were driven by global demand for the training and inferencing of large language models,recommendation engines,and generative AI applications.Data Center compute grew 324%from a year ago and 38%sequentially,largely reflecting the strong ramp of our
228、 Hopper GPU architecture-based HGX platform from cloud service providers,or CSPs,including GPU-specialized CSPs;consumer internet companies;and enterprises.Our sales of Ampere GPU architecture-based Data Center products were significant but declined sequentially,as we approach the tail end of this a
229、rchitecture.We recognized initial revenue on the ramp of our L40S GPU and the GH200 Grace Hopper Superchip for a broad range of customers.CSPs drove roughly half of Data Center revenue,while consumer internet companies and enterprises comprised approximately the other half.Networking was up 155%from
230、 a year ago and up 52%sequentially,almost entirely due to strong growth in InfiniBand infrastructure to support our HGX platform.Gaming revenue was up 81%from a year ago and up 15%sequentially.Strong year-on-year growth reflects higher sell-in to partners following normalization of channel inventory
231、 levels.Sequential growth reflects strong demand for our GeForce RTX 40 Series GPUs for back-to-school and the start of the holiday season.Professional Visualization revenue was up 108%from a year ago and up 10%sequentially.The year-on-year increase reflects higher sell-in to partners following norm
232、alization of channel inventory levels.The sequential increase was primarily due to stronger enterprise workstation demand and the ramp of notebook workstations based on the Ada Lovelace GPU architecture.Automotive revenue was up 4%from a year ago and up 3%sequentially.The year-on-year increase prima
233、rily reflects growth in sales of auto cockpit solutions and self-driving platforms.The sequential increase was driven by sales of self-driving platforms.Gross margin increased significantly from a year ago and sequentially,driven by improved product mix from Data Center revenue growth and lower net
234、inventory provisions and related charges.In the third quarter of fiscal year 2024,provisions for inventory and related charges were$681 million.Sales of previously reserved inventory or settlements of excess inventory purchase obligations resulted in a provision release of$239 million,primarily from
235、 Ampere GPU architecture products.The net inventory provisions were$442 million and the unfavorable effect on our gross margin was 2.4 percentage points.In the third quarter of fiscal year 2023,provisions for inventory and related charges were$702 million.Sales of previously reserved inventory or se
236、ttlements of excess inventory purchase obligations resulted in a provision release of$21 million.The net inventory provisions were$681 million and the unfavorable effect on our gross margin was 11.5 percentage points.Operating expenses were up 16%from a year ago and up 12%sequentially,driven by comp
237、ensation and benefits,including stock-based compensation,primarily reflecting growth in employees and compensation increases.Market Platform Highlights Data Center revenue for the third quarter of fiscal year 2024 was$14.51 billion,up 279%from a year ago and up 41%from the previous quarter.We announ
238、ced NVIDIA HGX H200 with the H200 Tensor Core GPU;introduced an AI foundry service,first available on Microsoft Azure;announced that the NVIDIA Spectrum-X will be integrated into servers from Dell Technologies,Hewlett Packard Enterprise and Lenovo in the first quarter of next year;announced that NVI
239、DIA GH200 Grace Hopper Superchips will power more than 40 new supercomputers and began shipping in the third quarter of fiscal year 2024;and partnered with a range of leading companies on AI initiatives,including Amdocs,Dropbox,Foxconn,Genentech(member of Roche Group),Infosys,Lenovo,Reliance Industr
240、ies,Scaleway,and Tata Group.Gaming revenue for the third quarter of fiscal year 2024 was$2.86 billion,up 81%from a year ago and up 15%from the previous quarter.We launched DLSS 3.5 Ray Reconstruction;released TensorRT-LLM for Windows;added 56 DLSS games and over 15 Reflex games;and surpassed 1,700 g
241、ames on GeForce NOW.28 Professional Visualization revenue for the third quarter of fiscal year 2024 was$416 million,up 108%from a year ago and up 10%from the previous quarter.We announced a new line of desktop workstations with NVIDIA RTX 6000 Ada Generation GPUs and NVIDIA ConnectX smart interface
242、cards.Automotive revenue for the third quarter of fiscal year 2024 was$261 million,up 4%from a year ago and up 3%from the previous quarter.We furthered our collaboration with Foxconn to develop next-generation electric vehicles.Financial Information by Business Segment and Geographic Data Refer to N
243、ote 15 of the Notes to Condensed Consolidated Financial Statements for disclosure regarding segment information.Critical Accounting Policies and Estimates Refer 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.Th
244、ere have been no material changes to our Critical Accounting Policies and Estimates.Results of Operations The following table sets forth,for the periods indicated,certain items in our Condensed Consolidated Statements of Income expressed as a percentage of revenue.Three Months Ended Nine Months Ende
245、d October 29,2023 October 30,2022 October 29,2023 October 30,2022 Revenue 100.0%100.0%100.0%100.0%Cost of revenue 26.0 46.4 29.1 44.9 Gross profit 74.0 53.6 70.9 55.1 Operating expenses Research and development 12.7 32.8 16.0 25.7 Sales,general and administrative 3.8 10.6 5.0 8.7 Acquisition termina
246、tion cost 6.5 Total operating expenses 16.5 43.4 21.0 40.9 Operating income 57.5 10.2 49.9 14.2 Interest income 1.3 1.5 1.5 0.7 Interest expense(0.3)(1.1)(0.5)(0.9)Other,net(0.4)(0.2)(0.1)(0.1)Other income(expense),net 0.6 0.2 0.9 (0.3)Income before income tax 58.1 10.4 50.8 13.9 Income tax expense(
247、benefit)7.1 (1.1)5.8 (0.3)Net income 51.0%11.5%45.0%14.2%Revenue Revenue for the third quarter and first nine months of fiscal year 2024 was$18.12 billion and$38.82 billion,up 206%and 86%,respectively.29 Revenue by Reportable Segments Three Months Ended Nine Months Ended October 29,2023 October 30,2
248、022$Change%Change October 29,2023 October 30,2022$Change%Change ($in millions)Compute&Networking$14,645$3,816$10,829 284%$29,507$11,395$18,112 159%Graphics 3,475 2,115 1,360 64%9,312 9,528 (216)(2)%Total$18,120$5,931$12,189 206%$38,819$20,923$17,896 86%Compute&Networking-The increase in the third qu
249、arter and first nine months of fiscal year 2024 compared to the third quarter and first nine months of fiscal year 2023 was due to higher Data Center revenue.Compute GPUs grew 369%year-on-year and 193%compared to the first nine months of fiscal year 2023 led by strong demand for the NVIDIA HGX platf
250、orm driven by global demand for the training and inferencing of large language models,recommendation engines and inferencing of generative AI applications.Networking was up 155%year-on-year and 99%compared to the first nine months of last year,almost entirely due to strong growth in InfiniBand infra
251、structure to support our HGX platform.Graphics-The increase in the third quarter of fiscal year 2024 compared to the third quarter of fiscal year 2023 reflects growth in Gaming GPUs reflecting higher sell-in to partners following normalization of channel inventory levels earlier this year.The decrea
252、se in the first nine months of fiscal year 2024 compared to the first nine months of fiscal year 2023 primarily reflects 57%lower enterprise graphics and 14%lower Professional Visualization GPUs,partially offset by 7%growth in Gaming GPUs,following normalization of channel inventory levels earlier t
253、his year.Concentration of Revenue Revenue by geographic region is designated based on the billing location even if the revenue may be attributable to end customers,or End Customers,such as CSPs,enterprises,and gamers in a different location.Revenue from sales to customers outside of the United State
254、s accounted for 65%and 62%of total revenue for the third quarter and first nine months of fiscal year 2024,respectively,and 64%and 71%of total revenue for the third quarter and first nine months of fiscal year 2023,respectively.Our customers include original equipment manufacturers,original device m
255、anufacturers,system builders,system integrators,add-in board manufacturers,retailers/distributors,automotive manufacturers,tier-1 automotive suppliers,and other enterprises.Sales to Customer A represented 12%of total revenue for the third quarter of fiscal year 2024,and sales to Customer B represent
256、ed 11%of total revenue for the first nine months of fiscal year 2024,both of which were attributable to the Compute&Networking segment.Our customers sell to End Customers.Our End Customers often do not purchase directly from us but purchase through multiple original equipment manufacturers,original
257、device manufacturers,system integrators,distributors,and other channel partners.Our sales to Customer A and Customer B were largely in support of two End Customers.One End Customer is estimated to have represented approximately 15%and 17%of total revenue for the third quarter and first nine months o
258、f fiscal year 2024,respectively.A second End Customer is estimated to have represented approximately 13%and 10%of total revenue for the third quarter and first nine months of fiscal year 2024,respectively.Both of these End Customers were primarily attributable to our Compute&Networking segment.Our e
259、stimated Compute&Networking End Customer demand is expected to remain concentrated.In the first nine months of fiscal year 2023,there were no customers with 10%or more of total revenue.In the third quarter of fiscal year 2023,one customer represented 10%of total revenue,primarily attributable to the
260、 Compute&Networking segment.Gross Margin Our overall gross margin increased to 74.0%and 70.9%for the third quarter and first nine months of fiscal year 2024,respectively,from 53.6%and 55.1%for the third quarter and first nine months of fiscal year 2023,30 respectively.The year over year increase in
261、the third quarter and first nine months of fiscal year 2024 was primarily due to improved product mix from Data Center revenue growth of 279%and 156%,respectively,and lower net inventory provisions and related charges.Provisions for inventory and excess inventory purchase obligations totaled$681 mil
262、lion and$1.39 billion for the third quarter and first nine months of fiscal year 2024,respectively.Sales of previously reserved inventory or settlements of excess inventory purchase obligations resulted in a provision release of$239 million and$372 million,primarily from Ampere GPU architecture prod
263、ucts,for the third quarter and first nine months of fiscal year 2024,respectively.The net effect on our gross margin was an unfavorable impact of 2.4%and 2.6%in the third quarter and first nine months of fiscal year 2024.Provisions for inventory and excess inventory purchase obligations totaled$702
264、million and$2.01 billion for the third quarter and first nine months of fiscal year 2023,respectively.Sales of previously reserved inventory or settlements of excess inventory purchase obligations resulted in a provision release of$21 million and$59 million for the third quarter and first nine month
265、s of fiscal year 2023,respectively.The net effect on our gross margin was an unfavorable impact of 11.5%and 9.3%in the third quarter and first nine months of fiscal year 2023,respectively.Operating Expenses Three Months Ended Nine Months Ended October 29,2023 October 30,2022$Change%Change October 29
266、,2023 October 30,2022$Change%Change ($in millions)Research and development expenses$2,294$1,945$349 18%$6,210$5,387$823 15%of net revenue 12.7%32.8%16.0%25.7%Sales,general and administrative expenses 689 631 58 9%1,942 1,815 127 7%of net revenue 3.8%10.6%5.0%8.7%Acquisition termination cost%1,353 (1
267、,353)(100)%of net revenue%6.5%Total operating expenses$2,983$2,576$407 16%$8,152$8,555$(403)(5)%of net revenue 16.5%43.4%21.0%40.9%The increases in research and development expenses and sales,general and administrative expenses for the third quarter and first nine months of fiscal year 2024 were pri
268、marily driven by compensation and benefits,including stock-based compensation,reflecting employee growth and compensation increases.Acquisition Termination Cost We recorded an acquisition termination cost related to the Arm transaction of$1.35 billion in fiscal year 2023 reflecting the write-off of
269、the prepayment provided at signing.Operating Income Operating income for the third quarter and first nine months of fiscal year 2024 was$10.42 billion and$19.36 billion,respectively,up 1,633%and 552%from a year ago,respectively.31 Operating Income by Reportable Segments Three Months Ended Nine Month
270、s Ended October 29,2023 October 30,2022$Change%Change October 29,2023 October 30,2022$Change%Change ($in millions)Compute&Networking$10,262$1,086$9,176 845%$19,149$3,509$15,640 446%Graphics 1,493 606 887 146%3,751 3,739 12%All Other(1,338)(1,091)(247)23%(3,542)(4,280)738 (17)%Total$10,417$601$9,816
271、1,633%$19,358$2,968$16,390 552%Compute&Networking Segment operating income increased during the third quarter and first nine months of fiscal year 2024 compared to the third quarter and first nine months of fiscal year 2023 primarily due to growth in revenue.Graphics-Segment operating income increas
272、ed during the third quarter of fiscal year 2024 compared to the third quarter of fiscal year 2023 due to growth in revenue.Segment operating income was flat during the first nine months of fiscal year 2024 compared to the first nine months of fiscal year 2023 due to a decline in revenue of$216 milli
273、on,offset by lower provisions for inventory and excess inventory purchase obligations of$337 million in fiscal year 2024.All Other expenses increased during the third quarter of fiscal year 2024 compared to the third quarter of fiscal year 2023 due to higher stock-based compensation expense.All Othe
274、r expenses decreased during the first nine months of fiscal year 2024 compared to the first nine months of fiscal year 2023 due to an acquisition termination cost of$1.35 billion related to the Arm transaction in the prior year,partially offset by higher stock-based compensation expense of$584 milli
275、on.Other Income(Expense),Net Three Months Ended Nine Months Ended October 29,2023 October 30,2022$Change October 29,2023 October 30,2022$Change ($in millions)Interest income$234$88$146$572$152$420 Interest expense(63)(65)2 (194)(198)4 Other,net(66)(11)(55)(24)(29)5 Other income(expense),net$105$12$9
276、3$354$(75)$429 Interest income consists of interest earned on cash,cash equivalents and marketable securities.The increase in interest income was due to higher yields.Interest expense is comprised of coupon interest and debt discount amortization related to our notes.Other,net,consists of realized o
277、r unrealized gains and losses from investments in non-affiliated entities and the impact of changes in foreign currency rates.The loss in Other,net,in the third quarter of fiscal year 2024 was driven by mark-to-market losses from publicly traded equity investments.Income Taxes Income tax was an expe
278、nse of$1.28 billion and$2.24 billion for the third quarter and first nine months of fiscal year 2024,respectively,and a benefit of$67 million and$61 million for the third quarter and first nine months of fiscal year 2023,respectively.Income tax as a percentage of income before income tax was an expe
279、nse of 12.2%and 11.3%for the third quarter and first nine months of fiscal year 2024,respectively,and a benefit of 10.9%and 2.1%for the third quarter and first nine months of fiscal year 2023,respectively.32 The effective tax rate increased due to a decreased impact of tax benefits from the foreign-
280、derived intangible income deduction,stock-based compensation,and the U.S.federal research tax credit,relative to the increase in income before income tax.The increase in the effective tax rate was partially offset by a benefit due to the IRS audit resolution.Liquidity and Capital Resources October 2
281、9,2023 January 29,2023 (In millions)Cash and cash equivalents$5,519$3,389 Marketable securities 12,762 9,907 Cash,cash equivalents and marketable securities$18,281$13,296 Nine Months Ended October 29,2023 October 30,2022 (In millions)Net cash provided by operating activities$16,591$3,393 Net cash pr
282、ovided by(used in)investing activities$(4,457)$7,378 Net cash used in financing activities$(10,004)$(9,961)As of October 29,2023,we had$18.28 billion in cash,cash equivalents,and marketable securities,an increase of$4.99 billion from the end of fiscal year 2023.Our investment policy requires the pur
283、chase of highly rated fixed income securities,the diversification of investment types and credit exposures,and certain maturity limits on our portfolio.Cash provided by operating activities increased in the first nine months of fiscal year 2024 compared to the first nine months of fiscal year 2023,d
284、ue to growth in revenue,partially offset by higher accounts receivable balance and taxes paid.Accounts receivable balance in the third quarter of fiscal year 2024 reflected approximately$570 million from customer payments received ahead of the invoice due date.Cash provided by investing activities d
285、ecreased in the first nine months of fiscal year 2024 compared to the first nine months of fiscal year 2023,primarily driven by lower marketable securities maturities.Cash used in financing activities increased in the first nine months of fiscal year 2024 compared to the first nine months of fiscal
286、year 2023,due to a debt repayment in the second quarter of fiscal year 2024 and higher tax payments related to RSUs,partially offset by lower share repurchases.Liquidity Our primary sources of liquidity are our cash,cash equivalents,and marketable securities,and the cash generated by our operations.
287、As of October 29,2023,we had$18.28 billion in cash,cash equivalents,and marketable securities.Our marketable securities consist of debt securities issued by the USG and its agencies,highly rated corporations and financial institutions,and foreign government entities,as well as certificates of deposi
288、t issued by highly rated financial institutions.These marketable securities are primarily denominated in U.S.dollars.Refer to Note 7 of the Notes to Condensed Consolidated Financial Statements for additional information.We believe that we have sufficient liquidity to meet our operating requirements
289、for at least the next twelve months,and for the foreseeable future,including our debt obligations,future supply obligations and vendor and supplier prepayments.We continuously evaluate our liquidity and capital resources,including our access to external capital,to ensure we can finance future capita
290、l requirements.Except for approximately$1.38 billion of cash,cash equivalents,and marketable securities held outside the U.S.for which we have not accrued any related foreign or state taxes if we repatriate these amounts to the U.S.,substantially all of our cash,cash equivalents and marketable secur
291、ities held outside of the U.S.as of October 29,2023 are available for use in the U.S.without incurring additional U.S.federal income taxes.We 33 paid$4.35 billion in cash taxes in the third quarter of fiscal year 2024,largely for previously deferred federal income tax payments related to the disaste
292、r relief made available by the IRS for certain California taxpayers.Capital Return to Shareholders During the third quarter and first nine months of fiscal year 2024,we returned$3.72 billion and$7.01 billion,respectively,in share repurchases and$99 million and$296 million,respectively,in cash divide
293、nds.Our cash dividend program and the payment of future cash dividends under that program are subject to the continuing determination by our Board of Directors that the dividend program and the declaration of dividends thereunder are in the best interests of our shareholders.On August 21,2023,our Bo
294、ard of Directors approved an increase to our share repurchase program of an additional$25.00 billion,without expiration.As of October 29,2023,we were authorized,subject to certain specifications,to repurchase additional shares of our common stock up to$25.24 billion.From October 30,2023 through Nove
295、mber 17,2023,we repurchased 0.8 million shares for$366 million pursuant to a Rule 10b5-1 trading plan.Our share repurchase program aims to offset dilution from shares issued to employees.We may pursue additional share repurchases as we weigh market factors and other investment opportunities.We plan
296、to continue share repurchases this fiscal year.The U.S.Inflation Reduction Act of 2022 requires a 1%excise tax on certain share repurchases in excess of shares issued for employee compensation made after December 31,2022.This provision has not had a material effect on our consolidated financial stat
297、ements.Outstanding Indebtedness and Commercial Paper Our aggregate debt maturities as of October 29,2023,by year payable,are as follows:October 29,2023 (In millions)Due in one year$1,250 Due in one to five years 2,250 Due in five to ten years 2,750 Due in greater than ten years 3,500 Unamortized deb
298、t discount and issuance costs (44)Net carrying amount 9,706 Less short-term portion (1,249)Total long-term portion$8,457 We have a$575 million commercial paper program to support general corporate purposes.As of October 29,2023,we had not issued any commercial paper.Material Cash Requirements and Ot
299、her Obligations We have unrecognized tax benefits of$1.10 billion,which includes related interest and penalties of$115 million recorded in non-current income tax payable as of October 29,2023.We are unable to reasonably estimate the timing of any potential tax liability,interest payments,or penaltie
300、s in individual years due to uncertainties in the underlying income tax positions and the timing of the effective settlement of such tax positions.Refer to Note 6 of the Notes to Condensed Consolidated Financial Statements for further information.Other than the contractual obligations described abov
301、e,there were no material changes outside the ordinary course of business in our contractual obligations from those disclosed in our Annual Report on Form 10-K for the fiscal year ended January29,2023.Refer to Item 7,“Managements Discussion and Analysis of Financial Condition and Results of Operation
302、s-Liquidity and Capital Resources”in our Annual Report on Form 10-K for the fiscal year ended January29,2023 for a description of our contractual obligations.For a description of our operating lease obligations,long-term debt,and purchase obligations,refer to Note 3,Note 12,and Note 13 of the Notes
303、to Condensed Consolidated Financial Statements,respectively.34 Climate Change To date,there has been no material impact to our results of operations associated with global sustainability regulations,compliance,costs from sourcing renewable energy or climate-related business trends.Adoption of New an
304、d Recently Issued Accounting Pronouncements There has been no adoption of any new and recently issued accounting pronouncements.ITEM 3.QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK Investment and Interest Rate Risk Financial market risks related to investment and interest rate risk are
305、described in Part II,Item 7A,“Quantitative and Qualitative Disclosures About Market Risk”in our Annual Report on Form 10-K for the fiscal year ended January 29,2023.As of October 29,2023,there have been no material changes to the financial market risks described as of January 29,2023.Foreign Exchang
306、e Rate Risk The impact of foreign currency transactions related to foreign exchange rate risk is described in Part II,Item 7A,“Quantitative and Qualitative Disclosures About Market Risk”in our Annual Report on Form 10-K for the fiscal year ended January 29,2023.As of October 29,2023,there have been
307、no material changes to the foreign exchange rate risks described as of January 29,2023.ITEM 4.CONTROLS AND PROCEDURES Controls and Procedures Disclosure Controls and Procedures Based on their evaluation as of October 29,2023,our management,including our Chief Executive Officer and Chief Financial Of
308、ficer,has concluded that our disclosure controls and procedures(as defined in Exchange Act Rule 13a-15(e)and 15d-15(e)were effective to provide reasonable assurance.Changes in Internal Control Over Financial Reporting There were no changes that occurred during the third quarter of fiscal year 2024 t
309、hat have materially affected,or are reasonably likely to materially affect,our internal control over financial reporting.In fiscal year 2022,we began an upgrade of our enterprise resource planning,or ERP,system,which will update much of our existing core financial systems.The ERP system is designed
310、to accurately maintain our financial records used to report operating results.The upgrade will occur in phases.We will continue to evaluate each quarter whether there are changes that materially affect our internal control over financial reporting.Inherent Limitations on Effectiveness of Controls Ou
311、r management,including our Chief Executive Officer and Chief Financial Officer,does not expect that our disclosure controls and procedures or our internal controls,will prevent all error and all fraud.A control system,no matter how well conceived and operated,can provide only reasonable,not absolute
312、,assurance that the objectives of the control system are met.Further,the design of a control system must reflect the fact that there are resource constraints,and the benefits of controls must be considered relative to their costs.Because of the inherent limitations in all control systems,no evaluati
313、on of controls can provide absolute assurance that all control issues and instances of fraud,if any,within NVIDIA have been detected.PART II.OTHER INFORMATION ITEM 1.LEGAL PROCEEDINGS Refer to Part I,Item 1,Note 13 of the Notes to Condensed Consolidated Financial Statements for a discussion of signi
314、ficant developments in our legal proceedings since January 29,2023.Also refer to Item 3,“Legal Proceedings”in our Annual Report on Form 10-K for the fiscal year ended January 29,2023 for a prior discussion of our legal proceedings.35 ITEM 1A.RISK FACTORS Other than the risk factors listed below,ther
315、e have been no material changes from the risk factors previously described under Item 1A of our Annual Report on Form 10-K for the fiscal year ended January 29,2023 and Items 1A of our Quarterly Reports on Form 10-Q for the fiscal quarters ended April 30,2023 and July 30,2023.Purchasing or owning NV
316、IDIA common stock involves investment risks including,but not limited to,the risks described in Item 1A of our Annual Report on Form 10-K for the fiscal year ended January 29,2023,in Items 1A of our Quarterly Reports on Form 10-Q for the fiscal quarters ended April 30,2023 and July 30,2023,and below
317、.Additionally,any one of those risks could harm our business,financial condition and results of operations or reputation,which could cause our stock price to decline.Additional risks,trends and uncertainties not presently known to us or that we currently believe are immaterial may also harm our busi
318、ness,financial condition,results of operations or reputation.Failure to estimate customer demand properly has led and could lead to mismatches between supply and demand.We use third parties to manufacture and assemble our products,and we have long manufacturing lead times.We are not provided guarant
319、eed wafer,component and capacity supply,and our supply deliveries and production may be non-linear within a quarter or year.If our estimates of customer demand are ultimately inaccurate,as we have experienced in the past,there could be a significant mismatch between supply and demand.This mismatch h
320、as resulted in both product shortages and excess inventory,has varied across our market platforms,and has significantly harmed our financial results.We build finished products and maintain inventory in advance of anticipated demand.While we have in the past entered and may in the future enter into l
321、ong-term supply and capacity commitments,we may not be able to secure sufficient commitments for capacity to address our business needs,or our long-term demand expectations may change.These risks may increase as we shorten our product development cycles or enter new lines of business,which may requi
322、re us to integrate new suppliers into our supply chain,creating additional supply chain complexity.Additionally,our ability to sell certain products has been and could be impeded if components from third parties that are necessary for the finished product are not available.This risk may increase as
323、a result of our platform strategy.In periods of shortages impacting the semiconductor industry and/or limited supply or capacity in our supply chain,the lead times on our orders may be extended.We have previously experienced and may continue to experience extended lead times of more than 12 months.W
324、e have paid premiums and provided deposits to secure future supply and capacity,which have increased our product costs and may continue to do so.If our existing suppliers are unable to scale their capabilities to meet our supply needs,we may require additional sources of capacity,which may require a
325、dditional deposits.We may not have 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 demand for our products,or otherwise
326、 cause a mismatch between supply and demand for our products and impact the timing and volume of our revenue,including:changes in product development cycles and time to market;competing technologies and competitor product releases and announcements;changes in business and economic conditions resulti
327、ng in decreased end demand;sudden or sustained government lockdowns or actions to control case spread of global or local health issues;rapidly changing technology or customer requirements;new product introductions and transitions resulting in less demand for existing products;new or unexpected end u
328、se cases;increase in demand for competitive products,including competitive actions;36 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 unde
329、rlying our products and technologies;the demand for our products relating to cryptocurrency mining,our Omniverse platform,third-party large language models and generative AI models;or government actions or changes in governmental policies,such as export controls or increased restrictions on gaming u
330、sage.Demand for our data center systems and products has surged over the last three quarters and our demand visibility extends into next year.To meet this expected demand,we have increased our purchase obligations with existing suppliers,added new suppliers,and entered into prepaid supply and capaci
331、ty agreements.These increased purchase volumes,the number of suppliers,and the integration of new suppliers into our supply chain,may create more supply chain complexity and execution risk.We expect to continue to enter into supplier and capacity arrangements and expect our supply to increase each q
332、uarter through next year.We may incur inventory provisions or impairments if our inventory or supply or capacity commitments exceed demand for our products or demand declines.Our customer orders and longer-term demand estimates may change or may not be correct,as we have experienced in the past.Prod
333、uct transitions are complex and can impact our revenue as we often ship both new and prior architecture products simultaneously and we and our channel partners prepare to ship and support new products.Due to our product introduction cycles,we are almost always in various stages of transitioning the architecture of our Data Center,Professional Visualization,and Gaming products.We will have a broade