NVIDIA Corporation (NVDA)
Q4 2010 Earnings Call Transcript
February 17, 2010 5:00 a.m. ET

Executives

Michael Hara - Senior Vice President, Investor Relations and Communications
David L. White - Executive Vice President and Chief Financial Officer
Jen-Hsun Huang - President and Chief Executive Officer

Analysts

Alex Gauna - JMP Securities
Suji DeSilva - Kaufman Brothers
Dan Morris - Oppenheimer and Company
Craig Berger - Friedman, Billings, Ramsay, & Co., Inc.
Daniel Berenbaum - Auriga USA
Glen Yeung - Citigroup Investment Research
James Schneider - Goldman Sachs
Douglas Freedman - Broadpoint AmTech
Nicholas Aberle - Caris & Company
Arnab Chanda - Roth Capital Partners

Presentation

Michael Hara

Before we begin, I would like to remind you that today’s call is being webcast live on NVIDIA’s Investor Relations website and is also being recorded. A replay of the conference call will be available via telephone until February 24, 2010, and the webcast will be available for replay until our conference call to discuss our financial results for our first quarter of 2011. The content of today’s conference call is NVIDIA’s property and cannot be reproduced or transcribed without our prior written consent.

During the course of this call we may make forward-looking statements based on current expectations. These forward-looking statements are subject to a number of significant risks and uncertainties and our actual results may differ materially.

For a discussion of factors that could affect our future financial results and business, please refer to the disclosure in today’s earnings release, our Form 10-Q for the fiscal period ended October 25, 2009, and the reports on Form 8-K filed with the Securities and Exchange Commission.

All of our statements are made as of today, February 17, 2010. Based on information available to us today and except as required by law, we assume no obligation to update any such statements. Unless otherwise noted, all references to research market and market share numbers throughout the call come from Ricker Research or John Petty Research.

During this call we will discuss non-GAAP financial measures. You can find a reconciliation of these non-GAAP financial measures to GAAP financial measures in our financial release, which is posted on our website. One final note, we have announced date of our financial Analyst Day, which is set for April 7th. With that, let’s begin.

GPU demand increased throughout the quarter with GeForce and Quadro revenues growing a combined 22% quarter-on-quarter and 97% over the same quarter a year ago. We were supply constrained from the beginning to the end of the quarter and expect the condition to persist.

We continue to invest to drive market growth and share gain. NVIDIA innovates around the basic PC platform to create differentiated solutions and experiences. Adding GeForce gives the PC great graphics for video games and multimedia. Quadro transforms the PC into a work station for designers, adding Tesla turns a PC server into a supercomputer, ION brings snappy graphics and multimedia to netbooks and Tegra is fueling the mobile competing revolution.

Each of our product lines enable a rich experience through architecture and ever growing composition of software. Momentum for Tesla and CUDA continues at a strong pace ahead the new Tesla 20.

In November CSIRO, Australia’s premier supercomputer center, officially opened the GPU supercomputing cluster. Researchers in Australia will GPUs to address emerging scientific challenges in astronomy, medical imaging and water resource management.

The Tesla group also had its biggest show of the year this quarter at Supercomputing ‘09. The most significant news of Supercomputing ‘09 was the GPU cluster in Japan that won the prestigious Gordon Bell award.

In the category of price performance, a team lead by Tsuyoshi Hamada of Nagasaki University, in collaboration with the researchers at the University of Bristol and RIKEN conducted simulations used to study the evolution of star clusters with unprecedented efficiency.

Supercomputing ‘09 was not a GPU conference yet 12% of the papers presented and half of the posters used GPUs. 75 booths, which is one out of four featured CUDA, compared to 33 booths and one booth that at SC08 and SC07 respectively.

HPCwire Reader’s and Editors Choice Awards were presented at the conference and NVIDIA received an unprecedented five awards. There are now approximately3500 CUDA citations on Google Scholar maybe 1000 CUDA videos on YouTube and 1000 applications featured on CUDA Zone. Over 300 universities now teach CUDA, up from 40 just 18 months ago. That’s a new university teaching CUDA every other day.