NVIDIA NVDA · USD

Segment Information Our Chief Executive Officer is our chief operating decision maker, or CODM, and reviews financial information presented on an operating segment basis for purposes of making decisions and assessing financial performance. Our CODM assesses operating performance of each segment based on regularly provided segment revenue and segment operating income. Operating results by segment include costs or expenses directly attributable to each segment, and costs or expenses that are leveraged across our unified architecture and therefore allocated between our two segments. Our CODM reviews expenses on a consolidated basis, and expenses attributable to each segment are not regularly provided to our CODM. The Compute & Networking segment includes our Data Center accelerated computing platforms and AI solutions and software; networking; automotive platforms and autonomous and electric vehicle solutions; Jetson for robotics and other embedded platforms; and DGX Cloud computing services. The 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 graphics; vGPU software for cloud-based visual and virtual computing; automotive platforms for infotainment systems; and Omniverse Enterprise software for building and operating industrial AI and digital twin applications. The “All Other” category includes the expenses that are not allocated to either Compute & Networking or Graphics for purposes of making operating decisions or assessing financial performance. The expenses include stock-based compensation expense, corporate infrastructure and support costs, acquisition-related and other 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. There are no intersegment transactions. 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.

Commitments and Contingencies Purchase Obligations Our purchase obligations reflect our commitment to purchase components used to manufacture our products, including long-term supply and capacity agreements, certain software and technology licenses, other goods and services and long-lived assets. As of January 26, 2025, we had outstanding inventory purchase and long-term supply and capacity obligations totaling $30.8 billion, an increase from the prior year led by commitments, capacity and components for new product introductions, including our new Blackwell architecture. We enter into agreements with contract manufacturers that allow them to procure inventory based upon our defined criteria, and in certain instances, these agreements are cancellable, able to be rescheduled, or adjustable for our business needs prior to placing firm orders. Though, changes to these agreements may result in additional costs. Other non-inventory purchase obligations were $14.3 billion, including $10.9 billion of multi-year cloud service agreements. We expect our cloud service agreements to primarily be used to support our research and development efforts, as well as our DGX Cloud offerings. Total future purchase commitments as of January 26, 2025 are as follows: Commitments (In millions) Fiscal Year: 2026 $ 35,727 2027 3,666 2028 2,992 2029 2,054 2030 422 2031 and thereafter 218 Total $ 45,079 Accrual for Product Warranty Liabilities The estimated amount of product warranty liabilities was $1.3 billion and $306 million as of January 26, 2025 and January 28, 2024, respectively. The estimated product returns and product warranty activity consisted of the following: Year Ended Jan 26, 2025 Jan 28, 2024 Jan 29, 2023 (In millions) Balance at beginning of period $ 306 $ 82 $ 46 Additions 1,203 278 145 Utilization (219) (54) (109) Balance at end of period $ 1,290 $ 306 $ 82 In fiscal years 2025, 2024, and 2023 the additions in product warranty liabilities primarily related to Compute & Networking segment. 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 Consolidated Financial Statements for such indemnifications.

Debt Long-Term Debt Expected Effective Jan 26, 2025 Jan 28, 2024 (In millions) 0.584% Notes Due 2024 (1) — 0.66% $ — $ 1,250 3.20% Notes Due 2026 1.6 3.31% 1,000 1,000 1.55% Notes Due 2028 3.4 1.64% 1,250 1,250 2.85% Notes Due 2030 5.2 2.93% 1,500 1,500 2.00% Notes Due 2031 6.4 2.09% 1,250 1,250 3.50% Notes Due 2040 15.2 3.54% 1,000 1,000 3.50% Notes Due 2050 25.2 3.54% 2,000 2,000 3.70% Notes Due 2060 35.2 3.73% 500 500 Unamortized debt discount and issuance costs (37) (41) Net carrying amount 8,463 9,709 Less short-term portion — (1,250) Total long-term portion $ 8,463 $ 8,459 (1) In fiscal year 2025, we repaid the 0.584% Notes Due 2024. Our notes are unsecured senior obligations. 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. The maturity of the notes is calendar year. As of January 26, 2025, we complied with the required covenants, which are non-financial in nature, under the outstanding notes. Commercial Paper We have a $575 million commercial paper program to support general corporate purposes. As of January 26, 2025, we had no commercial paper outstanding.

Income Taxes The income tax expense (benefit) applicable to income before income taxes consists of the following: Year Ended Jan 26, 2025 Jan 28, 2024 Jan 29, 2023 (In millions) Current income taxes: Federal $ 14,032 $ 5,710 $ 1,703 State 892 335 46 Foreign 699 502 228 Total current 15,623 6,547 1,977 Deferred income taxes: Federal (4,515) (2,499) (2,165) State (242) (206) — Foreign 280 216 1 Total deferred (4,477) (2,489) (2,164) Income tax expense (benefit) $ 11,146 $ 4,058 $ (187) Income before income tax consists of the following: Year Ended Jan 26, 2025 Jan 28, 2024 Jan 29, 2023 (In millions) U.S. $ 77,456 $ 29,495 $ 3,477 Foreign 6,570 4,323 704 Income before income tax $ 84,026 $ 33,818 $ 4,181 The income tax expense (benefit) differs from the amount computed by applying the U.S. federal statutory rate of 21% to income before income taxes as follows: Year Ended Jan 26, 2025 Jan 28, 2024 Jan 29, 2023 (In millions, except percentages) Tax expense computed at federal statutory rate $ 17,645 21.0 % $ 7,102 21.0 % $ 878 21.0 % Expense (benefit) resulting from: State income taxes, net of federal tax effect 554 0.7 % 120 0.4 % 50 1.2 % Foreign-derived intangible income (2,976) (3.5) % (1,408) (4.2) % (739) (17.7) % Stock-based compensation (2,097) (2.5) % (741) (2.2) % (309) (7.4) % U.S. federal research and development tax credit (990) (1.2) % (431) (1.3) % (278) (6.6) % Foreign tax rate differential (984) (1.2) % (467) (1.4) % (83) (2.0) % Acquisition termination cost — — % — — % 261 6.2 % Other (6) — % (117) (0.3) % 33 0.8 % Income tax expense (benefit) $ 11,146 13.3 % $ 4,058 12.0 % $ (187) (4.

Stock-Based Compensation Stock-based compensation expense is associated with RSUs, PSUs, market-based PSUs, and our ESPP. Consolidated Statements of Income include stock-based compensation expense, net of amounts capitalized into inventory and subsequently recognized to cost of revenue, as follows: Year Ended Jan 26, 2025 Jan 28, 2024 Jan 29, 2023 (In millions) Cost of revenue $ 178 $ 141 $ 138 Research and development 3,423 2,532 1,892 Sales, general and administrative 1,136 876 680 Total $ 4,737 $ 3,549 $ 2,710 Stock-based compensation capitalized in inventories was not significant during fiscal years 2025, 2024, and 2023. The following is a summary of equity awards granted under our equity incentive plans: Year Ended Jan 26, 2025 Jan 28, 2024 Jan 29, 2023 (In millions, except per share data) RSUs, PSUs and Market-based PSUs Awards granted 89 140 250 Estimated total grant-date fair value $ 7,834 $ 5,316 $ 4,505 Weighted average grant-date fair value per share $ 87.99 $ 37.41 $ 18.37 ESPP Shares purchased 30 30 30 Weighted average price per share $ 17.74 $ 15.81 $ 12.25 Weighted average grant-date fair value per share $ 8.61 $ 6.99 $ 5.19 As of January 26, 2025, aggregate unearned stock-based compensation expense was $11.6 billion, which is expected to be recognized over a weighted average period of 2.2 years for RSUs, PSUs, and market-based PSUs, and one year for ESPP. The fair value of shares issued under our ESPP have been estimated with the following assumptions: Year Ended Jan 26, 2025 Jan 28, 2024 Jan 29, 2023 (Using the Black-Scholes model) ESPP Weighted average expected life (in years) 0.1-2.0 0.1-2.0 0.1-2.0 Risk-free interest rate 3.6%-5.4% 3.9%-5.5% —%-4.6% Volatility 31%-75% 31%-67% 43%-72% Dividend yield 0.03% 0.06% 0.09% For ESPP shares, the expected term represents the average term from the first day of the offering period to the purchase date. The risk-free interest rate assumption used to value ESPP shares is based upon observed interest rates on Treasury bills appropriate for the expected term. Our expected stock price volatility assumption for ESPP is estimated using historical volatility. For awards granted, we use the dividend yield at grant date. Our RSUs, PSUs, and market-based PSUs are not eligible for cash dividends prior to vesting; therefore, the fair values of RSUs, PSUs, and market-based PSUs are discounted for the dividend yield.

Leases Our lease obligations primarily consist of operating leases for our headquarters' campus and domestic and international offices and data centers, with lease periods expiring between fiscal years 2026 and 2037. Future minimum lease obligations under our non-cancelable lease agreements as of January 26, 2025 were as follows: Operating Lease Obligations (In millions) Fiscal Year: 2026 $ 354 2027 331 2028 337 2029 301 2030 226 2031 and thereafter 537 Total 2,086 Less imputed interest 279 Present value of net future minimum lease payments 1,807 Less short-term operating lease liabilities 288 Long-term operating lease liabilities $ 1,519 Between fiscal years 2026 and 2030, we expect to commence leases with future obligations of $7.6 billion primarily of data center and office operating leases, with lease terms of 3 to 15.5 years. Operating lease expenses for fiscal years 2025, 2024, and 2023 were $356 million, $269 million, and $193 million, respectively. Short-term and variable lease expenses for fiscal years 2025, 2024, and 2023 were not significant. Other information related to leases was as follows: Year Ended Jan 26, 2025 Jan 28, 2024 Jan 29, 2023 (In millions) Supplemental cash flows information Operating cash flow used for operating leases $ 313 $ 286 $ 184 Operating lease assets obtained in exchange for lease obligations $ 877 $ 531 $ 358 As of January 26, 2025, our operating leases have a weighted average remaining lease term of 6.5 years and a weighted average discount rate of 4.16%. As of January 28, 2024, our operating leases had a weighted average remaining lease term of 6.1 years and a weighted average discount rate of 3.76%.

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 from SoftBank. The parties agreed to terminate it due to significant regulatory challenges preventing the completion of the transaction. We recorded an acquisition termination cost of $1.4 billion in fiscal year 2023 reflecting the write-off of the prepayment provided at signing.

We have in place certain infrastructure, systems, policies, and procedures that are designed to proactively and reactively address circumstances that arise when unexpected events such as a cybersecurity incident occur. These include processes for assessing, identifying, and managing material risks from cybersecurity threats. Our information security management program generally follows processes outlined in frameworks such as the ISO 27001 international standard for Information Security and we evaluate and evolve our security measures as appropriate. We consult with external parties, such as cybersecurity firms and risk management and governance experts, on risk management and strategy. Identifying, assessing, and managing cybersecurity risk is integrated into our overall risk management systems and processes, and we have in place cybersecurity and data privacy training and policies designed to (a) respond to new requirements in global privacy and cybersecurity laws and (b) prevent, detect, respond to, mitigate and recover from identified and significant cybersecurity threats. We also have a vendor risk assessment process consisting of, depending on the nature and sensitivity of the supplier and data they process on our behalf, the distribution and review of supplier questionnaires designed to help us evaluate cybersecurity risks that we may encounter when working with third parties that have access to confidential and other sensitive company information. We take steps designed to ensure that such vendors have implemented data privacy and security controls that help mitigate the cybersecurity risks associated with these vendors, depending on the nature and sensitivity of the supplier and data they process on our behalf. We routinely assess our high-risk suppliers’ conformance to industry standards (e.g., ISO 27001, ISO 28001, and C-TPAT), and we evaluate them for additional information, product, and physical security requirements. Refer to “Item 1A. Risk factors” in this annual report on Form 10-K for additional information about cybersecurity-related risks.