Analyst Conference Summary

conference date: November 5, 2015 @ 2:00 PM Pacific Time
for quarter ending: October 25, 2015 (Q3, third quarter fiscal 2016)

But I own competitors AMD and Marvell as this is written.
Forward-looking statements

Overview: Best quarter in a while with 7% y/y revenue growth, resulting in record revenue. Increased the dividend.

Basic data (GAAP) :

Revenues were $1.31 billion, up 13% sequentially from $1.15 billion, and up 7% from $1.23 billion in the year-earlier quarter.

Net income was $246 million, way up sequentially from $26 million and up 42% from $173 million year-earlier.

EPS (earnings per share) were $0.44, way up sequentially from $0.05, and up 42% from $0.31 year-earlier.

Guidance:

Q4 fiscal 2016 (ending in January) revenue is expected within 2% of $1.30 billion. Gross margin 56.7% GAAP, 57.0% non-GAAP. Operating expenses $503 million GAAP, $445 million non-GAAP. Tax rate near 20%. Restructuring charges between $25 and $35 million. Cap ex $20 to $30 million.

Conference Highlights:

The quarterly dividend will be increased to $0.115 per share from the prior $0.0975. It will be paid on December 14, 2015 to sharholders of record on November 20, 2015.

GPU segment revenue was $1.11 billion, up 16% sequentially from $959 million, and up 12% y/y.

Tegra segment revenue was $129 million, up 1% sequentially from $128 million, and down 23% y/y.

Gaming revenue was $761 million, up sequentially from $661 million, and up 44% y/y. New games and e-sports are driving graphic card sales.

Professional graphics revenue was $190 million, up 8% sequentially but down 8% y/y.

Datacenter revenue was $82 million, up 13% sequentially from $62 million, and down 8% y/y.

Automotive revenue was $79 million, up 11% sequentially from $71 million, and up 51% y/y. More than 50 companies are using the NVIDIA DRIVE PX platform to develop autonomous driving.

Intel license revenue of $66 million was flat y/y.

In the quarter GRID 2.0 was introduced, and it will be offered first by Microsoft Azure.

Non-GAAP numbers: Net income $255 million, up 34% sequentially from $190 million, and up 16% from $220 million year-earlier. EPS $0.46, up 35% sequentially from $0.34, and up 18% from $0.39 year-earlier. Excludes stock-based compensation expense of about $51 million, acquisition-related costs of $4 million, restructuring charges of $8 million, and other non-cash items and tax consequences.

Cash and equivalents balance was $4.73 billion. $255 million cash from operations. $16 million was used for capital expenditures. $239 million free cash flow. Repurchased 4.6 million shares, did not say $ million used. $53 million was used for dividends. Long-term debt $1.4 billion.

GAAP cost of good sold was $571 million, leaving gross profit of $734 million. Operating expenses of $489 million consisted of $329 million for R&D and $152 million for Sales, General and Administrative expense, and $8 million for restructuring. Leaving operating income of $245 million. Interest and other expense $0 million. Income tax benefit $1 million.

Q&A:

PC gaming has helped exceed guidance last two quarters, what drove that? PC gaming is driven by great new game titles. E-sports players spreading as a social phenomena. We are seeing growth in developing countries along with broadband availability. We have not fully penetrated the potential market. VR should be a growth driver next year.

Q4 guidance, why is it flatish? We think it is balanced guidance.

VR expectations for 2016? We are over the top excited about VR. Occulus with Nvidia gives an unbelievable experience. We power notebooks that can run VR.

Our expectation is that our automotive business growth will remain robust for a few years. Your future car will be software defined by a computer built like a datacenter. We are such a great software company, it will be a differentiating advantage for us. Autonomous driving is about to come; we can enable that.

And so forth.

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