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Investor Day 2013 Jen-Hsun Huang Presentation

NVIDIA CEO Jen-Hsun Huang presents at NVIDIA's Annual Investor Day 2013.

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Investor Day 2013 Jen-Hsun Huang Presentation

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  1. JEN-HSUN HUANG CEO & Co-Founder | Annual Investor Day 2013

  2. Poised for Growth PC Growth Rate Tegra Unit Shipments OPEX $1,800 8 12 $1,600 6 10 $1,400 4 Y/Y unit shipments, % $1,200 2 8 Millions Millions $1,000 0 6 $800 -2 $600 -4 4 $400 -6 2 $200 -8 -10 $0 - Q113 Q213 Q313 Q413 FY11 FY12 FY13 FY14E Source: Goldman Sachs Research estimates Android, WinRT, Auto, and Embedded Non-GAAP, see reconciliation in Appendix

  3. NVIDIA THE VISUAL COMPUTING COMPANY

  4. NVIDIA The Visual Computing Company VISUAL COMPUTING APPLIANCE PROCESSORS TECHNOLOGY MODULES

  5. TARGET END MARKETS GAMING ENTERPRISE NEW COMPUTING DEVICES

  6. A Computing Revolution 100% 90% 80% 70% OS Market Share 60% 50% 40% 30% 20% 10% 0% 1993 1998 2003 2008 2013 Source: Gartner, Strategy Analytics

  7. Computing Everywhere 5 100% 4 80% Processor Shipments (Billions) Processor Market Share 3 60% 2 40% 1 20% x86 and Cortex Processors Shipped 0 0% 1993 1998 2003 2008 2013 Source: Mercury Research, ARM, Internal estimates

  8. Growing Beyond the PC Visual computing is more important than ever 3B+ HD devices by 2015 We continue to drive our visual computing leadership GPU growth 12% CAGR GRID extends GPU computing into server and datacenters $10B+ growth opportunity Tegra leverages our GPU strengths to smart devices $10B+ growth opportunity Commitment to long-term profitable growth and capital return 20% Rev CAGR from FY10 2.4% dividend yield Revenue excluding chipset products

  9. Growth Strategies Conventional wisdom suggests Moore’s law should have integrated the GPU long ago… GPU

  10. Growth Strategies But it didn’t. Strategic investments led to invention of Programmable Shaders and CUDA GPGPU, fueled demand, and opened new markets. CUDA GPGPU Programmable Shaders

  11. Growth Strategies Now, GRID extends NVIDIA GPUs into the server and datacenters, creating a $10B+ growth opportunity.

  12. Growth Strategies Many markets need great GPUs. However, mainstream PCs are good enough for daily use. Low-end GPUs will eventually be integrated. PCs will be disrupted by tablets.

  13. Growth Strategies Our investment in Tegra leverages our world-class GPU assets to grow into new markets and puts us in position to disrupt the PC ourselves. Tegra devices disrupt PC

  14. R&D Synergies Across Products Total R&D ~$1.2B GRID ~$10M TEGRA ~$300M SHIELD ~$10M CORE R&D ~$880M CONTENT TECH PROCESS R&D GPU SOFTWARE VLSI Refers to estimated FY14 non-GAAP R&D expense, see reconciliation in Appendix

  15. Growing Beyond PC 20% CAGR Overall S4.5 Other S4.0 CAGR Tegra S3.5 109% Tesla Revenue (in billions) S3.0 68% Quadro S2.5 15% S2.0 9% GeForce Gamer S1.5 S1.0 12% S0.5 GeForce OEM 0 FY10 FY13 Tegra = Android, WinRT, Auto, and Embedded

  16. Growing Beyond PC Tegra growing 109% CAGR | GPU growing 12% CAGR Android Devices WinRT PC Auto TEGRA ~$10B $723M $79M GRID ~$10B GeForce Quadro Tesla $3.2B GPU $2.3B ~$6B TAM FY10 FY13

  17. GPU Computing GPU evolves into a general-purpose, massively parallel processor. NVIDIA CUDA GPU computing platform accelerates applications — from ray-tracing and molecular dynamics to visual search and big data.

  18. CUDA Revolutionizes Computing Multi-core plus Many-cores CPU GPU

  19. CUDA Driving GPU Growth NVIDIA GPU Growth — 12% CAGR AMD Graphics — FLAT $4 $4 3.2 3.0 2.7 $3 $3 Billions Billions 2.3 1.7 $2 1.6 $2 1.4 1.2 $1 $1 $0 $0 2009 2010 2011 2012 FY10 FY11 FY12 FY13 Overall PC Industry — FLAT CUDA & Tesla Investment 246 243 231 $250 223 Tesla/CUDA OPEX GPU Operating Income $200 Millions $800 Billions $150 $600 $100 $400 $50 $200 $0 $0 2009 2010 2011 2012 FY10 FY11 FY12 FY13 GPU excluding chipset. OPEX based on non-GAAP

  20. GPGPU Enables Next Generation Graphics Deferred Lighting, Depth of Field and Post-Processing | Facial Performance | Wave and Fire Simulation | Interactive Global Illumination | Volumetric Lighting and iRAY on CUDA

  21. CUDA Accelerating 19% of FLOPS from GPU Systems 40 35 Total Performance (PFLOPS) 30 NVIDIA Kepler 25 NVIDIA Fermi Intel Xeon Phi 20 IBM Cell Other 15 10 5 0 2007 2008 2009 2010 2011 2012

  22. Shazam 10M queries per day against 27M content library CUDA Accelerating Big Data Cortexica/ebay 500+ keypoint fingerprint search of like things Twitter/SalesForce.com 500M tweets against 1M expressions daily

  23. GRID Leveraging our graphics and GPU expertise, invent new technologies that can extend our GPUs into servers, datacenters and appliances.

  24. NVIDIA GRID Visual Computing Appliance

  25. GRID VCA — VAR Partner “ We’re delighted to offer GRID VCA to our customers. We believe it will expand the customer base for SolidWorks because it can now be deployed with less concern about the hardware platform being used. And it makes management and deployment to multiple users significantly easier. ” Dale Ford President & CEO, Hawk Ridge Systems

  26. The New Enterprise Mobile | BYOD | Mixed OS | Massive Data

  27. NVIDIA GRID A Visual Computing Appliance CISCO ROUTER A Networking Appliance NVIDIA GRID A Visual Computing Appliance NETAPP NAS A Storage Appliance

  28. GRID $10B+ TAM GAMING – $2B 700M cable subscribers 25 trials around the world VCA – $3B 10M creative designers 50% in SMB Launch GTC Certify ISV Signing up VARs Enterprise VDI – $5B 700M enterprise workers 160M knowledge workers Dell, HP, IBM, Cisco 75 trials around the world

  29. TEGRA Leveraging our GPU assets and expertise, invest to be a major player in a world where “visual computing is everywhere.”

  30. 48% PCs 55% Mobile Devices Mobile Graphics More Important than Ever 13% Xbox 360, PS3 11% Next-Gen Consoles % Developers working on games, per platform 5% Wii U Source: 2013 GDC Survey

  31. PROJECT SHIELD “ Project SHIELD is a major disruption to portable game devices, game consoles and devices like the Apple iPod. ” “ NVIDIA has built what could be the most compelling portable game system in some time. ”

  32. TEGRA Best in Graphics — Best for Gaming

  33. DX9 to DX11 A Major Discontinuity DX9, ES2.0 Programmable Pixel Shaders DX11, OGL4.3 Geometry Shaders GPGPU Computational Graphics

  34. DX11 — A Giant Leap in Graphics

  35. Bringing the World’s Best GPU to Mobile Kepler Fermi Performance Kepler.M Competition Mobile GPU 1 10 Power

  36. KAYLA Tegra + DX11 Kepler

  37. GK208 DEMO

  38. TEGRA TAM ANDROID WinRT AUTO 430M+Tablets by ‘16, >2x 2013 450M LTE phones by ‘16, >2x 2013 200M notebooks sold in ‘13 7 makers, 34 models Today’s tablet, tomorrow’s PC $2B+ design wins, $450M by FY16

  39. Growing Beyond the PC Visual computing is more important than ever 3B+ HD devices by 2015 We continue to drive our visual computing leadership GPU growth 12% CAGR GRID extends GPU computing into server and datacenters $10B+ growth opportunity Tegra leverages our GPU strengths to smart devices $10B+ growth opportunity Commitment to long-term profitable growth and capital return 20% Rev CAGR from FY10 2.4% dividend yield Revenue excluding chipset products

  40. ANNOUNCEMENT NVIDIA to return ~$1.2B to shareholders through 4Q FY14 $0.075 per share dividend ($50M/qtr) $100M repurchase in each of 4Q FY13 and 1Q FY14 Commitment to repurchase $750M

  41. NVIDIA The Visual Computing Company VISUAL COMPUTING APPLIANCE PROCESSORS TECHNOLOGY MODULES

  42. Appendix

  43. RECONCILIATION OF NON-GAAP TO GAAP FINANCIAL MEASURES Stock-based compensation (a) Acquisition- related items (b) Net warranty charges (c) Tax impact of non-GAAP adjustments Non-GAAP Other (d), (e) GAAP FY2010 Revenue $3,326 $- $- $- $- $- $3,326 Gross profit $1,296 $(23) $- $(96) $- $- $1,177 - - - - - Gross margin 39.0% 35.4% Net income (loss) $253 $(247) $(13) $(94) $- $33 $(68) Shares used in diluted per share calculation 568 - - - (18) - 550 Diluted net income (loss) per share FY2011 Operating expense FY2012 Operating expense $0.45 $- $- $- $- $- $(0.12) $1,096 $92 $9 $13 $(57) $- $1,153 $1,246 $125 $38 $- $- $- $1,409 (in millions, except per share data)

  44. RECONCILIATION OF NON-GAAP TO GAAP FINANCIAL MEASURES Stock-based compensation (a) Acquisition- related items (b) Net warranty charges (c) Tax impact of non-GAAP adjustments Non-GAAP Other (d), (e) GAAP FY2013 $4,280 $- $- $- $- $4,280 Revenue $- $2,237 $(11) $- $- $- $2,226 Gross profit $- Gross margin 52.3% - - - - - 52.0% $1,396 $126 $36 $- $20 $1,578 Operating expense $- $728 $(137) $(36) $- $(20) $28 $563 Net income 624 - - - - - 624 Shares used in diluted per share calculation $1.17 $0.90 Diluted net income per share $- $- $- $- $- FY2014 Estimate R&D expense $1,200 $1,600 $79 $125 $29 $35 $- $- $- $- $- $- $1,308 $1,760 Operating expense Footnotes (a) In addition to our historical practice of excluding stock-based compensation, during FY10, the Company completed a tender offer to purchase outstanding stock options which resulted in a charge of $140.2 million. This charge was allocated to cost of goods sold, research and development expense, and sales, general and administrative expense, of $11.4 million, $90.5 million and $38.3 million, respectively. (b) Acquisition-related items are comprised of amortization of acquisition-related intangible assets and other acquisition-related costs such as transaction costs, compensation charges and restructuring costs relating to the acquisitions. (c) Net warranty charges are comprised of charges to cost of goods sold related to the weak die/packaging material set that was used in certain versions of our previous generation chips and a charge to operating expense related to a class action lawsuit settlement, net of insurance reimbursement. (d) Other is comprised of legal settlement charges and benefits and the net present value of a charitable contribution. (e) Shares excluded for computation of net loss per share position. (in millions, except per share data)

  45. RECONCILIATION OF OTHER FINANCIAL MEASURES FY2010 FY2011 FY2012 FY2013 Graphics Processing Unit (GPU) revenue excluding chipset products $2,299 $2,659 $2,990 $3,228 Chipset product revenue $872 $687 $197 $24 GPU revenue $3,171 $3,346 $3,187 $3,252 FY2010 FY2011 FY2012 FY2013 GPU operating income excluding chipset products $305 $403 $729 $869 Chipset product operating income $85 $278 $93 $16 GPU operating income $390 $681 $822 $885 FY2010 FY2013 Total revenue excluding chipset products $2,454 $4,256 Chipset product revenue $872 $24 Total revenue $3,326 $4,280 (in millions)

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