Item 1. FINANCIAL STATEMENTS (UNAUDITED)

NVIDIA CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(In millions, except per share data)

(Unaudited)

			Three Months Ended												Nine Months Ended
			October 30,						October 31,						October 30,						October 31,
			2022						2021						2022						2021
Revenue			$	5,931					$	7,103					$	20,923					$	19,271
Cost of revenue			2,754						2,472						9,400						6,795
Gross profit			3,177						4,631						11,523						12,476
Operating expenses
Research and development			1,945						1,403						5,387						3,802
Sales, general and administrative			631						557						1,815						1,603
Acquisition termination cost			—						—						1,353						—
Total operating expenses			2,576						1,960						8,555						5,405
Income from operations			601						2,671						2,968						7,071
Interest income			88						7						152						20
Interest expense			(65)						(62)						(198)						(175)
Other, net			(11)						22						(29)						160
Other income (expense), net			12						(33)						(75)						5
Income before income tax			613						2,638						2,893						7,076
Income tax expense (benefit)			(67)						174						(61)						327
Net income			$	680					$	2,464					$	2,954					$	6,749
Net income per share:
Basic			$	0.27					$	0.99					$	1.18					$	2.71
Diluted			$	0.27					$	0.97					$	1.17					$	2.67
Weighted average shares used in per share computation:
Basic			2,483						2,499						2,495						2,493
Diluted			2,499						2,538						2,517						2,532

See accompanying Notes to Condensed Consolidated Financial Statements.

NVIDIA CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(In millions)

(Unaudited)

			Three Months Ended												Nine Months Ended
			October 30,						October 31,						October 30,						October 31,
			2022						2021						2022						2021
Net income			$	680					$	2,464					$	2,954					$	6,749
Other comprehensive income (loss), net of tax
Available-for-sale securities:
Net change in unrealized loss			(18)						(4)						(53)						(5)
Reclassification adjustments for net realized gain included in net income			—						—						1						—
Net change in unrealized loss			(18)						(4)						(52)						(5)
Cash flow hedges:
Net unrealized gain (loss)			(14)						22						(44)						(5)
Reclassification adjustments for net realized loss included in net income			(1)						(17)						(16)						—
Net change in unrealized gain (loss)			(15)						5						(60)						(5)
Other comprehensive income (loss), net of tax			(33)						1						(112)						(10)
Total comprehensive income			$	647					$	2,465					$	2,842					$	6,739

See accompanying Notes to Condensed Consolidated Financial Statements.

NVIDIA CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(In millions)

(Unaudited)

			October 30,						January 30,
			2022						2022
ASSETS
Current assets:
Cash and cash equivalents			$	2,800					$	1,990
Marketable securities			10,343						19,218
Accounts receivable, net			4,908						4,650
Inventories			4,454						2,605
Prepaid expenses and other current assets			718						366
Total current assets			23,223						28,829
Property and equipment, net			3,774						2,778
Operating lease assets			927						829
Goodwill			4,372						4,349
Intangible assets, net			1,850						2,339
Deferred income tax assets			2,762						1,222
Other assets			3,580						3,841
Total assets			$	40,488					$	44,187
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Accounts payable			$	1,491					$	1,783
Accrued and other current liabilities			4,115						2,552
Short-term debt			1,249						—
Total current liabilities			6,855						4,335
Long-term debt			9,701						10,946
Long-term operating lease liabilities			798						741
Other long-term liabilities			1,785						1,553
Total liabilities			19,139						17,575
Commitments and contingencies - see Note 13
Shareholders’ equity:
Preferred stock			—						—
Common stock			2						3
Additional paid-in capital			11,565						10,385
Accumulated other comprehensive loss			(123)						(11)
Retained earnings			9,905						16,235
Total shareholders' equity			21,349						26,612
Total liabilities and shareholders' equity			$	40,488					$	44,187

See accompanying Notes to Condensed Consolidated Financial Statements.

NVIDIA CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

FOR THE THREE MONTHS ENDED OCTOBER 30, 2022 AND OCTOBER 31, 2021

(Unaudited)

			Common Stock Outstanding												Additional Paid-in Capital						Treasury Stock						Accumulated Other Comprehensive Income (Loss)						Retained Earnings						Total Shareholders' Equity
(In millions, except per share data)			Shares						Amount
Balances, July 31, 2022			2,489						$	2					$	10,968					$	—					$	(90)					$	12,971					$	23,851
Net income			—						—						—						—						—						680						680
Other comprehensive loss			—						—						—						—						(33)						—						(33)
Issuance of common stock from stock plans			9						—						143						—						—						—						143
Tax withholding related to vesting of restricted stock units			(2)						—						(294)						—						—						—						(294)
Shares repurchased			(28)						—						(1)						—						—						(3,646)						(3,647)
Cash dividends declared and paid ($0.04 per common share)			—						—						—						—						—						(100)						(100)
Stock-based compensation			—						—						749						—						—						—						749
Balances, October 30, 2022			2,468						$	2					$	11,565					$	—					$	(123)					$	9,905					$	21,349
Balances, August 1, 2021			2,496						$	3					$	9,745					$	(11,604)					$	8					$	22,995					$	21,147
Net income			—						—						—						—						—						2,464						2,464
Other comprehensive income			—						—						—						—						1						—						1
Issuance of common stock from stock plans			8						—						150						—						—						—						150
Tax withholding related to vesting of restricted stock units			(2)						—						—						(434)						—						—						(434)
Cash dividends declared and paid ($0.04 per common share)			—						—						—						—						—						(100)						(100)
Fair value of partially vested equity awards assumed in connection with acquisitions			—						—						18						—						—						—						18
Stock-based compensation			—						—						552						—						—						—						552
Balances, October 31, 2021			2,502						$	3					$	10,465					$	(12,038)					$	9					$	25,359					$	23,798

See accompanying Notes to Condensed Consolidated Financial Statements.

NVIDIA CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

FOR THE NINE MONTHS ENDED OCTOBER 30, 2022 AND OCTOBER 31, 2021

(Unaudited)

			Common Stock Outstanding												Additional Paid-in Capital						Treasury Stock						Accumulated Other Comprehensive Income (Loss)						Retained Earnings						Total Shareholders' Equity
(In millions, except per share data)			Shares						Amount
Balances, January 30, 2022			2,506						$	3					$	10,385					$	—					$	(11)					$	16,235					$	26,612
Net income			—						—						—						—						—						2,954						2,954
Other comprehensive loss			—						—						—						—						(112)						—						(112)
Issuance of common stock from stock plans			24						—						349						—						—						—						349
Tax withholding related to vesting of restricted stock units			(6)						—						(1,131)						—						—						—						(1,131)
Shares repurchased			(56)						(1)						(3)						—						—						(8,984)						(8,988)
Cash dividends declared and paid ($0.12 per common share)			—						—						—						—						—						(300)						(300)
Stock-based compensation			—						—						1,965						—						—						—						1,965
Balances, October 30, 2022			2,468						$	2					$	11,565					$	—					$	(123)					$	9,905					$	21,349
Balances, January 31, 2021			2,479						$	3					$	8,719					$	(10,756)					$	19					$	18,908					$	16,893
Net income			—						—						—						—						—						6,749						6,749
Other comprehensive loss			—						—						—						—						(10)						—						(10)
Issuance of common stock from stock plans			30						—						277						—						—						—						277
Tax withholding related to vesting of restricted stock units			(7)						—						—						(1,282)						—						—						(1,282)
Cash dividends declared and paid ($0.12 per common share)			—						—						—						—						—						(298)						(298)
Fair value of partially vested equity awards assumed in connection with acquisitions			—						—						18						—						—						—						18
Stock-based compensation			—						—						1,451						—						—						—						1,451
Balances, October 31, 2021			2,502						$	3					$	10,465					$	(12,038)					$	9					$	25,359					$	23,798

See accompanying Notes to Condensed Consolidated Financial Statements.

NVIDIA CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In millions)

(Unaudited)

			Nine Months Ended
			October 30,						October 31,
			2022						2021
Cash flows from operating activities:
Net income			$	2,954					$	6,749
Adjustments to reconcile net income to net cash provided by operating activities:
Stock-based compensation expense			1,971						1,453
Acquisition termination cost			1,353						—
Depreciation and amortization			1,118						865
Losses (gains) on investments in non-affiliates, net			35						(152)
Deferred income taxes			(1,517)						(182)
Other			(27)						25
Changes in operating assets and liabilities, net of acquisitions:
Accounts receivable			(258)						(1,523)
Inventories			(1,848)						(400)
Prepaid expenses and other assets			(1,307)						(1,557)
Accounts payable			(358)						385
Accrued and other current liabilities			1,175						159
Other long-term liabilities			102						253
Net cash provided by operating activities			3,393						6,075
Cash flows from investing activities:
Proceeds from maturities of marketable securities			16,792						7,780
Proceeds from sales of marketable securities			1,806						916
Purchases of marketable securities			(9,764)						(16,020)
Purchases related to property and equipment and intangible assets			(1,324)						(703)
Acquisitions, net of cash acquired			(49)						(203)
Investments and other, net			(83)						(14)
Net cash provided by (used in) investing activities			7,378						(8,244)
Cash flows from financing activities:
Proceeds related to employee stock plans			349						277
Payments related to repurchases of common stock			(8,826)						—
Payments related to tax on restricted stock units			(1,131)						(1,282)
Dividends paid			(300)						(298)
Principal payments on property and equipment and intangible asset			(54)						(62)
Issuance of debt, net of issuance costs			—						4,977
Repayment of debt			—						(1,000)
Other			1						(2)
Net cash provided by (used in) financing activities			(9,961)						2,610
Change in cash and cash equivalents			810						441
Cash and cash equivalents at beginning of period			1,990						847
Cash and cash equivalents at end of period			$	2,800					$	1,288
Supplemental disclosures of cash flow information:
Cash paid for income taxes, net			$	1,372					$	313

See accompanying Notes to Condensed Consolidated Financial Statements.

NVIDIA CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Note 1 - Summary of Significant Accounting Policies

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements were prepared in accordance with accounting principles generally accepted in the United States of America, or U.S. GAAP, for interim financial information and with the instructions to Form 10-Q and Article 10 of Securities and Exchange Commission, or SEC, Regulation S-X. The January 30, 2022 consolidated balance sheet was derived from our audited consolidated financial statements included in our Annual Report on Form 10-K for the fiscal year ended January 30, 2022, as filed with the SEC, but does not include all disclosures required by U.S. GAAP. In the opinion of management, all adjustments, consisting only of normal recurring adjustments considered necessary for a fair statement of results of operations and financial position, have been included. The results for the interim periods presented are not necessarily indicative of the results expected for any future period. The following information should be read in conjunction with the audited consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the fiscal year ended January 30, 2022.

Significant Accounting Policies

There have been no material changes to our significant accounting policies disclosed in Note 1 - Organization and Summary of Significant Accounting Policies, of the Notes to the Consolidated Financial Statements included in our Annual Report on Form 10-K for the fiscal year ended January 30, 2022.

Fiscal Year

We operate on a 52- or 53-week year, ending on the last Sunday in January. Fiscal years 2023 and 2022 are both 52-week years. The third quarters of fiscal years 2023 and 2022 were both 13-week quarters.

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 9 have been adjusted to write off immaterial fully amortized intangible assets as of January 30, 2022.

Principles of Consolidation

Our condensed consolidated financial statements include the accounts of NVIDIA Corporation and our wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation.

Note 2 - Business Combination

Termination of the Arm Share Purchase Agreement

In February 2022, NVIDIA and SoftBank Group Corp, or SoftBank, announced the termination of the Share Purchase Agreement whereby NVIDIA would have acquired Arm Limited from SoftBank. The parties agreed to terminate because of significant regulatory challenges preventing the completion of the transaction. We recorded an acquisition termination cost of $1.35 billion in the first quarter of fiscal year 2023 reflecting the write-off of the prepayment provided at signing.

NVIDIA CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

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 2023 and 2035.

Future minimum lease payments under our non-cancelable operating leases as of October 30, 2022 are as follows:

			Operating Lease Obligations
			(In millions)
Fiscal Year:
2023 (excluding first nine months of fiscal year 2023)			$	50
2024			188
2025			167
2026			149
2027			137
2028 and thereafter			393
Total			1,084
Less imputed interest			130
Present value of net future minimum lease payments			954
Less short-term operating lease liabilities			156
Long-term operating lease liabilities			$	798

In addition to our existing operating lease obligations, we have operating leases, primarily for our data centers, that are expected to commence between the fourth quarter of fiscal year 2023 and fiscal year 2025 with lease terms of 2 to 8 years for $647 million.

Operating lease expenses were $49 million and $44 million for the third quarter of fiscal years 2023 and 2022, respectively, and $139 million and $125 million for the first nine months of fiscal years 2023 and 2022, respectively. Short-term and variable lease expenses for the third quarter and first nine months of fiscal years 2023 and 2022 were not significant.

Other information related to leases was as follows:

			Nine Months Ended
			October 30, 2022						October 31, 2021
			(In millions)
Supplemental cash flows information
Operating cash flows used for operating leases			$	134					$	114
Operating lease assets obtained in exchange for lease obligations			$	213					$	230

As of October 30, 2022, our operating leases had a weighted average remaining lease term of 6.9 years and a weighted average discount rate of 2.82%. 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%.

NVIDIA CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

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 employee stock purchase plan, or ESPP.

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

			Three Months Ended												Nine Months Ended
			October 30, 2022						October 31, 2021						October 30, 2022						October 31, 2021
			(In millions)
Cost of revenue			$	32					$	44					$	108					$	102
Research and development			530						363						1,365						935
Sales, general and administrative			183						152						498						416
Total			$	745					$	559					$	1,971					$	1,453

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 Per Share
			(In millions, except per share data)
Balances, January 30, 2022			46						$	114.19
Granted			23						$	185.07
Vested restricted stock			(18)						$	94.82
Canceled and forfeited			(1)						$	137.27
Balances, October 30, 2022			50						$	153.73

As of October 30, 2022, there was $7.19 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 1.1 years for ESPP.

NVIDIA CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

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:

			Three Months Ended												Nine Months Ended
			October 30,						October 31,						October 30,						October 31,
			2022						2021						2022						2021
			(In millions, except per share data)
Numerator:
Net income			$	680					$	2,464					$	2,954					$	6,749
Denominator:
Basic weighted average shares			2,483						2,499						2,495						2,493
Dilutive impact of outstanding equity awards			16						39						22						39
Diluted weighted average shares			2,499						2,538						2,517						2,532
Net income per share:
Basic (1)			$	0.27					$	0.99					$	1.18					$	2.71
Diluted (2)			$	0.27					$	0.97					$	1.17					$	2.67
Equity awards excluded from diluted net income per share because their effect would have been anti-dilutive			36						2						29						21

(1) Calculated as net income divided by basic weighted average shares.

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

Note 6 – Income Taxes

We recognized an income tax benefit of $67 million and $61 million for the third quarter and first nine months of fiscal year 2023, respectively, and an income tax expense of $174 million and $327 million for the third quarter and first nine months of fiscal year 2022, respectively. Income tax as a percentage of income before income tax was a benefit of 10.9% and 2.1% for the third quarter and first nine months of fiscal year 2023, respectively, and an expense of 6.6% and 4.6% for the third quarter and first nine months of fiscal year 2022, respectively.

The decrease in our effective tax rate for the third quarter and first nine months of fiscal year 2023 as compared to the same periods of fiscal year 2022 was primarily due to the increased tax benefit of the foreign-derived intangible income deduction, stock-based compensation, and the U.S. federal research tax credit, relative to a lower expected profitability. This is partially offset by the impact of an increase in the proportion of earnings subject to U.S. tax in fiscal year 2023 and the one-time discrete benefit from re-valuing certain deferred tax assets in connection with the domestication of one of our foreign subsidiaries, or the Domestication, in fiscal year 2022.

Our effective tax rate for the first nine months of fiscal year 2023 was 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.

Our effective tax rate for the first nine months of fiscal year 2022 was lower than the U.S. federal statutory rate of 21% due to tax benefits from the foreign-derived intangible income deduction, income earned in jurisdictions that are subject to taxes lower than the U.S. federal statutory tax rate, the discrete benefit of the Domestication, and tax benefits related to stock-based compensation and the U.S. federal research tax credit.

For the first nine months of fiscal year 2023, 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 30, 2022.

NVIDIA CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

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 October 30, 2022, 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

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 October 30, 2022 and January 30, 2022:

			October 30, 2022
			Amortized Cost						Unrealized Gain						Unrealized Loss						Estimated Fair Value						Reported as
															Cash Equivalents						Marketable Securities
			(In millions)
Corporate debt securities			$	4,221					$	—					$	(19)					$	4,202					$	239					$	3,963
Debt securities issued by the U.S. Treasury			4,176						1						(60)						4,117						1						4,116
Debt securities issued by U.S. government agencies			2,259						—						(4)						2,255						344						1,911
Certificates of deposit			316						—						—						316						58						258
Money market funds			1,843						—						—						1,843						1,843						—
Foreign government bonds			99						—						—						99						4						95
Total			$	12,914					$	1					$	(83)					$	12,832					$	2,489					$	10,343

			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 U.S. Treasury			7,314						—						(14)						7,300						—						7,300
Debt securities issued by U.S. 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

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:

			October 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 U.S. Treasury			$	1,928					$	(35)					$	1,051					$	(24)					$	2,979					$	(59)
Debt securities issued by U.S. government agencies			1,888						(4)						—						—						1,888						(4)
Corporate debt securities			1,786						(18)						208						(2)						1,994						(20)
Total			$	5,602					$	(57)					$	1,259					$	(26)					$	6,861					$	(83)

			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 U.S. 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 October 30, 2022 and January 30, 2022 are shown below by contractual maturity.

			October 30, 2022												January 30, 2022
			Amortized Cost						Estimated Fair Value						Amortized Cost						Estimated Fair Value
			(In millions)
Less than one year			$	8,985					$	8,952					$	16,346					$	16,343
Due in 1 - 5 years			3,929						3,880						4,584						4,570
Total			$	12,914					$	12,832					$	20,930					$	20,913

NVIDIA CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

Note 8 – 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.

									Fair Value at
			Pricing Category						October 30, 2022						January 30, 2022
									(In millions)
Assets
Cash equivalents and marketable securities:
Money market funds			Level 1						$	1,843					$	316
Corporate debt securities			Level 2						$	4,202					$	9,974
Debt securities issued by the U.S. Treasury			Level 2						$	4,117					$	7,300
Debt securities issued by U.S. government agencies			Level 2						$	2,255					$	1,612
Certificates of deposit			Level 2						$	316					$	1,561
Foreign government bonds			Level 2						$	99					$	150
Other assets (Investment in non-affiliated entities):
Publicly-held equity securities (1)			Level 1						$	27					$	58
Privately-held equity securities			Level 3						$	287					$	208
Liabilities (2)
0.309% Notes Due 2023			Level 2						$	1,217					$	1,236
0.584% Notes Due 2024			Level 2						$	1,168					$	1,224
3.20% Notes Due 2026			Level 2						$	945					$	1,055
1.55% Notes Due 2028			Level 2						$	1,036					$	1,200
2.85% Notes Due 2030			Level 2						$	1,281					$	1,542
2.00% Notes Due 2031			Level 2						$	979					$	1,200
3.50% Notes Due 2040			Level 2						$	764					$	1,066
3.50% Notes Due 2050			Level 2						$	1,427					$	2,147
3.70% Notes Due 2060			Level 2						$	344					$	551

(1) Unrealized losses of $11 million and $35 million from investments in publicly-traded equity securities were recorded in other income (expense), net, in the third quarter and first nine months of fiscal year 2023, respectively. Unrealized gains of $8 million and $126 million from an investment in a publicly-traded equity security were recorded in other income (expense), net, in the third quarter and first nine months of fiscal year 2022, respectively.

(2) These liabilities are carried on our Condensed Consolidated Balance Sheets at their original issuance value, net of unamortized debt discount and issuance costs.

NVIDIA CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

Note 9 - Amortizable Intangible Assets and Goodwill

The components of our amortizable intangible assets are as follows:

			October 30, 2022																		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					$	(1,441)					$	1,652					$	3,061					$	(947)					$	2,114
Patents and licensed technology			442						(244)						198						446						(221)						225
Total intangible assets			$	3,535					$	(1,685)					$	1,850					$	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.

Amortization expense associated with intangible assets was $181 million and $518 million for the third quarter and first nine months of fiscal year 2023, respectively, and $143 million and $418 million for the third quarter and first nine months of fiscal year 2022, respectively. Future amortization expense related to the net carrying amount of intangible assets as of October 30, 2022 is estimated to be $181 million for the remainder of fiscal year 2023, $600 million in fiscal year 2024, $538 million in fiscal year 2025, $244 million in fiscal year 2026, $141 million in fiscal year 2027, and $146 million in fiscal year 2028 and thereafter.

In the first nine months of fiscal year 2023, goodwill increased by $23 million and intangible assets increased by $33 million from acquisitions. We assigned $14 million of the increase in goodwill to our Compute & Networking segment and $9 million of the increase to our Graphics segment.

Note 10 - Balance Sheet Components

Certain balance sheet components are as follows:

			October 30,						January 30,
			2022						2022
Inventories:			(In millions)
Raw materials			$	1,936					$	791
Work in-process			788						692
Finished goods			1,730						1,122
Total inventories			$	4,454					$	2,605

			October 30,						January 30,
			2022						2022
Other assets:			(In millions)
Prepaid supply agreements			$	2,771					$	1,747
Prepaid royalties			393						409
Investment in non-affiliated entities			314						266
Advanced consideration for acquisition (1)			—						1,353
Other			102						66
Total other assets			$	3,580					$	3,841

(1) Refer to Note 2 - Business Combination for further details on the Arm acquisition.

NVIDIA CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

			October 30,						January 30,
			2022						2022
Accrued and Other Current Liabilities:			(In millions)
Customer program accruals			$	1,394					$	1,000
Excess inventory purchase obligations			1,181						196
Deferred revenue (1)			338						300
Accrued payroll and related expenses			307						409
Unsettled share repurchases			162						—
Product warranty			104						46
Taxes payable			108						132
Other			521						469
Total accrued and other current liabilities			$	4,115					$	2,552

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

			October 30,						January 30,
			2022						2022
Other Long-Term Liabilities:			(In millions)
Income tax payable (1)			$	1,057					$	980
Deferred income tax			246						245
Deferred revenue (2)			213						202
Other			269						126
Total other long-term liabilities			$	1,785					$	1,553

(1) As of October 30, 2022, income tax payable represents the long-term portion of the one-time transition tax payable of $188 million, unrecognized tax benefits of $789 million, and related interest and penalties of $80 million. As of January 30, 2022, income tax payable represents the long-term portion of the one-time transition tax payable of $251 million, unrecognized tax benefits of $670 million, and related interest and penalties of $59 million.

(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 the first nine months of fiscal years 2023 and 2022:

			October 30,						October 31,
			2022						2021
			(In millions)
Balance at beginning of period			$	502					$	451
Deferred revenue additions during the period			577						621
Revenue recognized during the period			(528)						(583)
Balance at end of period			$	551					$	489

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 October 30, 2022, $681 million of revenue related to 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.

NVIDIA CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

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 October 30, 2022 and January 30, 2022.

We also 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 the 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 October 30, 2022 and January 30, 2022:

			October 30, 2022						January 30, 2022
			(In millions)
Designated as cash flow hedges			$	1,139					$	1,023
Not designated for hedge accounting			$	330					$	408

As of October 30, 2022, 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 nine months of 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.

NVIDIA CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

Note 12 - Debt

Long-Term Debt

The carrying values of our outstanding notes and their associated interest rates were as follows:

																		Carrying Value at
						Expected Remaining Term (years)						Effective Interest Rate						October 30, 2022						January 30, 2022
																		(In millions)
0.309% Notes Due 2023						0.6						0.41%						$	1,250					$	1,250
0.584% Notes Due 2024						1.6						0.66%						1,250						1,250
3.20% Notes Due 2026						3.9						3.31%						1,000						1,000
1.55% Notes Due 2028						5.6						1.64%						1,250						1,250
2.85% Notes Due 2030						7.4						2.93%						1,500						1,500
2.00% Notes Due 2031						8.6						2.09%						1,250						1,250
3.50% Notes Due 2040						17.4						3.54%						1,000						1,000
3.50% Notes Due 2050						27.4						3.54%						2,000						2,000
3.70% Notes Due 2060						37.4						3.73%						500						500
Unamortized debt discount and issuance costs																		(50)						(54)
Net carrying amount																		10,950						10,946
Less short-term portion																		(1,249)						—
Total long-term portion																		$	9,701					$	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 October 30, 2022, we have complied with the required covenants under the notes.

Commercial Paper

We have a $575 million commercial paper program to support general corporate purposes. As of October 30, 2022, we had not issued any commercial paper.

Note 13 - Commitments and Contingencies

Purchase Obligations

Our purchase obligations primarily include 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 $917 million remaining unpaid. As of October 30, 2022, we had outstanding inventory purchase and long-term supply obligations totaling $7.02 billion, inclusive of the $917 million. Other non-inventory purchase obligations of $2.75 billion include $1.59 billion of multi-year cloud service agreements.

NVIDIA CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

Total gross future unconditional purchase commitments as of October 30, 2022 are as follows:

			Commitments
			(In millions)
Fiscal Year:
2023 (excluding first nine months of fiscal year 2023)			$	4,234
2024			3,362
2025			798
2026			504
2027			464
2028 and thereafter			410
Total			$	9,772

Accrual for Product Warranty Liabilities

The estimated amount of product warranty liabilities was $104 million and $46 million as of October 30, 2022 and January 30, 2022, respectively. The estimated product returns and estimated product warranty activity consisted of the following:

			Three Months Ended												Nine Months Ended
			October 30,						October 31,						October 30,						October 31,
			2022						2021						2022						2021
			(In millions)
Balance at beginning of period			$	168					$	31					$	46					$	22
Additions			3						5						141						20
Utilization			(67)						(4)						(83)						(10)
Balance at end of period			$	104					$	32					$	104					$	32

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 Condensed Consolidated Financial Statements for such indemnifications.

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, 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.

NVIDIA CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

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 October 30, 2022, 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.

Note 14 - Shareholders’ Equity

Capital Return Program

During the third quarter and first nine months of fiscal year 2023, we repurchased 28 million shares for $3.65 billion and 56 million shares for $8.99 billion, respectively. Since the inception of our share repurchase program through October 30, 2022, we have repurchased an aggregate of 1.10 billion shares for $16.07 billion. As of October 30, 2022, we were authorized, subject to certain specifications, to repurchase an additional $8.28 billion of shares through December 2023. From October 31, 2022 through November 17, 2022, we repurchased 7 million shares for $1.05 billion pursuant to a Rule 10b5-1 trading plan.

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. During the third quarter and first nine months of fiscal year 2022, we paid $100 million and $298 million in cash dividends to our shareholders, respectively.

Note 15 - 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.

Our Compute & Networking segment includes Data Center platforms and systems for artificial intelligence, or AI, high-performance computing, and accelerated computing; Mellanox networking and interconnect solutions; automotive AI Cockpit, autonomous driving development agreements, and autonomous vehicle solutions; cryptocurrency mining processors, or CMP; Jetson for robotics and other embedded platforms; and NVIDIA AI Enterprise and other software.

Our 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

NVIDIA CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

graphics; vGPU software for cloud-based visual and virtual computing; automotive platforms for infotainment systems; and Omniverse software for building 3D designs and virtual worlds.

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.

			Compute & Networking						Graphics						All Other						Consolidated
			(In millions)
Three Months Ended October 30, 2022
Revenue			$	3,816					$	2,115					$	—					$	5,931
Operating income (loss)			$	1,086					$	606					$	(1,091)					$	601
Three Months Ended October 31, 2021
Revenue			$	3,011					$	4,092					$	—					$	7,103
Operating income (loss)			$	1,332					$	2,160					$	(821)					$	2,671
Nine Months Ended October 30, 2022
Revenue			$	11,395					$	9,528					$	—					$	20,923
Operating income (loss)			$	3,509					$	3,739					$	(4,280)					$	2,968
Nine Months Ended October 31, 2021
Revenue			$	7,821					$	11,450					$	—					$	19,271
Operating income (loss)			$	3,227					$	6,073					$	(2,229)					$	7,071

NVIDIA CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

			Three Months Ended												Nine Months Ended
			October 30, 2022						October 31, 2021						October 30, 2022						October 31, 2021
			(In millions)
Reconciling items included in "All Other" category:
Stock-based compensation expense			$	(745)					$	(559)					$	(1,971)					$	(1,453)
Acquisition-related and other costs			(174)						(156)						(499)						(482)
Unallocated cost of revenue and operating expenses			(156)						(106)						(432)						(286)
Restructuring costs			(16)						—						(16)						—
Acquisition termination cost			—						—						(1,353)						—
IP-related and legal settlement costs			—						—						(7)						(8)
Contributions			—						—						(2)						—
Total			$	(1,091)					$	(821)					$	(4,280)					$	(2,229)

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:

			Three Months Ended												Nine Months Ended
			October 30,						October 31,						October 30,						October 31,
			2022						2021						2022						2021
			(In millions)
Revenue:
United States			$	2,148					$	1,126					$	6,069					$	2,890
Taiwan			1,153						2,187						5,134						5,932
China (including Hong Kong)			1,148						2,017						4,831						5,128
Other countries			1,482						1,773						4,889						5,321
Total revenue			$	5,931					$	7,103					$	20,923					$	19,271

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

			Three Months Ended												Nine Months Ended
			October 30,						October 31,						October 30,						October 31,
			2022						2021						2022						2021
			(In millions)
Revenue:
Data Center			$	3,833					$	2,936					$	11,389					$	7,350
Gaming			1,574						3,221						7,236						9,042
Professional Visualization			200						577						1,318						1,468
Automotive			251						135						609						441
OEM and Other			73						234						371						970
Total revenue			$	5,931					$	7,103					$	20,923					$	19,271

One customer represented 10% of our total revenue for the third quarter of fiscal year 2023 and was attributable primarily to the Compute & Networking segment. No customer represented 10% or more of total revenue for the first nine months of fiscal year 2023 and for the third quarter and first nine months of fiscal year 2022.

NVIDIA CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

One customer represented 10% or more of accounts receivable for a total of 12% of our accounts receivable balance as of October 30, 2022. Two customers each represented 10% or more of accounts receivable for a total of 22% as of January 30, 2022.