NVIDIA Reports Financial Results for Second Quarter Fiscal Year 2010

Conference Call and Web Cast Information

NVIDIA will conduct a conference call with analysts and investors to discuss its second quarter fiscal 2010 financial results and current financial prospects today at 2:00 p.m. Pacific Time (5:00 p.m. Eastern Time). To listen to the call, please dial (212) 231-2900. A live Web cast (listen-only mode) of the conference call will be held at the NVIDIA investor relations Web site www.nvidia.com/ir and at www.streetevents.com. The Web cast will be recorded and available for replay until the company's conference call to discuss its financial results for its third quarter fiscal 2010.

Non-GAAP Measures

To supplement NVIDIA's Condensed Consolidated Statements of Operations and Condensed Consolidated Balance Sheets presented in accordance with GAAP, the company uses non-GAAP measures of certain components of financial performance. These non-GAAP measures include non-GAAP gross profit, non-GAAP operating expenses, non-GAAP net income (loss), non-GAAP net income (loss) per share, free cash flow and days sales in inventory. In order for NVIDIA's investors to be better able to compare its current results with those of previous periods, the company has shown a reconciliation of GAAP to non-GAAP financial measures. These reconciliations adjust the related GAAP financial measures to exclude a charge related to the weak die/packaging material set that was used in certain versions of NVIDIA's previous generation chips, net of insurance reimbursements, a non-recurring charge related to a tender offer purchase, recurring stock-based compensation charges, and the associated tax impact of these items, where applicable. Free cash flow is calculated as GAAP net cash provided by operating activities less purchases of property and equipment and intangible assets. Days sales in inventory is computed by the number of days in the period divided by the non-GAAP inventory turnover ratio. NVIDIA believes the presentation of its non-GAAP financial measures enhances the user's overall understanding of the company's historical financial performance. The presentation of the company's non-GAAP financial measures is not meant to be considered in isolation or as a substitute for the company's financial results prepared in accordance with GAAP, and our non-GAAP measures may be different from non-GAAP measures used by other companies.

About NVIDIA

NVIDIA (NASDAQ: NVDA) is the world leader in visual computing technologies and the inventor of the GPU, a high-performance processor which generates breathtaking, interactive graphics on workstations, personal computers, game consoles, and mobile devices. NVIDIA serves the entertainment and consumer market with its GeForce(R) products, the professional design and visualization market with its Quadro(R) products, and the high-performance computing market with its Tesla(TM) products. NVIDIA is headquartered in Santa Clara, California and has offices throughout Asia, Europe, and the Americas. For more information, visit www.nvidia.com.

Certain statements in this press release including, but not limited to, statements as to: the recovery of NVIDIA's business; NVIDIA's growth opportunities; mobile and cloud computing; the expectation that NVIDIA will receive reimbursement of most of the new charge during the coming quarters; the number of NVIDIA ION platforms to be shipped in the third quarter of fiscal 2010; NVIDIA's revenue outlook for the third quarter of fiscal 2010; and the impact, benefits, progress and promise of, and the demand for, NVIDIA's products and technologies, are forward-looking statements that are subject to risks and uncertainties that could cause results to be materially different than expectations. Important factors that could cause actual results to differ materially include: global economic conditions; development of faster or more efficient technology; the impact of technological development and competition; design, manufacturing or software defects; changes in consumer preferences or demands; changes in industry standards and interfaces; unexpected loss of performance of our products or technologies when integrated into systems; as well as other factors detailed from time to time in the reports NVIDIA files with the Securities and Exchange Commission, or SEC, including its Form 10-Q for the fiscal period ended April 26, 2009. Copies of reports filed with the SEC are posted on NVIDIA's website and are available from NVIDIA without charge. These forward-looking statements are not guarantees of future performance and speak only as of the date hereof, and, except as required by law, NVIDIA disclaims any obligation to update these forward-looking statements to reflect future events or circumstances.

Copyright (C) 2009 NVIDIA Corporation. All rights reserved. NVIDIA, the NVIDIA logo, GeForce, Quadro, Tesla, CUDA, ION and Tegra are registered trademarks and/or trademarks of NVIDIA Corporation in the United States and other countries. All other company and/or product names may be trade names, trademarks, and/or registered trademarks of the respective owners with which they are associated. Features, pricing, availability, and specifications are subject to change without notice.

                                NVIDIA CORPORATION
                  CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                       (In thousands, except per share data)
                                    (Unaudited)


                                       Three Months           Six Months
                                          Ended                 Ended
                                      -------------          -----------
                                   July 26,   July 27,    July 26,    July 27,
                                     2009       2008        2009        2008
                                     ----       ----        ----        ----


    Revenue                        $776,520   $892,676  $1,440,751  $2,046,064

    Cost of revenue                 619,797    742,759   1,094,332   1,381,304
                                    -------    -------   ---------   ---------

    Gross profit                    156,723    149,917     346,419     664,760

    Operating expenses
      Research and development      192,855    212,910     494,652     431,740
      Sales, general and
             administrative                                73,975          92,399          192,839          185,433
                                                                          ------          ------          -------          -------

                    Total  operating
                      expenses                                  266,830        305,309          687,491          617,173
                                                                        -------        -------          -------          -------

        Operating  income  (loss)                (110,107)    (155,392)      (341,072)          47,587

        Interest  and  other  income,
          net                                                            3,006            8,792              9,150            18,831
                                                                            -----            -----              -----            ------

        Income  (loss)  before  income
          tax  expense                                      (107,101)    (146,600)      (331,922)          66,418

        Income  tax  expense  (benefit)(A)    (1,799)      (25,671)        (25,282)          10,542
                                                                          ------        -------          -------            ------

        Net  income  (loss)                          $(105,302)  $(120,929)    $(306,640)        $55,876
                                                                    =========    =========      =========          =======


        Basic  net  income  (loss)  per
          share                                                      $(0.19)        $(0.22)          $(0.56)            $0.10
                                                                          ======          ======            ======              =====

        Diluted  net  income  (loss)
          per  share                                              $(0.19)        $(0.22)          $(0.56)            $0.09
                                                                          ======          ======            ======              =====

        Shares  used  in  basic  per
          share  computation                            546,639        555,417          544,463          555,531

        Shares  used  in  diluted  per
          share  computation                            546,639        555,417          544,463          592,181


        (A)  The  income  tax  (benefit)  rate  for  the  three  months  ended  July  26,  2009
                and  July  27,  2008  was  (1.7)  %  and  (17.5)%,  respectively.    The  income
                tax  expense  (benefit)  rate  for  the  six  months  ended  July  26,  2009  and
                July  27,  2008  was  (7.6)  %  and  15.9%,  respectively.


                                                                  NVIDIA  CORPORATION
                              RECONCILIATION  OF  GAAP  TO  NON-GAAP  FINANCIAL  MEASURES
                                              (In  thousands,  except  per  share  data)
                                                                        (Unaudited)


                                                                            Three  Months                        Six  Months
                                                                                  Ended                                    Ended
                                                                          -------------                      -----------
                                                                        July              July                July                July
                                                                          26,                27,                  26,                  27,
                                                                        2009              2008                2009                2008
                                                                        ----              ----                ----                ----

        GAAP  gross  profit                          $156,723      $149,917        $346,419        $664,760
            as  a  percent  of
              GAAP  revenue                                      20.2%            16.8%              24.0%              32.5%

            Stock-based
              compensation
              expense  included
              in  cost  of  revenue(A)                  4,828            3,333              7,058              6,469
            Net  warranty  charge
              against  cost  of
              revenue  arising
              from  a  weak  die/
              packaging  material
              set  (B)                                          119,993        195,954          119,993          195,954
            Stock  option
              purchase  charge
              related  to  cost  of
              revenue  (C)                                              -                    -            11,412                      -
                                                                                --                  --            ------                    --
        Non-GAAP  gross
          profit                                              $281,544      $349,204        $484,882        $867,183
                                                                    ========      ========        ========        ========
            as  a  percent  of
              GAAP  revenue                                      36.3%            39.1%              33.7%              42.4%

        GAAP  operating
          expenses                                          $266,830      $305,309        $687,491        $617,173
            Stock-based
              compensation
              expense  (A)                                  (20,548)      (37,032)        (52,431)        (76,020)
            Insurance
              Reimbursement  (B)                              939                    -                  939                      -
            Stock  option
              purchase  charge
              related  to
              operating  expenses(C)                          -                    -        (128,829)                    -
                                                                                --                  --        --------                    --
        Non-GAAP  operating
          expenses                                          $247,221      $268,277        $507,170        $541,153
                                                                    ========      ========        ========        ========

        GAAP  net  income
          (loss)                                            $(105,302)  $(120,929)    $(306,640)        $55,876
            Stock-based
              compensation
              expense  (A)                                    25,376          40,365            59,489            82,489
            Net  warranty  charge
              against  cost  of
              revenue  arising
              from  a  weak  die/
              packaging  material
              set  (B)                                          119,054        195,954          119,054          195,954
            Stock  option
              purchase  charge  (C)                              -                    -          140,241                      -
            Income  tax  impact
              of  non-GAAP
              adjustments                                    (1,398)      (40,923)        (21,088)        (48,084)
                                                                        ------        -------          -------          -------
        Non-GAAP  net  income
          (loss)                                                $37,730        $74,467          $(8,944)      $286,235
                                                                      =======        =======          =======        ========

        Diluted  net  income
          (loss)  per  share

            GAAP                                                    $(0.19)        $(0.22)          $(0.56)            $0.09
                                                                        ======          ======            ======              =====
            Non-GAAP                                              $0.07            $0.13            $(0.02)            $0.49
                                                                          =====            =====            ======              =====


        Shares  used  in  GAAP
          diluted  net  income
          (loss)  per  share
          computation                                      546,639        555,417          544,463          592,181
            Cumulative  impact
              of  non-GAAP
              adjustments  (D)                            15,996          24,078                      -          (10,811)
                                                                        ------          ------                    --          -------
        Shares  used  in  non-
          GAAP  diluted  net
          income  (loss)  per
          share  computation                          562,635        579,495          544,463          581,370
                                                                      =======        =======          =======          =======

        Metrics:
        GAAP  net  cash  flow
          provided  by
          operating
          activities                                      $135,117        $80,957        $277,245        $226,202
            Purchase  of
              property  and
              equipment  and
              intangible  assets                      (17,656)      (53,514)        (38,433)      (255,687)
                                                                      -------        -------          -------        --------
        Free  cash  flow                                $117,461        $27,443        $238,812        $(29,485)
                                                                    ========        =======        ========        ========

        GAAP  cost  of
          revenue                                            $619,797      $742,759    $1,094,332    $1,381,304
        GAAP  inventory                                $279,216      $432,279        $279,216        $432,279
        GAAP  inventory
          turnover  ratio                                      2.22              1.72                3.92                3.20
                                                                            ----              ----                ----                ----
        GAAP  days  sales  in
          inventory                                                    41                  53                    46                    57
                                                                                ==                  ==                    ==                    ==

        GAAP  revenue                                    $776,520      $892,676    $1,440,751    $2,046,064
            Less:  Non-GAAP
              gross  profit                              (281,544)    (349,204)      (484,882)      (867,183)
                                                                    --------      --------        --------        --------
        Non-GAAP  cost  of
          revenue                                            $494,976      $543,472        $955,869    $1,178,881
                                                                    --------      --------        --------    ----------
        GAAP  inventory                                $279,216      $432,279        $279,216        $432,279

        Non-GAAP  inventory
          turnover  ratio                                      1.77              1.26                3.42                2.73
                                                                            ----              ----                ----                ----
        Non-GAAP  days  sales
          in  inventory                                              51                  72                    53                    67
                                                                                ==                  ==                    ==                    ==

        (A)  Results  include  stock-based  compensation  expense  as  follows  (in
                thousands):

                                                                            Three  Months                        Six  Months
                                                                                  Ended                                    Ended
                                                                          -------------                      -----------
                                                                            July              July              July                July
                                                                              26,                27,                26,                  27,
                                                                            2009              2008                2009                2008
                                                                            ----              ----                ----                ----

            Cost  of  revenue                              $4,828          $3,333            $7,058            $6,469
            Research  and  development          $13,268        $24,226          $34,538          $48,760
            Sales,  general
              and  administrative                      $7,280        $12,806          $17,893          $27,260

        (B)  Excludes  a  charge  related  to  the  weak  die/packaging  material  set  that
                was  used  in  certain  versions  of  our  previous  generation  chips,  net  of
                insurance  reimbursement.
        (C)  During  the  three  months  ended  April  26,  2009,  the  Company  completed  a
                tender  offer  to  purchase  an  aggregate  of  28.5  million  outstanding
                stock  options  for  a  total  cash  payment  of  $78.1  million.    As  a  result
                of  the  tender  offer  the  Company  incurred  a  charge  of  $140.2  million,
                consisting  of  the  remaining  unamortized  stock-based  compensation
                expenses  associated  with  the  unvested  portion  of  the  options  tendered
                in  the  offer,  stock-based  compensation  expense  resulting  from  amounts
                paid  in  excess  of  the  fair  value  of  the  underlying  options,  plus
                associated  payroll  taxes  and  professional  fees.    The  $140.2  million
                stock  option  purchase  charge  for  the  three  months  ended  April  26,  2009
                relates  to  personnel  associated  with  cost  of  revenue  (for
                manufacturing  personnel),  research  and  development,  and  sales,  general
                and  administrative  of  $11.4  million,  $90.5  million,  and  $38.3  million,
                respectively.
        (D)  Reflects  an  adjustment  to  the  diluted  outstanding  shares  calculated
                under  SFAS  123R  to  conform  to  diluted  outstanding  shares  calculated
                under  prior  accounting  standards  (APB  25).




                                                                NVIDIA  CORPORATION
                                            CONDENSED  CONSOLIDATED  BALANCE  SHEETS
                                                                    (In  thousands)
                                                                      (Unaudited)


                                                                                                                July  26,      January  25,
                                                                                                                    2009                2009
                                                                                                                    ----                ----
        ASSETS

        Current  assets:
            Cash,  cash  equivalents  and  marketable
              securities                                                                            $1,466,105    $1,255,390
            Accounts  receivable,  net                                                        351,960          318,435
            Inventories                                                                                  279,216          537,834
            Prepaid  expenses  and  other  current  assets                        70,624            56,299
                                                                                                                      ------            ------

                Total  current  assets                                                        2,167,905      2,167,958

        Property  and  equipment,  net                                                      582,914          625,798
        Goodwill                                                                                            369,844          369,844
        Intangible  assets,  net                                                                135,678          147,101
        Deposits  and  other  assets                                                            42,068            40,026
                                                                                                                      ------            ------

                Total  assets                                                                      $3,298,409    $3,350,727
                                                                                                              ==========    ==========

        LIABILITIES  AND  STOCKHOLDERS'  EQUITY

        Current  liabilities:
            Accounts  payable                                                                      $275,978        $218,864
            Accrued  liabilities  and  other  current
              liabilities                                                                                615,343          559,727
                                                                                                                    -------          -------


                Total  current  liabilities                                                  891,321          778,591

        Other  long-term  liabilities                                                      134,619          151,850
        Capital  lease  obligations,  long  term                                      25,060            25,634

        Stockholders'  equity                                                                2,247,409      2,394,652
                                                                                                                ---------      ---------

                Total  liabilities  and  stockholders'  equity          $3,298,409    $3,350,727
                                                                                                              ==========    ==========
 





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