What changed in this filing

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Item 9A. Controls and Procedures

2023-02-24 compared with 2022-03-18 · 259 added, 251 removed, 1098 unchanged (32% of the section changed)

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Disclosure Controls and Procedures

Based on their evaluation as of January 30, 2022, our management, including our Chief Executive Officer and Chief Financial Officer, has concluded that our disclosure controls and procedures (as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934, as amended, or the Exchange Act) were effective to provide reasonable assurance.

Based on their evaluation as of January 29, 2023, our management, including our Chief Executive Officer and Chief Financial Officer, has concluded that our disclosure controls and procedures (as defined in Rule 13a-15(e) under the Exchange Act) were effective to provide reasonable assurance.

Management’s Annual Report on Internal Control Over Financial Reporting

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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 to accurately maintain the Company’s financial records used to report operating results.

The upgrade will occur in phases with the consolidated financial reporting and general ledger module to be implemented in fiscal year 2023.

We will evaluate each quarter whether there are changes that affect our internal control over financial reporting.

The ERP system is designed to accurately maintain our financial records used to report operating results.

The upgrade will occur in phases.

During the second quarter of fiscal year 2023, we completed the consolidated financial reporting phase of the implementation, which included updating our internal control over financial reporting.

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

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The full text of our Code of Conduct and Financial Team Code of Conduct are published on the Investor Relations portion of our website, under Governance, at www.nvidia.com.

If we make any amendments to either code, or grant any waiver from a provision of either code to any executive officer or director, we will promptly disclose the nature of the amendment or waiver on our website or in a report on Form 8-K.

The contents of our website are not a part of this Annual Report on Form 10-K.

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Information regarding accounting fees and services required by this item will be contained in our 2023 Proxy Statement under the caption “Fees Billed by the Independent Registered Public Accounting Firm,” and is hereby incorporated by reference.

EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

EXHIBIT AND FINANCIAL STATEMENT SCHEDULES

Financial Statements

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Consolidated Statements of Comprehensive Income for the years ended January 29, 2023, January 30, 2022, and January 31, 2021

Consolidated Balance Sheets as of January 3 0 , 202 2 and January 31, 2021

Consolidated Balance Sheets as of January 29, 2023 an d January 30, 2022

Consolidated Statements of Shareholders’ Equity for the years ended January 29, 2023, January 30, 2022, and January 31, 2021

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Opinions on the Financial Statements and Internal Control over Financial Reporting

We have audited the accompanying consolidated balance sheets of NVIDIA Corporation and its subsidiaries (the “Company”) as of January 30, 2022 and January 31, 2021, and the related consolidated statements of income, of comprehensive income, of shareholders' equity and of cash flows for each of the three years in the period ended January 30, 2022, including the related notes and financial statement schedule listed in the index appearing under Item 15(a)(2) (collectively referred to as the “consolidated financial statements”).

We also have audited the Company's internal control over financial reporting as of January 30, 2022, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

We have audited the accompanying consolidated balance sheets of NVIDIA Corporation and its subsidiaries (the “Company”) as of January 29, 2023 and January 30, 2022, and the related consolidated statements of income, comprehensive income, shareholders' equity and cash flows for each of the three years in the period ended January 29, 2023, including the related notes and financial statement schedule listed in the index appearing under Item 15(a)(2) (collectively referred to as the “consolidated financial statements”).

We also have audited the Company's internal control over financial reporting as of January 29, 2023, based on criteria established in Internal Control - Integrated Framewor k (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of January 29, 2023 and January 30, 2022, and the results of its operations and its cash flows for each of the three years in the period ended January 29, 2023 in conformity with accounting principles generally accepted in the United States of America.

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A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company;

(ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company;

directors of the company;

and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

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The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Valuation of Inventories - Provisions for Excess or Obsolete Inventories

As described in Note 1 to the consolidated financial statements, the Company charges cost of sales for inventory provisions to write-down inventory to the lower of cost or net realizable value or for obsolete or excess inventory.

Valuation of Inventories - Provisions for Excess or Obsolete Inventories and Excess Product Purchase Commitments

As described in Notes 1, 10 and 13 to the consolidated financial statements, the Company charges cost of sales for inventory provisions to write-down inventory for excess or obsolete inventory and for excess product purchase commitments.

Most of the Company’s inventory provisions relate to excess quantities of products, based on the Company’s inventory levels and future product purchase commitments compared to assumptions about future demand and market conditions.

As of January 30, 2022, the Company’s consolidated inventories balance was $2,605 million.

The principal considerations for our determination that performing procedures relating to the valuation of inventories, specifically the provisions for excess or obsolete inventories, is a critical audit matter are the significant judgment by management when developing provisions for excess or obsolete inventories, including developing assumptions related to future demand and market conditions.

As of January 29, 2023, the Company’s consolidated inventories balance was $5,159 million and the Company’s consolidated outstanding inventory purchase and long-term supply obligations balance was $4,920 million, of which a significant portion relates to inventory purchase obligations.

The principal considerations for our determination that performing procedures relating to the valuation of inventories, specifically the provisions for excess or obsolete inventories and excess product purchase commitments, is a critical audit matter are the significant judgment by management when developing provisions for excess or obsolete inventories and excess product purchase commitments, including developing assumptions related to future demand and market conditions.

This in turn led to significant auditor judgment, subjectivity, and effort in performing procedures and evaluating management’s assumptions related to future demand and market conditions.

Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements.

These procedures included testing the effectiveness of controls relating to management’s provisions for excess or obsolete inventories, including controls over management’s assumptions related to future demand and market conditions.

These procedures also included, among others, testing management’s process for developing the provisions for excess or obsolete inventories;

These procedures included testing the effectiveness of controls relating to management’s provisions for excess or obsolete inventories and excess product purchase commitments, including controls over management’s assumptions related to future demand and market conditions.

These procedures also included, among others, testing management’s process for developing the provisions for excess or obsolete inventories and excess product purchase commitments;

evaluating the appropriateness of management’s approach;

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and evaluating the reasonableness of management’s assumptions related to future demand and market conditions.

Evaluating management’s assumptions related to future demand and market conditions involved evaluating whether the assumptions used by management were reasonable considering (i) current and past results, including historical product life cycle, (ii) the consistency with external market and industry data, (iii) changes in technology, and (iv) comparing prior period estimates to actual results of the same period.

/s/ PricewaterhouseCoopers LLP

San Jose, California

March 17, 2022

February 24, 2023

We have served as the Company’s auditor since 2004.

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Sales, general and administrative 2,440 2,166 1,940

Acquisition termination cost 1,353 — —

Total operating expenses 11,132 7,434 5,864

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Income before income tax 4,181 9,941 4,409

Income tax expense 189 77 174

Income tax expense (benefit) ( 187 ) 189 77

Net income $ 4,368 $ 9,752 $ 4,332

Net income per share:

$ 3.91 $ 1.76 $ 1.15

$ 3.85 $ 1.73 $ 1.13

Basic $ 1.76 $ 3.91 $ 1.76

Diluted $ 1.74 $ 3.85 $ 1.73

Weighted average shares used in per share computation:

2,496 2,467 2,439

2,535 2,510 2,472

Basic 2,487 2,496 2,467

Diluted 2,507 2,535 2,510

See accompanying notes to the consolidated financial statements.

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Reclassification adjustments for net realized gain (loss) included in net income 1 — ( 2 )

Net change in unrealized gain (loss) ( 16 ) — 8

Net change in unrealized loss ( 30 ) ( 16 ) —

Cash flow hedges:

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Additional paid-in capital 11,971 10,385

Treasury stock, at cost ( No ne as of January 30, 2022 and 1,380 shares as of January 31, 2021)

Accumulated other comprehensive income (loss) ( 11 ) 19

Accumulated other comprehensive loss ( 43 ) ( 11 )

Retained earnings 10,171 16,235

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CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

Outstanding Additional Treasury Accumulated Other Comprehensive Retained Total Shareholders'

(In millions, except per share data) Shares Amount Paid-in Capital Stock Income (Loss) Earnings Equity

Outstanding Additional Paid-in Treasury Accumulated Other Comprehensive Retained Total Shareholders'

(In millions, except per share data) Shares Amount Capital Stock Income (Loss) Earnings Equity

Balances, January 26, 2020 2,450 $ 3 $ 7,043 $ ( 9,814 ) $ 1 $ 14,971 $ 12,204

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— — — — — ( 395 ) ( 395 )

Fair value of partially vested equity awards assumed in connection with acquisitions — — 86 — — — 86

Stock-based compensation — — 1,396 — — — 1,396

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Net income — — — — — 9,752 9,752

Other comprehensive income — — — — 18 — 18

Other comprehensive loss — — — — ( 30 ) — ( 30 )

Issuance of common stock from stock plans 35 — 281 — — — 281

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Stock-based compensation — — 2,001 — — — 2,001

Retirement of Treasury Stock

— — ( 20 ) 12,046 — ( 12,026 ) —

Balances, January 30, 2022 2,506 3 10,385 — ( 11 ) 16,235 26,612

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Tax withholding related to vesting of restricted stock units ( 8 ) — ( 1,475 ) — — — ( 1,475 )

Shares repurchased ( 63 ) ( 1 ) ( 4 ) — — ( 10,034 ) ( 10,039 )

Cash dividends declared and paid ($ 0.16 per common share)

— — — — — ( 398 ) ( 398 )

Fair value of partially vested equity awards assumed in connection with acquisitions — — 18 — — — 18

Stock-based compensation — — 2,710 — — — 2,710

Retirement of Treasury Stock

— — ( 20 ) 12,046 — ( 12,026 ) —

Balances, January 29, 2023 2,466 $ 2 $ 11,971 $ — $ ( 43 ) $ 10,171 $ 22,101

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Depreciation and amortization 1,544 1,174 1,098

Acquisition termination cost 1,353 — —

Losses (gains) on investments in non-affiliates, net 45 ( 100 ) —

Deferred income taxes ( 2,164 ) ( 406 ) ( 282 )

(Gains) losses on investments in non-affiliates, net ( 100 ) — 1

Other ( 7 ) 47 ( 20 )

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Cash flows from financing activities:

Issuance of debt, net of issuance costs 4,977 4,968 —

Proceeds related to employee stock plans 355 281 194

Payments related to repurchases of common stock

( 10,039 ) — —

Payments related to tax on restricted stock units ( 1,475 ) ( 1,904 ) ( 942 )

Repayment of debt ( 1,000 ) — —

Dividends paid ( 398 ) ( 399 ) ( 395 )

Principal payments on property and equipment ( 58 ) ( 83 ) ( 17 )

Issuance of debt, net of issuance costs — 4,977 4,968

Repayment of debt — ( 1,000 ) —

Other ( 2 ) ( 7 ) ( 4 )

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All references to “NVIDIA,” “we,” “us,” “our” or the “Company” mean NVIDIA Corporation and its subsidiaries.

On July 19, 2021, we executed a four -for-one stock split of our common stock.

All share, equity award, and per share amounts and related shareholders' equity balances presented herein have been retroactively adjusted to reflect the Stock Split.

We operate on a 52- or 53-week year, ending on the last Sunday in January.

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Certain prior fiscal year balances have been reclassified to conform to the current fiscal year presentation.

Prior period intangible asset gross carrying amount and accumulated amortization in Note 7 have been adjusted to write off immaterial fully amortized intangible assets as of January 30, 2022.

Principles of Consolidation

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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 property, plant, and equipment.

Based on advances in technology and usage rate, we increased the estimated useful life of a majority of the server, storage, and network equipment from three to a range of four to five years , and assembly and test equipment from five to seven years .

This change in accounting estimate 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, it is estimated this change will increase our fiscal year 2024 operating income by $ 133 million as a result of the reduction in depreciation expense.

Revenue Recognition

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Revenue from product sales is recognized upon transfer of control of products to customers in an amount that reflects the consideration we expect to receive in exchange for those products.

Certain products are sold with support or an extended warranty for the incorporated system, hardware, and/or software.

Certain products are

NVIDIA CORPORATION AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

sold with support or an extended warranty for the incorporated system, hardware, and/or software.

Support and extended warranty revenue are recognized ratably over the service period, or as services are performed.

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However, if product returns for a fiscal period are anticipated to exceed historical return rates, we may determine that additional sales return allowances are required to properly reflect our estimated exposure for product returns.

NVIDIA CORPORATION AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Our customer programs involve rebates, which are designed to serve as sales incentives to resellers of our products in various target markets, and marketing development funds, or MDFs, which represent monies paid to our partners that are earmarked for market segment development and are designed to support our partners’ activities while also promoting NVIDIA products.

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Cloud Services

Cloud services, which allow customers to use hosted software over the contract period without taking possession of the software, are provided on a subscription basis or a combination of subscription plus usage.

Cloud services, which allow customers to use hosted software and hardware infrastructure without taking possession of the software or hardware, are provided on a subscription basis or a combination of subscription plus usage.

Revenue related to subscription-based cloud services is recognized ratably over the contract period.

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We use a Monte Carlo simulation on the date of grant to estimate the fair value of performance stock units that are based on market conditions, or market-based PSUs.

The compensation expense for RSUs and market-based PSUs is recognized using a straight-line attribution method over the requisite employee service period while compensation expense for PSUs is recognized using an accelerated amortization model.

The compensation expense for RSUs and market-based PSUs is recognized using a straight-line

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

attribution method over the requisite employee service period while compensation expense for PSUs is recognized using an accelerated amortization model.

We estimate the fair value of shares to be issued under our employee stock purchase plan, or ESPP, using the Black-Scholes model at the commencement of an offering period in March and September of each year.

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We currently, are, and will likely continue to be subject to claims, litigation, and other actions, including potential regulatory proceedings, involving patent and other intellectual property matters, taxes, labor and employment, competition and antitrust, commercial disputes, goods and services offered by us and by third parties, and other matters.

There are many uncertainties associated with any litigation or investigation, and we cannot be certain that these actions or other third-party claims against us will be resolved without litigation, fines and/or substantial

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settlement payments or judgements.

If information becomes available that causes us to determine that a loss in any of our pending litigation, investigations or settlements is probable, and we can reasonably estimate the loss associated with such events, we will record the loss in accordance with U.S.

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Foreign Currency Remeasurement

We use the United States dollar as our functional currency for all of our subsidiaries.

We use the United States dollar as our functional currency for our subsidiaries.

Foreign currency monetary assets and liabilities are remeasured into United States dollars at end-of-period exchange rates.

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If we determine that payment of these amounts is unnecessary or if the recorded tax liability is less than our current assessment, we may be required to recognize an income tax benefit or additional income tax expense in our financial statements accordingly.

As of January 30, 2022, we had a valuation allowance of $ 907 million related to state and certain other deferred tax assets that management determined are not likely to be realized due to jurisdictional projections of future taxable income, tax attributes usage limitation by certain jurisdictions, and potential utilization limitations of tax attributes acquired as a result of stock ownership changes.

As of January 29, 2023, we had a valuation allowance of $ 1.48 billion related to capital loss carryforwards, state, and certain other deferred tax assets that management determined are not likely to be realized due to jurisdictional projections of future taxable income, including capital gains, tax attributes usage limitation by certain jurisdictions, and potential utilization limitations of tax attributes acquired as a result of stock ownership changes.

To the extent realization of the deferred tax assets becomes more-likely-than-not, we would recognize such deferred tax assets as an income tax benefit during the period.

NVIDIA CORPORATION AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

We recognize the benefit from a tax position only if it is more-likely-than-not that the position would be sustained upon audit based solely on the technical merits of the tax position.

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We classify our cash equivalents and marketable securities related to debt securities at the date of acquisition as available-for-sale.

These available-for-sale debt securities are reported at fair value with the related unrealized gains and losses included in accumulated other comprehensive income or loss, a component of shareholders’ equity, net of

NVIDIA CORPORATION AND SUBSIDIARIES

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The fair value of interest-bearing debt securities includes accrued interest.

Realized gains and losses on the sale of marketable securities are determined using the specific-identification method and recorded in the other income (expense), net, section of our Consolidated Statements of Income.

All of our available-for-sale debt investments are subject to a periodic impairment review.

Available-for-sale debt investments are subject to a periodic impairment review.

If the estimated fair value of available-for-sale debt securities is less than its amortized cost basis, we determine if the difference, if any, is caused by expected credit losses and write-down the amortized cost basis of the securities if it is more likely than not we will be required or we intend to sell the securities before recovery of its amortized cost basis.

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We perform ongoing credit evaluations of our customers’ financial condition and maintain an allowance for potential credit losses.

This allowance consists of an amount identified for specific customers and an amount based on overall estimated exposure.

This allowance consists of an amount

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identified for specific customers and an amount based on overall estimated exposure.

Our overall estimated exposure excludes amounts covered by credit insurance and letters of credit.

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Inventory costs consist primarily of the cost of semiconductors, including wafer fabrication, assembly, testing and packaging, manufacturing support costs, including labor and overhead associated with such purchases, final test yield fallout, and shipping costs, as well as the cost of purchased memory products and other component parts.

We charge cost of sales for inventory provisions to write-down our inventory to the lower of cost or net realizable value or for obsolete or excess inventory.

We charge cost of sales for inventory provisions to write-down our inventory to the lower of cost or net realizable value or for obsolete or excess inventory, and for excess product purchase commitments.

Most of our inventory provisions relate to excess quantities of products, based on our inventory levels and future product purchase commitments compared to assumptions about future demand and market conditions.

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Leasehold improvements and assets recorded under finance leases are amortized over the shorter of the expected lease term or the estimated useful life of the asset.

NVIDIA CORPORATION AND SUBSIDIARIES

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We determine if an arrangement is or contains a lease at inception.

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Qualitative factors include industry and market considerations, overall financial performance, and other relevant events and factors affecting the reporting units.

Our quantitative impairment test considers both the income approach and the market approach to estimate a reporting unit’s fair value.

The income and market valuation approaches consider a number of factors that include, but are not limited to, prospective financial information, growth rates, residual values, discount rates and comparable multiples from publicly traded companies in our industry and require us to make certain assumptions and estimates regarding industry economic factors and the future profitability of our business.

The quantitative impairment test considers both the income approach and the market approach to estimate a reporting unit’s fair value.

The income and market valuation approaches consider factors that include, but are not limited to, prospective financial information, growth rates, residual values, discount rates and comparable multiples from publicly traded companies in our industry and require us to make certain assumptions and estimates regarding industry economic factors and the future profitability of our business.

NVIDIA CORPORATION AND SUBSIDIARIES

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Intangible Assets and Other Long-Lived Assets

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Management’s estimates of fair value are based upon assumptions believed to be reasonable, but our estimates and assumptions are inherently uncertain and subject to refinement.

The estimates and assumptions used in valuing intangible assets include, but are not limited to, the amount and timing of projected future cash flows, discount rate used

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to determine the present value of these cash flows and asset lives.

The estimates and assumptions used in valuing intangible assets include, but are not limited to, the amount and timing of projected future cash flows, discount rate used to determine the present value of these cash flows and asset lives.

These estimates are inherently uncertain and, therefore, actual results may differ from the estimates made.

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Marketable equity investments in publicly-held companies are recorded at fair value with the related unrealized and realized gains and losses recognized in other income (expense), net.

Adoption of New and Recently Issued Accounting Pronouncements

Recently Adopted Accounting Pronouncement

In October 2021, the Financial Accounting Standards Board issued a new accounting standard to require that an acquirer recognize and measure contract assets and liabilities acquired in a business combination in accordance with Accounting Standards Codification 606, Revenue from Contracts with Customers.

We early adopted this accounting standard in the third quarter of fiscal year 2022 and the impact was immaterial.

Note 2 - Business Combination

Termination of the Arm Share Purchase Agreement

On February 8, 2022, NVIDIA and SoftBank announced the termination of the Share Purchase Agreement whereby NVIDIA would have acquired Arm from SoftBank.

The parties agreed to terminate because of significant regulatory challenges preventing the completion of the transaction.

We intend to record in operating expenses a $ 1.36 billion charge in the first quarter of fiscal year 2023 reflecting the write-off of the prepayment provided at signing in September 2020.

Acquisition of Mellanox Technologies, Ltd.

In April 2020, we completed the acquisition of all outstanding shares of Mellanox for a total purchase consideration of $ 7.13 billion.

Mellanox is a supplier of high-performance interconnect products for computing, storage and communications applications.

We acquired Mellanox to optimize data center workloads to scale across the entire computing, networking, and storage stack.

In February 2022, NVIDIA and SoftBank announced the termination of the Share Purchase Agreement whereby NVIDIA would have acquired Arm from SoftBank.

The parties agreed to terminate due to significant

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

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.

Acquisition of Mellanox Technologies, Ltd.

In April 2020, we completed the acquisition of all outstanding shares of Mellanox for a total purchase consideration of $ 7.13 billion.

Purchase Price Allocation

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Revenue attributable to Mellanox was approximately 10 % for fiscal year 2021.

There is not a practical way to determine net income attributable to Mellanox due to integration.

Acquisition-related costs attributable to Mellanox of $ 28 million were included in selling, general and administrative expense for fiscal year 2021.

There is not a practical way to determine net income attributable to Mellanox due to

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Acquisition-related costs attributable to Mellanox of $ 28 million were included in selling, general and administrative expense for fiscal year 2021.

Intangible Assets

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The fair value of the finite-lived intangible assets will be amortized over the estimated useful lives based on the pattern in which the economic benefits are expected to be received to cost of revenue and operating expenses.

Mellanox has an IPR&D project associated with the next generation interconnect product that had not yet reached technological feasibility as of the acquisition date.

Mellanox had an IPR&D project associated with the next generation interconnect product that had not yet reached technological feasibility as of the acquisition date.

Accordingly, we recorded an indefinite-lived intangible asset of $ 630 million for the fair value of this project, which was initially not amortized.

Instead, the project is tested for impairment annually and whenever events or changes in circumstances indicate that the project may be impaired or may have reached technological feasibility.

Once and if the project reaches technological feasibility, we will begin to amortize the intangible asset over its estimated useful life.

In fiscal year 2023, we commenced amortization of the IPR&D intangible asset.

Supplemental Unaudited Pro Forma Information

The following unaudited pro forma financial information summarizes the combined results of operations for NVIDIA and Mellanox as if the companies were combined as of the beginning of fiscal year 2020:

January 31, 2021 January 26, 2020

January 31, 2021

(In millions)

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Net income $ 4,757

The unaudited pro forma information includes adjustments related to amortization of acquired intangible assets, adjustments to stock-based compensation expense, fair value of acquired inventory, and transaction costs.

The unaudited pro forma information presented above is for informational purposes only and is not necessarily indicative of our consolidated results of operations of the combined business had the acquisition actually occurred at the beginning of fiscal year 2020 or of the results of our future operations of the combined businesses.

The pro forma results reflect the inventory step-up expense of $ 161 million in the fiscal year 2020 and were excluded from the pro forma results for fiscal year 2021.

There were no other material nonrecurring adjustments.

The unaudited pro forma information presented above includes adjustments related to amortization of acquired intangible assets, adjustments to stock-based compensation expense, fair value of acquired inventory, and transaction costs.

The unaudited pro forma information is for informational purposes only and is not necessarily indicative of our consolidated results of operations of the combined business had the acquisition actually occurred at the beginning of fiscal year 2020 or of the results of our future operations of the combined businesses.

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The pro forma results for fiscal year 2021 excluded the inventory step-up expense of $ 161 million.

There were no other material nonrecurring adjustments.

Note 3 - Leases

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Long-term operating lease liabilities $ 902

In addition to our existing operating lease obligations, we have operating leases that are expected to commence within fiscal year 2023 with lease terms of 7 years for $ 169 million.

In addition to above, we have operating leases, primarily for our data centers, that are expected to commence within fiscal years 2024 and 2025 with lease terms of 2 to 8 years for $ 463 million.

Operating lease expense for fiscal years 2023, 2022, and 2021 was $ 193 million, $ 168 million, $ 145 million, respectively.

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Operating lease assets obtained in exchange for lease obligations $ 358 $ 266 $ 200

(1) Fiscal year 2021 includes $ 80 million of operating lease assets addition due to Mellanox.

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 %.

As of January 30, 2022, our operating leases had a weighted average remaining lease term of 7.1 years and a weighted average discount rate of 2.51 %.

Note 4 - Stock-Based Compensation

Our stock-based compensation expense is associated with restricted stock units, or RSUs, performance stock units that are based on our corporate financial performance targets, or PSUs, performance stock units that are based on market conditions, or market-based PSUs, and our ESPP.

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Note 4 - Stock-Based Compensation

Our Consolidated Statements of Income include stock-based compensation expense, net of amounts allocated to inventory, as follows:

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Weighted average grant-date fair value per share $ 51.87 $ 23.24 $ 16.91

As of January 30, 2022, there was $ 4.87 billion of aggregate unearned stock-based compensation expense, net of forfeitures.

This amount is expected to be recognized over a weighted average period of 2.4 years for RSUs, PSUs, and market-based PSUs, and 0.9 years for ESPP.

As of January 29, 2023, there was $ 6.56 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-based PSUs, and 1.0 year for ESPP.

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

The fair value of shares issued under our ESPP have been estimated with the following assumptions:

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therefore, the fair values of RSUs, PSUs, and market-based PSUs are discounted for the dividend yield.

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Additionally, for RSU, PSU, and market-based PSU awards, we estimate forfeitures semi-annually and revise the estimates of forfeiture in subsequent periods if actual forfeitures differ from those estimates.

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Currently, we grant RSUs, PSUs and market-based PSUs under the 2007 Plan, under which, as of January 29, 2023, there were 160 million shares available for future grants.

Subject to certain exceptions, RSUs granted to employees either vest (A) over a four-year period, subject to continued service, with 25 % vesting on a pre-determined date that is close to the anniversary of the date of grant and 6.25 % vesting quarterly thereafter, or (B) over a three-year period, subject to continued service, with 40 % vesting on a pre-determined date that is close to the anniversary of the date of grant and 7.5 % vesting quarterly thereafter.

Subject to certain exceptions, RSUs granted to employees vest (A) over a four-year period, subject to continued service, with 25 % vesting on a pre-determined date that is close to the anniversary of the date of grant and 6.25 % vesting quarterly thereafter, (B) over a three-year period, subject to continued service, with 40 % vesting on a pre-determined date that is close to the anniversary of the date of grant and 7.5 % vesting quarterly thereafter, or (C) over a four-year period, subject to continued service, with 6.25 % vesting quarterly.

PSUs vest over a four-year period, subject to continued service, with 25 % vesting on a pre-determined date that is close to the anniversary of the date of grant and 6.25 % vesting quarterly thereafter.

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However, the number of shares subject to both PSUs and market-based PSUs that are eligible to vest is generally determined by the Compensation Committee based on achievement of pre-determined criteria.

NVIDIA CORPORATION AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Amended and Restated 2012 Employee Stock Purchase Plan

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As of January 29, 2023, we had 230 million shares reserved for future issuance under the 2012 Plan.

NVIDIA CORPORATION AND SUBSIDIARIES

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Equity Award Activity

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As of January 29, 2023 and January 30, 2022, there were 160 million and 131 million shares, respectively, of common stock available for future grants under our equity incentive plans.

As of January 30, 2022, the total intrinsic value of options currently exercisable and outstanding was $ 1.38 billion, with an average exercise price of $ 3.55 per share and an average remaining term of 1.1 years.

As of January 29, 2023, the total intrinsic value of options currently exercisable and outstanding was $ 410 million, with an average exercise price of $ 3.79 per share and an average remaining term of 0.5 years.

The total intrinsic value of options exercised was $ 642 million, $ 741 million, and $ 521 million for fiscal years 2023, 2022, and 2021, respectively.

Upon the exercise of an option, we issue new shares of stock.

Upon the exercise of an option, we issue a new share of stock.

The total fair value of RSUs and PSUs, as of their respective vesting dates, during the years ended January 29, 2023, January 30, 2022, and January 31, 2021, was $ 4.27 billion, $ 5.56 billion, and $ 2.67 billion, respectively.

NVIDIA CORPORATION AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Note 5 - Net Income Per Share

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(2) Calculated as net income divided by diluted weighted average shares.

NVIDIA CORPORATION AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Note 6 - Goodwill

As of January 30, 2022, the total carrying amount of goodwill was $ 4.35 billion, consisting of goodwill balances allocated to our Graphics and Compute & Networking reporting units of $ 361 million and $ 3.99 billion, respectively.

As of January 31, 2021, the total carrying amount of goodwill was $ 4.19 billion, consisting of goodwill balances allocated to our Graphics and Compute & Networking reporting units of $ 347 million and $ 3.85 billion, respectively.

As of January 29, 2023, the total carrying amount of goodwill was $ 4.37 billion, consisting of goodwill balances allocated to our Compute & Networking and Graphics reporting units of $ 4.00 billion and $ 370 million, respectively.

As of January 30, 2022, the total carrying amount of goodwill was $ 4.35 billion, consisting of goodwill balances allocated to our Compute & Networking and Graphics reporting units of $ 3.99 billion and $ 361 million, respectively.

Goodwill increased by $ 23 million in fiscal year 2023 from acquisitions.

We assigned $ 14 million of the increase in goodwill to our Compute & Networking segment and assigned $ 9 million of the increase to our Graphics segment.

During the fourth quarters of fiscal years 2022, 2021, and 2020, we completed our annual impairment tests and concluded that goodwill was no t impaired in any of these years.

During the fourth quarters of fiscal years 2023, 2022, and 2021, we completed our annual qualitative impairment tests and concluded that goodwill was no t impaired in any of these years.

Note 7 - Amortizable Intangible Assets

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Amortization Net

(In millions) (In millions)

(In millions)

Acquisition-related intangible assets (1) $ 3,093 $ ( 1,614 ) $ 1,479 $ 3,061 $ ( 947 ) $ 2,114

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Total intangible assets $ 3,539 $ ( 1,863 ) $ 1,676 $ 3,507 $ ( 1,168 ) $ 2,339

(1) As of January 30, 2022, acquisition-related intangible assets include the fair value of a Mellanox in-process research and development project of $ 630 million, which has not yet commenced amortization.

(1) During the first quarter of fiscal year 2023, we commenced amortization of a $ 630 million in-process research and development intangible asset related to our acquisition of Mellanox.

NVIDIA CORPORATION AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Amortization expense associated with intangible assets for fiscal years 2023, 2022, and 2021 was $ 699 million, $ 563 million, and $ 612 million, respectively.

Future amortization expense related to the net carrying amount of intangible assets, excluding in-process research and development, as of January 30, 2022 is estimated to be $ 585 million in fiscal year 2023, $ 461 million in fiscal year 2024, $ 405 million in fiscal year 2025, $ 121 million in fiscal year 2026, $ 16 million in fiscal year 2027, and $ 121 million in fiscal year 2028 and thereafter.

Future amortization expense related to the net carrying amount of intangible assets as of January 29, 2023 is estimated to be $ 602 million in fiscal year 2024, $ 541 million in fiscal year 2025, $ 247 million in fiscal year 2026, $ 142 million in fiscal year 2027, $ 35 million in fiscal year 2028, and $ 109 million in fiscal year 2029 and thereafter.

Note 8 - Cash Equivalents and Marketable Securities

Our cash equivalents and marketable securities related to debt securities are classified as “available-for-sale” debt securities.

NVIDIA CORPORATION AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

The following is a summary of cash equivalents and marketable securities as of January 29, 2023 and January 30, 2022:

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Debt securities issued by United States government agencies 1,836 — ( 2 ) 1,834 50 1,784

Certificates of deposit 1,561 — — 1,561 21 1,540

Money market funds 1,777 — — 1,777 1,777 —

Certificates of deposit 365 — — 365 134 231

Foreign government bonds 140 — — 140 100 40

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Corporate debt securities $ 9,977 $ — $ ( 3 ) $ 9,974 $ 1,102 $ 8,872

Debt securities issued by United States government agencies 2,975 1 — 2,976 28 2,948

Debt securities issued by the United States Treasury 7,314 — ( 14 ) 7,300 — 7,300

Debt securities issued by United States government agencies 1,612 — — 1,612 256 1,356

Certificates of deposit 1,561 — — 1,561 21 1,540

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

The following table provides the breakdown of unrealized losses as of January 30, 2022, aggregated by investment category and length of time that individual securities have been in a continuous loss position:

The following tables provide the breakdown of unrealized losses as of January 29, 2023 and January 30, 2022, aggregated by investment category and length of time that individual securities have been in a continuous loss position:

January 29, 2023

Less than 12 Months 12 Months or Greater Total

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(In millions)

Debt securities issued by the United States Treasury $ 2,444 $ ( 21 ) $ 1,172 $ ( 23 ) $ 3,616 $ ( 44 )

Corporate debt securities 1,188 ( 7 ) 696 ( 5 ) 1,884 ( 12 )

Debt securities issued by United States government agencies 1,307 ( 2 ) — — 1,307 ( 2 )

Total $ 4,939 $ ( 30 ) $ 1,868 $ ( 28 ) $ 6,807 $ ( 58 )

January 30, 2022

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 United States Treasury $ 5,292 $ ( 14 ) $ — $ — $ 5,292 $ ( 14 )

Corporate debt securities 2,445 ( 3 ) 19 — 2,464 ( 3 )

Total $ 7,737 $ ( 17 ) $ 19 $ — $ 7,756 $ ( 17 )

Net realized gains and unrealized gains and losses were not significant for all periods presented.

The gross unrealized losses are related to fixed income securities, driven primarily by changes in interest rates.

Net realized gains and losses were not significant for all periods presented.

The amortized cost and estimated fair value of cash equivalents and marketable securities as of January 29, 2023 and January 30, 2022 are shown below by contractual maturity.

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Level 2 $ 410 $ 551

3.70 % Notes Due 2060

Level 2 $ 551 $ 602

(1) Unrealized losses of $ 61 million from investments in publicly-traded equity securities were recorded in other income (expense), net, in fiscal year 2023.

Unrealized gains of $ 48 million from an investment in a publicly-traded equity security were recorded in other income (expense), net, in fiscal year 2022.

(2) These liabilities are carried on our Consolidated Balance Sheets at their original issuance value, net of unamortized debt discount and issuance costs.

NVIDIA CORPORATION AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Note 10 - Balance Sheet Components

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(In millions)

Inventories (1) :

Raw materials $ 2,430 $ 791

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Total inventories $ 5,159 $ 2,605

(1) In fiscal years 2023 and 2022, we recorded an inventory reserve expense of approximately $ 1.04 billion and $ 173 million in cost of revenue, respectively.

NVIDIA CORPORATION AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

2023 January 30,

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Prepaid supply agreements $ 2,989 $ 1,747

Advanced consideration for acquisition (1) 1,357 1,357

Prepaid royalties 387 409

Investment in non-affiliated entities 299 266

Advanced consideration for acquisition (1) — 1,353

Total other assets $ 3,820 $ 3,841

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Customer program accruals $ 1,196 $ 1,000

Excess inventory purchase obligations (1) 954 196

Accrued payroll and related expenses 530 409

Taxes payable 467 132

Deferred revenue (2) 354 300

Excess inventory purchase obligations 196 52

Operating leases 176 144

Other 443 371

Total accrued and other current liabilities $ 4,120 $ 2,552

(1) In fiscal years 2023 and 2022, we recorded an expense of approximately $ 1.13 billion and $ 181 million, respectively, in cost of revenue for inventory purchase obligations in excess of our current demand projections, and cancellation and underutilization penalties.

(2) Deferred revenue primarily includes customer advances and deferrals related to license and development arrangements, support for hardware and software, and cloud services.

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Deferred revenue (2) 218 202

Other 126 135

Licenses payable 181 77

Total other long-term liabilities $ 1,913 $ 1,553

(1) As of January 30, 2022, income tax payable represents the long-term portion of the one-time transition tax payable of $ 251 million, long-term portion of the unrecognized tax benefits of $ 670 million, and related interest and penalties of $ 59 million.

(1) Income tax payable is comprised of the long-term portion of the one-time transition tax payable, unrecognized tax benefits, and related interest and penalties.

(2) Deferred revenue primarily includes deferrals related to support for hardware and software.

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This includes deferred revenue currently recorded and amounts that will be invoiced in future periods.

As of January 30, 2022, $ 624 million of revenue related to performance obligations had not been recognized, of which we expect to recognize approximately 49 % 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.

As of January 29, 2023, $ 652 million of revenue related to

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

performance obligations had not been recognized, of which we expect to recognize approximately 47 % 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

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The net proceeds from these offerings were $ 4.98 billion, $ 4.97 billion, and $ 1.98 billion, respectively, after deducting debt discount and issuance costs.

On August 16, 2021, we repaid the $ 1.00 billion of 2.20 % Notes Due 2021.

All of 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 maturity, subject to a make-whole premium as defined in the applicable form of note.

In fiscal year 2022, we repaid the $ 1.00 billion of 2.20 % Notes Due 2021.

NVIDIA CORPORATION AND SUBSIDIARIES

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37.2 3.73 % 500 500

3.70 % Notes Due 2060

38.2 3.73 % 500 500

Unamortized debt discount and issuance costs ( 47 ) ( 54 )

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Total long-term portion $ 9,703 $ 10,946

As of January 30, 2022, we were in compliance with the required covenants under the Notes.

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 maturity, subject to a make-whole premium as defined in the applicable form of note.

As of January 29, 2023, we were in compliance with the required covenants, which are non-financial in nature, under the Notes.

Commercial Paper

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Purchase Obligations

Our purchase obligations primarily include our commitments to purchase components used to manufacture our products, including long-term supply agreements, certain software and technology licenses, other goods and services and long-lived assets.

We have entered into several long-term supply agreements, under which we have made advance payments and have $ 1.58 billion remaining unpaid.

As of January 30, 2022, we had outstanding inventory purchase and long-term supply obligations totaling $ 9.00 billion, inclusive of the $ 1.58 billion, and other purchase obligations totaling $ 1.30 billion.

Total future unconditional purchase commitments as of January 30, 2022, are as follows:

(In millions)

Total $ 10,296

Our purchase obligations reflect our commitments to purchase components used to manufacture our products, including long-term supply agreements, certain software and technology licenses, other goods and services and long-lived assets.

We have entered into several long-term supply agreements, under which we have made advance payments and have $ 810 million remaining unpaid.

As of January 29, 2023, we had outstanding inventory purchase and long-term supply obligations totaling $ 4.92 billion, inclusive of the $ 810 million.

Under our manufacturing relationships with our foundry suppliers, subcontractors and contract manufacturers, cancellation of outstanding purchase commitments is generally allowed but may result in the payment of costs incurred through the date of cancellation.

Other non-inventory purchase obligations of $ 3.14 billion include $ 2.23 billion of multi-year cloud service agreements.

NVIDIA CORPORATION AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

In March 2022, we entered into a supply agreement with payments of $ 670 million to be paid over nine years .

Total future purchase commitments as of January 29, 2023, are as follows:

(In millions)

2029 and thereafter 253

Total $ 8,063

Accrual for Product Warranty Liabilities

The estimated amount of product warranty liabilities was $ 82 million and $ 46 million as of January 29, 2023 and January 30, 2022, respectively.

The estimated product returns and estimated product warranty activity consisted of the following:

January 29, January 30, January 31,

2023 2022 2021

(In millions)

Balance at beginning of period

$ 46 $ 22 $ 15

( 109 ) ( 16 ) ( 21 )

Balance at end of period

$ 82 $ 46 $ 22

In the second quarter of fiscal year 2023, we recorded $ 122 million in product warranty liabilities primarily related to a defect identified in a third-party component embedded in certain Data Center products.

In the third quarter of fiscal year 2023, we recognized a warranty-related benefit of approximately $ 70 million in cost of revenue due to favorable product recovery.

In connection with certain agreements that we have entered in the past, we have provided indemnities for matters such as tax, product, and employee liabilities.

We have included IP indemnification provisions in our technology related agreements with third parties.

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 for such indemnifications.

We have not recorded any liability in our Consolidated Financial Statements for such indemnifications.

Securities Class Action and Derivative Lawsuits

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Plaintiffs also alleged that the NVIDIA executives who they named as defendants violated Section 20(a) 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.

Plaintiffs sought class certification, an award of unspecified compensatory damages, an award of reasonable costs and expenses,

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

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 NVIDIA’s motion 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 in the United States Court of Appeals for the Ninth Circuit, case number 21-15604.

Oral argument is scheduled for May 10, 2022.

Oral argument on the appeal was held on May 10, 2022.

The putative derivative lawsuit pending in the United States District Court for the Northern District of California, captioned 4:19-cv-00341-HSG, initially filed January 18, 2019 and titled In re NVIDIA Corporation Consolidated Derivative Litigation, was stayed pending resolution of the plaintiffs’ appeal in the In Re NVIDIA Corporation Securities Litigation action.

21 unchanged sentences

Federal $ 1,703 $ 482 $ 197

State 46 42 1

Foreign 228 71 161

4 unchanged sentences

Total deferred ( 2,164 ) ( 406 ) ( 282 )

Income tax expense $ 189 $ 77 $ 174

Income tax expense (benefit) $ ( 187 ) $ 189 $ 77

Income before income tax consists of the following:

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(In millions)

Domestic (1) $ 8,446 $ 1,437 $ 620

$ 3,477 $ 8,446 $ 1,437

Foreign 704 1,495 2,972

Income before income tax $ 4,181 $ 9,941 $ 4,409

(1) Fiscal year 2022 domestic income before income tax increased as compared to fiscal years 2021 and 2020 due to the Domestication in the second quarter of fiscal year 2022.

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The income tax expense (benefit) differs from the amount computed by applying the U.S.

2 unchanged sentences

2022 January 31,

(In millions)

(In millions, except percentages)

Tax expense computed at federal statutory rate $ 878 21.0 % $ 2,088 21.0 % $ 926 21.0 %

Expense (benefit) resulting from:

Acquisition termination cost 261 6.2 % — — % — — %

State income taxes, net of federal tax effect 50 1.2 % 42 0.4 % 10 0.2 %

Foreign-derived intangible income ( 739 ) ( 17.7 ) % ( 520 ) ( 5.2 ) % — — %

Foreign tax rate differential ( 497 ) ( 561 ) ( 301 )

Stock-based compensation ( 309 ) ( 7.4 ) % ( 337 ) ( 3.4 ) % ( 136 ) ( 3.1 ) %

federal R&D tax credit ( 289 ) ( 173 ) ( 110 )

federal research and development tax credit ( 278 ) ( 6.6 ) % ( 289 ) ( 2.9 ) % ( 173 ) ( 3.9 ) %

Foreign tax rate differential ( 83 ) ( 2.0 ) % ( 497 ) ( 5.0 ) % ( 561 ) ( 12.7 ) %

IP domestication — — % ( 244 ) ( 2.5 ) % — — %

Other 33 0.8 % ( 54 ) ( 0.5 ) % 11 0.2 %

Income tax expense $ 189 $ 77 $ 174

Income tax expense (benefit) $ ( 187 ) ( 4.5 ) % $ 189 1.9 % $ 77 1.7 %

NVIDIA CORPORATION AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

The tax effect of temporary differences that gives rise to significant portions of the deferred tax assets and liabilities are presented below:

2 unchanged sentences

Deferred tax assets:

Capitalized research and development expenditure (1) $ 1,859 $ 508

Research and other tax credit carryforwards 951 798

Property, equipment and intangible assets 530 32

GILTI deferred tax assets 800 378

Accruals and reserves, not currently deductible for tax purposes 686 258

Net operating loss and capital loss carryforwards 409 118

Operating lease liabilities 193 125

Net operating loss carryforwards 118 100

Stock-based compensation 99 86

Property, equipment and intangible assets 66 22

Other deferred tax assets 91 22

3 unchanged sentences

Deferred tax liabilities:

Acquired intangibles ( 169 ) ( 191 )

Unremitted earnings of foreign subsidiaries ( 228 ) ( 150 )

Operating lease assets ( 179 ) ( 113 )

Acquired intangibles ( 115 ) ( 169 )

Gross deferred tax liabilities ( 522 ) ( 432 )

Net deferred tax asset (2) $ 3,148 $ 976

(1) Net deferred tax asset includes long-term deferred tax assets of $ 1.22 billion and $ 806 million and long-term deferred tax liabilities of $ 245 million and $ 241 million for fiscal years 2022 and 2021, respectively.

(1) Capitalized research and development deferred tax assets were previously included in Property, equipment and intangible assets.

(2) Net deferred tax asset includes long-term deferred tax assets of $ 3.40 billion and $ 1.22 billion and long-term deferred tax liabilities of $ 247 million and $ 245 million for fiscal years 2023 and 2022, respectively.

Long-term deferred tax liabilities are included in other long-term liabilities on our Consolidated Balance Sheets.

We recognized income tax expense of $ 189 million, $ 77 million, and $ 174 million for fiscal years 2022, 2021, and 2020 respectively.

Our annual effective tax rate was 1.9 %, 1.7 %, and 5.9 % for fiscal years 2022, 2021, and 2020, respectively.

The increase in our effective tax rate in fiscal year 2022 as compared to fiscal year 2021 was primarily due to an

NVIDIA CORPORATION AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

increase in the amount of earnings subject to U.S.

tax, and a decreased impact of tax benefits from the U.S.

federal research tax credit, partially offset by the benefit of the foreign-derived intangible income deduction and the discrete benefit of the Domestication.

The decrease in our effective tax rate in fiscal year 2021 as compared to fiscal year 2020 was primarily due to a decrease in the proportional amount of earnings subject to United States tax and an increase of tax benefits from stock-based compensation.

On June 28, 2021, we simplified our corporate structure by repatriating the economic rights of certain non-U.S.

IP to the United States via domestication of a foreign subsidiary, or the Domestication.

The Domestication more closely aligns our corporate structure to our operating structure in accordance with the Organization for Economic Cooperation and Development’s Base Erosion and Profit Shifting conclusions and changes to U.S.

and European tax laws.

The impact of the Domestication, which is regarded as a change in tax status, resulted in a discrete benefit primarily from re-valuing certain deferred tax assets, net of deferred tax liabilities, of $ 244 million in fiscal year 2022.

Our effective tax rate for fiscal year 2022 was lower than the U.S.

federal statutory rate of 21% due to tax benefits from the foreign-derived intangible income deduction, income earned in jurisdictions, including the British Virgin Islands and Israel, that are subject to taxes lower than the U.S.

federal statutory tax rate, excess tax benefits related to stock-based compensation, recognition of U.S.

federal research tax credits and the one-time benefits of the Domestication.

Our effective tax rates for fiscal years 2021 and 2020 were lower than the U.S.

federal statutory rate of 21% due primarily to income earned in jurisdictions, including the British Virgin Islands, Israel and Hong Kong, where the tax rate was lower than the U.S.

federal statutory tax rate, recognition of U.S.

federal research tax credits, and excess tax benefits related to stock-based compensation.

During the second quarter of fiscal year 2021, we completed the acquisition of Mellanox.

As a result of the acquisition, we recorded $ 256 million of net deferred tax liabilities primarily on the excess of book basis over the tax basis of the acquired intangible assets and undistributed earnings in certain foreign subsidiaries.

We also recorded $ 153 million of long-term tax liabilities related to tax basis differences in Mellanox.

As of January 29, 2023, we intend to indefinitely reinvest approximately $ 1.05 billion and $ 245 million of cumulative undistributed earnings held by certain subsidiaries in Israel and the United Kingdom, respectively.

We have not provided the amount of unrecognized deferred tax liabilities for temporary differences related to these investments as the determination of such amount is not practicable.

As of January 30, 2022 and January 31, 2021, we had a valuation allowance of $ 907 million and $ 728 million, respectively, related to state and certain other deferred tax assets that management determined not likely to be realized due, in part, to jurisdictional projections of future taxable income.

As of January 29, 2023 and January 30, 2022, we had a valuation allowance of $ 1.48 billion and $ 907 million, respectively, related to capital loss carryforwards, state, and certain other deferred tax assets that management determined not likely to be realized due, in part, to jurisdictional projections of future taxable income, including capital gains.

To the extent realization of the deferred tax assets becomes more-likely-than-not, we would recognize such deferred tax assets as income tax benefits during the period.

As of January 30, 2022, we had federal, state and foreign net operating loss carryforwards of $ 397 million, $ 345 million and $ 341 million, respectively.

The federal and state carryforwards will begin to expire in fiscal year 2023.

As of January 29, 2023, we had U.S.

federal, state and foreign net operating loss carryforwards of $ 363 million, $ 329 million and $ 329 million, respectively.

The federal and state carryforwards will begin to expire in fiscal years 2026 and 2024, respectively.

The foreign net operating loss carryforwards of $ 329 million may be carried forward indefinitely.

As of January 30, 2022, we had federal research tax credit carryforwards of $ 102 million that will begin to expire in fiscal year 2042.

We have state research tax credit carryforwards of $ 1.24 billion, of which $ 1.18 billion is attributable to the State of California and may be carried over indefinitely, and $ 55 million is attributable to various other states and will begin to expire in fiscal year 2023.

Our tax attributes, net operating loss and tax credit carryforwards, remain subject to audit and may be adjusted for changes or modification in tax laws, other authoritative interpretations thereof, or other facts and circumstances.

Utilization of federal, state, and foreign net operating losses and tax credit carryforwards may also be subject to limitations due to ownership changes and other limitations provided by the Internal Revenue Code and similar state and foreign tax provisions.

If any such limitations apply, the federal, state, or foreign net operating loss and tax credit carryforwards, as applicable, may expire or be denied before utilization.

As of January 30, 2022, we had $ 1.01 billion of gross unrecognized tax benefits, of which $ 808 million would affect our effective tax rate if recognized.

However, $ 181 million of the unrecognized tax benefits were related to state income tax positions taken, that, if recognized, would be in the form of a carryforward deferred tax asset that would likely attract a full valuation allowance.

The $ 808 million of net unrecognized tax benefits as of January 30, 2022 consisted of $ 670 million recorded in non-current income taxes payable and $ 138 million reflected as a net reduction to the deferred tax assets.

As of January 29, 2023, we had federal research tax credit carryforwards of $ 26 million, before the impact of uncertain tax positions, that will begin to expire in fiscal year 2024.

We have state research tax credit carryforwards of $ 1.49 billion, before the impact of uncertain tax positions.

$ 1.41 billion is attributable to the State of California and may be carried over indefinitely and $ 83 million is attributable to various other states and will begin to expire in fiscal year 2024.

As of January 29, 2023, we had federal capital loss carryforwards of $ 1.38 billion that will begin to expire in fiscal year 2024.

Our tax attributes remain subject to audit and may be adjusted for changes or modification in tax laws, other authoritative interpretations thereof, or other facts and circumstances.

Utilization of tax attributes may also

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be subject to limitations due to ownership changes and other limitations provided by the Internal Revenue Code and similar state and foreign tax provisions.

If any such limitations apply, the tax attributes may expire or be denied before utilization.

A reconciliation of gross unrecognized tax benefits is as follows:

9 unchanged sentences

Balance at end of period $ 1,238 $ 1,013 $ 776

(1) The fiscal year 2021 balance represents prior year gross unrecognized tax benefits recorded as a result of the Mellanox acquisition.

Included in the balance of unrecognized tax benefits as of January 29, 2023 are $ 770 million of tax benefits that would affect our effective tax rate if recognized.

We classify an unrecognized tax benefit as a current liability, or amount refundable, to the extent that we anticipate payment or receipt of cash for income taxes within one year.

The amount is classified as a long-term liability, or reduction of long-term deferred tax assets or amount refundable, if we anticipate payment or receipt of cash for income taxes during a period beyond a year.

The amount is classified as a long-term liability, or reduction of long-term amount refundable, if we anticipate payment or receipt of cash for income taxes during a period beyond a year.

We include interest and penalties related to unrecognized tax benefits as a component of income tax expense.

As of January 30, 2022, January 31, 2021, and January 26, 2020, we had accrued $ 59 million, $ 44 million, and $ 31 million, respectively, for the payment of interest and penalties related to unrecognized tax benefits, which is not included as a component of our unrecognized tax benefits.

As of January 30, 2022, unrecognized tax benefits of $ 670 million and the related interest and penalties of $ 59 million are included in non-current income taxes payable.

We recognized net interest and penalties related to unrecognized tax benefits in income tax expense line of our consolidated statements of income of $ 33 million, $ 14 million, and $ 7 million during fiscal years 2023, 2022 and 2021, respectively.

As of January 29, 2023 and January 30, 2022, we have accrued $ 95 million and $ 59 million, respectively, for the payment of interest and penalties related to unrecognized tax benefits, which is not included as a component of our gross unrecognized tax benefits.

While we believe that we have adequately provided for all tax positions, amounts asserted by tax authorities could be greater or less than our accrued position.

Accordingly, our provisions on federal, state and foreign tax-related matters to be recorded in the future may change as revised estimates are made or the underlying matters are settled or otherwise resolved.

As of January 30, 2022, we do not believe that our estimates, as otherwise provided for, on such tax positions will significantly increase or decrease within the next twelve months.

As of January 29, 2023, we have not identified any positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly increase or decrease within the next twelve months.

We are subject to taxation by taxing authorities both in the United States and other countries.

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Capital Return Program

Beginning August 2004, our Board of Directors authorized us to repurchase our stock.

Through January 30, 2022, we have repurchased an aggregate of 1.04 billion shares under our share repurchase program for a total cost of $ 7.08 billion.

As of January 30, 2022, we have a remaining authorization, subject to certain specifications, to repurchase shares of our common stock up to $ 7.24 billion through December 2022.

From January 31, 2022 through March 17, 2022, we repurchased 7.7 million shares of our common stock for $ 1.75 billion.

During fiscal year 2023, we repurchased 63 million shares for $ 10.04 billion.

Since the inception of our share repurchase program through January 29, 2023, we have repurchased an aggregate of 1.10 billion shares under our share repurchase program for a total cost of $ 17.12 billion.

As of January 29, 2023, we were authorized, subject to certain specifications, to repurchase an additional $ 7.23 billion of shares through December 2023.

NVIDIA CORPORATION AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

During fiscal years 2023, 2022, and 2021, we paid $ 398 million, $ 399 million, and $ 395 million in cash dividends to our shareholders, respectively.

During the fourth quarter of fiscal year 2022, our Board of Directors approved the retirement of our existing 349 million treasury shares.

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 interests of our shareholders.

In fiscal year 2022, we retired our existing 349 million treasury shares.

These shares assumed the status of authorized and unissued shares upon retirement.

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Any future repurchased shares will assume the status of authorized and unissued shares.

NVIDIA CORPORATION AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Note 16 - Employee Retirement Plans

4 unchanged sentences

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.

Our 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;

vGPU software for cloud-based visual and virtual computing;

automotive platforms for infotainment systems;

and Omniverse software for building 3D designs and virtual worlds.

Our Compute & Networking segment includes Data Center platforms and systems for AI, HPC, and accelerated computing;

Mellanox networking and interconnect solutions;

The Compute & Networking segment includes our Data Center accelerated computing platform;

automotive AI Cockpit, autonomous driving development agreements, and autonomous vehicle solutions;

electric vehicle computing platforms;

Jetson for robotics and other embedded platforms;

and NVIDIA AI Enterprise and other software;

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;

vGPU software for cloud-based visual and virtual computing;

automotive platforms for infotainment systems;

and Omniverse Enterprise software for building and operating metaverse and 3D internet applications.

Operating results by segment include costs or expenses that are directly attributable to each segment, and costs or expenses that 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 Graphics or Compute & Networking for purposes of making operating decisions or assessing financial performance.

The expenses include stock-based compensation expense, corporate infrastructure and support costs, acquisition-related costs, IP-related costs, and other non-recurring charges and benefits that our CODM deems to be enterprise in nature.

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 expenses include stock-based compensation expense, acquisition-related and other costs, corporate infrastructure and support costs, restructuring costs, acquisition termination cost, IP-related and legal settlement costs, contributions, and other non-recurring charges and benefits that our CODM deems to be enterprise in nature.

Our CODM does not review any information regarding total assets on a reportable segment basis.

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The table below presents details of our reportable segments and the “All Other” category.

Graphics Compute & Networking All Other Consolidated

NVIDIA CORPORATION AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Compute & Networking Graphics All Other Consolidated

(In millions)

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Operating income (loss) $ 2,548 $ 4,612 $ ( 2,628 ) $ 4,532

NVIDIA CORPORATION AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

2023 January 30,

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Stock-based compensation expense $ ( 2,710 ) $ ( 2,004 ) $ ( 1,397 )

Acquisition-related intangible asset amortization, inventory step-up charge, and other costs ( 636 ) ( 836 ) ( 31 )

Acquisition termination cost ( 1,353 ) — —

Acquisition-related and other costs ( 674 ) ( 636 ) ( 836 )

Unallocated cost of revenue and operating expenses ( 595 ) ( 399 ) ( 357 )

IP-related costs ( 10 ) ( 38 ) ( 14 )

Restructuring costs and other ( 54 ) — —

IP-related and legal settlement costs ( 23 ) ( 10 ) ( 38 )

Contributions ( 2 ) — —

Total $ ( 5,411 ) $ ( 3,049 ) $ ( 2,628 )

Revenue by geographic region is allocated to individual countries based on the location to which the products are initially billed even if our customers’ revenue is attributable to end customers that are located in a different location.

Revenue by geographic region is allocated to individual countries based on the billing location of the customer.

End customer location may be different than our customer’s billing location.

The following table summarizes information pertaining to our revenue from customers based on the invoicing address by geographic regions:

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(In millions)

United States $ 8,292 $ 4,349 $ 3,214

Taiwan 6,986 8,544 4,531

China (including Hong Kong) 5,785 7,111 3,886

United States 4,349 3,214 886

Other countries 5,911 6,910 5,044

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No customer represented 10% or more of total revenue for fiscal years 2023, 2022 and 2021.

One customer represented 11 % of our total revenue for fiscal year 2020 and was attributable primarily to the Graphics segment.

Two customers represented 22 % of our accounts receivable balance as of January 30, 2022.

One customer represented 16 % of our accounts receivable balance as of January 31, 2021.

NVIDIA CORPORATION AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Two customers accounted for 14 % and 11 % of our accounts receivable balance as of January 29, 2023.

Two customers each accounted for 11 % of our accounts receivable balance as of January 30, 2022.

The following table summarizes information pertaining to our revenue by each of the specialized markets we serve:

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(In millions)

Gaming $ 12,462 $ 7,759 $ 5,518

Data Center $ 15,005 $ 10,613 $ 6,696

Gaming 9,067 12,462 7,759

Professional Visualization 1,544 2,111 1,053

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Total revenue $ 26,974 $ 26,914 $ 16,675

NVIDIA CORPORATION AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

The following table presents summarized information for long-lived assets by country.

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(3) Additional valuation allowance on deferred tax assets not likely to be realized.

Fiscal year 2023 includes additional valuation allowance on capital loss carryforwards, state, and certain other deferred tax assets.

Refer to Note 14 of the Notes to the Consolidated Financial Statements in Part IV, Item 15 of this Annual Report on Form 10-K for additional information.

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3.1 Restated Certificate of Incorporation

10-K 0-23985 3.1 3/18/2022

3.2 Amendment to Restated Certificate of Incorporation of NVIDIA Corporation

8-K 0-23985 3.1 6/6/2022

3.3 Bylaws of NVIDIA Corporation, Amended and Restated as of March 3, 2022

3 unchanged sentences

S-1/A 333-47495 4.2 4/24/1998

4.3 Indenture, dated as of September 16, 2016, by and between the Company and Wells Fargo Bank, National Association, as Trustee

4.3 Indenture, dated as of September 16, 2016, by and between the Company and Computershare Trust Company, N.A., as successor to Wells Fargo Bank, National Association, as Trustee

8-K 0-23985 4.1 9/16/2016

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4.5 Form of 2026 Note

8-K 0-23985 Annex A to Exhibit 4.2 9/16/2016

4.6 Form of 2026 Note

8-K 0-23985 Annex B-1 to Exhibit 4.2 9/16/2016

23 unchanged sentences

10.2+* Amended and Restated 2007 Equity Incentive Plan

10.1 8/20/2021

10.3+ 2007 Equity Incentive Plan - Non-Statutory Stock Option (Annual Grant - Board Service (2011))

10-Q 0-23985 10.41 5/27/2011

10.4+ 2007 Equity Incentive Plan - Non-Statutory Stock Option (Initial Grant - Board Service (2011))

8-K 0-23985 10.1 12/14/2011

10.3+ Amended and Restated 2007 Equity Incentive Plan - Non-Employee Director Stock Option Grant (2012 Annual Board Retainer)

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10-Q 0-23985 10.2 5/22/2018

10.11+ Amended and Restated 2007 Equity Incentive Plan - Restricted Stock Unit Grant Notice and Restricted Stock Unit Agreement & Performance-Based Restricted Stock Unit Grant Notice and Performance-Based Restricted Stock Unit Agreement (2018)

10-Q 0-23985 10.2 5/22/2018

10.9+ Amended and Restated 2007 Equity Incentive Plan - Global Restricted Stock Unit Grant Notice and Global Restricted Stock Unit Agreement (2019)

7 unchanged sentences

10.13+ Amended and Restated 2007 Equity Incentive Plan – Global Restricted Stock Unit Grant Notice and Global Restricted Stock Unit Agreement (2022)

10-K 0-23985 10.16 3/18/2022

10.14+* Amended and Restated 2007 Equity Incentive Plan – Global Restricted Stock Unit Grant Notice and Global Restricted Stock Unit Agreement (2023)

10.15+ Amended and Restated 2012 Employee Stock Purchase Plan

4 unchanged sentences

8-K 0-23985 10.1 3/9/2022

10.20+ Fiscal Year 2023 Variable Compensation Plan

8-K 0-23985 10.1 3/9/2022

10.18+ Offer Letter between NVIDIA Corporation and Colette Kress, dated September 13, 2013

4 unchanged sentences

8-K 0-23985 10.1 6/17/2019

10.24 Credit Agreement, dated as of October 7, 2016 by and among NVIDIA Corporation, Wells Fargo Bank, National Association, as administrative agent, and the lenders party thereto

8-K 0-23985 1.1 10/13/2016

10.21 Form of Commercial Paper Dealer Agreement between NVIDIA Corporation, as Issuer, and the Dealer party thereto

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Not Applicable.

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, on March 17, 2022.

NVIDIA Corporation

8 unchanged sentences

/s/ JEN-HSUN HUANG President, Chief Executive Officer and Director

(Principal Executive Officer) March 17, 2022

(Principal Executive Officer) February 24, 2023

Jen-Hsun Huang

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KRESS Executive Vice President and Chief Financial Officer

(Principal Financial Officer) March 17, 2022

(Principal Financial Officer) February 24, 2023

/s/ DONALD ROBERTSON Vice President and Chief Accounting Officer

(Principal Accounting Officer) March 17, 2022

(Principal Accounting Officer) February 24, 2023

Donald Robertson

/s/ ROBERT BURGESS Director March 17, 2022

/s/ ROBERT BURGESS Director February 24, 2023

Robert Burgess

/s/ TENCH COXE Director March 17, 2022

DABIRI Director March 17, 2022

/s/ PERSIS DRELL Director March 17, 2022

/s/ DAWN HUDSON Director March 17, 2022

/s/ TENCH COXE Director February 24, 2023

DABIRI Director February 24, 2023

/s/ PERSIS DRELL Director February 24, 2023

/s/ DAWN HUDSON Director February 24, 2023

/s/ HARVEY C.

JONES Director March 17, 2022

/s/ MICHAEL MCCAFFERY Director March 17, 2022

JONES Director February 24, 2023

/s/ MICHAEL MCCAFFERY Director February 24, 2023

Michael McCaffery

/s/ STEPHEN C.

NEAL Director March 17, 2022

PERRY Director March 17, 2022

BROOKE SEAWELL Director March 17, 2022

NEAL Director February 24, 2023

PERRY Director February 24, 2023

BROOKE SEAWELL Director February 24, 2023

Brooke Seawell

/s/ AARTI SHAH Director March 17, 2022

/s/ MARK STEVENS Director March 17, 2022

/s/ AARTI SHAH Director February 24, 2023

/s/ MARK STEVENS Director February 24, 2023

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 9A. Controls and Procedures