INVESTOR PRESENTATION Q2 FY2021 August 24, 2020
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, benefits, abilities and impact of our products and technology; NVIDIA continuing to win new business; our partnerships; the impact of COVID- 19 and our response; our use of cash; NVIDIA’s financial outlook for the third quarter of fisc al 2021, including the impact of Mellanox; our operating expenses for fiscal 2021; the benefits and impact of the Mellanox acquisition; our growth drivers; the users and customers of our products and us reaching them; our financial policy; future revenue growth; our opportunities in existing and new markets; the TAM for our products; and performance in our financial metrics are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements and any other forward-looking statements that go beyond historical facts that are made in this presentation are subject to risks and uncertainties that may cause actual results to differ materially. Important factors that could cause actual results to differ materially include: global economic conditions; our reliance on third parties to manufacture, assemble, package and test our products; the impact of technological development and competition; development of new products and technologies or enhancements to our existing product and technologies; market acceptance of our products or our partners' products; design, manufacturing or software defects; changes in consumer preferences and demands; changes in industry standards and interfaces; unexpected loss of performance of our products or technologies when integrated into systems and other factors. NVIDIA has based these forward-looking statements largely on its current expectations and projections about future events and trends that it believes may affect its financial condition, results of operations, business strategy, short-term and long-term business operations and objectives, and financial needs. These forward-looking statements are subject to a number of risks and uncertainties, and you should not rely upon the forward-looking statements as predictions of future events. The future events and trends discussed in this presentation may not occur and actual results could differ materially and adversely from those anticipated or implied in the forward-looking statements. Although NVIDIA believes that the expectations reflected in the forward-looking statements are reasonable, the company cannot guarantee that future results, levels of activity, performance, achievements or events and circumstances reflected in the forward-looking statements will occur. Except as required by law, NVIDIA disclaims any obligation to update these forward-looking statements to reflect future events or circumstances. For a complete discussion of factors that could materially affect our financial results and operations, please refer to the reports we file from time to time with the SEC, including our Annual Report on Form 10-K and quarterly reports on Form 10-Q. Copies of reports we file with the SEC are posted on our website and are available from NVIDIA without charge. NVIDIA uses certain non-GAAP measures in this presentation including non-GAAP gross margin, non-GAAP operating margin, non-GAAP net income, non-GAAP operating income, non-GAAP diluted earnings per share, non-GAAP operating expenses, non-GAAP other income (expense), net, free cash flow, and adjusted EBITDA. NVIDIA believes the presentation of its non-GAAP financial measures enhances investors' overall understanding of the company's historical financial performance. The presentation of the company's non-GAAP financial measures is not meant to be considered in isolation or as a substitute for the company's financial results prepared in accordance with GAAP, and the company's non-GAAP measures may be different from non-GAAP measures used by other companies. Further information relevant to the interpretation of non-GAAP financial measures, and reconciliations of these non-GAAP financial measures to the most comparable GAAP measures, may be found in the slide titled “Reconciliation of Non - GAAP to GAAP Financial Measures”. 2
CONTENT Q2 FY2021 Earnings Summary Key Announcements This Quarter NVIDIA Overview Financials Non-GAAP to GAAP Reconciliation 3
Q2 FY21 EARNINGS SUMMARY 4
“The world is confronting COVID -19, one of the greatest challenges in human history. “We owe our thanks to those on the front lines of this crisis: first responders, healthcare workers, and service providers who inspire us every day with their bravery and selflessness. “At NVIDIA, we closed our nearly 60 offices around the world. We continue to pay contractors their full wages despite reduced staffing needs in our facilities. We gave employees raises early to put a little more money in their hands. Paying it forward, our employees have donated more than $10 million to help their communities.” Jensen 2020 Annual Meeting of Stockholders 5
HIGHLIGHTS Record Data Center revenue and exceptional strength in Gaming Total revenue up 50% y/y to $3.87B, ahead of outlook of $3.65B Data Center up 167% y/y to a record $1.75B; Gaming up 26% y/y to $1.65B Mellanox growth accelerated in its first quarter as part of NVIDIA; contributed 14% of total revenue NVIDA computing adoption is accelerating Cumulative CUDA GPUs shipped reach 1 billion NVIDIA developers reach 2 million: took 10+ years to reach 1 st million, <2 years for 2 nd million Ampere GPU architecture launch kicks off major new product cycle Ampere GPU is our biggest ever generational leap: performance up to 20X vs Volta Strong Hyperscale demand drives early ramp; Vertical Industries ramp still ahead 6
Q2 FY2021 FINANCIAL SUMMARY GAAP Non-GAAP 4,000 80.0% $3,866 Q2 FY21 Y/Y Q/Q Q2 FY21 Y/Y Q/Q 3,500 75.0% $3,866 +50% +26% $3,866 +50% +26% Revenue $3,105 $3,080 $3,014 3,000 70.0% 58.8% -100 bps -630 bps 66.0% +590 bps +20 bps Gross Margin 66.0% 65.8% $2,579 65.4% 64.1% 2,500 65.0% $651 +14% -33% $1,516 +89% +26% Operating Income 60.1% $622 +13% -32% $1,366 +79% +22% Net Income 2,000 60.0% $0.99 +10% -33% $2.18 +76% +21% Diluted EPS 1,500 55.0% Q2FY20 Q3FY20 Q4FY20 Q1FY21 Q2FY21 $1,566 +67% +72% $1,566 +67% +72% Cash Flow from Ops Revenue(M) Non-GAAP GM No difference between GAAP and Non-GAAP Cash Flow from Operations and Revenue 7
GAMING Revenue ($M) Highlights Broad-based upside across regions, products, channels 24% q/q and 26% y/y $1,800 $1,659 After closing down at the outset of the $1,654 pandemic, stores and iCafes have largely $1,600 $1,491 reopened and demand has picked up; online sales continue to thrive $1,400 $1,339 $1,313 Gaming’s growth amidst the pandemic $1,200 highlights its emergence as a leading form of entertainment worldwide $1,000 Gaming laptop demand very strong; ramped 100+ new laptops from OEMs $800 NVIDIA’s GeForce NOW cloud gaming $600 service extends support to Chromebooks – Q2FY20 Q3FY20 Q4FY20 Q1FY21 Q2FY21 joining PCs, Macs and Android devices 8
DATA CENTER Revenue ($M) Highlights 54% q/q and Both compute and networking within Data 167% y/y $1,752 $1,800 Center set a record, with accelerating year-on-year growth $1,600 We launched our new Ampere GPU architecture – greatest generational leap $1,400 A100 has been widely adopted by all $1,141 $1,200 major server vendors and cloud service providers $968 $1,000 NVIDIA set 16 records, sweeping all $800 $726 categories for commercially available $655 solutions in the latest MLPerf benchmark $600 The latest TOP500 list showed that 8 of the world’s top 10 supercomputers use $400 Q2FY20 Q3FY20 Q4FY20 Q1FY21 Q2FY21 NVIDIA GPUs and/or networking 9
PROFESSIONAL VISUALIZATION Revenue ($M) Highlights Sales were hurt by lower enterprise demand amid the closure of many offices around the world as a result of the $331 $350 $324 pandemic $307 $291 Initiatives by enterprises to enable 34% q/q and 30% y/y remote workers drove demand for virtual $203 and cloud-based graphics solutions vGPU bookings accelerated, increasing 60 percent year on year Despite NT challenges, we are winning new business in areas such as Healthcare - including Siemens, Philips, and General $0 Electric - and the Public Sector Q2FY20 Q3FY20 Q4FY20 Q1FY21 Q2FY21 10
AUTOMOTIVE Revenue ($M) Highlights $250 Impact of the pandemic was less $209 pronounced than our outlook for a 40% q/q decline, as auto production started to recover after bottoming in April $163 $162 $155 Announced a landmark partnership with 28% q/q and Mercedes-Benz which, starting in 2024, 47% y/y will launch software-defined, intelligent $111 vehicles across its entire fleet, using end- to-end NVIDIA technology The Mercedes-Benz announcement is transformative for NVIDIA’s evolving business model as the software content of our platforms grows, positioning us to $0 build a recurring revenue stream Q2FY20 Q3FY20 Q4FY20 Q1FY21 Q2FY21 11
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