What changed in this filing

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Item 1. Financial Statements

2023-11-21 compared with 2023-08-28 · 144 added, 138 removed, 574 unchanged (33% of the section changed)

3 unchanged sentences

(In millions, except per share data)

Three Months Ended Six Months Ended

July 30, July 31, July 30, July 31,

Three Months Ended Nine Months Ended

October 29, October 30, October 29, October 30,

2023 2022 2023 2022

26 unchanged sentences

(In millions)

Three Months Ended Six Months Ended

July 30, July 31, July 30, July 31,

Three Months Ended Nine Months Ended

October 29, October 30, October 29, October 30,

2023 2022 2023 2022

2 unchanged sentences

Available-for-sale securities:

Net change in realized gain (loss) ( 11 ) ( 12 ) 7 ( 35 )

Net change in unrealized gain (loss) — ( 18 ) 7 ( 53 )

Reclassification adjustments for net realized gain included in net income — — — 1

1 unchanged sentence

Cash flow hedges:

Net unrealized gain (loss) 22 ( 2 ) 8 ( 30 )

Net change in unrealized loss ( 23 ) ( 14 ) ( 14 ) ( 44 )

Reclassification adjustments for net realized loss included in net income ( 14 ) ( 1 ) ( 38 ) ( 16 )

Net change in unrealized gain (loss) 10 ( 15 ) ( 15 ) ( 45 )

Net change in unrealized loss ( 37 ) ( 15 ) ( 52 ) ( 60 )

Other comprehensive loss, net of tax ( 37 ) ( 33 ) ( 45 ) ( 112 )

4 unchanged sentences

(In millions)

July 30, January 29,

October 29, January 29,

Current assets:

34 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

FOR THE THREE MONTHS ENDED JULY 30, 2023 AND JULY 31, 2022

FOR THE THREE MONTHS ENDED OCTOBER 29, 2023 AND OCTOBER 30, 2022

Outstanding Additional Paid-in Capital Accumulated Other Comprehensive Loss Retained Earnings Total Shareholders' Equity

(In millions, except per share data) Shares Amount

Balances, April 30, 2023 2,473 $ 2 $ 12,453 $ ( 50 ) $ 12,115 $ 24,520

Balances, July 30, 2023 2,469 $ 2 $ 12,629 $ ( 51 ) $ 14,921 $ 27,501

Net income — — — — 9,243 9,243

6 unchanged sentences

Stock-based compensation — — 983 — — 983

Balances, October 29, 2023 2,466 $ 2 $ 12,991 $ ( 88 ) $ 20,360 $ 33,265

Balances, July 31, 2022 2,489 $ 2 $ 10,968 $ ( 90 ) $ 12,971 $ 23,851

Balances, May 1, 2022 2,504 $ 3 $ 10,623 $ ( 64 ) $ 15,758 $ 26,320

Net income — — — — 680 680

6 unchanged sentences

Stock-based compensation — — 749 — — 749

Balances, July 31, 2022 2,489 $ 2 $ 10,968 $ ( 90 ) $ 12,971 $ 23,851

Balances, October 30, 2022 2,468 $ 2 $ 11,565 $ ( 123 ) $ 9,905 $ 21,349

See accompanying Notes to Condensed Consolidated Financial Statements.

1 unchanged sentence

CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

FOR THE SIX MONTHS ENDED JULY 30, 2023 AND JULY 31, 2022

FOR THE NINE MONTHS ENDED OCTOBER 29, 2023 AND OCTOBER 30, 2022

Outstanding Additional Paid-in Capital Accumulated Other Comprehensive Loss Retained Earnings Total Shareholders' Equity

9 unchanged sentences

Stock-based compensation — — 2,574 — — 2,574

Balances, July 30, 2023 2,469 $ 2 $ 12,629 $ ( 51 ) $ 14,921 $ 27,501

Balances, October 29, 2023 2,466 $ 2 $ 12,991 $ ( 88 ) $ 20,360 $ 33,265

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

7 unchanged sentences

Stock-based compensation — — 1,965 — — 1,965

Balances, July 31, 2022 2,489 $ 2 $ 10,968 $ ( 90 ) $ 12,971 $ 23,851

Balances, October 30, 2022 2,468 $ 2 $ 11,565 $ ( 123 ) $ 9,905 $ 21,349

See accompanying Notes to Condensed Consolidated Financial Statements.

2 unchanged sentences

(In millions)

Six Months Ended

July 30, July 31,

Nine Months Ended

October 29, October 30,

Cash flows from operating activities:

3 unchanged sentences

Depreciation and amortization 1,121 1,118

(Gains) losses on investments in non-affiliates, net ( 45 ) 24

Losses on investments in non-affiliates 24 35

Deferred income taxes ( 2,411 ) ( 1,517 )

15 unchanged sentences

Acquisitions, net of cash acquired ( 83 ) ( 49 )

Investments and other, net ( 435 ) ( 65 )

Investments in non-affiliates and other, net ( 872 ) ( 83 )

Net cash provided by (used in) investing activities ( 4,457 ) 7,378

6 unchanged sentences

Principal payments on property and equipment and intangible assets ( 44 ) ( 54 )

Other ( 1 ) 1

Net cash used in financing activities ( 10,004 ) ( 9,961 )

2 unchanged sentences

Cash, cash equivalents, and restricted cash at end of period $ 5,519 $ 2,800

Reconciliation of cash, cash equivalents, and restricted cash to the Condensed Consolidated Balance Sheet:

Cash and cash equivalents $ 5,783 $ 3,013

Restricted cash, included in prepaid expenses and other current assets 99 —

Total cash, cash equivalents, and restricted cash $ 5,882 $ 3,013

Supplemental disclosure of cash flow information:

15 unchanged sentences

Fiscal years 2024 and 2023 are both 52-week years.

The second quarters of fiscal years 2024 and 2023 were both 13-week quarters.

The third quarters of fiscal years 2024 and 2023 were both 13-week quarters.

Reclassifications

12 unchanged sentences

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, the effect of this change in estimate for the three months ended July 30, 2023 was a benefit of $ 5 million and $ 28 million for cost of revenue and operating expenses, respectively, which resulted in an increase in operating income of $ 33 million and net income of $ 27 million after tax, or $ 0.01 per both basic and diluted share.

The effect of this change in estimate for the first half of fiscal year 2024 was a benefit of $ 7 million and $ 59 million for

Based on the carrying amounts of a majority of our server, storage, network, and assembly and test equipment, net, in use as of the end of fiscal year 2023, the estimated effect of this change for the three months ended October 29, 2023 was a benefit of $ 17 million and $ 24 million for cost of revenue and operating expenses, respectively, which resulted in an increase in operating income of $ 41 million and net income of $ 36 million after tax, or $ 0.01 per both basic and diluted share.

The estimated effect of this change for the first nine months of fiscal year 2024 was a benefit of $ 24 million and $ 83 million

NVIDIA CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

cost of revenue and operating expenses, respectively, which resulted in an increase in operating income of $ 66 million and net income of $ 55 million after tax, or $ 0.02 per both basic and diluted share.

for cost of revenue and operating expenses, respectively, which resulted in an increase in operating income of $ 107 million and net income of $ 91 million after tax, or $ 0.04 per both basic and diluted share.

Note 2 - Business Combination

5 unchanged sentences

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 July 30, 2023 are as follows:

Future minimum lease payments under our non-cancelable operating leases as of October 29, 2023 are as follows:

Operating Lease Obligations

(In millions)

2024 (excluding first half of fiscal year 2024)

2024 (excluding first nine months of fiscal year 2024)

2029 and thereafter

3 unchanged sentences

Long-term operating lease liabilities $ 1,091

In addition, we have operating leases, primarily for our data centers, that are expected to commence between the third quarter of fiscal year 2024 and the end of fiscal year 2025 with lease terms of 3 to 8 years for $ 205 million.

Operating lease expenses were $ 67 million and $ 47 million for the second quarter of fiscal years 2024 and 2023, respectively, and $ 126 million and $ 90 million for the first half of fiscal years 2024 and 2023, respectively.

Short-term and variable lease expenses for the second quarter and first half of fiscal years 2024 and 2023 were not significant.

In addition, we have operating leases, primarily for our data centers, that are expected to commence between the fourth quarter of fiscal year 2024 and fiscal year 2025 with lease terms of 3 to 10 years for $ 924 million.

Operating lease expenses were $ 69 million and $ 49 million for the third quarter of fiscal years 2024 and 2023, respectively, and $ 195 million and $ 139 million for the first nine months of fiscal years 2024 and 2023, respectively.

Short-term and variable lease expenses for the third quarter and first nine months of fiscal years 2024 and 2023 were not significant.

NVIDIA CORPORATION AND SUBSIDIARIES

1 unchanged sentence

Other information related to leases was as follows:

Six Months Ended

July 30, 2023 July 31, 2022

Nine Months Ended

October 29, 2023 October 30, 2022

(In millions)

2 unchanged sentences

Operating lease assets obtained in exchange for lease obligations $ 439 $ 213

As of July 30, 2023, our operating leases had a weighted average remaining lease term of 6.5 years and a weighted average discount rate of 3.47 %.

As of October 29, 2023, our operating leases had a weighted average remaining lease term of 6.3 years and a weighted average discount rate of 3.64 %.

As of January 29, 2023, our operating leases had a weighted average remaining lease term of 6.8 years and a weighted average discount rate of 3.21 %.

2 unchanged sentences

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

Three Months Ended Six Months Ended

2023 July 31,

2022 July 30,

2023 July 31,

Three Months Ended Nine Months Ended

2023 October 30,

2022 October 29,

2023 October 30,

(In millions)

10 unchanged sentences

Granted 13 $ 364.52

Vested restricted stock ( 11 ) $ 127.12

Vested ( 16 ) $ 141.02

Canceled and forfeited ( 1 ) $ 201.49

Balances, July 30, 2023 46 $ 219.47

As of July 30, 2023, there was $ 9.69 billion of aggregate unearned stock-based compensation expense.

This amount is expected to be recognized over a weighted average period of 2.7 years for RSUs, PSUs, and market-based PSUs, and 1.0 year for ESPP.

Balances, October 29, 2023 41 $ 230.11

As of October 29, 2023, there was $ 9.03 billion of aggregate unearned stock-based compensation expense.

This amount is expected to be recognized over a weighted average period of 2.6 years for RSUs, PSUs, and market-based PSUs, and 11 months for ESPP.

NVIDIA CORPORATION AND SUBSIDIARIES

2 unchanged sentences

The following is a reconciliation of the denominator of the basic and diluted net income per share computations for the periods presented:

Three Months Ended Six Months Ended

July 30, July 31, July 30, July 31,

Three Months Ended Nine Months Ended

October 29, October 30, October 29, October 30,

2023 2022 2023 2022

10 unchanged sentences

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

Diluted net income per share is computed using the weighted average number of common and potentially dilutive shares outstanding during the period, using the treasury stock method.

Any anti-dilutive effect of equity awards outstanding is not included in the computation of diluted net income per share.

Note 6 – Income Taxes

Income tax was an expense of $ 793 million and $ 958 million for the second quarter and first half of fiscal year 2024, respectively, a benefit of $ 181 million for the second quarter of fiscal year 2023, and an expense of $ 6 million for the first half of fiscal year 2023.

The income tax as a percentage of income before income tax was an expense of 11.4 % and 10.4 % for the second quarter and first half of fiscal year 2024, respectively, a benefit of 38.0 % for the second quarter of fiscal year 2023, and an expense of 0.3 % for the first half of fiscal year 2023.

The increase in the effective tax rate was primarily due to a decreased impact of tax benefits from the foreign-derived intangible income deduction, stock-based compensation, and the U.S.

Income tax was an expense of $ 1.28 billion and $ 2.24 billion for the third quarter and first nine months of fiscal year 2024, respectively, and a benefit of $ 67 million and $ 61 million for the third quarter and first nine months of fiscal year 2023, respectively.

Income tax as a percentage of income before income tax was an expense of 12.2 % and 11.3 % for the third quarter and first nine months of fiscal year 2024, respectively, and a benefit of 10.9 % and 2.1 % for the third quarter and first nine months of fiscal year 2023, respectively.

During the third quarter of fiscal year 2024, the Internal Revenue Service, or IRS, audit of our federal income tax returns for fiscal years 2018 and 2019 was resolved.

We recognized a non-cash net benefit of $ 145 million, related to this IRS audit resolution, for effectively settled positions.

This benefit consists of a reduction in unrecognized tax benefits of $ 236 million and related accrued interest of $ 17 million, net of federal benefit partially offset by additional cash tax payments and reductions in tax attribute carryforwards of $ 108 million.

The effective tax rate increased due to a decreased impact of tax benefits from the foreign-derived intangible income deduction, stock-based compensation, and the U.S.

federal research tax credit, relative to the increase in income before income tax.

Our effective tax rates for the first half of fiscal years 2024 and 2023 were lower than the U.S.

The increase in the effective tax rate was partially offset by a benefit due to the IRS audit resolution.

Our effective tax rates for the first nine months of fiscal years 2024 and 2023 were lower than the U.S.

federal statutory rate of 21% due to tax benefits from the foreign-derived intangible income deduction, stock-based compensation and the U.S.

federal research tax credit.

For the first half of fiscal year 2024, there were no material changes to our tax years that remain subject to examination by major tax jurisdictions.

We are currently under examination by the Internal Revenue Service for our fiscal years 2018 and 2019.

Additionally, there have been no material changes to our unrecognized tax benefits and any related interest or penalties since the fiscal year ended January 29, 2023.

While we believe that we have adequately provided for all uncertain tax positions, or tax positions where we believe it is not more-likely-than-not that the position will be sustained upon review, amounts asserted by tax authorities could be greater or less than our accrued 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 with the respective tax authorities.

As of July 30, 2023, we do not believe that our estimates, as otherwise provided for, on such tax positions will significantly increase or decrease within the next 12 months.

Our effective tax rate for the first nine months of fiscal year 2024 was additionally benefited by the IRS audit resolution.

NVIDIA CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Other than the IRS audit resolution, for the first nine months of fiscal year 2024, there were no material changes to our tax years that remain subject to examination by major tax jurisdictions.

Additionally, there have been no other material changes to our unrecognized tax benefits and any related interest or penalties since the fiscal year ended January 29, 2023.

As of October 29, 2023, we do not believe that our estimates, as otherwise provided for, on such tax positions will significantly increase or decrease within the next 12 months.

Note 7 - Cash Equivalents and Marketable Securities

1 unchanged sentence

The following is a summary of cash equivalents and marketable securities:

July 30, 2023

October 29, 2023

Cost Unrealized

7 unchanged sentences

Treasury 5,075 1 ( 24 ) 5,052 — 5,052

Money market funds 3,190 — — 3,190 3,190 —

Debt securities issued by U.S.

government agencies 2,316 — ( 5 ) 2,311 100 2,211

Money market funds 2,348 — — 2,348 2,348 —

Certificates of deposit 418 — — 418 198 220

20 unchanged sentences

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

July 30, 2023

October 29, 2023

Less than 12 Months 12 Months or Greater Total

1 unchanged sentence

(In millions)

Corporate debt securities $ 2,773 $ ( 16 ) $ 852 $ ( 4 ) $ 3,625 $ ( 20 )

Debt securities issued by the U.S.

Treasury 2,098 ( 12 ) 1,371 ( 12 ) 3,469 ( 24 )

Corporate debt securities 1,379 ( 9 ) 802 ( 4 ) 2,181 ( 13 )

Debt securities issued by U.S.

14 unchanged sentences

The amortized cost and estimated fair value of cash equivalents and marketable securities are shown below by contractual maturity.

July 30, 2023 January 29, 2023

October 29, 2023 January 29, 2023

Amortized Cost Estimated Fair Value Amortized Cost Estimated Fair Value

3 unchanged sentences

Total $ 18,111 $ 18,064 $ 13,112 $ 13,055

Restricted cash was $ 99 million as of July 30, 2023 and primarily represented amounts due to employees.

NVIDIA CORPORATION AND SUBSIDIARIES

4 unchanged sentences

Fair Value at

Pricing Category July 30, 2023 January 29, 2023

Pricing Category October 29, 2023 January 29, 2023

(In millions)

35 unchanged sentences

The components of our amortizable intangible assets are as follows:

July 30, 2023 January 29, 2023

October 29, 2023 January 29, 2023

Amount Accumulated

6 unchanged sentences

Total intangible assets $ 3,092 $ ( 1,841 ) $ 1,251 $ 3,539 $ ( 1,863 ) $ 1,676

Amortization expense associated with intangible assets was $ 146 million and $ 327 million for the second quarter and first half of fiscal year 2024, respectively, and $ 182 million and $ 336 million for the second quarter and first half of fiscal year 2023, respectively.

The following table outlines the estimated future amortization expense related to the net carrying amount of intangible assets as of July 30, 2023:

Amortization expense associated with intangible assets was $ 144 million and $ 471 million for the third quarter and first nine months of fiscal year 2024, respectively, and $ 181 million and $ 518 million for the third quarter and first nine months of fiscal year 2023, respectively.

The following table outlines the estimated future amortization expense related to the net carrying amount of intangible assets as of October 29, 2023:

Future Amortization Expense

(In millions)

2024 (excluding first half of fiscal year 2024)

2024 (excluding first nine months of fiscal year 2024)

2029 and thereafter 109

Total $ 1,251

In the first half of fiscal year 2024, goodwill increased by $ 58 million from an acquisition, and was assigned to our Compute & Networking segment.

In the first nine months of fiscal year 2024, goodwill increased by $ 58 million from an acquisition, and was assigned to our Compute & Networking segment.

Note 10 - Balance Sheet Components

Two customers each accounted for 11 % of our accounts receivable balance as of October 29, 2023.

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

Certain balance sheet components are as follows:

July 30, January 29,

October 29, January 29,

Inventories (1):

4 unchanged sentences

Total inventories $ 4,779 $ 5,159

(1) During the second quarter of fiscal years 2024 and 2023, we recorded an inventory provision of approximately $ 343 million and $ 570 million, respectively, in cost of revenue.

NVIDIA CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

July 30, January 29,

(1) During the third quarter of fiscal years 2024 and 2023, we recorded an inventory provision of approximately $ 208 million and $ 354 million, respectively, in cost of revenue.

October 29, January 29,

Other Assets:

6 unchanged sentences

Total other assets $ 4,667 $ 3,820

(1) As of July 30, 2023 and January 29, 2023, there were $ 799 million and $ 458 million of short-term prepaid supply and capacity agreements included in Prepaid expenses and other current assets, respectively.

July 30, January 29,

(1) As of October 29, 2023 and January 29, 2023, there were an additional $ 743 million and $ 458 million of short-term prepaid supply and capacity agreements included in Prepaid expenses and other current assets, respectively.

October 29, January 29,

Accrued and Other Current Liabilities:

(In millions)

Taxes payable $ 2,803 $ 467

Customer program accruals $ 1,771 $ 1,196

2 unchanged sentences

Deferred revenue (2) 513 354

Unsettled share repurchases 217 —

Operating leases 208 176

Taxes payable 420 467

Product warranty and return provisions 299 108

Operating leases 230 176

Licenses and royalties 150 149

Unsettled share repurchases 117 —

Other 176 186

Total accrued and other current liabilities $ 5,472 $ 4,120

(1) During the second quarter of fiscal years 2024 and 2023, we recorded an expense of approximately $ 232 million and $ 650 million, respectively, in cost of revenue for inventory purchase obligations in excess of our current demand projections, and cancellation and underutilization penalties.

(1) During the third quarter of fiscal years 2024 and 2023, we recorded an expense of approximately $ 473 million and $ 348 million, respectively, in cost of revenue for inventory purchase obligations in excess of our current demand projections, supplier charges and for penalties related to cancellations and underutilization.

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

July 30, January 29,

October 29, January 29,

Other Long-Term Liabilities:

1 unchanged sentence

Income tax payable (1) $ 1,206 $ 1,204

Deferred income tax 373 247

Deferred revenue (2) 425 218

Deferred income tax 424 247

Licenses payable 113 181

5 unchanged sentences

Deferred Revenue

The following table shows the changes in deferred revenue during the first half of fiscal years 2024 and 2023:

July 30, July 31,

The following table shows the changes in deferred revenue during the first nine months of fiscal years 2024 and 2023:

October 29, October 30,

(In millions)

3 unchanged sentences

Balance at end of period $ 938 $ 551

Revenue allocated to remaining performance obligations, which includes deferred revenue and amounts that will be invoiced and recognized as revenue in future periods, was $ 717 million as of July 30, 2023.

Revenue allocated to remaining performance obligations, which includes deferred revenue and amounts that will be invoiced and recognized as revenue in future periods, was $ 896 million as of October 29, 2023.

We expect to recognize approximately 42 % of this revenue over the next twelve months and the remainder thereafter.

12 unchanged sentences

Non-designated hedges $ 365 $ 366

The unrealized gains and losses or fair value of our foreign currency forward contracts was not significant as of July 30, 2023 and January 29, 2023.

As of July 30, 2023, all designated foreign currency forward contracts mature within 18 months.

The unrealized gains and losses or fair value of our foreign currency forward contracts was not significant as of October 29, 2023 and January 29, 2023.

As of October 29, 2023, all designated foreign currency forward contracts mature within 18 months.

The expected realized gains and losses deferred into accumulated other comprehensive income or loss related to foreign currency forward contracts within the next twelve months was not significant.

During the first half of fiscal years 2024 and 2023, the impact of derivative financial instruments designated for hedge accounting treatment on other comprehensive income or loss was not significant and all such instruments were determined to be highly effective.

During the first nine months of fiscal years 2024 and 2023, the impact of derivative financial instruments designated for hedge accounting treatment on other comprehensive income or loss was not significant and all such instruments were determined to be highly effective.

NVIDIA CORPORATION AND SUBSIDIARIES

5 unchanged sentences

Remaining Term (years) Effective

Interest Rate July 30, 2023 January 29, 2023

Interest Rate October 29, 2023 January 29, 2023

(In millions)

26 unchanged sentences

On June 15, 2023, we repaid the 0.309 % Notes Due 2023.

As of July 30, 2023, we were in compliance with the required covenants, which are non-financial in nature, under the outstanding notes.

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

Commercial Paper

We have a $ 575 million commercial paper program to support general corporate purposes.

As of July 30, 2023, we had no t issued any commercial paper.

As of October 29, 2023, we had no t issued any commercial paper.

Note 13 - Commitments and Contingencies

1 unchanged sentence

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

As of July 30, 2023, we had outstanding inventory purchase and long-term supply and capacity obligations totaling $ 11.15 billion.

During the normal course of business, to manage manufacturing lead times and help ensure adequate supply, we enter into agreements with contract manufacturers that allow them to procure inventory based upon criteria as defined by us, and in certain instances, these agreements allow us the option to cancel, reschedule, and adjust our requirements based on our business needs prior to firm orders being

As of October 29, 2023, we had outstanding inventory purchase and long-term supply and capacity obligations totaling $ 17.11 billion.

We enter into agreements with contract manufacturers that allow them to procure inventory based upon criteria as defined by us, and in certain instances, these agreements allow us the option to cancel, reschedule, and adjust our requirements based on our business needs prior to firm orders being placed, but these changes may result in the payment of costs incurred through the date of

NVIDIA CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

placed, but these changes may result in the payment of costs incurred through the date of cancellation.

Other non-inventory purchase obligations of $ 4.31 billion include $ 3.50 billion of multi-year cloud service agreements.

Total future purchase commitments as of July 30, 2023 are as follows:

cancellation.

Other non-inventory purchase obligations were $ 4.43 billion, which includes $ 3.60 billion of multi-year cloud service agreements, primarily to support our research and development efforts.

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

(In millions)

2024 (excluding first half of fiscal year 2024)

2024 (excluding first nine months of fiscal year 2024)

2029 and thereafter

1 unchanged sentence

Accrual for Product Warranty Liabilities

The estimated amount of product warranty liabilities was $ 115 million and $ 82 million as of July 30, 2023 and January 29, 2023, respectively.

The estimated amount of product warranty liabilities was $ 142 million and $ 82 million as of October 29, 2023 and January 29, 2023, respectively.

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

Three Months Ended

Six Months Ended

July 30, 2023 July 31, 2022 July 30, 2023 July 31, 2022

Three Months Ended Nine Months Ended

October 29, 2023 October 30, 2022 October 29, 2023 October 30, 2022

(In millions)

2 unchanged sentences

( 23 ) ( 67 ) ( 45 ) ( 83 )

( 4 ) ( 9 ) ( 22 ) ( 16 )

Balance at end of period

$ 142 $ 104 $ 142 $ 104

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 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.

12 unchanged sentences

On August 25, 2023, a majority of a three-judge Ninth Circuit panel affirmed in part and reversed in part the district court’s dismissal of the case, with a third judge dissenting on the basis that the district court did not err in dismissing the case.

On November 15, 2023, the Ninth Circuit denied NVIDIA’s petition for rehearing en banc of the Ninth Circuit panel’s majority decision to reverse in part the dismissal of the case, which NVIDIA had filed on October 10, 2023.

The putative derivative lawsuit pending in the United States District Court 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.

Following the Ninth Circuit’s denial of NVIDIA’s petition for rehearing on November 15, 2023, the parties will meet and confer regarding the next steps in this derivative matter.

The lawsuit asserts claims, purportedly on behalf of us, against certain officers and directors of the Company for breach of fiduciary duty, unjust enrichment, waste of corporate assets, and violations of Sections 14(a), 10(b), and 20(a) of the Exchange Act based on the dissemination of allegedly false and misleading statements related to channel inventory and the impact of cryptocurrency mining on GPU demand.

4 unchanged sentences

1:19-cv-01798- UNA), remain stayed pending resolution of the plaintiffs’ appeal in the In Re NVIDIA Corporation Securities Litigation action.

Following the Ninth Circuit’s denial of NVIDIA’s petition for rehearing on November 15, 2023, the parties will meet and confer regarding the next steps in these derivative matters.

The lawsuits assert claims, purportedly on 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.

Another putative derivative action was filed on October 30, 2023 in the Court of Chancery of the State of Delaware, captioned Horanic v.

Huang, et al.

2023-1096-KSJM).

This lawsuit asserts claims, purportedly on behalf of us, against certain officers and directors of the Company for breach of fiduciary duty and insider trading based 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 reform of unspecified corporate governance measures.

Accounting for Loss Contingencies

As of July 30, 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.

As of October 29, 2023, we have not recorded any accrual for contingent liabilities associated with the legal proceedings described above based on our belief that liabilities, while possible, are not probable.

Further, except as specifically described above, any possible loss or range of loss in these matters cannot be reasonably estimated at this time.

2 unchanged sentences

Capital Return Program

During the second quarter and first half of fiscal year 2024, we repurchased 7.5 million shares of our common stock for $ 3.28 billion.

During the second quarter and first half of fiscal year 2023, we repurchased 19 million and 28 million shares for $ 3.35 billion and $ 5.34 billion, respectively.

Since the inception of our share repurchase program through July 30, 2023, we have repurchased an aggregate of 1.11 billion shares for a total cost of $ 20.40 billion.

As of July 30, 2023, we were authorized, subject to certain specifications, to repurchase shares of our common stock up to $ 3.95 billion.

On August 21, 2023, our Board of Directors approved an increase to our share repurchase program of an additional $ 25.00 billion, without expiration.

From July 31, 2023 through August 24, 2023, we repurchased 2 million shares for $ 998 million pursuant to a Rule 10b5-1 trading plan.

As of August 24, 2023, a total of $ 27.95 billion was available for repurchase.

Our share repurchase program aims to offset dilution from shares issued to employees.

We may pursue additional share repurchases as we weigh market factors and other investment opportunities.

During the second quarter and first half of fiscal year 2024, we paid $ 99 million and $ 199 million in cash dividends to our shareholders, respectively.

During the second quarter and first half of fiscal year 2023, we paid $ 100 million and $ 200 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'

During the third quarter and first nine months of fiscal year 2024, we repurchased 8.3 million and 15.9 million shares of our common stock for $ 3.72 billion and $ 7.01 billion, respectively.

During the third quarter and first nine months of fiscal year 2023, we repurchased 28 million and 56 million shares of our common stock for

NVIDIA CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

continuing determination that the dividend program and the declaration of dividends thereunder are in the best interests of our shareholders.

$ 3.65 billion and $ 8.99 billion, respectively.

In August 2023, our Board of Directors approved an increase to our share repurchase program of an additional $ 25.00 billion, without expiration.

As of October 29, 2023, we were authorized, subject to certain specifications, to repurchase additional shares of our common stock up to $ 25.24 billion.

From October 30, 2023 through November 17, 2023, we repurchased 0.8 million shares for $ 366 million pursuant to a Rule 10b5-1 trading plan.

Our share repurchase program aims to offset dilution from shares issued to employees.

We may pursue additional share repurchases as we weigh market factors and other investment opportunities.

During the third quarter and first nine months of fiscal year 2024, we paid $ 99 million and $ 296 million in cash dividends to our shareholders, respectively.

During the third quarter and first nine months of fiscal year 2023, we paid $ 100 million and $ 300 million in cash dividends to our shareholders, respectively.

Our cash dividend program and the payment of future cash dividends under that program are subject to our Board of Directors' continuing determination that the dividend program and the declaration of dividends thereunder are in the best interests of our shareholders.

Note 15 - Segment Information

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NVIDIA AI Enterprise and other software;

and cryptocurrency mining processors, or CMP.

and DGX Cloud.

The Graphics segment includes GeForce GPUs for gaming and PCs, the GeForce NOW game streaming service and related infrastructure, and solutions for gaming platforms;

5 unchanged sentences

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, acquisition termination cost, intellectual property related, or IP-related and legal settlement costs, contributions, and other non-recurring charges and benefits that our CODM deems to be enterprise in nature.

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

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

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(In millions)

Three Months Ended July 30, 2023

Three Months Ended October 29, 2023

Revenue $ 14,645 $ 3,475 $ — $ 18,120

Operating income (loss) $ 10,262 $ 1,493 $ ( 1,338 ) $ 10,417

Three Months Ended July 31, 2022

Three Months Ended October 30, 2022

Revenue $ 3,816 $ 2,115 $ — $ 5,931

Operating income (loss) $ 1,086 $ 606 $ ( 1,091 ) $ 601

Six Months Ended July 30, 2023

Nine Months Ended October 29, 2023

Revenue $ 29,507 $ 9,312 $ — $ 38,819

Operating income (loss) $ 19,149 $ 3,751 $ ( 3,542 ) $ 19,358

Six Months Ended July 31, 2022

Nine Months Ended October 30, 2022

Revenue $ 11,395 $ 9,528 $ — $ 20,923

Operating income (loss) $ 3,509 $ 3,739 $ ( 4,280 ) $ 2,968

Three Months Ended Six Months Ended

2023 July 31,

2022 July 30,

2023 July 31,

Three Months Ended Nine Months Ended

2023 October 30,

2022 October 29,

2023 October 30,

(In millions)

3 unchanged sentences

Acquisition-related and other costs ( 135 ) ( 174 ) ( 446 ) ( 499 )

IP-related and legal settlement costs ( 2 ) — ( 10 ) ( 7 )

IP-related costs ( 26 ) — ( 36 ) —

Acquisition termination cost — — — ( 1,353 )

Contributions — ( 2 ) — ( 2 )

Other — ( 16 ) 10 ( 25 )

Total $ ( 1,338 ) $ ( 1,091 ) $ ( 3,542 ) $ ( 4,280 )

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

NVIDIA CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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

Three Months Ended Six Months Ended

July 30, July 31, July 30, July 31,

Revenue by geographic region is designated based upon the billing location of the customer.

Revenue by Geographic areas were as follows:

Three Months Ended Nine Months Ended

October 29, October 30, October 29, October 30,

2023 2022 2023 2022

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China (including Hong Kong) 4,030 1,148 8,360 4,831

Singapore 2,702 536 4,506 1,963

Other countries 753 946 2,255 2,926

Total revenue $ 18,120 $ 5,931 $ 38,819 $ 20,923

One data center distributor customer represented approximately 17 % and 13 % of total revenue for the second quarter and first half of fiscal year 2024, respectively, and was attributable to the Compute & Networking segment.

There were no customers with 10% or more of total revenue for the second quarter and first half of fiscal year 2023.

A large cloud service provider, or CSP, which primarily purchases indirectly through multiple system integrators and distributors, is estimated to represent approximately 22 % and 19 % of total revenue for the second quarter and first half of fiscal year 2024, respectively, and was attributable to our Compute & Networking segment.

Two customers accounted for 16 % and 13 % of our accounts receivable balance as of July 30, 2023.

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

Revenue from sales to customers outside of the United States accounted for 65 % and 62 % of total revenue for the third quarter and first nine months of fiscal year 2024, respectively, and 64 % and 71 % of total revenue for the third quarter and first nine months of fiscal year 2023, respectively.

The increase in revenue to the United States for the third quarter and first nine months of fiscal year 2024 was primarily due to higher U.S.-based Data Center end demand.

Sales to one customer, or Customer A, represented 12 % of total revenue for the third quarter of fiscal year 2024, and sales to a second customer, or Customer B, represented 11 % of total revenue for the first nine months of fiscal year 2024, both of which were attributable to the Compute & Networking segment.

In the first nine months of fiscal year 2023, there were no customers with 10% or more of total revenue.

In the third quarter of fiscal year 2023, one customer represented 10 % of total revenue, primarily attributable to the Compute & Networking segment.

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

Three Months Ended Six Months Ended

July 30, July 31, July 30, July 31,

Three Months Ended Nine Months Ended

October 29, October 30, October 29, October 30,

2023 2022 2023 2022

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

What changed 10-Q

Item 1. Financial Statements