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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended May 2, 2021
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Commission file number: 0-23985

NVIDIA CORPORATION
(Exact name of registrant as specified in its charter)
Delaware94-3177549
(State or Other Jurisdiction of(I.R.S. Employer
Incorporation or Organization)Identification No.)
2788 San Tomas Expressway
Santa Clara, California 95051
(408) 486-2000
(Address, including zip code, and telephone number,
including area code, of principal executive offices)
N/A
(Former name, former address and former fiscal year if changed since last report)
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common Stock, $0.001 par value per shareNVDAThe Nasdaq Global Select Market
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes No
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes No
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See definitions of “large accelerated filer”, “accelerated filer”, “smaller reporting company”, and "emerging growth company" in Rule 12b-2 of the Exchange Act.
Large accelerated filerAccelerated filerNon-accelerated filerSmaller reporting companyEmerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes No
The number of shares of common stock, $0.001 par value, outstanding as of May 21, 2021, was 623 million.



NVIDIA CORPORATION
FORM 10-Q
FOR THE QUARTER ENDED May 2, 2021
TABLE OF CONTENTS
  Page
  
Financial Statements (Unaudited) 
 a) Condensed Consolidated Statements of Income for the three months ended May 2, 2021 and April 26, 2020
b) Condensed Consolidated Statements of Comprehensive Income for the three months ended May 2, 2021 and April 26, 2020
 c) Condensed Consolidated Balance Sheets as of May 2, 2021 and January 31, 2021
d) Condensed Consolidated Statements of Shareholders' Equity for the three months ended May 2, 2021 and April 26, 2020
 e) Condensed Consolidated Statements of Cash Flows for the three months ended May 2, 2021 and April 26, 2020
 f) Notes to Condensed Consolidated Financial Statements
Management’s Discussion and Analysis of Financial Condition and Results of Operations
Quantitative and Qualitative Disclosures About Market Risk
Controls and Procedures
  
Legal Proceedings
Risk Factors
Unregistered Sales of Equity Securities and Use of Proceeds
Exhibits
 
WHERE YOU CAN FIND MORE INFORMATION
Investors and others should note that we announce material financial information to our investors using our investor relations website, press releases, SEC filings and public conference calls and webcasts. We also use the following social media channels as a means of disclosing information about the company, our products, our planned financial and other announcements and attendance at upcoming investor and industry conferences, and other matters, and for complying with our disclosure obligations under Regulation FD: 
NVIDIA Twitter Account (https://twitter.com/nvidia)
NVIDIA Company Blog (http://blogs.nvidia.com)
NVIDIA Facebook Page (https://www.facebook.com/nvidia)
NVIDIA LinkedIn Page (http://www.linkedin.com/company/nvidia)
NVIDIA Instagram Page (https://www.instagram.com/nvidia)
In addition, investors and others can view NVIDIA videos on YouTube (https://www.YouTube.com/nvidia).
The information we post through these social media channels may be deemed material. Accordingly, investors should monitor these accounts and the blog, in addition to following our press releases, SEC filings and public conference calls and webcasts. This list may be updated from time to time. The information we post through these channels is not a part of this Quarterly Report on Form 10-Q. These channels may be updated from time to time on NVIDIA's investor relations website.
2


PART I. FINANCIAL INFORMATION
ITEM 1.  FINANCIAL STATEMENTS (UNAUDITED)
NVIDIA CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In millions, except per share data)
(Unaudited)
 Three Months Ended
 May 2,April 26,
20212020
Revenue$5,661 $3,080 
Cost of revenue2,032 1,076 
Gross profit3,629 2,004 
Operating expenses  
Research and development1,153 735 
Sales, general and administrative520 293 
Total operating expenses1,673 1,028 
Income from operations1,956 976 
Interest income6 31 
Interest expense(53)(25)
Other, net135 (1)
Other income (expense), net
88 5 
Income before income tax2,044 981 
Income tax expense132 64 
Net income$1,912 $917 
Net income per share:
Basic$3.08 $1.49 
Diluted$3.03 $1.47 
Weighted average shares used in per share computation:
Basic621 614 
Diluted632 622 
See accompanying Notes to Condensed Consolidated Financial Statements.

3


NVIDIA CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(In millions)
(Unaudited)
 Three Months Ended
 May 2,April 26,
20212020
 
Net income$1,912 $917 
Other comprehensive loss, net of tax
Cash flow hedges:
Net unrealized loss(14)(10)
Reclassification adjustments for net realized gain (loss) included in net income9 (1)
Net change in unrealized loss(5)(11)
Total comprehensive income$1,907 $906 
See accompanying Notes to Condensed Consolidated Financial Statements.

4


NVIDIA CORPORATION AND SUBSIDIARIES 
CONDENSED CONSOLIDATED BALANCE SHEETS
(In millions)
(Unaudited)
May 2,January 31,
 20212021
ASSETS
Current assets:  
Cash and cash equivalents$978 $847 
Marketable securities11,689 10,714 
Accounts receivable, net3,024 2,429 
Inventories1,992 1,826 
Prepaid expenses and other current assets444 239 
Total current assets18,127 16,055 
Property and equipment, net2,268 2,149 
Operating lease assets727 707 
Goodwill4,193 4,193 
Intangible assets, net2,613 2,737 
Deferred income tax assets778 806 
Other assets2,090 2,144 
Total assets$30,796 $28,791 
LIABILITIES AND SHAREHOLDERS’ EQUITY  
Current liabilities:  
Accounts payable$1,218 $1,201 
Accrued and other current liabilities1,787 1,725 
Short-term debt999 999 
Total current liabilities4,004 3,925 
Long-term debt5,964 5,964 
Long-term operating lease liabilities640 634 
Other long-term liabilities1,414 1,375 
Total liabilities12,022 11,898 
Commitments and contingencies - see Note 13
Shareholders’ equity:  
Preferred stock  
Common stock1 1 
Additional paid-in capital9,280 8,721 
Treasury stock, at cost(11,242)(10,756)
Accumulated other comprehensive income14 19 
Retained earnings20,721 18,908 
Total shareholders' equity18,774 16,893 
Total liabilities and shareholders' equity$30,796 $28,791 
See accompanying Notes to Condensed Consolidated Financial Statements.

5


NVIDIA CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY
FOR THE THREE MONTHS ENDED MAY 2, 2021 AND APRIL 26, 2020
(Unaudited)
Common Stock
Outstanding
Additional Paid-in CapitalTreasury StockAccumulated Other Comprehensive Income (Loss)Retained EarningsTotal Shareholders' Equity
(In millions, except per share data)SharesAmount
Balances, January 31, 2021620 $1 $8,721 $(10,756)$19 $18,908 $16,893 
Net income— — — — — 1,912 1,912 
Other comprehensive loss— — — — (5)— (5)
Issuance of common stock from stock plans 4 — 126 — — — 126 
Tax withholding related to vesting of restricted stock units(1)— — (486)— — (486)
Cash dividends declared and paid ($0.16 per common share)
— — — — — (99)(99)
Stock-based compensation— — 433 — — — 433 
Balances, May 2, 2021623 $1 $9,280 $(11,242)$14 $20,721 $18,774 
Balances, January 26, 2020612 $1 $7,045 $(9,814)$1 $14,971 $12,204 
Net income— — — — — 917 917 
Other comprehensive loss— — — — (11)— (11)
Issuance of common stock from stock plans 4 — 88 — — — 88 
Tax withholding related to vesting of restricted stock units(1)— — (222)— — (222)
Cash dividends declared and paid ($0.16 per common share)
— — — — — (98)(98)
Stock-based compensation— — 221 — — — 221 
Balances, April 26, 2020615 $1 $7,354 $(10,036)$(10)$15,790 $13,099 
See accompanying Notes to Condensed Consolidated Financial Statements.
6


NVIDIA CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In millions)
(Unaudited)
 Three Months Ended
May 2,April 26,
 20212020
Cash flows from operating activities:  
Net income$1,912 $917 
Adjustments to reconcile net income to net cash provided by operating activities:
Stock-based compensation expense429 224 
Depreciation and amortization281 107 
Deferred income taxes24 16 
(Gains) losses on investments in non-affiliates, net(133)3 
Other(3)1 
Changes in operating assets and liabilities, net of acquisitions:
Accounts receivable(595)(249)
Inventories(159)(151)
Prepaid expenses and other assets2 (8)
Accounts payable70 71 
Accrued and other current liabilities(1)(32)
Other long-term liabilities47 10 
Net cash provided by operating activities1,874 909 
Cash flows from investing activities:  
Proceeds from maturities of marketable securities3,140  
Proceeds from sales of marketable securities358 1 
Purchases of marketable securities(4,470)(861)
Purchases related to property and equipment and intangible assets(298)(155)
Investments and other, net(2)(6)
Acquisitions, net of cash acquired (34)
Net cash used in investing activities(1,272)(1,055)
Cash flows from financing activities:  
Proceeds related to employee stock plans126 88 
Payments related to tax on restricted stock units(477)(222)
Dividends paid(99)(98)
Principal payments on property and equipment(19) 
Other(2)(3)
Issuance of debt, net of issuance costs 4,979 
Net cash provided by (used in) financing activities(471)4,744 
Change in cash and cash equivalents131 4,598 
Cash and cash equivalents at beginning of period847 10,896 
Cash and cash equivalents at end of period$978 $15,494 
See accompanying Notes to Condensed Consolidated Financial Statements.
7

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 31, 2021 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 31, 2021, 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 31, 2021. 
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 31, 2021.
Fiscal Year
We operate on a 52- or 53-week year, ending on the last Sunday in January. Fiscal year 2022 is a 52-week year and fiscal year 2021 was a 53-week year. The first quarters of fiscal years 2022 and 2021 were both 13-week quarters.
Reclassifications
Certain prior fiscal year balances have been reclassified to conform to the current fiscal year presentation.
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.
Use of Estimates
The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ materially from our estimates. On an ongoing basis, we evaluate our estimates, including those related to revenue recognition, cash equivalents and marketable securities, accounts receivable, inventories, income taxes, goodwill, stock-based compensation, litigation, investigation and settlement costs, restructuring and other charges, and other contingencies. The inputs into our judgments and estimates consider the economic implications of COVID-19. These estimates are based on historical facts and various other assumptions that we believe are reasonable.
Note 2 - Business Combination
Pending Acquisition of Arm Limited
On September 13, 2020, we entered into a Share Purchase Agreement, or the Purchase Agreement, with Arm Limited, or Arm, and SoftBank Group Capital Limited and SVF Holdco (UK) Limited, or together, SoftBank, for us to acquire, from SoftBank, all allotted and issued ordinary shares of Arm in a transaction valued at $40 billion. We paid $2 billion in cash at signing, or the Signing Consideration, and will pay upon closing of the acquisition $10 billion in cash and issue to SoftBank 44.3 million shares of our common stock, which had an aggregate value of $21.5 billion as of the date of the Purchase Agreement. The transaction includes a potential earn out, which is contingent on the achievement of certain financial performance targets by Arm during the fiscal year ending March 31, 2022. If the financial targets are achieved, SoftBank can elect to receive either up to an additional $5 billion in cash or up to an additional 10.3 million shares of our common stock. We will issue up to $1.5 billion in restricted stock units to Arm employees after closing. The $2 billion
8

NVIDIA CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Unaudited)


paid upon signing was allocated between advanced consideration for the acquisition of $1.36 billion and the prepayment of intellectual property licenses from Arm of $0.17 billion and royalties of $0.47 billion, both with a 20-year term. The closing of the acquisition is subject to customary closing conditions, including receipt of specified governmental and regulatory consents and approvals and the expiration of any related mandatory waiting period, and Arm's implementation of the reorganization and distribution of Arm’s IoT Services Group and certain other assets and liabilities. We are engaged with regulators in the United States, the United Kingdom, the European Union, China and other jurisdictions. If the Purchase Agreement is terminated under certain circumstances, we will be refunded $1.25 billion of the Signing Consideration. The Signing Consideration was allocated on a fair value basis and any refund of the Signing Consideration will use stated values in the Purchase Agreement. We believe the closing of the acquisition will likely occur in the first quarter of calendar year 2022.
Acquisition of Mellanox Technologies, Ltd.
On April 27, 2020, we completed the acquisition of all outstanding shares of Mellanox for a total purchase consideration of $7.13 billion. Mellanox is a supplier of high-performance interconnect products for computing, storage and communications applications. We acquired Mellanox to optimize data center workloads to scale across the entire computing, networking, and storage stack.
Supplemental Unaudited Pro Forma Information
The following unaudited pro forma financial information summarizes the combined results of operations for NVIDIA and Mellanox as if the companies were combined as of the beginning of fiscal year 2020:
Pro Forma
 Three Months Ended
 April 26, 2020
(In millions)
Revenue$3,509 
Net income$918 
The unaudited pro forma information includes adjustments related to amortization of acquired intangible assets, adjustments to stock-based compensation expense, fair value of acquired inventory, and transaction costs. The unaudited pro forma information presented above is for informational purposes only and is not necessarily indicative of our consolidated results of operations of the combined business had the acquisition occurred at the beginning of fiscal year 2020 or of the results of our future operations of the combined businesses.
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 2022 and 2035.
9

NVIDIA CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Unaudited)


Future minimum lease payments under our non-cancelable operating leases as of May 2, 2021, are as follows:
Operating Lease Obligations
 (In millions)
Fiscal Year: 
2022 (excluding first quarter of fiscal year 2022)
$106 
2023144 
2024123 
2025102 
202694 
2027 and thereafter
306 
Total875 
Less imputed interest100 
Present value of net future minimum lease payments775 
Less short-term operating lease liabilities135 
Long-term operating lease liabilities$640 
Operating lease expenses were $39 million and $31 million for the first quarter of fiscal years 2022 and 2021, respectively. Short-term and variable lease expenses for the first quarter of fiscal years 2022 and 2021 were not significant.
Other information related to leases was as follows:
Three Months Ended
May 2, 2021April 26, 2020
 (In millions)
Supplemental cash flows information 
Operating cash flows used for operating leases$39 $31 
Operating lease assets obtained in exchange for lease obligations$54 $3 
As of May 2, 2021, our operating leases had a weighted average remaining lease term of 7.5 years and a weighted average discount rate of 2.77%. As of January 31, 2021, our operating leases had a weighted average remaining lease term of 7.6 years and a weighted average discount rate of 2.87%.

10

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
 May 2,
2021
April 26,
2020
(In millions)
Cost of revenue$25 $21 
Research and development276 134 
Sales, general and administrative128 69 
Total$429 $224 
Equity Award Activity
The following is a summary of equity award transactions under our equity incentive plans:
RSUs, PSUs, and Market-based PSUs Outstanding
 Number of SharesWeighted Average Grant-Date Fair Value Per Share
(In millions, except per share data)
Balances, January 31, 202115 $264.69 
Granted1 $535.82 
Vested restricted stock(4)$252.22 
Balances, May 2, 202112 $279.79 
As of May 2, 2021, there was $3.32 billion of aggregate unearned stock-based compensation expense, net of forfeitures. This amount is expected to be recognized over a weighted average period of 2.4 years for RSUs, PSUs, and market-based PSUs, and 1.1 years for ESPP.

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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
May 2,April 26,
20212020
 (In millions, except per share data)
Numerator:  
Net income
$1,912 $917 
Denominator:
Basic weighted average shares
621 614 
Dilutive impact of outstanding equity awards
11 8 
Diluted weighted average shares
632 622 
Net income per share:
Basic (1)
$3.08 $1.49 
Diluted (2)
$3.03 $1.47 
Equity awards excluded from diluted net income per share because their effect would have been anti-dilutive1 1 
(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 expense of $132 million and $64 million for the first quarter of fiscal years 2022 and 2021, respectively. The income tax expense as a percentage of income before income tax was 6.5% and 6.6% for the first quarter of fiscal years 2022 and 2021, respectively.
The slight decrease in our effective tax rate for the first quarter of fiscal year 2022 as compared to the first quarter of fiscal year 2021 was primarily due to a change in the jurisdiction of earnings, partially offset by a decrease in the impact of tax benefits from the U.S. federal research tax credit.
Our effective tax rates for the first quarter of fiscal years 2022 and 2021 were lower than the U.S. federal statutory rate of 21% due to income earned in jurisdictions that are subject to taxes lower than the U.S. federal statutory tax rate, the benefit of the U.S. federal research tax credit, and tax benefits related to stock-based compensation.
As of May 2, 2021, we intend to indefinitely reinvest approximately $1.3 billion of cumulative undistributed earnings held by Mellanox non-U.S. subsidiaries. We have not provided the amount of unrecognized deferred tax liabilities for temporary differences related to investments in Mellanox non-U.S. subsidiaries as the determination of such amount is not practicable.
For the first quarter of fiscal year 2022, there have been 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 31, 2021.
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 May 2, 2021, 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.
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NVIDIA CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Unaudited)


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 May 2, 2021 and January 31, 2021:
 May 2, 2021
Amortized
Cost
Unrealized
Gain
Unrealized
Loss
Estimated
Fair Value
Reported as
 Cash EquivalentsMarketable Securities
 (In millions)
Corporate debt securities$5,240 $2 $ $5,242 $323 $4,919 
Debt securities issued by United States government agencies3,045 1  3,046  3,046 
Debt securities issued by the United States Treasury2,820 1  2,821  2,821 
Certificates of deposit884   884 48 836 
Money market funds319   319 319  
Foreign government bonds67   67  67 
Total$12,375 $4 $ $12,379 $690 $11,689 
 January 31, 2021
Amortized
Cost
Unrealized
Gain
Unrealized
Loss
Estimated
Fair Value
Reported as
 Cash EquivalentsMarketable Securities
 (In millions)
Corporate debt securities$4,442 $2 $ $4,444 $234 $4,210 
Debt securities issued by United States government agencies2,975 1  2,976 28 2,948 
Debt securities issued by the United States Treasury2,846   2,846 25 2,821 
Certificates of deposit705   705 37 668 
Money market funds313   313 313  
Foreign government bonds67   67  67 
Total$11,348 $3 $ $11,351 $637 $10,714 
Net realized gains and unrealized 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 May 2, 2021 and January 31, 2021 are shown below by contractual maturity.
May 2, 2021January 31, 2021
Amortized CostEstimated Fair ValueAmortized CostEstimated Fair Value
(In millions)
Less than one year$11,499 $11,502 $10,782 $10,783 
Due in 1 - 5 years876 877 566 568 
Total$12,375 $12,379 $11,348 $11,351 
13

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 CategoryMay 2, 2021January 31, 2021
(In millions)
Assets
Cash equivalents and marketable securities:
Money market fundsLevel 1$319 $313 
Corporate debt securitiesLevel 2$5,242 $4,444 
Debt securities issued by United States government agenciesLevel 2$3,046 $2,976 
Debt securities issued by the United States TreasuryLevel 2$2,821 $2,846 
Certificates of depositLevel 2$884 $705 
Foreign government bondsLevel 2$67 $67 
Prepaid expenses and other current assets:
Publicly-held equity security (1)Level 1$133 $ 
Other assets:
Investment in non-affiliated entities (2)Level 3$146 $144 
Liabilities
2.20% Notes Due 2021 (3)
Level 2$1,006 $1,011 
3.20% Notes Due 2026 (3)
Level 2$1,101 $1,124 
2.85% Notes Due 2030 (3)
Level 2$1,592 $1,654 
3.50% Notes Due 2040 (3)
Level 2$1,095 $1,152 
3.50% Notes Due 2050 (3)
Level 2$2,158 $2,308 
3.70% Notes Due 2060 (3)
Level 2$552 $602 
(1)    The balance as of May 2, 2021 includes an investment that was reclassified from privately-held equity securities following the commencement of public market trading of the issuer in the first quarter of fiscal year 2022. As of May 2, 2021, the investment is subject to short-term selling restrictions. Due to the public market trading of the issuer, an unrealized gain on the investment of $124 million was recorded in other income (expense), net in the first quarter of fiscal year 2022. The net cumulative unrealized gain on the investment was $130 million as of May 2, 2021.
(2)    Investment in private non-affiliated entities is recorded at fair value on a non-recurring basis only if an impairment or observable price adjustment occurs in the period with changes in fair value recorded through net income. The amount recorded as of May 2, 2021 has not been significant.
(3)    These liabilities are carried on our Consolidated Balance Sheets at their original issuance value, net of unamortized debt discount and issuance costs, and are not marked to fair value each period. Refer to Note 12 of the Notes to Condensed Consolidated Financial Statements for additional information.
14

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:
 May 2, 2021January 31, 2021
 Gross
Carrying
Amount
Accumulated
Amortization
Net Carrying
Amount
Gross
Carrying
Amount
Accumulated
Amortization
Net Carrying
Amount
 (In millions)
Acquisition-related intangible assets (1)$3,280 $(904)$2,376 $3,280 $(774)$2,506 
Patents and licensed technology719 (482)237 706 (475)231 
Total intangible assets$3,999 $(1,386)$2,613 $3,986 $(1,249)$2,737 
(1)    As of May 2, 2021, acquisition-related intangible assets include the fair value of a Mellanox in-process research and development, or IPR&D, project of $630 million, which has not yet commenced amortization. Once the project reaches technological feasibility, we will begin to amortize the intangible asset over its estimated useful life.
Amortization expense associated with intangible assets was $137 million and $7 million for the first quarter of fiscal years 2022 and 2021, respectively. Future amortization expense related to the net carrying amount of intangible assets, excluding IPR&D, as of May 2, 2021 is estimated to be $412 million for the remainder of fiscal year 2022, $546 million in fiscal year 2023, $424 million in fiscal year 2024, $370 million in fiscal year 2025, $99 million in fiscal year 2026, and $132 million in fiscal year 2027 and thereafter.
There were no changes to the carrying amount of goodwill during the first quarter of fiscal year 2022.
Note 10 - Balance Sheet Components 
Certain balance sheet components are as follows:
May 2,January 31,
 20212021
Inventories:(In millions)
Raw materials$734 $632 
Work in-process504 457 
Finished goods754 737 
Total inventories$1,992 $1,826 
May 2,January 31,
 20212021
Prepaid expenses and other current assets:(In millions)
Prepaid expenses$179 $142 
Publicly-held equity security (1)133  
Other132 97 
Total prepaid expenses and other current assets$444 $239 
(1)    The balance as of May 2, 2021 includes an investment that was reclassified from privately-held equity securities following the commencement of public market trading of the issuer in the first quarter of fiscal year 2022. As of May 2, 2021, the investment is subject to short-term selling restrictions. Due to the public market trading of the issuer, an unrealized gain on the investment of $124 million was recorded in other income (expense), net in the first quarter of fiscal year 2022. The net cumulative unrealized gain on the investment was $130 million as of May 2, 2021.

15

NVIDIA CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Unaudited)


May 2,January 31,
 20212021
Other assets:(In millions)
Advanced consideration for acquisition$1,357 $1,357 
Prepaid royalties428 440 
Investment in non-affiliated entities146 144 
Deposits123 136 
Other36 67 
Total other assets$2,090 $2,144 

May 2,January 31,
 20212021
Accrued and Other Current Liabilities:(In millions)
Customer program accruals$700 $630 
Deferred revenue (1)333 288 
Accrued payroll and related expenses265 297 
Operating leases135 121 
Licenses and royalties96 128 
Taxes payable96 61 
Product warranty and return provisions45 39 
Professional service fees33 26 
Coupon interest on debt obligations19 74 
Other65 61 
Total accrued and other current liabilities$1,787 $1,725 
(1)    Deferred revenue primarily includes customer advances and deferrals related to license and development arrangements and post-contract customer support, or PCS.
May 2,January 31,
 20212021
Other Long-Term Liabilities:(In millions)
Income tax payable (1)$864 $836 
Deferred income tax234 241 
Deferred revenue (2)173 163 
Licenses payable59 56 
Employee benefits34 33 
Other50 46 
Total other long-term liabilities$1,414 $1,375 
(1)    As of May 2, 2021, income tax payable represents the long-term portion of the one-time transition tax payable of $284 million, unrecognized tax benefits of $374 million, related interest and penalties of $48 million, and other foreign long-term tax payable of $158 million.
(2)    Deferred revenue primarily includes deferrals related to PCS.

16

NVIDIA CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Unaudited)


Deferred Revenue
The following table shows the changes in deferred revenue during the first quarter of fiscal years 2022 and 2021:
May 2,April 26,
 20212020
(In millions)
Balance at beginning of period$451 $201 
Deferred revenue added during the period178 110 
Revenue recognized during the period(123)(70)
Balance at end of period$506 $241 
Revenue related to remaining performance obligations represents the remaining contracted license, development arrangements and PCS that has not been recognized. This includes related deferred revenue currently recorded and amounts that will be invoiced in future periods. As of May 2, 2021, the amount of our remaining performance obligations that has not been recognized as revenue was $680 million, of which we expect to recognize approximately 48% as revenue over the next 12 months and the remainder thereafter. This amount excludes the value of remaining performance obligations for contracts with an original expected length of one year or less.
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 May 2, 2021 and January 31, 2021.
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 May 2, 2021 and January 31, 2021:
 May 2,
2021
January 31,
2021
(In millions)
Designated as cash flow hedges$888 $840 
Not designated for hedge accounting$402 $441 
As of May 2, 2021, 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 12 months was not significant.
During the first quarter of fiscal years 2022 and 2021, 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. Therefore, there were no gains or losses associated with ineffectiveness.

17

NVIDIA CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Unaudited)


Note 12 - Debt
Long-Term Debt
In March 2020, we issued $1.50 billion of the 2.85% Notes Due 2030, $1.00 billion of the 3.50% Notes Due 2040, $2.00 billion of the 3.50% Notes Due 2050, and $500 million of the 3.70% Notes Due 2060, or collectively, the March 2020 Notes. Interest on the March 2020 Notes is payable on April 1 and October 1 of each year.
In September 2016, we issued $1.00 billion of the 2.20% Notes Due 2021 and $1.00 billion of the 3.20% Notes Due 2026, or collectively, the September 2016 Notes. Interest on the September 2016 Notes is payable on March 16 and September 16 of each year.
Both the September 2016 Notes and the March 2020 Notes, or collectively, the Notes, are our unsecured senior obligations and rank equally in right of payment with all existing and future unsecured and unsubordinated indebtedness. The Notes are structurally subordinated to the liabilities of our subsidiaries and are effectively subordinated to any secured indebtedness to the extent of the value of the assets securing such indebtedness. All existing and future liabilities of our subsidiaries will be effectively senior to the Notes.
The carrying value of the Notes and the associated interest rates were as follows:
Expected
Remaining Term (years)
Effective
Interest Rate
May 2, 2021January 31, 2021
(In millions)
2.20% Notes Due 2021
0.42.38%$1,000 $1,000 
3.20% Notes Due 2026
5.43.31%1,000 1,000 
2.85% Notes Due 2030
8.92.93%1,500 1,500 
3.50% Notes Due 2040
18.93.54%1,000 1,000 
3.50% Notes Due 2050
28.93.54%2,000 2,000 
3.70% Notes Due 2060
38.93.73%500 500 
Unamortized debt discount and issuance costs(37)(37)
Net carrying amount6,963 6,963 
Less short-term portion(999)(999)
Total long-term portion$5,964 $5,964 
As of May 2, 2021, we were in compliance with the required covenants under the Notes.
Credit Facilities
We have a Credit Agreement under which we may borrow up to $575 million for general corporate purposes and can obtain revolving loan commitments up to $425 million. As of May 2, 2021, we had not borrowed any amounts and were in compliance with the required covenants under this agreement. The Credit Agreement expires October 2021.
We have a $575 million commercial paper program to support general corporate purposes. As of May 2, 2021, we had not issued any commercial paper.
Note 13 - Commitments and Contingencies
Purchase Obligations
As of May 2, 2021, we had outstanding inventory purchase obligations totaling $3.46 billion which are expected to occur over the next 12 months, and other purchase obligations totaling $396 million, which are primarily expected to occur over the next 18 months.

18

NVIDIA CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Unaudited)


Accrual for Product Warranty Liabilities
The estimated amount of product warranty liabilities was $30 million and $22 million as of May 2, 2021 and January 31, 2021, respectively, and the activities related to the warranty liabilities were not significant.
In connection with certain agreements that we have entered in the past, we have provided indemnities to cover the indemnified party 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.
Litigation
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 a notice of appeal from judgment in the United States Court of Appeals for the Ninth Circuit, case number 21-15604.
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, remains stayed pending resolution of the plaintiffs’ appeal in the In Re NVIDIA Corporation Securities Litigation action. The lawsuit asserts claims 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 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.
It is possible that additional suits will be filed, or allegations received from shareholders, with respect to these same or other matters, naming NVIDIA and/or its officers and directors as defendants.
Accounting for Loss Contingencies
As of May 2, 2021, 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.

19

NVIDIA CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Unaudited)


Note 14 - Shareholders’ Equity 
Capital Return Program 
Beginning August 2004, our Board of Directors authorized us to repurchase our stock.
Through May 2, 2021, we have repurchased an aggregate of 260 million shares under our share repurchase program for a total cost of $7.08 billion. All shares delivered from these repurchases have been placed into treasury stock. As of May 2, 2021, we were authorized, subject to certain specifications, to repurchase additional shares of our common stock up to $7.24 billion through December 2022.
During the first quarter of fiscal year 2022, we paid $99 million in cash dividends to our shareholders.
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 two operating segments are "Graphics" and "Compute & Networking." Our operating segments are equivalent to our reportable segments.
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 design; GRID software for cloud-based visual and virtual computing; and automotive platforms for infotainment systems.
Our Compute & Networking segment includes Data Center platforms and systems for artificial intelligence, or AI, high performance computing, or HPC, and accelerated computing; Mellanox networking and interconnect solutions; automotive AI Cockpit, autonomous driving development agreements, and autonomous vehicle solutions; cryptocurrency mining processors, or CMP; and Jetson for robotics and other embedded platforms.
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 Graphics or Compute & Networking for purposes of making operating decisions or assessing financial performance. The expenses include stock-based compensation expense, corporate infrastructure and support costs, acquisition-related costs, IP-related costs, 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.
 GraphicsCompute & NetworkingAll OtherConsolidated
 (In millions)
Three Months Ended May 2, 2021    
Revenue$3,451 $2,210 $ $5,661 
Operating income (loss)$1,786 $861 $(691)$1,956 
Three Months Ended April 26, 2020    
Revenue$1,906 $1,174 $ $3,080 
Operating income (loss)$836 $451 $(311)$976 
20

NVIDIA CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Unaudited)


Three Months Ended