NOTICE OF ANNUAL MEETING PROXY AND STATEMENT FORM10-K 2015 ANNUAL REVIEW2015 NVIDIA CORPORATION NVIDIA CORPORATION | 2015 ANNUAL REVIEW OVERVIEW GIANT LEAPS IN VISUAL COMPUTING NVIDIA is the world leader in visual computing. The GPU, our invention, serves as the visual cortex of modern computers and is at the heart of our products and services. Our work opens up new universes to explore, enables amazing creativity and discovery, and powers what were once science fiction inventions like self-learning machines and self-driving cars. We serve markets where visual computing is essential and deeply valued — gaming, automotive, enterprise, and high performance computing & cloud. NVIDIA’s VXGI technology enables dynamic global illumination in games. Our “Apollo 11” demo relied on VXGI to debunk long-held moon landing conspiracy theories. GIANT LEAPS IN VISUAL COMPUTING 2015 ANNUAL REVIEW 1 GAMING MADE TO GAME At $100 billion, computer gaming is the world’s largest entertainment industry, exceeding Hollywood and professional sports. And it continues to grow. > GeForce,, our GPU brand for PC gamers, is the world’s largest gaming platform, with 200 million users. > Our share of the market for discrete GPUs hit a record 72 percent. > We formally launched GRID — dubbed “a Netflix for games” — as the world’s first game-streaming service that provides AAA titles at a resolution of up to 1080p, at 60 frames per second. > We announced our first living-room entertainment device, SHIELD , the world’s most advanced smart TV console. “This product marks a major step for NVIDIA, one it has been building toward for decades — to be a full service consumer electronics company.”Jon Peddie “This product marks a major step for NVIDIA, one it has been building toward for decades — to be a full service consumer electronics company.”Jon Peddie 2015 ANNUAL REVIEW 3 AUTOMOTIVE POWERING TOMORROW’S CARS TODAY Automakers like Audi, BMW and Tesla rely on NVIDIA technology. We are at the intersection of two trends that are transforming the industry. First, as the car interior continues to shift from analog to digital, displays will increasingly be used as the interface for basic functions and the delivery of information. At the same time, the industry is working toward the self-driving car. > NVIDIA powers 8 million cars on the road today, a figure that will reach 25 million in five years. > We launched NVIDIA DRIVE , the world’s most advanced car computer, which enables vehicles to be increasingly aware of the world around them and will pave the way to self-driving cars. DRIVE is a car supercomputer made possible with our Tegra X1 mobile chip. “With every mile it drives, every hour, the car will learn more and more.” Ricky Hudi, Executive VP of Electronics Development, Audi 2015 ANNUAL REVIEW 5 COMPUTING REVOLUTIONIZING ENTERPRISE GRAPHICS We have long been the standard enterprise workstation platform for digital designers and artists. With NVIDIA GRID, we’ve virtualized graphics so that millions of enterprise workers who use design tools can benefit from the flexibility, security, and efficiency of the cloud. > NVIDIA GRID vGPU virtualizes graphics-intensive applications, allowing hundreds of millions of professionals to enjoy PC applications hosted in data centers. > GRID revenues doubled from the previous year. > NVIDIA Iray technology was incorporated into leading applications from Autodesk, Dassault Systèmes, Siemens PLM, and others. > In March 2015, VMware brought to market NVIDIA GRID vGPU in vSphere, and we launched the Quadro M6000, our flagship GPU for designers. “VMware, NVIDIA Revolutionizing Secure Cloud Desktop.” CIO Magazine 2015 ANNUAL REVIEW 7 HPC & CLOUD ACCELERATING HPC AND DEEP LEARNING GPU computing continues to expand its reach. Researchers around the world are doing groundbreaking work in areas as diverse as preventing heart attacks and discovering the origin of galaxies. NVIDIA GPUs have been broadly adopted in deep learning, a branch of the longstanding field of artificial intelligence. Deep learning has recently been ignited by three converging trends: the flood of data brought by web service companies; recent algorithm breakthroughs, created by some of the brightest minds in computer science; and the ability to compute massive amounts of data with GPUs. GPU-powered machines are used to deliver applications that make interacting with computers magical. It’s nothing short of miraculous that you can ask your phone a question and instantly receive a spoken response. Speech recognition is just one application. Recognizing images is another. And they are just the tip of the iceberg. > The U.S. Department of Energy selected NVIDIA to power what are expected to be the world’s fastest supercomputers when they come online at the Oak Ridge and Lawrence Livermore National Labs. > GPU computing is taught in nearly 800 universities. More than 60,000 GPU-related research papers have been published to date. > Some of the world’s largest and most innovative companies are using GPUs for deep learning applications, including Adobe, Alibaba, Baidu, Facebook, Flickr Yahoo!, Google, IBM, Microsoft, Nuance, and Twitter. IMAGENET CHALLENGE Our GPUs are enabling Accuracy % computers to outperform humans DNN at image recognition in the 84% ImageNet Challenge, the World Cup of deep learning. NVIDIA GPUs CV 74% 72% 2010 2011 2012 2013 2014 “Everyone in the deep learning business is using GPUs for training.” Yann LeCun, Director of AI Research at Facebook 2015 ANNUAL REVIEW 9 DEAR STAKEHOLDERS, THE YEAR IN REVIEW WE’VE TRANSFORMED OUR COMPANY We remain the world’s leading PC graphics chip company. But we are now much more. We create software-rich visual computing products for PCs, data centers, and mobile devices. Our reinvention has allowed us to continue to grow despite the slowing PC market. WE’VE Our financial results reached record levels in fiscal 2015, > We launched SHIELD, our first living-room entertainment with revenue up 13 percent to $4.7 billion and gross margins device, in March 2015. SHIELD is the most advanced widening 60 basis points to 55.5 percent. GAAP EPS rose smart TV device on the market, and early reviews have 51 percent to $1.12 a share. And we returned $1 billion to been fantastic. Smart TV consoles are revolutionizing our TRANSFORMED shareholders through dividends and stock repurchases. TV experience, just as smartphones revolutionized mobile communications. Tens of millions of these devices are The successful execution of our strategies drove a year sold each year, with growth over 50 percent annually. of progress: We see this as a very large market where we can make > We created new products that bring our world-leading a great, sustainable contribution. visual computing capabilities to customers through > Our invention engine continues to fire. We introduced OUR COMPANY mobile and cloud platforms. Our data center and cloud Maxwell, our 10th generation GPU architecture and a platform businesses, Tesla and GRID, grew 60 percent. breakthrough in performance and efficiency. We also Our mobile platform businesses, including auto, launched Tegra X1, our latest mobile superchip, which grew 45 percent. is at the heart of our DRIVE automotive computers and > We introduced specialized, software-rich visual our SHIELD devices. computing products for large vertical markets. Our We faced challenges during the year in commodity phone market share for discrete GPUs hit a record 72 percent – and PC markets. But our strategy is to engage component not only because our GeForce GPUs are best-in-class, opportunities only where OEMs value our differentiation. but because GeForce is a “game platform” within the And to focus our resources on growth markets – gaming, PC, and is loved by gamers all over the world. automotive, enterprise, and high performance computing & cloud. REVENUE BY MARKET GAMING AUTOMOTIVE ENTERPRISE HPC AND CLOUD PC AND MOBILE OEMs 2400 200 85% YoY 900 4% YoY 300 53% YoY 1600 36% YoY -13% YoY 1800 150 675 225 1200 1200 100 450 150 800 600 50 225 75 400 2014 2015 2014 2015 2014 2015 2014 2015 2014 2015 Revenue in Millions 2015 ANNUAL REVIEW 11 MAKING AN IMPACT The people of NVIDIA share a passion for community service THE YEAR IN REVIEW and a deep sense of corporate responsibility. Our philanthropic giving this year totaled $4.8 million, including more than $2 million toward Stanford University’s investments in medical research, teaching, and a new state-of-the-art hospital. In Courbevoie, France, we transformed Centre We proudly awarded our first annual $150,000 Global Impact Franchemont School. And in Westford, Massachusetts, Award, recognizing the groundbreaking use of GPUs to our office made over a local Boys and Girls Club. address social, humanitarian, and environmental problems. Over the course of the year, employees contributed more The winner, out of more than two dozen outstanding than 15,500 volunteer hours. Many chose to support candidates, was the San Diego Supercomputer Center education programs and activities that, in total, benefited for its work developing seismic simulations that help us more than 67,000 children. understand conditions that cause earthquakes. All of these efforts reflect the dedication and spirit of our Our philanthropic efforts are driven by the NVIDIA employees, which benefit the less fortunate and brings Foundation, one of the industry’s few employee-run giving us closer as a team. initiatives, which ensures that our energies in this area reflect our employees’ priorities. The Foundation’s flagship program, Compute the Cure, THE ROAD AHEAD focuses on funding research that uses innovative I am delighted by NVIDIA’s transformation this year. computing techniques in the fight against cancer. We have innovated beyond PCs, and emerged as a growth Our $1.6 million invested in Compute the Cure in recent company which offers products that are having great years includes major grants to research teams at the success in the large mobile and cloud markets.