NVIDIA reports record results for fourth quarter and fiscal year 2007

NVIDIA Corporation today reported financial results for the fourth quarter of
fiscal 2007 and the fiscal year ended January 28, 2007. For the fourth quarter
of fiscal 2007, revenue increased to a record $ 878.9 million, compared to $ 633.6
million for the fourth quarter of fiscal 2006, an increase of 39 percent. Net
income computed in accordance with U.S. generally accepted accounting principles
(GAAP) for the fourth quarter of fiscal 2007 was $ 163.5 million, or $ 0.41 per
diluted share, compared to net income of $ 97.4 million, or $ 0.26 per diluted share,
for the fourth quarter of fiscal 2006, a net income increase of 68 percent.


NVIDIA Corporation today reported financial results for the fourth quarter of
fiscal 2007 and the fiscal year ended January 28, 2007. For the fourth quarter
of fiscal 2007, revenue increased to a record $ 878.9 million, compared to $ 633.6
million for the fourth quarter of fiscal 2006, an increase of 39 percent. Net
income computed in accordance with U.S. generally accepted accounting principles
(GAAP) for the fourth quarter of fiscal 2007 was $ 163.5 million, or $ 0.41 per
diluted share, compared to net income of $ 97.4 million, or $ 0.26 per diluted share,
for the fourth quarter of fiscal 2006, a net income increase of 68 percent.

Non-GAAP net income for the fourth quarter of fiscal 2007, which excludes a
charge for in-process research and development related to our acquisition of
PortalPlayer, Inc., plus SFAS 123R and other stock-based compensation charges
and the associated payroll tax impact, was $ 205.6 million, or $ 0.53 per diluted
share. Revenue for the fiscal year ended January 28, 2007 was a record $ 3.07
billion, compared to revenue of $ 2.38 billion for the fiscal year ended January
29, 2006, an increase of 29 percent. GAAP net income for the fiscal year ended
January 28, 2007 was $ 448.8 million, or $ 1.15 per diluted share, compared to
GAAP net income of $ 301.2 million, or $ 0.82 per diluted share, for the fiscal
year ended January 29, 2006, a net income increase of 49 percent.

Non-GAAP net income for the fiscal year ended January 28, 2007, which excludes
a charge for in-process research and development related to the acquisition
of Portal Player, Inc., a one-time charge associated with licensing certain
patents, plus SFAS 123R and other stock-based compensation charges and the associated
payroll tax impact, was $ 577.9 million, or $ 1.50 per diluted share.

“Fiscal 2007 was an outstanding year,” stated Jen-Hsun Huang, president
and CEO of NVIDIA. “Our record year is a result of intense focus on building
market-defining products and financial performance. We established the number
one position in multiple categories – desktop GPUs, notebook GPUs, workstation
GPUs, and AMD chipsets. Most importantly, we significantly enhanced our strategic
position in the markets we serve.”

“Looking ahead into fiscal 2008, we expect multiple growth drivers –
driving deeper into the Intel segment with our branded motherboard GPUs, delivering
our first application processor for the handheld market, and launching the ‘GPU
Computing’ era with GPUs designed to dramatically accelerate high-performance
computing. This is the year the industry ramps three very new applications that
are enhanced with our GPUs – Vista, DX10, and HD/Blu-ray DVD. It is exciting
that the GPU is becoming an increasingly central part of our computing experience,”
added Mr. Huang.

Fourth Quarter Fiscal 2007 Highlights:

• Non-GAAP gross margin reached a Company record of 44.2 percent, an
increase of 130 basis points sequentially from the third quarter of fiscal 2007,
and 400 basis points year-over-year. GAAP gross margin was 43.9 percent.
• NVIDIA extended its leadership share position in the notebook graphics
processing unit (GPU) segment to 58 percent share, according to the Mercury
Research Fourth Quarter 2006 PC Graphics Report. Notebook GPU revenue grew over
120 percent year-over-year.
• The NVIDIA nForce® MCP product line achieved record revenue for
its tenth consecutive quarter. NVIDIA nForce MCP revenue grew 16 percent sequentially
from the third quarter of fiscal 2007 and 89 percent year-over-year.
• The NVIDIA Quadro® professional product line achieved record revenue
with a 24 percent revenue increase from the fourth quarter of fiscal 2006.
• NVIDIA announced the latest version of its Preface™ Personal Media
Display platform, a secondary processor and display subsystem that enables users
to access information from their notebook or PC, even when the main system is
powered down.
• The National Academy of Television Arts and Science recognized the Company’s
innovation in graphics processor development with a Technology and Engineering
Emmy Award at the Consumer Electronics Show (CES) held in January 2007.
• NVIDIA completed its acquisition of PortalPlayer, Inc., a leading supplier
of semiconductors, firmware, and software for personal media players and secondary
display-enabled computers.

NVIDIA has conducted a conference call with analysts and investors to discuss
its fourth quarter fiscal 2007 financial results and current financial prospects.
The Web cast is available for replay until the Company’s conference call
to discuss its financial results for its first quarter fiscal 2008.

Non-GAAP Measures

To supplement the Company’s Consolidated Statements of Income presented
in accordance with GAAP, we use non-GAAP measures of certain components of financial
performance. These non-GAAP measures include non-GAAP net income, non-GAAP basic
and diluted net income per share, and other non-GAAP line items from the Consolidated
Statements of Income, including cost of revenue information, gross profit, gross
margin, operating expenses (including research and development, and sales, general
and administrative expenses) and income tax expense. In order for our investors
to be better able to compare our current results with those of previous periods,
we have shown a non-GAAP presentation of our Consolidated Statements of Income
as reconciled against the GAAP presentation. Our non-GAAP results adjust our
GAAP results to exclude stock-based compensation, in-process R&D related
to acquisitions, certain non-recurring charges associated with settling IP matters,
and related tax differences. We believe the presentation of our non-GAAP results
enhances the user’s overall understanding of our historical financial performance.
The presentation of our non-GAAP financial results is not meant to be considered
in isolation or as a substitute for our financial results prepared in accordance
with GAAP, and our non-GAAP measures may be different from non-GAAP measures
used by other companies.

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