NVIDIA CORP 10-K

ITEM 9A. CONTROLS AND PROCEDURES Controls and Procedures Disclosure Controls and Procedures 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 Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rule 13a-15(f). Under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, we conducted an evaluation of the effectiveness of our internal control over financial reporting as of January 29, 2023 based on the criteria set forth in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on our evaluation under the criteria set forth in Internal Control — Integrated Framework , our management concluded that our internal control over financial reporting was effective as of January 29, 2023. The effectiveness of our internal control over financial reporting as of January 29, 2023 has been audited by PricewaterhouseCoopers LLP, an independent registered public accounting firm, as stated in its report which is included herein. Changes in Internal Control Over Financial Reporting There have been no changes in our internal control over financial reporting during the quarter ended January 29, 2023 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. In fiscal year 2022, we began an upgrade of our enterprise resource planning, or ERP, system, which will update much of our existing core financial systems. The ERP system is designed 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 Our management, including our Chief Executive Officer and Chief Financial Officer, does not expect that our disclosure controls and procedures or our internal controls, will prevent all error and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within NVIDIA have been detected. ITEM 9B. OTHER INFORMATION None. ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS Not Applicable. PART III Certain information required by Part III is omitted from this report because we will file with the SEC a definitive proxy statement pursuant to Regulation 14A, or the 2023 Proxy Statement, no later than 120 days after the end of fiscal year 2023, and certain information included therein is incorporated herein by reference. 48 Table of Contents ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE Identification of Directors Information regarding directors required by this item will be contained in our 2023 Proxy Statement under the caption “Proposal 1 - Election of Directors,” and is hereby incorporated by reference. Identification of Executive Officers Reference is made to the information regarding executive officers appearing under the heading “Information About Our Executive Officers” in Part I of this Annual Report on Form 10-K, which information is hereby incorporated by reference. Identification of Audit Committee and Financial Experts Information regarding our Audit Committee required by this item will be contained in our 2023 Proxy Statement under the captions “Report of the Audit Committee of the Board of Directors” and “Information About the Board of Directors and Corporate Governance,” and is hereby incorporated by reference. Material Changes to Procedures for Recommending Directors Information regarding procedures for recommending directors required by this item will be contained in our 2023 Proxy Statement under the caption “Information About the Board of Directors and Corporate Governance,” and is hereby incorporated by reference. Delinquent Section 16(a) Reports Information regarding compliance with Section 16(a) of the Exchange Act required by this item will be contained in our 2023 Proxy Statement under the caption “Delinquent Section 16(a) Reports,” and is hereby incorporated by reference. Code of Conduct Information regarding our Code of Conduct required by this item will be contained in our 2023 Proxy Statement under the caption “Information About the Board of Directors and Corporate Governance - Code of Conduct,” and is hereby incorporated by reference. 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. ITEM 11. EXECUTIVE COMPENSATION Information regarding our executive compensation required by this item will be contained in our 2023 Proxy Statement under the captions “Executive Compensation”, “Compensation Committee Interlocks and Insider Participation”, “Director Compensation” and “Compensation Committee Report,” and is hereby incorporated by reference. ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS Ownership of NVIDIA Securities Information regarding ownership of NVIDIA securities required by this item will be contained in our 2023 Proxy Statement under the caption “Security Ownership of Certain Beneficial Owners and Management,” and is hereby incorporated by reference. Equity Compensation Plan Information Information regarding our equity compensation plans required by this item will be contained in our 2023 Proxy Statement under the caption "Equity Compensation Plan Information," and is hereby incorporated by reference. 49 Table of Contents ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE Information regarding related transactions and director independence required by this item will be contained in our 2023 Proxy Statement under the captions “Review of Transactions with Related Persons” and “Information About the Board of Directors and Corporate Governance - Independence of the Members of the Board of Directors,” and is hereby incorporated by reference. ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES 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. 50 Table of Contents PART IV ITEM 15. EXHIBIT AND FINANCIAL STATEMENT SCHEDULES Page (a) 1. Financial Statements Report of Independent Registered Public Accounting Firm (PCAOB ID: 238 ) 52 Consolidated Statements of Income for the years ended January 29 , 202 3 , January 30, 2022 , and January 31, 2021 54 Consolidated Statements of Comprehensive Income for the years ended January 29, 2023, January 30, 2022, and January 31, 2021 55 Consolidated Balance Sheets as of January 29, 2023 an d January 30, 2022 56 Consolidated Statements of Shareholders’ Equity for the years ended January 29, 2023, January 30, 2022, and January 31, 2021 57 Consolidated Statements of Cash Flows for the years ended January 29, 2023, January 30, 2022, and January 31, 2021 58 Notes to the Consolidated Financial Statements 59 2. Financial Statement Schedule Schedule II Valuation and Qualifying Accounts for the years ended January 29, 2023, January 30, 2022, and January 31, 2021 87 3. Exhibits The exhibits listed in the accompanying index to exhibits are filed or incorporated by reference as a part of this Annual Report on Form 10-K. 88 51 Table of Contents Report of Independent Registered Public Accounting Firm To the Board of Directors and Shareholders of NVIDIA Corporation 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 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. Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of January 29, 2023, based on criteria established in Internal Control - Integrated Framework (2013) issued by the COSO. Basis for Opinions The Company's management is responsible for these consolidated financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in Management’s Annual Report on Internal Control over Financial Reporting appearing under Item 9A. Our responsibility is to express opinions on the Company’s consolidated financial statements and on the Company's internal control over financial reporting based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects. Our audits of the consolidated financial statements included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions. Definition and Limitations of Internal Control over Financial Reporting A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. 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 52 Table of Contents 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. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. Critical Audit Matters The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that (i) relates to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments. 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 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 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 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; testing the completeness and accuracy of underlying data used in the approach; 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, and (iii) changes in technology. /s/ PricewaterhouseCoopers LLP San Jose, California February 24, 2023 We have served as the Company’s auditor since 2004. 53 Table of Contents NVIDIA CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME (In millions, except per share data) Year Ended January 29, 2023 January 30, 2022 January 31, 2021 Revenue $ 26,974 $ 26,914 $ 16,675 Cost of revenue 11,618 9,439 6,279 Gross profit 15,356 17,475 10,396 Operating expenses Research and development 7,339 5,268 3,924 Sales, general and administrative 2,440 2,166 1,940 Acquisition termination cost 1,353 — — Total operating expenses 11,132 7,434 5,864 Income from operations 4,224 10,041 4,532 Interest income 267 29 57 Interest expense ( 262 ) ( 236 ) ( 184 ) Other, net ( 48 ) 107 4 Other income (expense), net ( 43 ) ( 100 ) ( 123 ) Income before income tax 4,181 9,941 4,409 Income tax expense (benefit) ( 187 ) 189 77 Net income $ 4,368 $ 9,752 $ 4,332 Net income per share: Basic $ 1.76 $ 3.91 $ 1.76 Diluted $ 1.74 $ 3.85 $ 1.73 Weighted average shares used in per share computation: Basic 2,487 2,496 2,467 Diluted 2,507 2,535 2,510 See accompanying notes to the consolidated financial statements. 54 Table of Contents NVIDIA CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (In millions) Year Ended January 29, 2023 January 30, 2022 January 31, 2021 Net income $ 4,368 $ 9,752 $ 4,332 Other comprehensive income (loss), net of tax Available-for-sale debt securities: Net unrealized gain (loss) ( 31 ) ( 16 ) 2 Reclassification adjustments for net realized gain (loss) included in net income 1 — ( 2 ) Net change in unrealized loss ( 30 ) ( 16 ) — Cash flow hedges: Net unrealized gain (loss) 47 ( 43 ) 9 Reclassification adjustments for net realized gain (loss) included in net income ( 49 ) 29 9 Net change in unrealized gain (loss) ( 2 ) ( 14 ) 18 Other comprehensive income (loss), net of tax ( 32 ) ( 30 ) 18 Total comprehensive income $ 4,336 $ 9,722 $ 4,350 See accompanying notes to the consolidated financial statements. 55 Table of Contents NVIDIA CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (In millions, except par value) January 29, 2023 January 30, 2022 ASSETS Current assets: Cash and cash equivalents $ 3,389 $ 1,990 Marketable securities 9,907 19,218 Accounts receivable, net 3,827 4,650 Inventories 5,159 2,605 Prepaid expenses and other current assets 791 366 Total current assets 23,073 28,829 Property and equipment, net 3,807 2,778 Operating lease assets 1,038 829 Goodwill 4,372 4,349 Intangible assets, net 1,676 2,339 Deferred income tax assets 3,396 1,222 Other assets 3,820 3,841 Total assets $ 41,182 $ 44,187 LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Accounts payable $ 1,193 $ 1,783 Accrued and other current liabilities 4,120 2,552 Short-term debt 1,250 — Total current liabilities 6,563 4,335 Long-term debt 9,703 10,946 Long-term operating lease liabilities 902 741 Other long-term liabilities 1,913 1,553 Total liabilities 19,081 17,575 Commitments and contingencies - see Note 13 Shareholders’ equity: Preferred stock, $ 0.001 par value; 2 shares authorized; none issued — — Common stock, $ 0.001 par value; 8,000 shares authorized; 2,466 shares issued and outstanding as of January 29, 2023; 2,506 shares issued and outstanding as of January 30, 2022 2 3 Additional paid-in capital 11,971 10,385 Accumulated other comprehensive loss ( 43 ) ( 11 ) Retained earnings 10,171 16,235 Total shareholders' equity 22,101 26,612 Total liabilities and shareholders' equity $ 41,182 $ 44,187 See accompanying notes to the consolidated financial statements. 56 Table of Contents NVIDIA CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY Common Stock 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 Net income — — — — — 4,332 4,332 Other comprehensive income — — — — 18 — 18 Issuance of common stock from stock plans 40 — 194 — — — 194 Tax withholding related to vesting of restricted stock units ( 11 ) — — ( 942 ) — — ( 942 ) Cash dividends declared and paid ($ 0.16 per common share) — — — — — ( 395 ) ( 395 ) Fair value of partially vested equity awards assumed in connection with acquisitions — — 86 — — — 86 Stock-based compensation — — 1,396 — — — 1,396 Balances, January 31, 2021 2,479 3 8,719 ( 10,756 ) 19 18,908 16,893 Net income — — — — — 9,752 9,752 Other comprehensive loss — — — — ( 30 ) — ( 30 ) Issuance of common stock from stock plans 35 — 281 — — — 281 Tax withholding related to vesting of restricted stock units ( 8 ) — ( 614 ) ( 1,290 ) — — ( 1,904 ) Cash dividends declared and paid ($ 0.16 per common share) — — — — — ( 399 ) ( 399 ) Fair value of partially vested equity awards assumed in connection with acquisitions — — 18 — — — 18 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 Net income — — — — — 4,368 4,368 Other comprehensive loss — — — — ( 32 ) — ( 32 ) Issuance of common stock from stock plans 31 — 355 — — — 355 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 ) Stock-based compensation — — 2,710 — — — 2,710 Balances, January 29, 2023 2,466 $ 2 $ 11,971 $ — $ ( 43 ) $ 10,171 $ 22,101 See accompanying notes to the consolidated financial statements. 57 Table of Contents NVIDIA CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (In millions) Year Ended January 29, 2023 January 30, 2022 January 31, 2021 Cash flows from operating activities: Net income $ 4,368 $ 9,752 $ 4,332 Adjustments to reconcile net income to net cash provided by operating activities: Stock-based compensation expense 2,709 2,004 1,397 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 ) Other ( 7 ) 47 ( 20 ) Changes in operating assets and liabilities, net of acquisitions: Accounts receivable 822 ( 2,215 ) ( 550 ) Inventories ( 2,554 ) ( 774 ) ( 524 ) Prepaid expenses and other assets ( 1,517 ) ( 1,715 ) ( 394 ) Accounts payable ( 551 ) 568 312 Accrued and other current liabilities 1,341 581 290 Other long-term liabilities 252 192 163 Net cash provided by operating activities 5,641 9,108 5,822 Cash flows from investing activities: Proceeds from maturities of marketable securities 19,425 15,197 8,792 Proceeds from sales of marketable securities 1,806 1,023 527 Purchases of marketable securities ( 11,897 ) ( 24,787 ) ( 19,308 ) Purchases related to property and equipment and intangible assets ( 1,833 ) ( 976 ) ( 1,128 ) Acquisitions, net of cash acquired ( 49 ) ( 263 ) ( 8,524 ) Investments and other, net ( 77 ) ( 24 ) ( 34 ) Net cash provided by (used in) investing activities 7,375 ( 9,830 ) ( 19,675 ) Cash flows from financing activities: 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 ) 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 ) Net cash provided by (used in) financing activities ( 11,617 ) 1,865 3,804 Change in cash and cash equivalents 1,399 1,143 ( 10,049 ) Cash and cash equivalents at beginning of period 1,990 847 10,896 Cash and cash equivalents at end of period $ 3,389 $ 1,990 $ 847 Supplemental disclosures of cash flow information: Cash paid for income taxes, net $ 1,404 $ 396 $ 249 Cash paid for interest $ 254 $ 246 $ 138 See accompanying notes to the consolidated financial statements. 58 Table of Contents NVIDIA CORPORATION AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Note 1 - Organization and Summary of Significant Accounting Policies Our Company Headquartered in Santa Clara, California, NVIDIA was incorporated in California in April 1993 and reincorporated in Delaware in April 1998. All references to “NVIDIA,” “we,” “us,” “our” or the “Company” mean NVIDIA Corporation and its subsidiaries. Fiscal Year We operate on a 52- or 53-week year, ending on the last Sunday in January. Fiscal years 2023 and 2022 were both 52-week years. Fiscal year 2021 was a 53-week year. Reclassifications 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 Our consolidated financial statements include the accounts of NVIDIA Corporation and our wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ materially from our estimates. On an on-going basis, we evaluate our estimates, including those related to revenue recognition, cash equivalents and marketable securities, accounts receivable, inventories, income taxes, goodwill, stock-based compensation, litigation, investigation and settlement costs, restructuring and other charges, and other contingencies. The inputs into our judgments and estimates consider the economic implications of COVID-19. 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 We derive our revenue from product sales, including hardware and systems, license and development arrangements, software licensing, and cloud services. We determine revenue recognition through the following steps: (1) identification of the contract with a customer; (2) identification of the performance obligations in the contract; (3) determination of the transaction price; (4) allocation of the transaction price to the performance obligations in the contract (where revenue is allocated on a relative standalone selling price basis by maximizing the use of observable inputs to determine the standalone selling price for each performance obligation); and (5) recognition of revenue when, or as, we satisfy a performance obligation. Product Sales Revenue 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 59 Table of Contents NVIDIA CORPORATION AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued) 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. Revenue is recognized net of allowances for returns, customer programs and any taxes collected from customers. For products sold with a right of return, we record a reduction to revenue by establishing a sales return allowance for estimated product returns at the time revenue is recognized, based primarily on historical return rates. 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. 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. We account for customer programs as a reduction to revenue and accrue for potential rebates and MDFs based on the amount we expect to be claimed by customers. License and Development Arrangements Our license and development arrangements with customers typically require significant customization of our IP components. As a result, we recognize the revenue from the license and the revenue from the development services as a single performance obligation over the period in which the development services are performed. We measure progress to completion based on actual cost incurred to date as a percentage of the estimated total cost required to complete each project. If a loss on an arrangement becomes probable during a period, we record a provision for such loss in that period. Software Licensing Our software licenses provide our customers with a right to use the software when it is made available to the customer. Customers may purchase either perpetual licenses or subscriptions to licenses, which differ mainly in the duration over which the customer benefits from the software. Software licenses are frequently sold along with the right to receive, on a when-and-if available basis, future unspecified software updates and upgrades. Revenue from software licenses is recognized up front when the software is made available to the customer. Software support revenue is recognized ratably over the service period, or as services are performed. Cloud Services 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. Revenue related to cloud services based on usage is recognized as usage occurs. Product Warranties We generally offer a limited warranty to end-users that ranges from one to three years for products in order to repair or replace products for any manufacturing defects or hardware component failures. Cost of revenue includes the estimated cost of product warranties that are calculated at the point of revenue recognition. Under limited circumstances, we may offer an extended limited warranty to customers for certain products. We also accrue for known warranty and indemnification issues if a loss is probable and can be reasonably estimated. Stock-based Compensation We use the closing trading price of our common stock on the date of grant, minus a dividend yield discount, as the fair value of awards of restricted stock units, or RSUs, and performance stock units that are based on our corporate financial performance targets, or PSUs. 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 60 Table of Contents NVIDIA CORPORATION AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued) 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. Stock-based compensation for our ESPP is expensed using an accelerated amortization model. Additionally, we estimate forfeitures at least annually based on historical experience and revise the estimates of forfeiture in subsequent periods if actual forfeitures differ from those estimates. Litigation, Investigation and Settlement Costs 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 settlement payments or judgments. 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. GAAP. However, the actual liability in any such litigation or investigation may be materially different from our estimates, which could require us to record additional costs. Foreign Currency Remeasurement 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. Non-monetary assets and liabilities such as property and equipment and equity are remeasured at historical exchange rates. Revenue and expenses are remeasured at exchange rates in effect during each period, except for those expenses related to non-monetary balance sheet amounts, which are remeasured at historical exchange rates. Gains or losses from foreign currency remeasurement are included in earnings in our Consolidated Statements of Income and to date have not been significant. Income Taxes We recognize federal, state and foreign current tax liabilities or assets based on our estimate of taxes payable or refundable in the current fiscal year by tax jurisdiction. We recognize federal, state and foreign deferred tax assets or liabilities, as appropriate, for our estimate of future tax effects attributable to temporary differences and carryforwards; and we record a valuation allowance to reduce any deferred tax assets by the amount of any tax benefits that, based on available evidence and judgment, are not expected to be realized. Our calculation of deferred tax assets and liabilities is based on certain estimates and judgments and involves dealing with uncertainties in the application of complex tax laws. Our estimates of deferred tax assets and liabilities may change based, in part, on added certainty or finality to an anticipated outcome, changes in accounting standards or tax laws in the United States, or foreign jurisdictions where we operate, or changes in other facts or circumstances. In addition, we recognize liabilities for potential United States and foreign income tax contingencies based on our estimate of whether, and the extent to which, additional taxes may be due. 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 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. 61 Table of Contents NVIDIA CORPORATION AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued) 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. Our policy is to include interest and penalties related to unrecognized tax benefits as a component of income tax expense. Net Income Per Share Basic net income per share is computed using the weighted average number of common shares outstanding during the period. Diluted net income per share is computed using the weighted average number of common and potentially dilutive shares outstanding during the period, using the treasury stock method. Under the treasury stock method, the effect of equity awards outstanding is not included in the computation of diluted net income per share for periods when their effect is anti-dilutive. Cash and Cash Equivalents and Marketable Securities We consider all highly liquid investments that are readily convertible into cash and have an original maturity of three months or less at the time of purchase to be cash equivalents. Marketable securities consist of highly liquid debt investments with maturities of greater than three months when purchased. We currently classify our investments as current based on the nature of the investments and their availability for use in current operations. 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 tax. 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. 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. Allowances for credit losses and write-downs are recognized in the other income (expense), net section of our Consolidated Statements of Income. Fair Value of Financial Instruments The carrying value of cash equivalents, accounts receivable, accounts payable and accrued liabilities approximate their fair values due to their relatively short maturities as of January 29, 2023 and January 30, 2022. Marketable securities are comprised of available-for-sale securities that are reported at fair value with the related unrealized gains or losses included in accumulated other comprehensive income or loss, a component of shareholders’ equity, net of tax. Fair value of the marketable securities is determined based on quoted market prices. Derivative instruments are recognized as either assets or liabilities and are measured at fair value. The accounting for changes in the fair value of a derivative depends on the intended use of the derivative and the resulting designation. For derivative instruments designated as fair value hedges, the gains or losses are recognized in earnings in the periods of change together with the offsetting losses or gains on the hedged items attributed to the risk being hedged. For derivative instruments designated as cash-flow hedges, the effective portion of the gains or losses on the derivatives is initially reported as a component of other comprehensive income or loss and is subsequently recognized in earnings when the hedged exposure is recognized in earnings. For derivative instruments not designated for hedge accounting, changes in fair value are recognized in earnings. Concentration of Credit Risk Financial instruments that potentially subject us to concentrations of credit risk consist primarily of cash equivalents, marketable securities, and accounts receivable. Our investment policy requires the purchase of highly-rated fixed income securities, the diversification of investment type and credit exposures, and includes certain limits on our portfolio duration. We perform ongoing credit evaluations of our customers’ financial condition and maintain an allowance for potential credit losses. This allowance consists of an amount 62 Table of Contents NVIDIA CORPORATION AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued) 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. Inventories Inventory cost is computed on an adjusted standard basis, which approximates actual cost on an average or first-in, first-out basis. 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, 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. Once inventory has been written-off or written-down, it creates a new cost basis for the inventory that is not subsequently written-up. We record a liability for noncancelable purchase commitments with suppliers for quantities in excess of our future demand forecasts consistent with our valuation of obsolete or excess inventory. Property and Equipment Property and equipment are stated at cost. Depreciation of property and equipment is computed using the straight-line method based on the estimated useful lives of the assets, generally three to five years . Once an asset is identified for retirement or disposition, the related cost and accumulated depreciation or amortization are removed, and a gain or loss is recorded. The estimated useful lives of our buildings are up to thirty years . Depreciation expense includes the amortization of assets recorded under finance leases. 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. Leases We determine if an arrangement is or contains a lease at inception. Operating leases with lease terms of more than 12 months are included in operating lease assets, accrued and other current liabilities, and long-term operating lease liabilities on our consolidated balance sheet. Operating lease assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments over the lease term. Operating lease assets and liabilities are recognized based on the present value of the remaining lease payments discounted using our incremental borrowing rate. Operating lease assets also include initial direct costs incurred and prepaid lease payments, minus any lease incentives. Our lease terms include options to extend or terminate the lease when it is reasonably certain that we will exercise that option. Lease expense is recognized on a straight-line basis over the lease term. We combine the lease and non-lease components in determining the operating lease assets and liabilities. Goodwill Goodwill is subject to our annual impairment test during the fourth quarter of our fiscal year, or earlier if indicators of potential impairment exist. For the purposes of completing our impairment test, we perform either a qualitative or a quantitative analysis on a reporting unit basis. Qualitative factors include industry and market considerations, overall financial performance, and other relevant events and factors affecting the reporting units. 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. 63 Table of Contents NVIDIA CORPORATION AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued) Intangible Assets and Other Long-Lived Assets Intangible assets primarily represent acquired intangible assets including developed technology, in-process research and development, or IPR&D, and customer relationships, as well as rights acquired under technology licenses, patents, and acquired IP. We currently amortize our intangible assets with finite lives over periods ranging from one to twenty years using a method that reflects the pattern in which the economic benefits of the intangible asset are consumed or otherwise used up or, if that pattern cannot be reliably determined, using a straight-line amortization method. We initially capitalize the fair value of IPR&D as an intangible asset with an indefinite life. When IPR&D projects are completed, we reclassify the IPR&D as an amortizable purchased intangible asset and amortize over the asset’s estimated useful life. Long-lived assets, such as property and equipment and intangible assets subject to amortization, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset or asset group may not be recoverable. Recoverability of assets or asset groups to be held and used is measured by a comparison of the carrying amount of an asset or asset group to estimated undiscounted future cash flows expected to be generated by the asset or asset group. If the carrying amount of an asset or asset group exceeds its estimated future cash flows, an impairment charge is recognized for the amount by which the carrying amount of the asset or asset group exceeds the estimated fair value of the asset or asset group. Fair value is determined based on the estimated discounted future cash flows expected to be generated by the asset or asset group. Assets and liabilities to be disposed of would be separately presented in the Consolidated Balance Sheet and the assets would be reported at the lower of the carrying amount or fair value less costs to sell, and would no longer be depreciated. Business Combination We allocate the fair value of the purchase price of an acquisition to the tangible assets acquired, liabilities assumed, and intangible assets acquired, including IPR&D, based on their estimated fair values. The excess of the fair value of the purchase price over the fair values of these net tangible and intangible assets acquired is recorded as goodwill. 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 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. As a result, during the measurement period of up to one year from the acquisition date, we may record adjustments to the assets acquired and liabilities assumed with the corresponding offset to goodwill. Upon the conclusion of the measurement period or final determination of the fair value of the purchase price of an acquisition, whichever comes first, any subsequent adjustments are recorded to our Consolidated Statements of Income. Acquisition-related expenses are recognized separately from the business combination and expensed as incurred. Investment in Non-Affiliated Entities Non-marketable equity investments in privately-held companies are recorded at fair value on a non-recurring basis only if an impairment or observable price adjustment occurs in the period with changes in fair value recorded through net income. These investments are valued using observable and unobservable inputs or data in an inactive market and the valuation requires our judgment due to the absence of market prices and inherent lack of liquidity. The estimated fair value is based on quantitative and qualitative factors including subsequent financing activities by the investee. 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. Note 2 - Business Combination Termination of the Arm Share Purchase Agreement 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 64 Table of Contents NVIDIA CORPORATION AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued) 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 The aggregate purchase consideration has been allocated as follows (in millions): Purchase Price Cash paid for outstanding Mellanox ordinary shares (1) $ 7,033 Cash for Mellanox equity awards (2) 16 Total cash consideration 7,049 Fair value of Mellanox equity awards assumed by NVIDIA (3) 85 Total purchase consideration $ 7,134 Allocation Cash and cash equivalents $ 115 Marketable securities 699 Accounts receivable, net 216 Inventories 320 Prepaid expenses and other assets 179 Property and equipment, net 144 Goodwill 3,431 Intangible assets 2,970 Accounts payable ( 136 ) Accrued and other current liabilities ( 236 ) Income tax liability ( 191 ) Deferred income tax liability ( 258 ) Other long-term liabilities ( 119 ) $ 7,134 (1) Represents the cash consideration of $ 125.00 per share paid to Mellanox shareholders for approximately 56 million shares of outstanding Mellanox ordinary shares. (2) Represents the cash consideration for the settlement of approximately 249 thousand Mellanox stock options held by employees and non-employee directors of Mellanox. (3) Represents the fair value of Mellanox’s stock-based compensation awards attributable to pre-combination services. We allocated the purchase price to tangible and identified intangible assets acquired and liabilities assumed based on the estimated fair values. The goodwill is primarily attributable to the planned growth in the combined business of NVIDIA and Mellanox. Goodwill is not amortized to earnings, but instead is reviewed for impairment at least annually, absent any interim indicators of impairment. Goodwill recognized in the acquisition is not expected to be deductible for foreign tax purposes. Goodwill arising from the Mellanox acquisition has been allocated to the Compute and Networking segment. Refer to Note 17 – Segment Information for further details on segments. The operating results of Mellanox have been included in our consolidated financial statements for fiscal year 2021 since the acquisition date of April 27, 2020. 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 65 Table of Contents NVIDIA CORPORATION AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued) integration. Acquisition-related costs attributable to Mellanox of $ 28 million were included in selling, general and administrative expense for fiscal year 2021. Intangible Assets The estimated fair value and useful life of the acquired intangible assets at the time of the acquisition are as follows: Fair Value Useful Lives (In millions) Developed technology (1) $ 1,640 5 years Customer relationships (2) 440 3 years Order backlog (3) 190 Based on actual shipments Trade names (4) 70 5 years Total identified finite-lived intangible assets 2,340 IPR&D (5) 630 N/A Total identified intangible assets $ 2,970 (1) The fair value of developed technology was identified using the Multi-Period Excess Earnings Method. (2) Customer relationships represent the fair value of the existing relationships using the With and Without Method. (3) Order backlog represents primarily the fair value of purchase arrangements with customers using the Multi-Period Excess Earnings Method. The intangible asset was fully amortized as of January 31, 2021. (4) Trade names primarily relate to Mellanox trade names and fair value was determined by applying the Relief-from-Royalty Method under the income approach. (5) The fair value of IPR&D was determined using the Multi-Period Excess Earnings Method. 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 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. 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: Pro Forma Year Ended January 31, 2021 (In millions) Revenue $ 17,104 Net income $ 4,757 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. 66 Table of Contents NVIDIA CORPORATION AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued) 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 Our lease obligations primarily consist of operating leases for our headquarters complex, domestic and international office facilities, and data center space, with lease periods expiring between fiscal years 2024 and 2035. Future minimum lease payments under our non-cancelable operating leases as of January 29, 2023, are as follows: Operating Lease Obligations (In millions) Fiscal Year: 2024 $ 220 2025 198 2026 180 2027 166 2028 144 2029 and thereafter 323 Total 1,231 Less imputed interest 153 Present value of net future minimum lease payments 1,078 Less short-term operating lease liabilities 176 Long-term operating lease liabilities $ 902 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. Short-term and variable lease expenses for fiscal years 2023, 2022, and 2021 were not significant. Other information related to leases was as follows: Year Ended January 29, 2023 January 30, 2022 January 31, 2021 (In millions) Supplemental cash flows information Operating cash flows used for operating leases $ 184 $ 154 $ 141 Operating lease assets obtained in exchange for lease obligations $ 358 $ 266 $ 200 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 %. 67 Table of Contents NVIDIA CORPORATION AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued) 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. Our Consolidated Statements of Income include stock-based compensation expense, net of amounts allocated to inventory, as follows: Year Ended January 29, 2023 January 30, 2022 January 31, 2021 (In millions) Cost of revenue $ 138 $ 141 $ 88 Research and development 1,892 1,298 860 Sales, general and administrative 680 565 449 Total $ 2,710 $ 2,004 $ 1,397 Stock-based compensation capitalized in inventories was not significant during fiscal years 2023, 2022, and 2021. The following is a summary of equity awards granted under our equity incentive plans: Year Ended January 29, 2023 January 30, 2022 January 31, 2021 (In millions, except per share data) RSUs, PSUs and Market-based PSUs Awards granted 25 18 36 Estimated total grant-date fair value $ 4,505 $ 3,492 $ 2,764 Weighted average grant-date fair value per share $ 183.72 $ 190.69 $ 76.81 ESPP Shares purchased 3 5 4 Weighted average price per share $ 122.54 $ 56.36 $ 34.80 Weighted average grant-date fair value per share $ 51.87 $ 23.24 $ 16.91 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. 68 Table of Contents NVIDIA CORPORATION AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued) The fair value of shares issued under our ESPP have been estimated with the following assumptions: Year Ended January 29, 2023 January 30, 2022 January 31, 2021 (Using the Black-Scholes model) ESPP Weighted average expected life (in years) 0.1 - 2.0 0.1 - 2.0 0.1 - 2.0 Risk-free interest rate — %- 4.6 % — %- 0.5 % 0.1 %- 1.6 % Volatility 43 %- 72 % 20 %- 58 % 26 %- 89 % Dividend yield 0.1 % 0.1 % 0.1 %- 0.3 % For ESPP shares, the expected term represents the average term from the first day of the offering period to the purchase date. The risk-free interest rate assumption used to value ESPP shares is based upon observed interest rates on Treasury bills appropriate for the expected term. Our expected stock price volatility assumption for ESPP is estimated using historical volatility. For awards granted, we use the dividend yield at grant date. Our RSU, PSU, and market-based PSU awards are not eligible for cash dividends prior to vesting; therefore, the fair values of RSUs, PSUs, and market-based PSUs are discounted for the dividend yield. 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. Forfeitures are estimated based on historical experience. Equity Incentive Program We grant or have granted stock options, RSUs, PSUs, market-based PSUs, and stock purchase rights under the following equity incentive plans. In addition, in connection with our acquisitions of various companies, we have assumed certain stock-based awards granted under their stock incentive plans and converted them into our RSUs. Amended and Restated 2007 Equity Incentive Plan In 2007, our shareholders approved the NVIDIA Corporation 2007 Equity Incentive Plan, as most recently amended and restated, or the 2007 Plan. The 2007 Plan authorizes the issuance of incentive stock options, non-statutory stock options, restricted stock, restricted stock units, stock appreciation rights, performance stock awards, performance cash awards, and other stock-based awards to employees, directors and consultants. Only our employees may receive incentive stock options. As of January 29, 2023, up to 47 million shares of our common stock could be issued pursuant to stock awards granted under the 2007 Plan, of which 2 million shares were issuable upon the exercise of outstanding stock options. All options are fully vested, the last of which will expire by December 2023 if not exercised. 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 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. Market-based PSUs vest 100 % on approximately the three-year anniversary of the date of grant. 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. 69 Table of Contents NVIDIA CORPORATION AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued) Amended and Restated 2012 Employee Stock Purchase Plan In 2012, our shareholders approved the NVIDIA Corporation 2012 Employee Stock Purchase Plan, as most recently amended and restated, or the 2012 Plan. Employees who participate in the 2012 Plan may have up to 15 % of their earnings withheld to purchase shares of common stock. The Board may decrease this percentage at its discretion. Each offering period is approximately 24 months, which is generally divided into four purchase periods of six months . The price of common stock purchased under our 2012 Plan will be equal to 85 % of the lower of the fair market value of the common stock on the commencement date of each offering period or the fair market value of the common stock on each purchase date within the offering. As of January 29, 2023, we had 230 million shares reserved for future issuance under the 2012 Plan. Equity Award Activity The following is a summary of our equity award transactions under our equity incentive plans: RSUs, PSUs and Market-based PSUs Outstanding Number of Shares Weighted Average Grant-Date Fair Value (In millions, except per share data) Balances, January 30, 2022 46 $ 114.19 Granted 25 $ 183.72 Vested restricted stock ( 24 ) $ 100.06 Canceled and forfeited ( 2 ) $ 141.17 Balances, January 29, 2023 45 $ 158.45 Vested and expected to vest after January 29, 2023 45 $ 158.35 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 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 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. 70 Table of Contents NVIDIA CORPORATION AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued) Note 5 - Net Income Per Share The following is a reconciliation of the denominator of the basic and diluted net income per share computations for the periods presented: Year Ended January 29, 2023 January 30, 2022 January 31, 2021 (In millions, except per share data) Numerator: Net income $ 4,368 $ 9,752 $ 4,332 Denominator: Basic weighted average shares 2,487 2,496 2,467 Dilutive impact of outstanding equity awards 20 39 43 Diluted weighted average shares 2,507 2,535 2,510 Net income per share: Basic (1) $ 1.76 $ 3.91 $ 1.76 Diluted (2) $ 1.74 $ 3.85 $ 1.73 Equity awards excluded from diluted net income per share because their effect would have been anti-dilutive 40 21 12 (1) Calculated as net income divided by basic weighted average shares. (2) Calculated as net income divided by diluted weighted average shares. Note 6 - Goodwill 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 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 The components of our amortizable intangible assets are as follows: January 29, 2023 January 30, 2022 Gross Carrying Amount Accumulated Amortization Net Carrying Amount Gross Carrying Amount Accumulated Amortization Net Carrying Amount (In millions) Acquisition-related intangible assets (1) $ 3,093 $ ( 1,614 ) $ 1,479 $ 3,061 $ ( 947 ) $ 2,114 Patents and licensed technology 446 ( 249 ) 197 446 ( 221 ) 225 Total intangible assets $ 3,539 $ ( 1,863 ) $ 1,676 $ 3,507 $ ( 1,168 ) $ 2,339 (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. 71 Table of Contents NVIDIA CORPORATION AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued) 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 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. The following is a summary of cash equivalents and marketable securities as of January 29, 2023 and January 30, 2022: January 29, 2023 Amortized Cost Unrealized Gain Unrealized Loss Estimated Fair Value Reported as Cash Equivalents Marketable Securities (In millions) Corporate debt securities $ 4,809 $ — $ ( 12 ) $ 4,797 $ 1,087 $ 3,710 Debt securities issued by the United States Treasury 4,185 1 ( 44 ) 4,142 — 4,142 Debt securities issued by United States government agencies 1,836 — ( 2 ) 1,834 50 1,784 Money market funds 1,777 — — 1,777 1,777 — Certificates of deposit 365 — — 365 134 231 Foreign government bonds 140 — — 140 100 40 Total $ 13,112 $ 1 $ ( 58 ) $ 13,055 $ 3,148 $ 9,907 January 30, 2022 Amortized Cost Unrealized Gain Unrealized Loss Estimated Fair Value Reported as Cash Equivalents Marketable Securities (In millions) Corporate debt securities $ 9,977 $ — $ ( 3 ) $ 9,974 $ 1,102 $ 8,872 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 Money market funds 316 — — 316 316 — Foreign government bonds 150 — — 150 — 150 Total $ 20,930 $ — $ ( 17 ) $ 20,913 $ 1,695 $ 19,218 72 Table of Contents NVIDIA CORPORATION AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued) 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 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 $ 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 ) 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. January 29, 2023 January 30, 2022 Amortized Cost Estimated Fair Value Amortized Cost Estimated Fair Value (In millions) Less than one year $ 9,738 $ 9,708 $ 16,346 $ 16,343 Due in 1 - 5 years 3,374 3,347 4,584 4,570 Total $ 13,112 $ 13,055 $ 20,930 $ 20,913 Note 9 - Fair Value of Financial Assets and Liabilities The fair values of our financial assets and liabilities are determined using quoted market prices of identical assets or quoted market prices of similar assets from active markets. We review fair value hierarchy classification on a quarterly basis. 73 Table of Contents NVIDIA CORPORATION AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued) Fair Value at Pricing Category January 29, 2023 January 30, 2022 (In millions) Assets Cash equivalents and marketable securities: Money market funds Level 1 $ 1,777 $ 316 Corporate debt securities Level 2 $ 4,797 $ 9,974 Debt securities issued by the United States Treasury Level 2 $ 4,142 $ 7,300 Debt securities issued by United States government agencies Level 2 $ 1,834 $ 1,612 Certificates of deposit Level 2 $ 365 $ 1,561 Foreign government bonds Level 2 $ 140 $ 150 Other assets (Investment in non-affiliated entities): Publicly-held equity securities (1) Level 1 $ 11 $ 58 Privately-held equity securities Level 3 $ 288 $ 208 Liabilities (2) 0.309 % Notes Due 2023 Level 2 $ 1,230 $ 1,236 0.584 % Notes Due 2024 Level 2 $ 1,185 $ 1,224 3.20 % Notes Due 2026 Level 2 $ 966 $ 1,055 1.55 % Notes Due 2028 Level 2 $ 1,099 $ 1,200 2.85 % Notes Due 2030 Level 2 $ 1,364 $ 1,542 2.00 % Notes Due 2031 Level 2 $ 1,044 $ 1,200 3.50 % Notes Due 2040 Level 2 $ 870 $ 1,066 3.50 % Notes Due 2050 Level 2 $ 1,637 $ 2,147 3.70 % Notes Due 2060 Level 2 $ 410 $ 551 (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. Note 10 - Balance Sheet Components Certain balance sheet components are as follows: January 29, 2023 January 30, 2022 (In millions) Inventories (1) : Raw materials $ 2,430 $ 791 Work in-process 466 692 Finished goods 2,263 1,122 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. 74 Table of Contents NVIDIA CORPORATION AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued) January 29, 2023 January 30, 2022 Estimated Useful Life (In millions) (In years) Property and Equipment: Land $ 218 $ 218 (A) Buildings, leasehold improvements, and furniture 1,598 874 (B) Equipment, compute hardware, and software 4,303 2,852 3 - 5 Construction in process 382 737 (C) Total property and equipment, gross 6,501 4,681 Accumulated depreciation and amortization ( 2,694 ) ( 1,903 ) Total property and equipment, net $ 3,807 $ 2,778 (A) Land is a non-depreciable asset. (B) The estimated useful lives of our buildings are up to thirty years . Leasehold improvements and finance leases are amortized based on the lesser of either the asset’s estimated useful life or the expected lease term. (C) Construction in process represents assets that are not available for their intended use as of the balance sheet date. Depreciation expense for fiscal years 2023, 2022, and 2021 was $ 844 million, $ 611 million, and $ 486 million, respectively. Accumulated amortization of leasehold improvements and finance leases was $ 327 million and $ 265 million as of January 29, 2023 and January 30, 2022, respectively. Property, equipment and intangible assets acquired by assuming related liabilities during fiscal years 2023, 2022, and 2021 were $ 374 million, $ 258 million, and $ 157 million, respectively. January 29, 2023 January 30, 2022 Other assets: (In millions) Prepaid supply agreements $ 2,989 $ 1,747 Prepaid royalties 387 409 Investment in non-affiliated entities 299 266 Advanced consideration for acquisition (1) — 1,353 Other 145 66 Total other assets $ 3,820 $ 3,841 (1) Refer to Note 2 - Business Combination for further details on the Arm acquisition. 75 Table of Contents NVIDIA CORPORATION AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued) January 29, 2023 January 30, 2022 (In millions) Accrued and Other Current Liabilities: 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 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. January 29, 2023 January 30, 2022 (In millions) Other Long-Term Liabilities: Income tax payable (1) $ 1,204 $ 980 Deferred income tax 247 245 Deferred revenue (2) 218 202 Licenses payable 181 77 Other 63 49 Total other long-term liabilities $ 1,913 $ 1,553 (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. Deferred Revenue The following table shows the changes in deferred revenue during fiscal years 2023 and 2022. January 29, 2023 January 30, 2022 (In millions) Balance at beginning of period $ 502 $ 451 Deferred revenue added during the period 830 821 Addition due to business combinations — 8 Revenue recognized during the period ( 760 ) ( 778 ) Balance at end of period $ 572 $ 502 Revenue related to remaining performance obligations represents the contracted license and development arrangements and support for hardware and software. This includes deferred revenue currently recorded and amounts that will be invoiced in future periods. As of January 29, 2023, $ 652 million of revenue related to 76 Table of Contents NVIDIA CORPORATION AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued) 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 We enter into foreign currency forward contracts to mitigate the impact of foreign currency exchange rate movements on our operating expenses. These contracts are designated as cash flow hedges for hedge accounting treatment. Gains or losses on the contracts are recorded in accumulated other comprehensive income or loss and reclassified to operating expense when the related operating expenses are recognized in earnings or ineffectiveness should occur. The fair value of the contracts was not significant as of January 29, 2023 and January 30, 2022. We enter into foreign currency forward contracts to mitigate the impact of foreign currency movements on monetary assets and liabilities that are denominated in currencies other than U.S. dollar. These forward contracts were not designated for hedge accounting treatment. Therefore, the change in fair value of these contracts is recorded in other income or expense and offsets the change in fair value of the hedged foreign currency denominated monetary assets and liabilities, which is also recorded in other income or expense. The table below presents the notional value of our foreign currency forward contracts outstanding as of January 29, 2023 and January 30, 2022: January 29, 2023 January 30, 2022 (In millions) Designated as cash flow hedges $ 1,128 $ 1,023 Non-designated hedges $ 366 $ 408 As of January 29, 2023, all designated foreign currency forward contracts mature within eighteen months . The expected realized gains and losses deferred into accumulated other comprehensive income (loss) related to foreign currency forward contracts within the next twelve months was not significant. During fiscal years 2023 and 2022, the impact of derivative financial instruments designated for hedge accounting treatment on other comprehensive income or loss was not significant and all such instruments were determined to be highly effective. Note 12 - Debt Long-Term Debt In June 2021, March 2020, and September 2016, we issued a total of $ 5.00 billion, $ 5.00 billion, and $ 2.00 billion aggregate principal of senior notes, respectively. 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. In fiscal year 2022, we repaid the $ 1.00 billion of 2.20 % Notes Due 2021. 77 Table of Contents NVIDIA CORPORATION AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued) The carrying value of the Notes, the calendar year of maturity, and the associated interest rates were as follows: Expected Remaining Term (years) Effective Interest Rate January 29, 2023 January 30, 2022 (In millions) 0.309 % Notes Due 2023 0.4 0.41 % $ 1,250 $ 1,250 0.584 % Notes Due 2024 1.4 0.66 % 1,250 1,250 3.20 % Notes Due 2026 3.6 3.31 % 1,000 1,000 1.55 % Notes Due 2028 5.4 1.64 % 1,250 1,250 2.85 % Notes Due 2030 7.2 2.93 % 1,500 1,500 2.00 % Notes Due 2031 8.4 2.09 % 1,250 1,250 3.50 % Notes Due 2040 17.2 3.54 % 1,000 1,000 3.50 % Notes Due 2050 27.2 3.54 % 2,000 2,000 3.70 % Notes Due 2060 37.2 3.73 % 500 500 Unamortized debt discount and issuance costs ( 47 ) ( 54 ) Net carrying amount 10,953 10,946 Less short-term portion ( 1,250 ) — Total long-term portion $ 9,703 $ 10,946 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 We have a $ 575 million commercial paper program to support general corporate purposes. As of January 29, 2023, we had no t issued any commercial paper. Note 13 - Commitments and Contingencies Purchase Obligations Our purchase obligations reflect our commitments to purchase components used to manufacture our products, 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. 78 Table of Contents NVIDIA CORPORATION AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued) Total future purchase commitments as of January 29, 2023, are as follows: Commitments (In millions) Fiscal Year: 2024 $ 5,230 2025 983 2026 679 2027 622 2028 296 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: Year Ended January 29, January 30, January 31, 2023 2022 2021 (In millions) Balance at beginning of period $ 46 $ 22 $ 15 Additions 145 40 28 Utilization ( 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 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 in our Consolidated Financial Statements for such indemnifications. Litigation Securities Class Action and Derivative Lawsuits The plaintiffs in the putative securities class action lawsuit, captioned 4:18-cv-07669-HSG, initially filed on December 21, 2018 in the United States District Court for the Northern District of California, and titled In Re NVIDIA Corporation Securities Litigation, filed an amended complaint on May 13, 2020. The amended complaint asserted that NVIDIA and certain NVIDIA executives violated Section 10(b) of the Securities Exchange Act of 1934, as amended, or the Exchange Act, and SEC Rule 10b-5, by making materially false or misleading statements related to channel inventory and the impact of cryptocurrency mining on GPU demand between May 10, 2017 and November 14, 2018. Plaintiffs also alleged that the NVIDIA executives who they named as defendants violated Section 20(a) of the Exchange Act. Plaintiffs sought class certification, an award of unspecified compensatory damages, an award of reasonable costs and expenses, 79 Table of Contents NVIDIA CORPORATION AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued) 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 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. On February 22, 2022, the court administratively closed the case, but stated that it would reopen the case once the appeal in the In Re NVIDIA Corporation Securities Litigation action is resolved. The lawsuit asserts claims, purportedly on behalf of us, against certain officers and directors of the Company for breach of fiduciary duty, unjust enrichment, waste of corporate assets, and violations of Sections 14(a), 10(b), and 20(a) of the Exchange Act based on the dissemination of allegedly false and misleading statements related to channel inventory and the impact of cryptocurrency mining on GPU demand. The plaintiffs are seeking unspecified damages and other relief, including reforms and improvements to NVIDIA’s corporate governance and internal procedures. The putative derivative actions initially filed September 24, 2019 and pending in the United States District Court for the District of Delaware, Lipchitz v. Huang, et al. (Case No. 1:19-cv-01795-UNA) and Nelson v. Huang, et. al. (Case No. 1:19-cv-01798- UNA), remain stayed pending resolution of the plaintiffs’ appeal in the In Re NVIDIA Corporation Securities Litigation action. The lawsuits assert claims, purportedly on behalf of us, against certain officers and directors of the Company for breach of fiduciary duty, unjust enrichment, insider trading, misappropriation of information, corporate waste and violations of Sections 14(a), 10(b), and 20(a) of the Exchange Act based on the dissemination of allegedly false, and misleading statements related to channel inventory and the impact of cryptocurrency mining on GPU demand. The plaintiffs seek unspecified damages and other relief, including disgorgement of profits from the sale of NVIDIA stock and unspecified corporate governance measures. Accounting for Loss Contingencies As of January 29, 2023, we have not recorded any accrual for contingent liabilities associated with the legal proceedings described above based on our belief that liabilities, while possible, are not probable. Further, except as specifically described above, any possible loss or range of loss in these matters cannot be reasonably estimated at this time. We are engaged in legal actions not described above arising in the ordinary course of business and, while there can be no assurance of favorable outcomes, we believe that the ultimate outcome of these actions will not have a material adverse effect on our operating results, liquidity or financial position. 80 Table of Contents NVIDIA CORPORATION AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued) Note 14 - Income Taxes The income tax expense (benefit) applicable to income before income taxes consists of the following: Year Ended January 29, 2023 January 30, 2022 January 31, 2021 (In millions) Current income taxes: Federal $ 1,703 $ 482 $ 197 State 46 42 1 Foreign 228 71 161 Total current 1,977 595 359 Deferred taxes: Federal ( 2,165 ) ( 420 ) ( 246 ) Foreign 1 14 ( 36 ) Total deferred ( 2,164 ) ( 406 ) ( 282 ) Income tax expense (benefit) $ ( 187 ) $ 189 $ 77 Income before income tax consists of the following: Year Ended January 29, 2023 January 30, 2022 January 31, 2021 (In millions) U.S. $ 3,477 $ 8,446 $ 1,437 Foreign 704 1,495 2,972 Income before income tax $ 4,181 $ 9,941 $ 4,409 The income tax expense (benefit) differs from the amount computed by applying the U.S. federal statutory rate of 21% to income before income taxes as follows: Year Ended January 29, 2023 January 30, 2022 January 31, 2021 (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 ) % — — % Stock-based compensation ( 309 ) ( 7.4 ) % ( 337 ) ( 3.4 ) % ( 136 ) ( 3.1 ) % U.S. 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 (benefit) $ ( 187 ) ( 4.5 ) % $ 189 1.9 % $ 77 1.7 % 81 Table of Contents NVIDIA CORPORATION AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued) The tax effect of temporary differences that gives rise to significant portions of the deferred tax assets and liabilities are presented below: January 29, 2023 January 30, 2022 (In millions) Deferred tax assets: Capitalized research and development expenditure (1) $ 1,859 $ 508 Research and other tax credit carryforwards 951 798 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 Stock-based compensation 99 86 Property, equipment and intangible assets 66 22 Other deferred tax assets 91 22 Gross deferred tax assets 5,154 2,315 Less valuation allowance ( 1,484 ) ( 907 ) Total deferred tax assets 3,670 1,408 Deferred tax liabilities: 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) 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. 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 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 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 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 82 Table of Contents NVIDIA CORPORATION AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued) 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: January 29, 2023 January 30, 2022 January 31, 2021 (In millions) Balance at beginning of period $ 1,013 $ 776 $ 583 Increases in tax positions for current year 268 246 158 Increases in tax positions for prior years 1 14 60 Decreases in tax positions for prior years ( 15 ) ( 4 ) ( 11 ) Settlements ( 9 ) ( 8 ) ( 5 ) Lapse in statute of limitations ( 20 ) ( 11 ) ( 9 ) Balance at end of period $ 1,238 $ 1,013 $ 776 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 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. 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 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. As of January 29, 2023, the significant tax jurisdictions that may be subject to examination include China, Germany, Hong Kong, India, Israel, Taiwan, United Kingdom, and the United States for fiscal years 2005 through 2022. As of January 29, 2023, the significant tax jurisdictions for which we are currently under examination include Germany, India, Israel, and the United States for fiscal years 2005 through 2022. Note 15 - Shareholders’ Equity Capital Return Program 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. 83 Table of Contents NVIDIA CORPORATION AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued) During fiscal years 2023, 2022, and 2021, we paid $ 398 million, $ 399 million, and $ 395 million in cash dividends to our shareholders, respectively. Our cash dividend program and the payment of future cash dividends under that program are subject to our Board of Directors' continuing determination that the dividend program and the declaration of dividends thereunder are in the best 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. The excess of repurchase price over par value was allocated between additional paid-in capital and retained earnings, resulting in a reduction in additional paid-in capital by $ 20 million and retained earnings by $ 12.0 billion. Any future repurchased shares will assume the status of authorized and unissued shares. Note 16 - Employee Retirement Plans We provide tax-qualified defined contribution plans to eligible employees in the U.S. and certain other countries. Our contribution expense for fiscal years 2023, 2022, and 2021 was $ 227 million, $ 168 million, and $ 120 million, respectively. Note 17 - Segment Information Our Chief Executive Officer, who is considered to be our chief operating decision maker, or CODM, reviews financial information presented on an operating segment basis for purposes of making decisions and assessing financial performance. The Compute & Networking segment includes our Data Center accelerated computing platform; networking; 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; and CMP. 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 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. Depreciation and amortization expense directly attributable to each reportable segment is included in operating results for each segment. However, the CODM does not evaluate depreciation and amortization expense by operating segment and, therefore, it is not separately presented. There is no intersegment revenue. The accounting policies for segment reporting are the same as for our consolidated financial statements. The table below presents details of our reportable segments and the “All Other” category. 84 Table of Contents NVIDIA CORPORATION AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued) Compute & Networking Graphics All Other Consolidated (In millions) Year Ended January 29, 2023: Revenue $ 15,068 $ 11,906 $ — $ 26,974 Operating income (loss) $ 5,083 $ 4,552 $ ( 5,411 ) $ 4,224 Year Ended January 30, 2022: Revenue $ 11,046 $ 15,868 $ — $ 26,914 Operating income (loss) $ 4,598 $ 8,492 $ ( 3,049 ) $ 10,041 Year Ended January 31, 2021: Revenue $ 6,841 $ 9,834 $ — $ 16,675 Operating income (loss) $ 2,548 $ 4,612 $ ( 2,628 ) $ 4,532 Year Ended January 29, 2023 January 30, 2022 January 31, 2021 (In millions) Reconciling items included in "All Other" category: Stock-based compensation expense $ ( 2,710 ) $ ( 2,004 ) $ ( 1,397 ) Acquisition termination cost ( 1,353 ) — — Acquisition-related and other costs ( 674 ) ( 636 ) ( 836 ) Unallocated cost of revenue and operating expenses ( 595 ) ( 399 ) ( 357 ) 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 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: Year Ended January 29, 2023 January 30, 2022 January 31, 2021 Revenue: (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 Other countries 5,911 6,910 5,044 Total revenue $ 26,974 $ 26,914 $ 16,675 No customer represented 10% or more of total revenue for fiscal years 2023, 2022 and 2021. 85 Table of Contents NVIDIA CORPORATION AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued) 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: Year Ended January 29, 2023 January 30, 2022 January 31, 2021 Revenue: (In millions) Data Center $ 15,005 $ 10,613 $ 6,696 Gaming 9,067 12,462 7,759 Professional Visualization 1,544 2,111 1,053 Automotive 903 566 536 OEM & Other 455 1,162 631 Total revenue $ 26,974 $ 26,914 $ 16,675 The following table presents summarized information for long-lived assets by country. Long-lived assets consist of property and equipment and exclude other assets, operating lease assets, goodwill, and intangible assets. January 29, 2023 January 30, 2022 Long-lived assets: (In millions) United States $ 2,587 $ 2,023 Taiwan 702 379 Israel 283 185 Other countries 235 191 Total long-lived assets $ 3,807 $ 2,778 86 NVIDIA CORPORATION AND SUBSIDIARIES SCHEDULE II – VALUATION AND QUALIFYING ACCOUNTS Description Balance at Beginning of Period Additions Deductions Balance at End of Period (In millions) Fiscal year 2023 Allowance for doubtful accounts $ 4 $ — (1) $ — (1) $ 4 Sales return allowance $ 13 $ 104 (2) $ ( 91 ) (4) $ 26 Deferred tax valuation allowance $ 907 $ 577 (3) $ — $ 1,484 Fiscal year 2022 Allowance for doubtful accounts $ 4 $ — (1) $ — (1) $ 4 Sales return allowance $ 17 $ 19 (2) $ ( 23 ) (4) $ 13 Deferred tax valuation allowance $ 728 $ 179 (3) $ — $ 907 Fiscal year 2021 Allowance for doubtful accounts $ 2 $ 2 (1) $ — (1) $ 4 Sales return allowance $ 9 $ 30 (2) $ ( 22 ) (4) $ 17 Deferred tax valuation allowance $ 621 $ 107 (3) $ — $ 728 (1) Additions represent either expense or acquired balances and deductions represent write-offs. (2) Additions represent estimated product returns charged as a reduction to revenue or an acquired balance. (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. (4) Represents sales returns. 87 EXHIBIT INDEX Incorporated by Reference Exhibit No. Exhibit Description Schedule/Form File Number Exhibit Filing Date 2.1 Agreement and Plan of Merger, dated March 10, 2019, by and among NVIDIA Corporation, NVIDIA International Holdings Inc., Mellanox Technologies Ltd. and Teal Barvaz Ltd. 8-K 0-23985 2.1 3/11/2019 2.2^ Share Purchase Agreement, dated September 13, 2020, by and among NVIDIA, NVIDIA Holdings, Arm, SoftBank, and Vision Fund 8-K 0-23985 2.1 9/14/2020 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 8-K 0-23985 3.1 3/9/2022 4.1 Reference is made to Exhibits 3.1, 3.2 and 3.3 4.2 Specimen Stock Certificate 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 Computershare Trust Company, N.A., as successor to Wells Fargo Bank, National Association, as Trustee 8-K 0-23985 4.1 9/16/2016 4.4 Officers’ Certificate, dated as of September 16, 2016 8-K 0-23985 4.2 9/16/2016 4.5 Form of 2026 Note 8-K 0-23985 Annex B-1 to Exhibit 4.2 9/16/2016 4.6* Description of Securities 4.7 Officers’ Certificate, dated as of March 31, 2020 8-K 0-23985 4.2 3/31/2020 4.8 Form of 2030 Note 8-K 0-23985 Annex A-1 to Exhibit 4.2 3/31/2020 4.9 Form of 2040 Note 8-K 0-23985 Annex B-1 to Exhibit 4.2 3/31/2020 4.10 Form of 2050 Note 8-K 0-23985 Annex C-1 to Exhibit 4.2 3/31/2020 4.11 Form of 2060 Note 8-K 0-23985 Annex D-1 to Exhibit 4.2 3/31/2020 4.12 Officers' Certificate, dated as of June 16, 2021 8-K 0-23985 4.2 6/16/2021 4.13 Form of 2023 Note 8-K 0-23985 Annex A-1 to Exhibit 4.2 6/16/2021 4.14 Form of 2024 Note 8-K 0-23985 Annex B-1 to Exhibit 4.2 6/16/2021 4.15 Form of 2028 Note 8-K 0-23985 Annex C-1 to Exhibit 4.2 6/16/2021 4.16 Form of 2031 Note 8-K 0-23985 Annex D-1 to Exhibit 4.2 6/16/2021 10.1 Form of Indemnity Agreement between NVIDIA Corporation and each of its directors and officers 8-K 0-23985 10.1 3/7/2006 10.2+* Amended and Restated 2007 Equity Incentive Plan 10.3+ Amended and Restated 2007 Equity Incentive Plan - Non-Employee Director Stock Option Grant (2012 Annual Board Retainer) 10-Q 0-23985 10.4 5/23/2012 10.4+ Amended and Restated 2007 Equity Incentive Plan - Non Statutory Stock Option 10-Q 0-23985 10.1 8/22/2012 10.5+ Amended and Restated 2007 Equity Incentive Plan - Incentive Stock Option 10-Q 0-23985 10.2 8/22/2012 88 10.6+ Amended and Restated 2007 Equity Incentive Plan - Non-Employee Director Deferred Restricted Stock Unit Grant Notice and Deferred Restricted Stock Unit Agreement (2016) 10-K 0-23985 10.26 3/12/2015 10.7+ Amended and Restated 2007 Equity Incentive Plan - Non-Employee Director Restricted Stock Unit Grant Notice and Restricted Stock Unit Agreement (2016) 10-K 0-23985 10.27 3/12/2015 10.8+ 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) 10-K 0-23985 10.19 2/21/2019 10.10+ Amended and Restated 2007 Equity Incentive Plan - Global Performance-Based Restricted Stock Unit Grant Notice and Performance-Based Restricted Stock Unit Agreement (2019) 8-K 0-23985 10.1 3/11/2019 10.11+ Amended and Restated 2007 Equity Incentive Plan – Global Restricted Stock Unit Grant Notice and Global Restricted Stock Unit Agreement (2020) 10-Q 0-23985 10.2 5/21/2020 10.12+ Amended and Restated 2007 Equity Incentive Plan – Global Restricted Stock Unit Grant Notice and Global Restricted Stock Unit Agreement (2021) 10-Q 0-23985 10.2 5/26/2021 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 10-Q 0-23985 10.2 8/20/2021 10.16+ Fiscal Year 2022 Variable Compensation Plan 8-K 0-23985 10.1 3/19/2021 10.17+ 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 8-K 0-23985 10.1 9/16/2013 10.19+ Offer Letter between NVIDIA Corporation and Tim Teter, dated December 16, 2016 8-K 0-23985 10.1 1/19/2017 10.20+ Offer Letter between NVIDIA Corporation and Donald Robertson, dated May 21, 2019 8-K 0-23985 10.1 6/17/2019 10.21 Form of Commercial Paper Dealer Agreement between NVIDIA Corporation, as Issuer, and the Dealer party thereto 8-K 0-23985 10.1 12/15/2017 21.1* List of Registrant's Subsidiaries 23.1* Consent of PricewaterhouseCoopers LLP 24.1* Power of Attorney (included in signature page) 31.1* Certification of Chief Executive Officer as required by Rule 13a-14(a) of the Securities Exchange Act of 1934 31.2* Certification of Chief Financial Officer as required by Rule 13a-14(a) of the Securities Exchange Act of 1934 32.1#* Certification of Chief Executive Officer as required by Rule 13a-14(b) of the Securities Exchange Act of 1934 89 32.2#* Certification of Chief Financial Officer as required by Rule 13a-14(b) of the Securities Exchange Act of 1934 101.INS* XBRL Instance Document 101.SCH* XBRL Taxonomy Extension Schema Document 101.CAL* XBRL Taxonomy Extension Calculation Linkbase Document 101.DEF* XBRL Taxonomy Extension Definition Linkbase Document 101.LAB* XBRL Taxonomy Extension Labels Linkbase Document 101.PRE* XBRL Taxonomy Extension Presentation Linkbase Document 104 Cover Page Interactive Data File - the cover page interactive data file does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document * Filed herewith. + Management contract or compensatory plan or arrangement. # In accordance with Item 601(b)(32)(ii) of Regulation S-K and SEC Release Nos. 33-8238 and 34-47986, Final Rule: Management's Reports on Internal Control Over Financial Reporting and Certification of Disclosure in Exchange Act Periodic Reports, the certifications furnished in Exhibits 32.1 and 32.2 hereto are deemed to accompany this Annual Report on Form 10-K and will not be deemed “filed” for purpose of Section 18 of the Exchange Act. Such certifications will not be deemed to be incorporated by reference into any filing under the Securities Act or the Exchange Act, except to the extent that the registrant specifically incorporates it by reference. ^ Certain exhibits and schedules have been omitted in accordance with Regulation S-K Item 601(a)(5). Copies of above exhibits not contained herein are available to any shareholder upon written request to: Investor Relations: NVIDIA Corporation, 2788 San Tomas Expressway, Santa Clara, CA 95051 ITEM 16. FORM 10-K SUMMARY Not Applicable. 90 SIGNATURES 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 February 24, 2023. NVIDIA Corporation By: /s/ Jen-Hsun Huang Jen-Hsun Huang President and Chief Executive Officer POWER OF ATTORNEY KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Jen-Hsun Huang and Colette M. Kress, and each or any one of them, his true and lawful attorney-in-fact and agent, with full power of substitution and resubstitution, for him and in his name, place and stead, in any and all capacities, to sign any and all amendments to this report, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-facts and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in connection therewith, as fully to all intents and purposes as he might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or any of them, or their or his substitutes or substitutes, may lawfully do or cause to be done by virtue hereof. 91 Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. Signature Title Date /s/ JEN-HSUN HUANG President, Chief Executive Officer and Director (Principal Executive Officer) February 24, 2023 Jen-Hsun Huang /s/ COLETTE M. KRESS Executive Vice President and Chief Financial Officer (Principal Financial Officer) February 24, 2023 Colette M. Kress /s/ DONALD ROBERTSON Vice President and Chief Accounting Officer (Principal Accounting Officer) February 24, 2023 Donald Robertson /s/ ROBERT BURGESS Director February 24, 2023 Robert Burgess /s/ TENCH COXE Director February 24, 2023 Tench Coxe /s/ JOHN O. DABIRI Director February 24, 2023 John O. Dabiri /s/ PERSIS DRELL Director February 24, 2023 Persis Drell /s/ DAWN HUDSON Director February 24, 2023 Dawn Hudson /s/ HARVEY C. JONES Director February 24, 2023 Harvey C. Jones /s/ MICHAEL MCCAFFERY Director February 24, 2023 Michael McCaffery /s/ STEPHEN C. NEAL Director February 24, 2023 Stephen C. Neal /s/ MARK L. PERRY Director February 24, 2023 Mark L. Perry /s/ A. BROOKE SEAWELL Director February 24, 2023 A. Brooke Seawell /s/ AARTI SHAH Director February 24, 2023 Aarti Shah /s/ MARK STEVENS Director February 24, 2023 Mark Stevens 92