Slide 1: Investor Presentation Q2 FY2023
Investor Presentation Q2 FY2023 September 1, 2022
Slide 2: Forward-looking statements
Except for the historical information contained herein, certain matters in this presentation including, but not limited to, statements as to: our financial position; our markets; the performance, specifications, benefits, impact and availability of our products and technologies, including NVIDIA Gra
Slide 3: Content
Content • Q2 FY23 Earnings Summary • Key Announcements This Quarter • NVIDIA Overview • Financials • Reconciliation of Non-GAAP to GAAP Financial Measures
Slide 4: Q2 FY23 Earnings Summary
Q2 FY23 Earnings Summary
Slide 5: Highlights
Highlights • Challenging quarter; shortfall to expectations driven primarily by weaker Gaming revenue • Total revenue up 3% y/y to $6.70B, below outlook of $8.10B +/- 2% provided on the Q1 earnings call • Data Center up 61% y/y to $3.81B • Gaming down 33% y/y to $2.04B • Data Center revenue impacted
Slide 6: Q2 FY2023 Financial Summary
Q2 FY2023 Financial Summary GAAP Non-GAAP 9,500 Revenue($M) Non-GAAP GM 100.0% Q2 FY23 Y/Y Q/Q Q2 FY23 Y/Y Q/Q 8,500 $8,288 90.0% $7,643 7,500 Revenue $6,704 +3% -19% $6,704 +3% -19% $7,103 $6,704 80.0% $6,507 6,500 Gross Margin 43.5% -21.3 pts -22.0 pts 45.9% -20.8 pts -21.2 pts 5,500 70.0% 66.7% 6
Slide 7: Data Center
Data Center Highlights 61% y/y and • Revenue from hyperscale customers nearly doubled y/y 1% q/q $3,750 $3,806 • Sales to North America hyperscale and cloud computing customers increased q/q, but were more than offset by $3,263 lower sales to China hyperscale customers $2,936 • Vertical industries g
Slide 8: Gaming
Gaming Highlights • Gaming partners and ecosystem are responding to a sudden slowdown in consumer demand and correcting $3,620 channel inventory $3,420 $3,221 • NVIDIA implemented programs with channel partners to $3,061 adjust pricing, and to price-position current high-end desktop GPUs ahead of ne
Slide 9: Professional Visualization
Professional Visualization $643 Highlights $622 4% y/y $577 and • Sequential increase in mobile revenue was more than 20% q/q $519 offset by lower desktop revenue, particularly at the $496 high-end • Enterprise demand slowed as macroeconomic headwinds intensified • OEMs worked to reduce inventory; e
Slide 10: Automotive
Automotive 45% y/y and 59% q/q $220 Highlights • Q2 an inflection point for Automotive revenue, as NVIDIA Orin has great momentum $152 • Strong growth driven by Auto AI Solutions (AI Cockpit $135 $125 $138 and Self-Driving revenue) • Strength in Self-Driving driven by New Energy Vehicle design wins
Slide 11: Sources & Uses of Cash
Sources & Uses of Cash $3,033 Highlights $2,682 • Sequential decrease reflects lower revenue and higher cash tax payments, partially offset by reduced advance payments on supply payments $1,731 53% y/y • Returned $3.44 billion to shareholders in the form of $1,519 and 27% q/q share repurchases and c
Slide 12: Q3 FY2023 Outlook
Q3 FY2023 Outlook Revenue $5.9 billion, plus or minus 2% Expect Gaming and Pro Viz revenue to decline q/q, partially offset by q/q growth in Data Center and Automotive Gross Margins 62.4% GAAP and 65.0% non-GAAP, plus or minus 50 basis points Operating Expense Approximately $2.59 billion GAAP and $1
Slide 13: Key Announcements This Quarter
Key Announcements This Quarter
Slide 14: Top Global Systems Makers Accelerate Adoption of NVIDIA Grace and Grace Hopper
Top Global Systems Makers Accelerate Adoption of NVIDIA Grace and Grace Hopper • Atos, Dell Technologies, GIGABYTE, HPE, Inspur, Lenovo and Supermicro are adopting NVIDIA Grace CPU Superchip and Grace Hopper Superchip to build the next-gen of servers turbocharging AI and HPC workloads for the exasca
Slide 15: NVIDIA Gains Ground in the Latest Top500 List of Supercomputers
NVIDIA Gains Ground in the Latest Top 500 List of Supercomputers • 357 of the top 500 supercomputers, or 71%, are powered by NVIDIA, including 31 of 39 new systems • Includes 154 NVIDIA GPU-accelerated systems, up from 138 at ISC21 and 145 at SC21 • 23 of the top 30 on the GREEN500 list of most ener
Slide 16: NVIDIA and Siemens to Enable Industrial Metaverse
NVIDIA and Siemens to Enable Industrial Metaverse • As a first step in this collaboration, NVIDIA plans to connect the Siemens Xcelerator open digital business platform with the NVIDIA Omniverse platform for 3D design and collaboration • Enables an industrial metaverse with physics-based digital mod
Slide 17: Reinforcing NVIDIA's Leadership in Latest MLPerf Training Benchmark
Reinforcing NVIDIA’s Leadership in Latest MLPerf Training Benchmark What is MLPerf? MLPerf June 2022 — AI Training • The industry’s first objective AI benchmark for • A100 GPU continues to secure the highest number of measuring machine learning performance wins; NVIDIA AI remains the only platform t
Slide 18: NVIDIA Announces Hybrid Quantum-Classical Computing Platform
NVIDIA Announces Hybrid Quantum-Classical Computing Platform • NVIDIA QODA (Quantum Optimized Device Architecture) is an open, unified programming model that spans today’s most powerful, “classical” computers and quantum processors • NVIDIA QODA Unified Programming Platform adopted by community’s gl
Slide 19: NVIDIA Omniverse Avatar Cloud Engine for Virtual Assistants and Digital Humans
NVIDIA Omniverse Avatar Cloud Engine for Virtual Assistants and Digital Humans • NVIDIA Omniverse Avatar Cloud Engine (ACE) is a suite of cloud-native AI models and services enabling businesses to create and deploy assistants and avatars • These assistants and avatars understand multiple languages,
Slide 20: NVIDIA and Partners Build Out Universal Scene Description
NVIDIA and Partners Build Out Universal Scene Description to Accelerate Industrial Metaverse and Next Wave of AI • Announced a broad initiative to evolve Universal Scene Description (USD), the open-source and extensible language of 3D worlds, to become a foundation of the open metaverse and 3D inter
Slide 21: Major Release of Omniverse with New USD Connectors and Neural Graphics SDKs
Major Release of Omniverse with New USD Connectors and Neural Graphics SDKs • Unveiled 11 new Omniverse Connectors including for PTC Creo, Visual Components and SideFX Houdini, bringing the total number of Connectors to the Omniverse USD ecosystem to 112 • Development is ongoing for Blender, Autodes
Slide 22: NVIDIA Overview
NVIDIA Overview
Slide 23: NVIDIA — A Computing Platform Company
NVIDIA — A Computing Platform Company NVIDIA pioneered accelerated computing to help solve the most challenging computational problems. The approach is broadly recognized as the way to advance computing as Moore’s law ends and AI lifts off. NVIDIA’s platform is installed in several hundred million c
Slide 24: NVIDIA At a Glance
NVIDIA At a Glance Accelerated computing pioneer Brief History Revenue by Market Platform OEM & Others Auto ProViz Data Center Gaming 1993: Founded by Jensen Huang, Chris Malachowsky, and Curtis Priem $26.9B 1999: IPO on NASDAQ at $12 (prior to 5 stock splits, now 48:1) 2001: Xbox win; fastest semic
Slide 25: Tremendous Market Forces Driving NVIDIA Growth
Tremendous Market Forces Driving NVIDIA Growth Gaming Artificial Intelligence Data Center Autonomous Robotics & Vehicles Omniverse
Slide 26: Our Core Businesses
Our Core Businesses Gaming Data Center Professional Visualization Automotive 46% of FY22 revenue 40% of FY22 revenue 8% of FY22 revenue 2% of FY22 revenue FY22 REVENUE $12.5B, FY22 REVENUE OF $10.6B, FY22 REVENUE OF $2.1B, FY22 REVENUE OF $566M, 5-YEAR CAGR OF 25% 5-YEAR CAGR OF 66% 5-YEAR CAGR OF 2
Slide 27: Growth, Profitability and Mix Metrics
Growth, Profitability and Mix Metrics Revenue ($M) Gross Margin Operating Margin Revenue ($M) Gross Margin Operating Margin 1H FY22 1H FY23 30,000 100% 15,000 100% 6 22 3 7 7 90% 38 24,000 12,000 80% 80% 48 66% 66% 67% 70% 58% 18,000 9,000 60% 36 62% 63% 60% 51 60% 46% 12,000 6,000 35% 40% 47% 50% 4
Slide 28: Why Accelerated Computing?
Why Accelerated Computing? Advancing computing in the post-Moore’s Law era 109 • The world’s demand for computing power continues to 108 grow exponentially, yet CPUs are no longer keeping up as GPU-Computing perf 1000X 107 2X per year Moore’s law has ended In 10 years • NVIDIA pioneered GPU-accelera
Slide 29: World Leader in Accelerated Computing
World Leader in Accelerated Computing Our four market platforms & key brands Gaming Data Center Professional Visualization Automotive GeForce GPU for PC gamers DGX/HGX/EGX for HPC/AI compute Quadro/NVIDIA RTX for workstations DRIVE for autonomous vehicles NVIDIA networking
Slide 30: Data Center
Data Center High performance computing (HPC) and AI NVIDIA Share of TOP500 Systems 3.5M 66% 5-YR CAGR 71% $10,613 68% 67% 65% 3.0M $7,556 2.5M 46% $6,696 2.0M 1.5M $2,932 $2,983 $1,932 1.0M FY18 FY19 FY20 FY21 FY22 1H FY23 2005 2010 2015 2022 ISC18 ISC19 ISC20 ISC21 ISC22 Revenue ($M) Registered NVI
Slide 31: Gaming
Gaming GeForce — The world’s largest gaming platform 25% 5-YR CAGR $12,462 #1 in PC gaming with 80%+ market share 15 of the top 15 most popular GPUs on Steam $7,759 $6,246 $5,513 $5,518 $5,662 Expanding the market with creators, gaming laptops and cloud gaming Powering the Nintendo Switch console FY
Slide 32: Professional Visualization
Professional Visualization Workstation graphics 20% 5-YR CAGR Accelerate Rendering | AR/VR | Data Science $2,111 Adobe Premiere Pro Adobe Premiere Rush Thea Render Inspire Studio Simulation and Sci Viz | Virtual Workstations Armorpaint ArcGIS Enterprise ArcGIS Pro LumenRT Microstation Connect $1,212
Slide 33: Automotive
Automotive Infotainment and autonomous vehicles 3% 5-YR CAGR $700 Software 87 $641 $558 $566 Sensors 50 $536 Mapping 10 $358 Robotaxis 26 Tier 1s 30 Trucks 14 Car Makers 48 FY18 FY19 FY20 FY21 FY22 1H FY23 Revenue ($M) NVIDIA DRIVE Partners Strong Partnership / Ecosystem
Slide 34: Large and Diverse Customer Base
Large and Diverse Customer Base Reaching hundreds of millions of end users through hundreds of customers Cloud 45M Designers/Creatives HPC ORNL LLNL Piz ABCI 20M Enterprise Users Summit Sierra Daint Vertical Industry Reaching 200M+ PC Gamers Every Major PC OEM/ODM Every Major Graphics Card Manufactu
Slide 35: Financials
Financials
Slide 36: Annual Cash & Cash Flow Metrics
Annual Cash & Cash Flow Metrics Operating Income (Non-GAAP) — $M Operating Cash Flow — $M 12,690 9,108 5,822 6,803 4,761 3,502 3,743 4,407 3,617 3,735 FY18 FY19 FY20 FY21 FY22 FY18 FY19 FY20 FY21 FY22 Free Cash Flow (Non-GAAP) — $M Cash Balance— $M 8,049 21,208 4,677 4,272 11,561 10,897 2,909 3,143
Slide 37: Corporate Responsibility
Corporate Responsibility ENVIRONMENTALLY CONSCIOUS A PLACE FOR PEOPLE TO DO THEIR LIFE’S WORK MANAGEMENT Time Magazine’s 100 Most Influential Companies #1 CEO Magazine’s 10 Best CEOs Fortune’s World’s Most Admired Companies Wall Street Journal’s Management Top 250 All- Stars NVIDIA GPUs Are Typicall
Slide 38: Reconciliation of Non-GAAP to GAAP Financial Measures
Reconciliation of Non-GAAP to GAAP Financial Measures
Slide 39: Reconciliation of Non-GAAP to GAAP Financial Measures
Reconciliation of Non-GAAP to GAAP Financial Measures Acquisition-Related Stock-Based and Other Costs Compensation IP-Related Gross Margin Non-GAAP (A) (B) Costs GAAP Q2 FY2022 66.7% (1.3) (0.5) (0.1) 64.8% Q3 FY2022 67.0% (1.2) (0.6) — 65.2% Q4 FY2022 67.0% (1.1) (0.5) — 65.4% Q1 FY2023 67.1% (1.1)
Slide 40: Reconciliation of Non-GAAP to GAAP Financial Measures (contd)
Reconciliation of Non-GAAP to GAAP Financial Measures (contd) Acquisition-Related Stock-Based and Other Costs Compensation IP-Related Gross Margin Non-GAAP (A) (B) Costs GAAP 1H FY22 66.4% (1.3) (0.5) (0.1) 64.5% 1H FY23 57.6% (1.4) (0.5) — 55.7% A. Consists of amortization of intangible assets B. S
Slide 41: Reconciliation of Non-GAAP to GAAP Financial Measures (contd.)
Reconciliation of Non-GAAP to GAAP Financial Measures (contd.) Acquisition-Related Stock-Based and Other Costs Compensation IP-Related Gross Margin Non-GAAP (A) (B) Costs GAAP FY 2018 60.2% — (0.3) — 59.9% FY 2019 61.7% — (0.2) (0.3) 61.2% FY 2020 62.5% — (0.4) (0.1) 62.0% FY 2021 65.6% (2.6) (0.5)
Slide 42: Reconciliation of Non-GAAP to GAAP Financial Measures (contd.)
Reconciliation of Non-GAAP to GAAP Financial Measures (contd.) Operating Acquisition-Related Stock-Based Margin and Other Costs Compensation ($ in Millions & Margin Percentage) Non-GAAP (A) (B) Other GAAP $3,617 (13) (391) (3) $3,210 FY 2018 37.2% (0.2) (4.0) — 33.0% $4,407 (2) (557) (44) $3,804 FY
Slide 43: Reconciliation of Non-GAAP to GAAP Financial Measures (contd.)
Reconciliation of Non-GAAP to GAAP Financial Measures (contd.) Operating Acquisition- Margin Related and Stock-Based ($ in Millions & Acquisition Other Costs Compensation Margin Percentage) Non-GAAP Termination Cost (A) (B) Other GAAP $5,628 -- (325) (894) (9) $4,400 1H FY22 46.3% -- (2.7) (7.3) (0.
Slide 44: Reconciliation of Non-GAAP to GAAP Financial Measures (contd.)
Reconciliation of Non-GAAP to GAAP Financial Measures (contd.) Acquisition- Stock- Acquisition Related and Based Termination Other Costs Compensation Other Tax Impact of Non-GAAP Cost (A) (B) (C) Adjustments GAAP Q2 FY2023 Operating income $1,325 -- (175) (649) (2) -- $499 ($ in million) Net income
Slide 45: Reconciliation of Non-GAAP to GAAP Financial Measures (contd.)
Reconciliation of Non-GAAP to GAAP Financial Measures (contd.) Purchases Related to Principal Payments Net Cash Property and Equipment on Property Provided by ($ in Millions) Free Cash Flow and Intangible Assets and Equipment Operating Activities FY 2018 $2,909 593 — $3,502 FY 2019 $3,143 600 — $3,7
Slide 46: Reconciliation of Non-GAAP to GAAP Financial Measures
Reconciliation of Non-GAAP to GAAP Financial Measures ($ in Millions) Q3 FY2023 Outlook Non-GAAP gross margin 65.0% Impact of stock-based compensation expense, acquisition-related costs, and other costs (2.6%) GAAP gross margin 62.4% Non-GAAP operating expenses $1,820 Impact of stock-based compensat
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