earnings per share computed average common stock. Diluted EPS dilutive shares treasury stock method. shares include stock options awards.


components basic diluted EPS millions earnings per share Ended June 30 Net income shareholders,361,738,271 shares common stock Dilutive effect awards Common equivalents Earnings Basic. 72. Diluted.


-dilutive awards diluted EPS immaterial.


components income millions Ended June 30 Interest dividends income,994,131 Interest expense(1,968(2,063(2,346 gains investments gains derivatives foreign currency remeasurements#(32# Total#788,186#


gains debt investments millions Ended June 30 gains securities#36#162 losses(124(138#(40# credit losses(81## Total(98#(57###63##


gains equity investments millions Ended June 30 gains investments sold unrealized gains investments Impairments investments Total,169


investments millions Value Level Cost Gains Basis Equivalents-term Investments Investments June 30 2023 Changes Fair Value Income Commercial paper 2 Certificates deposit 2,701. government securities 1,237.securities 2,703 Foreign government bonds 2####475 Mortgage-backed securities 2 Corporate notes bonds 2,809,234 3 Municipal securities 2 Municipal securities 3####103 Total debt investments#99,869,332,780,552 Changes Fair Value Net Income Equity investments 1,138#7,446 Equity investments,187 equity,325#7,446,478 Derivatives,141,558 millions Value Level Cost Gains Basis Equivalents-term Investments Investments June 30 2022 Changes Fair Value Income Commercial paper 2,500 Certificates deposit. government securities 1,696,547,538.securities 2####419 Foreign government bonds 2####506 Mortgage-backed securities 2####727 Corporate notes bonds 2,661,111 Corporate notes bonds 3####67 Municipal securities 2####368 Municipal securities 3####103 debt investments,118,357,818 Changes Value Net Income Equity investments 1#1,590,134 Total equity#8,025,134,258 Derivatives,648#13,931#,826


Note 5 Derivatives value instruments.


Equity investments include without values adjustments price net value not categorized fair value hierarchy. June 30 2023 2022 equity investments values were $4. 2 billion $3. 8 billion.


Debt investments unrealized losses less 12 values than 12 or Greater millions June 30, 2023 U. S. government agency securities,273,223 Foreign government bonds Mortgage securities Corporate notes bonds Municipal securities Total,721,598,319 than 12 or Greater Unrealized Losses millions June 30, 2022.government agency securities,092,835,210,302,187 Foreign government bonds(24 Mortgage securities(26(30 Corporate notes bonds(477(77,229(554 Municipal securities(7,641,368,138(446,779(2,814#


Unrealized losses fixed-income securities attributable interest rates. impairments.


millions Cost Value June 30 2023 year,182 five years,127,490 10,262 10 years,166 Total,869,332


derivative instruments risks currencies interest rates equity prices enhance returns portfolio diversification. objectives eliminating economic impact. programs hedge accounting.


transactions assets liabilities exposed foreign currency risk. monitor positions.


risks non. dollar investments hedged fair value instruments. Euro debt cash flow hedging instruments.


options forwards not foreign exchange rates foreign currency exposures.


Interest rate risks fixed-rate debt hedged interest swaps floating.


Securities portfolio interest rate risks maturities. manage average maturity returns indices option futures swap contracts. not hedging tables.


Securities market price. hold options futures swap contracts. hedging.


fixed-income portfolio diversified investment-grade securities. credit default swap contracts diversification. not hedging included tables.


counterparty agreements derivative debt investment grade credit rating minimum liquidity $1. 0 billion. post collateral. June 30, 2023 debt AAA cash investments $1. 0 billion. no collateral.


table derivative instruments. dollar 30 2023 2022 Hedging Instruments Foreign exchange contracts purchased Interest,139 Not,322 sold,159,606 Equity contracts purchased,867,131 sold,154 contracts purchased


table presents derivative instruments millions 30, 30 Hedging Instruments Foreign exchange contracts Interest rate contracts Not Hedging Instruments Foreign exchange contracts Equity contracts(400 Other contracts Gross amounts derivatives(805 offset balance sheet Cash collateral received Net amounts derivatives Short-term investments Other current assets long-term assets liabilities(298 long-term liabilities(383(195#267######(724##226#####


assets liabilities $442 $804 million June 2023 $343 $550 million June 30 2022.


table presents value derivatives instruments millions 1 3 June 30, 2023 assets liabilities June 30 2022 assets liabilities


Gains derivative instruments Ended June 30 Fair Value Hedging Foreign exchange Derivatives Hedged items Excluded Interest rate Derivatives Hedged items Cash Flow Hedging Foreign exchange reclassified income Not Hedging Foreign exchange contracts Equity contracts contracts


Gains derivative instruments income Ended June 30 Cash Flow Hedging Instruments Foreign exchange contracts effectiveness assessment


inventories June 30 Raw materials,144 Work process Finished goods,500,742


property equipment millions June 30 Land Buildings improvements,014 Leasehold improvements Computer,631 Furniture equipment cost,058 depreciation,251,660 net,641,398


2023 2022 2021 expense $11. $12. $9. billion. declined 2023 server network.


June 30 2023 committed $13. 5 billion datacenters.


March 4, 2022 acquisition Nuance Communications. $18. 8 billion cash. cloud software provider healthcare enterprise cloud offerings. financial results included statements. Intelligent Cloud segment.


allocation purchase price goodwill December 31, 2022. liabilities Goodwill,326 Intangible assets,365 Other assets liabilities Total,761#


assigned Intelligent Cloud attributed increased synergies integration Nuance. deductible income tax.


$986 million notes Nuance 2015 redeemed.


purchase price intangible assets millions life Customer years Technology years Marketing years Total,365 years


March 9, 2021 ZeniMax Media. parent Bethesda Softworks $8. 1 billion cash. $766 million cash equivalents. Bethesda game games technology Xbox. financial results ZeniMax included financial statements. More Personal Computing segment.


allocation purchase price goodwill December 31, 2021. liabilities Cash equivalents Goodwill Intangible assets Other assets liabilities Total


Goodwill assigned Personal Computing. increased synergies integration ZeniMax. deductible income tax.


purchase price intangible assets millions average life Technology,341 years Marketing years years


January 18, 2022 Activision Blizzard. $95. 00 per share $68. 7 billion net cash. leader game development interactive entertainment publisher. acquisition mobile PC console cloud. approved shareholders. transaction regulatory approvals conditions. merger agreement October 18, 2023 concerns.


Changes goodwill millions 30 2021 2022 2023 Productivity Business Processes,317#599,775 Intelligent Cloud,256,879,182,469 Personal Computing,138,642 Total#49,711#18,126#67,524#234,886


measurement periods valuation assets acquired liabilities assumed end information exceed 12 months. Adjustments purchase price require change goodwill.


goodwill foreign currency translations accounting adjustments table. business dispositions transfers reorganizations.


test goodwill May 1 discounted cash flow peer-based risk-adjusted cost capital. discounted cash flow values.


impairment 2023 2021 tests. 30 goodwill impairment $11. billion.


components intangible assets finite-lived millions Carrying Amount Carrying Amount June 30 Technology-based,245(7,589,656,277(6,958,319 Customer-related,281,047,234,342,171 Marketing-related,473,462,143,799 Contract-based(15 Total#23,490(14,124,366,577,279,298


impairments identified 2023 2022 2021. no residual value.


intangible assets millions Life Ended June 30 Technology-based years years Customer-related years Marketing-related years years Contract-based years#541 years#5,681 years


Intangible assets expense $2. 2023 2022 2021.


table amortization intangible assets June 30 2023,363 2025 2026,381 2027 2028,366


debt millions calendar year Interest Interest Rate 30 2023 30 2022 2009 $3. 8. 24% 2010 $4. 8. 57% 2011 $2. 3. 36% 2012 $2. 3. 57% 2013 $5. 2 billion. 63%. 88%. 92% 2013 €4. 1 billion. 63%. 2015 $23. 8 billion. 70%. 77%. 2016 $19. 8 billion. 2017 $17. billion. 88%.53% 2020 $10. billion. 53%. 68%. 2021 $8. 2 billion. 92%. value Unamortized discount issuance costs Hedge value adjustments Premium debt exchange,085 Total debt,781 long debt,247,990,032


Note 5 interest swaps fixed debt.


June 2022 long-term debt $46. billion $50. billion. Level 2.


senior unsecured obligations. Interest semi-annually Euro annually. 2023 2022 2021 $1. 7 billion. 9 $2. billion.


table long-term debt June 30 2023 2024,250 2025 2026 2027 2028,366,866


income taxes millions Ended June 30 Current. federal,009,329,285. state local Foreign,467 Current taxes,009,680#9,981 Deferred. federal,146(4,815. state local(1,062 Foreign Deferred taxes(6,059,702 Provision income taxes,950,978


. S. foreign income taxes millions Ended June 30.,917,837 Foreign,394,879,130 before,311,716,102


difference income taxes. federal statutory rate effective rate Ended June 30 Federal statutory rate. Foreign earnings taxed lower rates. Impact intangible property transfers. Foreign intangible income deduction. State income taxes federal benefit. Research development credit. Excess tax benefits stock compensation. Interest. reconciling items. Effective rate. 1%


2022 transferred properties Puerto Rico U. S. $3. 3 billion net income tax benefit future. tax deductions exceeded current tax liability.


paid taxes software sales. March 2021 Supreme Court Engineering Analysis Centre vs Commissioner Income Tax 86 appeals software sales not taxes. sales. recorded net income tax benefit $620 million third quarter fiscal year 2021 Supreme Court decision 1996 2016.


decrease federal rate 2023 due earnings taxed lower Ireland. decrease 2022 due income tax benefit transfer intangible properties earnings taxed lower tax benefits stock-based compensation. decrease 2021 due earnings taxed lower Ireland Puerto Rico stock-based compensation India Supreme Court decision withholding taxes. 2023 Ireland. generated 81% foreign income before tax. 2022 2021 Ireland Puerto Rico. generated 71% 82% income tax. reconciling items tax credits GILTI tax tax benefits India Supreme Court decision withholding taxes. 2023 2022 2021 no significant reconciling items.


increase tax rate 2023 due $3. 3 billion tax benefit transfer intangible properties decrease benefits stock-based compensation. decrease tax rate 2022 $3. 3 billion tax benefit transfer offset income. tax benefits India Supreme Court withholding agreement U. S. India tax authorities transfer Tax Cuts Jobs Act regulations.


deferred income tax assets liabilities June 30 Stock compensation Accruals reserves expenses Loss credit carryforwards Amortization,183 Leasing liabilities Unearned revenue differences investments debt Capitalized research development Deferred income tax assets,571 Less valuation allowance,559 Deferred Tax differences investments debt Leasing assets Depreciation Deferred tax foreign earnings Deferred tax liabilities Net deferred tax,730,285,163 deferred income tax liabilitiesdeferred tax,730,285


TCJA research expenditures effective July 1, 2022. capitalize expenditures amortize. tax return five fifteen years.


Deferred income tax balances differences assets liabilities tax bases stated tax rates.


June 30, 2023 federal state foreign loss carryforwards $509 million $1. 2 billion $2. 3 billion. expiration dates 2024 2043 indefinite. majority foreign expire. acquired carryforwards annual valuation. 2023 $456 million federal loss carryforwards. tax Nuance. expire 2025.


valuation allowance foreign loss federal capital loss deferred tax assets.


taxes refunds $23. $16. $13. 2023 2021.


unrecognized tax benefits 2023 2022 2021 $17. $15. 6. taxes. recognized rates 2023 2022 2021 $14. $13. 3 $12. 5 billion.


June 30 2023 2022 2021 accrued interest expense tax $5. billion. tax. 2023 2022 2021 $918 million $36 million $274 million.


changes unrecognized tax benefits positions millions Ended June 30 benefits,593,550,792 Decreases settlements Increases current year Increases prior years Decreases prior years Decreases lapsed statutes limitations Ending unrecognized tax benefits,120,593,550


settled Internal Revenue audit 2004 2006 2011. 2012, withdrew 2011 Revenue Agents Report reopened audit. settled 2007 2009 2016, 2010 2013 2018. 2021 settled 2004 2013 payment $1. 7 billion tax interest. audit 2004 to 2017.


June 30, 2023 unresolved issues IRS transfer pricing financial statements. allowances income tax contingencies adequate. proposed assessment transfer pricing issues. final resolution 12 months. increase tax contingencies 12 months.


subject income tax jurisdictions outside U. S. operations 1996 to 2022 audit. resolution not financial statements.


revenue millions June 30 Productivity,572,558 Intelligent Cloud,371 Personal Computing,813,408


unearned revenue millions Ended June 30,408 Deferral Recognition unearned revenue end,813


obligations unearned invoiced $229 billion June 30, 2023 $224 billion commercial. recognize 45% next 12 months remainder.


leases datacenters corporate offices research facilities Microsoft Experience Centers equipment. to 18 years extend 5 years terminate 1 year.


lease expense millions June 30 lease cost,461,127 Finance lease Amortization right-use,352 Interest lease liabilities lease cost,307


cash flow leases millions Ended June 30 lease liabilities Operating cash flows leases,706,368 Right-of-use assets lease obligations Operating leases,268,380 Finance leases,128,234,290


balance sheet leases millions lease term discount rate June 30 Operating right-use assets,346,148 liabilities,409,228,489,137,717 Finance Property equipment,538,388 Accumulated depreciation,647,103 current liabilities,197 long liabilities,842 finance lease liabilities,067,902 Average Lease Operating leases Finance leases Discount Operating leases. Finance leases.


table lease liabilities June 30 2023 millions June 30 2024,784 2025 2026 2027 2028,787,462 lease payments,634 Less interest,567,137,067


June 30 2023 leases datacenters $7. billion $34. 4 billion. 2024 2030 1 18 years.


Microsoft Mobile subsidiary defendant 46 lawsuits 45 Superior Court Columbia radio emissions handsets brain tumors adverse health effects. responsibility Devices Services substituted Nokia defendants. Nine cases filed 2002 consolidated remaining stayed. 2009 Court Appeals adverse health claims cellular handsets. Federal Communications Commission pre-empted. plaintiffs allege handsets outside manufactured before. conspiracy manipulate emission guidelines.


2013, defendants exclude evidence flawed methodologies. 2014, trial court denied motion. filed appeal District Columbia Court Appeals standard evidence. October 2016, standard cases trial court. plaintiffs filed supplemental evidence stricken. hearing causation September 2022. April 2023 court granted strike testimony cell phones brain cancer order excluding.


2018 Irish Data Protection Commission LinkedIn advertising European Union Data Protection Regulation. Microsoft cooperated. April 2023 decision GDPR violations fine. Microsoft. no timeline final decision.


subject to claims suits in business. management believes resolving claims adverse impact in financial statements subject to uncertainties view may change.


June 30, 2023 accrued legal liabilities $617 million. defend adverse outcomes $600 million possible. unfavorable outcomes adverse impact financial statements.


Shares common stock millions Ended June 30####7,519 Issued Repurchased end year#7,432####7,519


18 Board approved program $40. billion. February 2020 completed November 2021.


September 14 2021 Board approved $60. billion. commenced November 2021 18 2019 expiration. June 30, 2023 $22. 3 billion remained.


repurchased shares stock millions Ended June 30 First Quarter,600,200,270 Second,600,233 Third Quarter,600,800 Fourth Quarter,600,800,200 Total$#18,400,033,970


repurchases cash. 2023 2022 September 14 2021. second quarter 2022 14. shares September 18 2019. excludes shares employee tax withholding $3. 8 billion $4. 7 billion $4. 4 billion 2023 2022 2021.


Board Directors declared dividends Declaration Date Date Date Fiscal Year 2023 September 20 8.,066 16 9. 18 8.,054 June 13, 17, 14.,233 Fiscal Year 2022 September 14 18 9. December 7 17, 10. March 14 19, 9. June 14 18 8.,550


dividend June 13, liabilities 30,.


table summarizes changes income by component millions Ended June 30 Balance Unrealized gains net tax $9 $(15) $9 Reclassification adjustments Tax expense income taxes# Amounts reclassified(15 Net change derivatives net tax $(4) $1 $7# Balance end period Balance,138,478 Unrealized losses net tax $(393), $(1 $(589) Reclassification adjustments(63 Tax expense income taxes## Amounts reclassified income Net change investments net tax $(373), $(1 $(602),360#,266## accounting changes end period(3,582#,138#,222# Translation Adjustments(2,527#,381#,254# Translation adjustments tax $0#,146#####873# end period,734#(2,527#,381# income end period,343#,678##


grant stock compensation employees directors. Awards canceled delivery available. issue shares Microsoft awards. ESPP employees.


Stock-based compensation expense tax benefits millions Ended June 30 expense,118 tax benefits


awards holder receive shares Microsoft stock. service four five.


Executive Incentive Plan Compensation Committee stock awards officers senior executives. RSUs four. PSUs three years. performance goals.


value stock awards estimated grant assumptions June 30 Dividends share. 62. 68. Interest rates. 0% – 5. 3 5%


2023 stock plans Value millions Awards Nonvested. 59 Granted. 59 Vested. 90 Forfeited. 93 year. 37


1 million 2 million PSUs years 2023 2022 2021.


June 2023 unrecognized compensation costs $18. 6 billion. three years. value $252. $291. $221. 2021. vested $11. 9 $14. 1 billion $13. 4 billion 2021. 164 million shares authorized grant.


ESPP employees. Shares common stock purchased three-month intervals 90% market value last day. 15% compensation period.


Employees purchased shares millions Ended June 30 Shares Average price share.


June 30 2023 74 million future.


savings plans. Section 401(k Internal Revenue Code international locations. employees contribute salary. Employer-funded retirement benefits. 6 billion. 4 billion. 2 billion 2023 2022 2021 expensed contributed.


management Executive Officer reviews financial information profit loss statements GAAP. reported financial performance Productivity Business Processes Intelligent Cloud Personal Computing.


recast amounts conform monitor business.


segments.


Productivity Business Processes segment communication devices platforms. Commercial on Exchange SharePoint Teams Security Compliance Viva Copilot. Consumer on-premises services. Talent Solutions Marketing Premium Subscriptions Sales Solutions. business solutions 365 cloud applications ERP CRM Power Apps Automate on-premises ERP CRM.


Intelligent Cloud public hybrid server business. products services Azure SQL Server Windows Server Visual Studio System Center Client Licenses Nuance GitHub. Services Industry Solutions.


Personal Computing segment products center. OEM Commercial cloud services patent licensing Internet of Things. Surface HoloLens PC accessories. Xbox hardware content services third content Game Pass subscriptions Cloud Gaming advertising disc royalties cloud services. advertising Bing News Edge third-party affiliates.


Revenue costs attributed to segments. integrated structure revenue costs benefit. Revenue from contracts allocated relative value products services estimated costs profit margin. Cost revenue allocated relative revenue methodology. Operating expenses include marketing segments gross margin.


costs corporate allocated segments. legal settlements fines information technology human resources finance taxes field selling shared facilities customer service severance. allocation measured margin headcount.


revenue income millions June 30 Productivity Processes,274,364 Intelligent Cloud,965,728 Personal Computing,734,270 Operating Productivity Processes,189,690,351 Cloud,884,203,471 Personal Computing,450,490,094 Total,383


sales United States 10% revenue 2023 2022 2021. Revenue classified areas Ended June 30 United States,744,218#83,953 Other countries,171,052,135 Total,270


billings OEMs multinational organizations determining source revenue.


Revenue millions Ended June 30 Server cloud services,970,350,589 Office Windows,507,488 Gaming,466 LinkedIn,145,816,289 Search advertising,208,267 Enterprise Services Devices,306 Dynamics,437,754 Other Total,270


Microsoft revenue Azure Office 365 LinkedIn $111. billion $91. 4 $69. 1 billion 2023 2022 2021. Server Office LinkedIn Dynamics.


Assets not allocated. amortization depreciation included overhead allocation. impracticable identify amortization depreciation segment profit loss.


Long-lived assets financial tax classified location countries 10% June 30 United States,380,153 Ireland,359,505,303 countries,500,433,858 Total,239,368,314


Stockholders Board Microsoft


audited balance sheets Microsoft Corporation subsidiaries June 30 2023 2022 statements income cash flows stockholders' equity three years 2023 related notes "financial. financial statements present financial position June 30 2023 2022 results operations cash flows accounting principles United.


audited Public Company Accounting Oversight Board control financial reporting June 30, 2023 Internal Control Integrated Framework report July 27, 2023 unqualified opinion.


financial statements responsibility Company management. opinion audits. public accounting firm registered PCAOB independent. federal securities laws Securities Exchange Commission PCAOB.


conducted audits standards PCAOB. standards require plan audit assurance financial statements free misstatement. audits included risks misstatement. procedures included examining evidence amounts disclosures statements. accounting principles estimates management overall presentation. audits provide reasonable basis for opinion.


critical audit matters from current-period audit of financial statements communicated to audit committee relate to accounts disclosures material challenging complex judgments. communication alter our opinion on financial statements not providing separate opinions.


Note 1 statements


Company recognizes revenue transfer control promised products customers consideration. offers acquire multiple licenses software cloud volume licensing programs.


judgment Company revenue recognition customer agreements includes products services obligations separately software licenses cloud. pattern of delivery. timing revenue obligation. contract terms timing revenue. variable consideration optional purchases free services. stand-alone selling prices obligation not.


volume transactions audit management judgments revenue recognition extensive high auditor judgment.


audit procedures Company revenue recognition customer agreements included tested controls performance obligations timing revenue recognition estimation variable consideration. evaluated management accounting policies. selected agreements read contract source documents. management contract terms.#Assessed terms evaluated accounting policies estimates revenue recognition conclusions. evaluated stand-alone selling prices products not. tested mathematical accuracy calculations revenue timing financial statements.


Positions Note 12 financial statements


Company long-term income taxes liability includes uncertain tax positions pricing. under IRS years 2003. settled IRS audits remaining financial statements.


recognizing measuring uncertain tax positions estimates judgment Internal Revenue Code regulations tax laws audit settlements. transfer pricing estimates audit auditor judgment tax specialists.


audit procedures management estimates uncertain tax positions transfer pricing included evaluated management methods assumptions identification recognition measurement disclosure positions testing internal controls. read evaluated management documentation accounting policies information outside tax specialists uncertain tax positions. tested management judgments future resolution technical merits. evaluated new information recognition measurement disclosure. evaluated tax law judgments.


served auditor.


DISAGREEMENTS DISCLOSURE


supervision participation management Chief Financial evaluated disclosure controls procedures Exchange Act Rule 13a-15(b) end period report. concluded controls procedures effective.


management responsible establishing internal control over financial reporting Company. Internal control assurance reliability financial reporting external accounting principles accepted United States. includes maintaining records transactions transactions necessary for consolidated financial statements receipts expenditures assets management authorization unauthorized acquisition use disposition assets financial statements prevented detected. not absolute assurance misstatement statements prevented.


Management internal control financial reporting Internal Control – Integrated Framework (2013) Committee Sponsoring Organizations Treadway Commission. concluded effective June 30, 2023. no changes June 2023. Deloitte & Touche LLP audited report Item 9A.


Stockholders Board Microsoft


audited Microsoft Corporation subsidiaries June 30, 2023 Internal Control Integrated Framework (2013) Sponsoring Organizations Treadway Commission. Company maintained effective internal control June 2023.


audited Public Company Accounting Oversight consolidated financial statements June 30, 2023 report July unqualified opinion.


Company management responsible internal control financial reporting assessment Report. opinion control based audit. public accounting firm registered PCAOB independent U. S. federal securities laws rules Securities and Exchange Commission PCAOB.


conducted audit standards PCAOB. standards require assurance internal control financial reporting. audit included understanding control risk material weakness testing evaluating design effectiveness other procedures necessary. audit provides basis opinion.


company internal control over financial reporting assurance reliability financial reporting preparation financial statements for accounting principles. includes policies procedures maintenance of records transactions dispositions assets assurance transactions recorded preparation financial statements receipts expenditures with authorizations management directors prevention of unauthorized acquisition use disposition assets financial statements.


limitations internal control financial reporting prevent misstatements. projections effectiveness future risk controls compliance policies deteriorate.


months June 30 2023 directors officers Securities Exchange Act 1934 informed termination 10b5-1 Item 408 Regulation.


executive officers biographical Part I Item 1 Form 10-K. directors Proxy Statement Annual Meeting Shareholders December 7, 2023. Audit Committee Statement. incorporated.


adopted Microsoft Finance Code Professional Conduct code Chief Executive Officer Financial Officer Accounting Officer finance organization employees. available website https://aka. ms/FinanceCodeProfessionalConduct. amendments waiver Chief Executive Financial Accounting disclose website report Form 8-K.


Proxy Statement Officer Committee Report Committee Interlocks Insider Participation incorporated.


SECURITY OWNERSHIP STOCKHOLDER


Proxy Statement Ownership “Equity Compensation Plan incorporated.


Proxy Statement “Director Independence Relationships Related incorporated.


fees services Deloitte & Touche LLP ID. Proxy Statement Deloitte Audit-Approval Non-Audit Services Independent incorporated.


financial statements Part II Item 8 Form 10-K. schedules omitted. Financial Statements Balance Sheets Cash Flows Stockholders’ Equity


Independent Accounting Firm Exhibit Date. Articles Incorporation Microsoft Corporation. Microsoft. May 18 2009, Microsoft Bank New York Mellon Trust Company./29/2015. First Supplemental Indenture. 95% Notes 2014,. 20% 2019. 20% 2039 May 18 Microsoft Bank New York Mellon Trust Company. Second Supplemental Indenture. 875% Notes 2013,. 625% 2015,. 2020. 50% 2040 September 27, 2010, Microsoft Bank New York Mellon Trust Company. May 18 Microsoft Bank Trust. Reference Date. Supplemental Indenture. 500% Notes 2016,.% 2021.300% Notes 2041 February 8 2011, Microsoft Bank New York Mellon Trust Company. May 18, 2009, Microsoft Bank New York Mellon Trust Company. Supplemental Indenture. 875% Notes 2017. 125% 2022. 500% Notes 2042 November 7, 2012, Microsoft Bank New York Mellon Trust Company. May 18 2009, Bank. Supplemental Indenture. 625% Notes 2033 May 2, 2013, Microsoft Bank New York Mellon Trust Company. May. Supplemental Indenture. 000% Notes 2018. 375% 2023. 750% Notes 2043 May 2, 2013, Microsoft Corporation Bank New York Mellon Trust Company. Exhibit Number Date.Supplemental Indenture 2. 125% 2021. 125% 2028 December 6 2013, Microsoft Bank New York Mellon Trust Company. May 18. Supplemental Indenture 1. 625% 2018 3. 625% 2023. 875% 2043 December Microsoft Bank New York Mellon Trust. Supplemental Indenture. 850% 2020. 375% 2022. 700% 2025. 500% 2035. 750% 2045.% 2055 February 12 2015, Microsoft U. Bank May 18 Bank New York Mellon Trust. Supplemental Indenture. 300% 2018. 2020. 650% 2022. 125% 2025. 200% 2035. 450% 2045. 750% 2055 November 3 Microsoft Corporation.Bank National Association Trustee May 18 2009, Microsoft Bank New York Mellon Trust Company. Exhibit. Supplemental Indenture. 2019. 550% 2021.% 2023. 400% 2026. 450% 2036. 700% 2046. 950% 2056 August 8 2016, Microsoft U. S. Bank. Supplemental Indenture. 850% 2020. 400% 2022. 875% 2024. 300% 2027. 100% 2037. 250% 2047. 500% 2057 February 6 2017 Microsoft Bank New York Mellon Trust Company. May 18. Supplemental Indenture. 525% 2050. 675% 2060 June 1 2020 Microsoft Corporation U.Bank National Association Trustee May 18 2009, Microsoft Corporation Bank New York Mellon Trust Company./2020. Supplemental Indenture. 921% Notes 2052 3. 041% Notes 2062 March 17, 2021 Microsoft Corporation Bank New York Mellon Trust Company. May 18./2021. Securities/2019. Corporation 2001 Stock Plan. Corporation Employee Stock Purchase Plan. Date. Corporation Deferred Compensation Plan. Corporation 2017 Stock Plan. Stock Award Agreement. Stock Award Agreement. Officers’ Indemnification Trust Agreement Microsoft Corporation Bank New York Mellon Trust Company.trustee. Beneficiaries’ Obligations Officers’ Indemnification Trust Agreement/2020./2020. Indemnification Agreement Microsoft Corporation Bank New York Mellon Trust Company. trustee/2019. Beneficiaries’ Obligations Trust Agreement/2020./2020. Corporation Deferred Compensation Plan Non Directors/31/2017. Corporation Executive Incentive Plan. Executive Incentive Plan Stock Award Agreement Microsoft Stock. Incentive Plan Stock Award Agreement. Executive Severance Benefit Plan. Letter February 3 2014, Microsoft Corporation Satya Nadella.Reference Exhibit Number Description Ending Date. 24-Term Performance Stock Award Agreement Microsoft Satya Nadella/31/2014. Letter October 25 2020 Microsoft Christopher Young/2021./26/2021 Registrant. Independent Registered Public Accounting Firm. Chief Executive Officer Section 302 Sarbanes-Oxley Act 2002. Financial Officer. Chief Executive Officer Section 906 Act 2002. Officer Section 906. XBRL Instance Interactive Data File tags. XBRL Taxonomy Extension Schema. Taxonomy Extension Calculation Linkbase. Extension. Extension.XBRL Taxonomy Inline XBRL Exhibit 101


management plan.


Furnished.


13 Securities Exchange Act 1934 Registrant report undersigned authorized Redmond Washington July 27, 2023.


Securities Exchange Act 1934 report signed Registrant July 27, 2023.


pioneered accelerated computing problems. full-stack-scale reshaping industry.


full-stack CUDA NVIDIA GPUs-specific software libraries kits. accelerates performance deployment NVIDIA artificial intelligence model training data analytics scientific computing 3D graphics optimizations healthcare telecom automotive manufacturing.


data-center-scale offerings compute networking solutions GPU-accelerated servers single giant computer modern AI applications.


GPU imagination virtual video games. simulates human deeper understanding physical world. parallel processing thousands cores essential for deep learning algorithms. AI data brain computers robots self-driving cars. GPU-powered AI solutions developed enterprises services products traditional coding. Examples include generative AI content recommendation systems relevant content deep neural networks datasets.


NVIDIA platform strategy hardware systems software algorithms libraries services value markets. computing requirements diverse unified architecture GPUs networking software stacks. programmable multi-billion-dollar markets software stacks third-party. developers base platforms ecosystem increases value.


Innovation. invested $45. 3 billion research development inventions essential modern computing. GPU 1999 PC gaming redefined. CUDA programming model 2006, parallel processing compute-intensive applications AI. 2012, AlexNet neural network won ImageNet AI. Tensor Core GPU 2017 autonomous driving system 2018. acquisition Mellanox 2020 innovation networking new data processing unit. built software stacks GPUs CUDA AI NVIDIA DRIVE Clara healthcare Omniverse NVIDIA AI Enterprise software. 2023 data center CPU Grace giant-scale AI high-performance computing. engineering culture product technology innovations networking. half engineers software.


cloud providers internet companies use platforms services AI search recommendations social networking online shopping live video translation.


Enterprises startups use platforms AI products services. software AI assistants chatbots transportation autonomous driving healthcare drug discovery financial services support fraud detection.


Researchers developers dynamics climate. 3,500 applications NVIDIA enables climate prediction materials science wind tunnel simulation genomics. powers 75% supercomputers TOP500 24 30 systems Green500.


Gamers choose NVIDIA GPUs virtual worlds. market PC GPUs live streamers broadcasters artists creators. generative AI users choose NVIDIA GPUs privacy latency cost.


artists architects designers use NVIDIA products GPUs cases effects designing buildings. generative AI market workstation GPUs customers deploy.


Santa Clara NVIDIA 1993 Delaware 1998.


report segments.


Compute Networking Data Center Quantum InfiniBand Spectrum Ethernet NVIDIA DRIVE Jetson robotics NVIDIA AI DGX Cloud.


Graphics segment GeForce GPUs NOW infrastructure Quadro/NVIDIA RTX GPUs automotive platforms infotainment Omniverse Enterprise software 3D.


platforms acceleration. processors interconnects software algorithms systems services. Data Center Gaming Professional Visualization Automotive.


NVIDIA Data Center platform compute workloads AI data analytics performance power efficiency. deployed cloud hyperscale on-premises centers. compute networking software services.


supercomputing platforms servers GPUs DPUs AI stacks. NVIDIA DGX Cloud acceleration libraries APIs SDKs frameworks.


networking offerings include platforms InfiniBand Ethernet adapters cables DPUs switch systems software stack. data center-scale platforms high-performance networking. server workloads data center new unit networking.


customers cloud companies enterprises startups public sector entities. work industry leaders applications data infrastructure. direct customers system integrators distributors. partnerships automotive healthcare financial services manufacturing retail.


foundation NVIDIA platform GPUs excel training inferencing neural networks. available servers cloud provider. platform DPUs 2022 CPUs 2024. optimize computing networking storage data center-scale solutions.


starts chips full-stack software CUDA CUDA-X acceleration libraries APIs SDKs frameworks.


data center paid licenses NVIDIA AI Enterprise-grade AI vGPU software virtual desktops workstations.


2024 launched NVIDIA DGX Cloud AI-training infrastructure software models experts. partnered cloud providers.


largest entertainment industry PC predominant. factors growth games franchises competitive social connectivity streamers modders creators.


gaming platforms leverage GPUs software enhance. developed NVIDIA RTX next generation graphics AI games. features ray tracing real-time cinematic rendering. light. learning sampling frame rates images. accelerate AI applications. 100 million AI PCs 500 RTX AI-enabled applications games development tools RTX AI PC leader.


products RTX GTX GPUs NOW cloud gaming underpowered SoCs services game consoles.


Professional Visualization NVIDIA GPUs. platform productivity capabilities design manufacturing digital content. computer-aided architectural consumer medical instrumentation aerospace. Digital editing post special effects broadcast-television.


RTX photorealistic objects accurate shadows reflections refractions ray tracing. 3D applications support RTX workflows GPUs software.


NVIDIA Omniverse platform virtual world simulation subscription free. enterprises 3D simulation technologies assets processes environments building digital 3D configurators autonomous robots vehicles NVIDIA cloud.


Automotive market automated driving-vehicle cockpit computing. leadership automotive relationships delivering end-to-end solution AV DRIVE Hyperion brand. demonstrated applications AI co safer driving experience.


working partners suppliers manufacturers institutions mapping startups AI self-driving. AI architecture neural networks Data Center perception fusion planning control NVIDIA DRIVE Hyperion. DRIVE AGX hardware sensor self-driving DRIVE software autonomous driving mapping parking-vehicle experiences.


offer scalable NVIDIA DRIVE Sim Omniverse digital cockpit self-driving platform. end-to-end software approach continuous innovation development cars updates features.


strategies business include


NVIDIA accelerated computing platform. problems less time lower power consumption. performance leaps Moore’s Law innovation architecture chip design system interconnect software. full-stack performance advantages target markets Data Center Gaming Professional Visualization Automotive. requirements unified architecture GPUs CUDA networking technologies. programmable leveraged investments research development support multi-billion-dollar end markets software stacks-party. platform approach.


technology leadership AI. computing platform AI training inferencing. compute networking solutions processing units interconnects software. solutions include processing units GPUs CPUs DPUs. suited AI features leadership. offer DGX Cloud AI-training platform NeMo Language Models open source proprietary. leadership ecosystem. platforms available server CSP AI supercomputers. 7 million developers CUDA software tools. evangelize AI partnerships universities startups Inception program. Deep Learning Institute design train deploy neural networks.


leadership computer graphics. AI fundamental. research user experience entertainment professional visualization virtual world simulation capabilities. technologies gaming design creative industries libraries algorithms experience GeForce NVIDIA RTX platforms. platforms leverage AI developer tools cloud services Tensor Cores RTX GPUs. NVIDIA Avatar Cloud Engine avatars AI. GeForce Experience settings recording sharing gameplay. Studio drivers creative applications. Omniverse real-time 3D design collaboration virtual world simulation artists designers. interactive applications device cloud platforms vGPU GeForce NOW.


Advancing autonomous vehicle platform. revolutionizing transportation industry. algorithms complex hand multiple neural networks. EV makers next-generation car computers functions AI platform. provide AI-based hardware software solution automotive safety standards AV EV DRIVE brand partnerships automotive OEMs


suppliers start-ups. AV solution includes GPU hardware neural networks deployment operation software updates. top-bottom end-to-end approach autonomous driving.


Leveraging intellectual property. valuable accessed customers partners license development agreements capabilities products custom development. license enhance reach technology.


sales marketing strategy high computing platforms software. teams work customers industry ecosystems partner network. CSPs OEMs ODMs system integrators software vendors manufacturers distributors manufacturers suppliers participants.


sales team technical expertise product industry knowledge. employ application engineers solution architects pre-sales assistance network system designs. solution architects work with CSPs hardware software infrastructure AI LLM training. enterprise software developers training enterprise end-users system integrator-tune build AI applications. design support time-to-market customer satisfaction relationships next generation products.


applications platforms relationships. Engineering marketing personnel engage developers platforms ascertain requirements solve problems. developer program supports AI frameworks SDKs APIs game titles platforms. Deep Learning Institute online training AI accelerated computing.


platforms markets data centers gaming visualization automotive. desktop gaming revenue. trends.


utilize manufacturing strategy employ suppliers phases wafer fabrication assembly testing packaging. use expertise suppliers certified International Organization Standardization fabrication assembly quality reliability testing. avoid costs risks manufacturing. procure raw materials suppliers responsible. focus resources product design quality marketing customer support. growth place non-cancellable inventory orders pay premiums provide deposits secure future supply capacity.


expanded supplier relationships demand. supply chain Asia-Pacific. Taiwan Semiconductor Samsung Electronics. semiconductor wafers. purchase memory Micron. SK Hynix. Samsung. CoWoS semiconductor packaging. subcontractors Hon Hai Precision. Wistron Fabrinet assembly testing packaging.


market products competitive rapid technological change evolving industry standards. principal competitive factors are performance access distribution channels software support APIs manufacturing capabilities processor pricing system costs. features functions consistent volumes quality competitive prices. expect competition from new entrants lower priced better performance features. new competitors alliances acquire market share.


competition GPUs CPUs DPUs SoCs AI semiconductor interconnect products InfiniBand Ethernet Fibre Channel proprietary technologies. competitors marketing financial distribution manufacturing changes. competitive environment.


competitors include licensors hardware software GPUs chips accelerated computing solutions Advanced Micro Devices. Huawei Technologies. Intel Corporation cloud services companies Alibaba Alphabet. Amazon. Baidu. Huawei Microsoft CPUs Amazon Huawei software SoC servers automobiles autonomous machines gaming devices Ambarella. AMD Broadcom. Intel Qualcomm Renesas Electronics Samsung Tesla. products switches adapters cable solutions AMD Arista Networks Broadcom Cisco Systems. Hewlett Packard Huawei Intel Lumentum Holdings Marvell Technology Group system vendors cloud services companies.


rely on patents trademarks secrets nondisclosure agreements licensing arrangements IP internationally. issued patents expiration February 2024 to August 2043. numerous patents issued pending United States foreign jurisdictions. applications relate to products technology. rely on international treaties organizations foreign laws IP. laws foreign countries not protect products IP rights. decreased protection piracy likely. assess protection innovations location strategic technology directions IP laws commercial significance.


licensed technology continue agreements.


subject laws rules United States foreign governments.


third quarter fiscal 2023 U. announced licensing requirements exports China Hong Kong Macau Russia A100 H100 circuits.


July 2023 USG additional licensing A100 H100 products Middle East.


2023 USG fourth quarter 2024 exports China Country Groups D1 D5 Saudi Arabia United Emirates Vietnam Israel A100 A800 H100 H800 L4 L40 RTX 4090. Country Group D5 China. October 23, 2023 A100 A800 H100 H800 L40S.


competitive position harmed results USG’s export controls. increasing importance AI rising geopolitical tensions USG may change export control rules products export restrictions licensing impacting business financial results. sell inventory develop replacement products excluding from China other impacted markets Middle East.


enhance resiliency supply chain Asia-Pacific export controls limit manufacturing locations impact business. 1A. Risk Factors Regulatory Legal Stock potential impact.


Compliance laws capital expenditures competitive position capital expenditures environmental facilities. Compliance regulations IP ownership taxes tariffs anti acquisitions foreign exchange data privacy competition antitrust advertising employment product cybersecurity environmental health safety AI climate change cryptocurrency consumer laws costs competitive position business financial. 1A. Risk.


NVIDIA invents challenges. environmental social corporate governance principles Company. Nominating Corporate Governance Committee sustainability governance. assess programs annually stakeholder expectations market trends business risks. success stakeholders.


Human Capital Management overview principles practices. More information website annual Sustainability Report. not incorporated report Securities Exchange Commission. “Item 1A. Risk risks sustainability.


climate impacts assess risks regulations market impacts.


2023 published metrics environmental impact. metrics 2025. no impact capital results competitive position environmental sustainability regulations costs renewable energy. 2025 goal


renewable energy 100% global electricity offices data centers. 2023 increased electricity renewable 44%. 2026 engage 67% GHG emissions science targets.


technology laptops high-performance supercomputers energy efficiency research development design. GPU-accelerated computing energy efficient optimized throughput performance watt AI workloads. energy efficiency Green500 list. powered 24 top 30 systems.


build Earth-2 AI Omniverse platforms. scientists predictions climate change mitigation adaptation strategies.


employees assets value. fiscal year 2024 29,600 employees 36 countries 22,200 research development 7,400 sales marketing operations administrative. Compensation Committee human capital management.


strategy recruit develop retain executives scientists engineers staff.


demand talent grown workforce talent NVIDIA. attracted brand differentiated hiring strategies. workforce 83% technical 49% advanced degrees. increased diversity female hiring. talent 40% new hires 2024 employee referrals.


employee development-job training development programs mentoring coaching feedback. library live on-demand learning workshops panel discussions speaker forums. create learning paths upgrade current content technologies. offer tuition reimbursement certifications. career coaching service job mobility. mentoring programs women underrepresented groups.


employee sentiment engagement pulse surveys suggestion box anonymous third-party platform. Pulse surveys ideas targeted action. suggestion box tool. anonymous third-party platform identity investigation receive responses.


NVIDIA build careers. employees. 2024 turnover rate 2. 7%.


compensation program rewards performance invest future. Employees receive equity tied stock price vests time interests shareholders.


offer benefits physical financial health. Programs include 401(k). pension. employee stock purchase program flexible work hours time off policies mental time-management. evaluate aim comparable support regions. committed tailored benefits Community Resource Groups support.


support enhanced crisis economic world-class talent families.


diverse teams fuel committed inclusive culture.


recruiting diverse talent underrepresented women Black/African Hispanic/Latino candidates.


with institutions organizations underrepresented communities recruiting teams candidates women employees peer support executive sponsors community resource groups training education environments recruiting diversity equity parity in retention promotions pay engagement progress visibility diversity efforts.


2024 global workforce 79% 20% female 1% 6% Black Hispanic Latino.


support flexible work environment employees home. supports hiring retention engagement NVIDIA great.


fiscal year 2025 flexible 2-days off rest recharge.


officers positions February 16 2024 Jen-Hsun Huang Colette. Kress Vice President Ajay. Puri Debora Shoquist Timothy S. Teter General


Huang co-founded NVIDIA 1993 President Chief Executive Officer member Board. 1985 1993. LSI Logic chip manufacturer Director Coreware. 1983 1985. microprocessor designer AMD. B Oregon State University M. Stanford University.


. Kress NVIDIA 2013 Executive Vice President Chief Financial Officer. Senior Vice President Chief Financial Officer Cisco Systems. 2010. financial strategy planning reporting development. 1997 2010. positions Microsoft Chief Financial Officer Server Tools.


strategy business development division. Kress eight years Texas Instruments semiconductor finance positions. Finance University Arizona. Southern Methodist University.


. Puri joined NVIDIA 2005 Senior Vice President Sales Executive Vice President Operations 2009. sales marketing management 22-year Sun Microsystems. product development Hewlett-Packard Booz Allen Hamilton. Texas Instruments. University Minnesota. California Institute Technology. Harvard Business School.


Shoquist NVIDIA 2007 Senior Vice 2009 Executive Vice. 2004 2007 Vice JDS Uniphase. communications products. 2002 2004 Senior Vice President General Manager Electro-Optics Coherent. laser equipment. Quantum. Hewlett-Packard. Electrical Engineering Kansas State. Biology Santa Clara University.


Timothy. Teter joined NVIDIA 2017 Vice Executive Vice President 2018. decades Cooley LLP patent technology. Lockheed Missiles Space Company. Mechanical Engineering University California Davis J. D Stanford Law School.


annual 10-K quarterly 10-Q current Form 8-K amendments Section 13(a) 15(d) Securities Exchange Act 1934 available free website http://www. nvidia. com Securities Exchange Commission SEC. website. sec. contains reports proxy statements issuers. web site not part Annual Report 10-K.


risk factors Annual Report Form 10-K. harm business financial condition reputation stock price decline. Additional risks trends uncertainties harm business reputation.


industry impact financial results. impact market financial results.


estimate demand mismatches supply demand. on third-party suppliers reduces control over product quantity quality yields delivery schedules harm business. expenses damage business.


economic conditions harm business. sales operations risks. data breaches cyber-attacks disrupt operations affect financial stock price reputation. disruptions harm operations financial results. •Climate change. realize benefits investments acquisitions integrate acquisition targets. revenue from limited partners distributors concentration sales end customers. attract retain motivate executives employees. processes information systems disrupt internal controls. operating results below expectations stock price decline.


subject complex laws political actions business. scrutiny shareholders regulators sustainability financial reputational operational harm liability. responsible use technologies AI harm liability. IP rights costly unsuccessful. subject data privacy security laws obligations. damage reputation deter customers product design proceedings liability. operating results impacted tax liabilities rates. exposed risks investigations regulatory proceedings. indebtedness financial position cash strategy contractual obligations. law documents agreement Microsoft delay change control.


industry markets impact financial results.


accelerated platforms products standards.


success depends identify industry changes adapt strategies develop maintain products technologies needs innovation acquire products technologies research development offerings business models software services cloud ecosystem safety security reliability compliance standards product software lifecycles satisfaction acquire maintain secure infrastructure energy data centers acquisition integrations customer support e IP licensing cloud service technical financial operational compliance sales marketing investments.


invested in research development limited operating history produce revenue years. fail develop monetize new products adopted financial results. design wins lengthy process depends anticipate features functionality. guarantee revenue. Failure future. ensure products technologies value. fail success criteria financial results harmed.


begun offering NVIDIA DGX Cloud services cloud infrastructure software services training AI models NVIDIA AI Foundations models. partnered CSPs software data entered multi-year cloud service agreements research development. timing availability impacting revenue expenses development timelines. time resources investment. offer standalone software solutions NVIDIA AI Enterprise Omniverse DRIVE. fail sell. incur costs revenue.


market financial results.


target markets competitive competition intensify product service offerings industry standards needs consolidations. competitors’ products services technologies cheaper better functionality features lower prices. competitors operate fabrication facilities longer histories larger customer bases IP portfolios patent protections design wins financial sales marketing distribution resources. acquire market share new markets trends transition products impinge foundry capacity scarce input materials supply harm business. customers in-house expertise development solutions replace. offer cloud services establish market share objectives. unable demand products decrease establish revenue.


Failure estimate demand supply demand.


use third parties manufacture long lead times. guaranteed capacity supply deliveries production non-linear. estimates demand inaccurate mismatch supply demand. product shortages excess inventory harmed financial results.


build products maintain inventory anticipated demand. past long-term supply capacity commitments secure


commitments capacity demand expectations change. risks increase shorten product development cycles new business integrate suppliers complexity. sell products if components third parties. risk platform strategy. shortages limited supply lead times extended. experienced extended lead times more than 12 months. paid premiums provided deposits future supply capacity increased product costs. suppliers require additional capacity deposits. reduce supply commitments revenue declines.


factors underestimate overestimate demand mismatch supply demand impact revenue product development cycles time to market technologies releases business economic conditions decreased demand government lockdowns health issues changing technology requirements data center capacity energy product introductions transitions less demand end-use cases demand competitive products decisions third parties demand accelerated AI-related cloud services software NVIDIA DGX Cloud ecosystem actions export controls restrictions gaming usage.


Demand data center systems surged 2024. 2025 gathering demand indications transitions. products 2025. increased supply capacity purchases added vendors prepaid manufacturing agreements. volumes complexity risk. arrangements. purchase commitments inventory manufacturing capacity 2024 impacted shortening lead times. Supply Hopper improving demand strong. next-generation products supply-constrained. incur inventory provisions exceed demand.


customer orders demand estimates change. Product transitions impact revenue ship new products. introduction cycles transitioning architecture Data Center Professional Visualization Gaming products. faster Data Center launch cadence AI opportunities. increased frequency challenges managing supply demand long manufacturing lead times. Qualification time anticipating transitions reducing inventory revenue. reduced demand current generation architectures


unable sell multiple product architectures. unable execute transitions financial results. increasing frequency complexity products quality production issues inventory provisions warranty costs delays. Deployment new products challenges complexity timing purchases demand. managed prior product transitions sold multiple transitions difficult impair demand supply mix incur additional costs.


customers purchase directly indirectly through OEMs ODMs integrators distributors partners. decisions by OEMs ODMs market conditions-user demand impacted forecast demand based on estimates downstream parties.


underestimate future demand foundry partners lead-time capacity increase production obtain inventory fill orders. increase supply timely contract manufacturers experience supply constraints. procure supply fail fulfill orders relationships lose revenue market share reputation harmed. products part complex data center buildout supply constraints issues broader revenue impact.


overestimate future demand cancel defer orders purchase competitors reduce inventory purchase commitments. experienced reduction selling prices channel pricing programs overestimation future demand need continue reductions. prices products suppliers’ increase may need continue. written down inventory incurred cancellation penalties recorded impairments. impacts amplified non-cancellable non-returnable purchasing terms lead times exacerbated changes design future. risk increased purchase obligations prepaids grown supply. impact gross margins financial results.


build technology introduce products NVIDIA Cloud AI Foundations Omniverse platform LLMs generative AI models. demand estimates create volatility revenue supply generate revenue. generative AI models emerged demand Data Center long-term trajectory unknown. products difficult estimate impact revenue demand. shipping CPU Grace CPU Grace Hopper Superchips quarter 2024. CPU demand volatility revenue.


Challenges estimating demand future global regional. Extended lead times supply constraints disasters pandemics. geopolitical tensions Taiwan China revenue suppliers manufacturers partners critical supply continuity.


use GPUs new use cases impacted demand inconsistent spikes drops. Gaming GPUs used for mining currencies Ethereum. difficult to estimate impact mining future demand. Volatility cryptocurrency market new compute technologies price changes government policies new standards changes blockchain transactions mining demand. Changes cryptocurrency standards Ethereum 2. merge 2022 reduced decrease usage GPUs for Ethereum mining. increased aftermarket sales


impact prices reduce demand. resold online unauthorized market demand forecasting difficult. Gray market compete new products channels.


depend on developers customers third parties build maintain accelerated computing applications. rely on third-party content providers publishers content GeForce NOW. Failure developers parties make content available could affect customer demand.


third-party suppliers control quantity quality yields delivery schedules harm business.


depend foundries semiconductor wafers. assemble test package contract subcontractors. components systems boards products.risks meet customer demand scale supply chain impact demand business operations gross margin revenue financial results of guaranteed supply potential higher prices incorrectly estimating demand orders foundries manufacturers procure raw materials provide manufacturing test capacity develop implement high quality process technologies suppliers comply with policies regulatory requirements •limited global suppliers foundries contract manufacturers assembly providers memory manufacturers •loss supplier additional expense production delays control over product quantity quality delivery schedules failing supply high quality products changes without qualification •delays shipments shortages quality higher expenses orders orders prepay manufacturing yields failure product design proprietary process technology •disruptions manufacturing assembly due to closures heat waves earthquakes fires disasters conservation efforts.


Defects products expenses damage reputation lose market share.


hardware software complex. contain defects security vulnerabilities failures unsatisfactory performance design fabrication packaging materials bugs use. risks increase new devices markets technologies versions. risks increase rely on partners components control over production.


data from third parties new training methods products contain defects errors unintended bias. arrangements with providers defect expense reimbursement responsible for warranty defects. failures in products services discovered after shipped used. Undiscovered vulnerabilities loss data property expose to third parties malicious software. Defects damage products OEMs ODMs. defect warranty support repair replacement costs write-off value inventory divert attention from. efforts not. error defect in new products software after commercial shipments failure market acceptance loss of design wins withdrawal harm relationships with customers partners perceptions brand business operations gross margin revenue financial results. may to reimburse customers partners consumers for costs repair products pay fines.


fiscal year 2023 defect identified third-party component Data Center products. effect cost supply components finished goods. costs significant future. recorded net warranty liability 2023 defect. need record additional amounts if estimate incorrect. product liability claim third party cost defending significant efforts technical personnel harm business. business liability insurance inadequate future coverage unavailable impact financial results.


harm business.


Economic industry uncertainty recession growth inflation fiscal monetary trade policy disruptions capital markets banking system currency fluctuations higher interest rates tighter credit lower capital expenditures unemployment labor shortages lower consumer confidence spending global supply chain constraints geopolitical developments business financial results costs logistics supply chain expenses gross margin supply employee facilities infrastructure costs volatility financial markets margins demand products services technologies suppliers supply commitments results decisions insolvency suppliers distributors customers cloud providers profitability bankruptcy mergers consolidations alliances credit collectability risks higher borrowing costs capital reduced liquidity impacts customers suppliers failures impairments declines value financial instruments.


Adverse developments financial institutions bank failures instability concerns speculation lead liquidity problems disruptions impact customers’ payment vendors’ our.


maintain investment portfolio holdings maturities. subject credit liquidity market interest rate risks downturns. majority USG securities. decline markets downgrade USG credit rating higher interest rates decline. dollar reduced liquidity adverse conditions. loss impairment charges.


International sales operations significant exposes risks.


sell products business. semiconductor wafers manufactured tested packaged parties outside States generated 56% revenue 2024 sales. sales to China decreased revenue from 19% 2023 to 14% 2024. licenses products China started alternatives small volumes. China mid-single digit Data Center revenue fourth quarter 2024 expect similar first quarter 2025. global business risks uncertainties business financial. include economic political conditions government lockdowns legal standards business practices disruptions capital counter-inflation policies currency fluctuations disasters terrorism public health issues catastrophic events.


breaches cyber-attacks reduce revenue expenses harm business reputation.


Security breaches malware social-engineering denial-of-service software bugs malfunctions failures loss data sophisticated detect.


Cyber-attacks ransomware nation-supported prevalent severe. recover limited backups affected restoring delayed not feasible.


Individuals hackers organizations nation-states actors engaged expected cyber-attacks. using AI technology automated targeted coordinated attacks. geopolitical conflicts third parties vulnerable risk cyber-attacks services products. face cybersecurity threats error misconduct employees contractors third service providers. cybersecurity safeguarding sensitive information security policies access control mechanisms. past experienced security incidents failure handle sensitive information policies no insider threat incident. rely on products services third-party suppliers cloud-based infrastructure encryption authentication email exposes supply-chain attacks business disruptions. guarantee third parties infrastructure compromised vulnerabilities defects bugs technology. incorporate third-party data AI algorithms open-source datasets. datasets flawed insufficient biased information vulnerable to security incidents.limited insight data privacy security third-party suppliers AI algorithms. monitor security practices limited adequate security measures. security incident


response limited difficult direct access systems logs information security incident. incorporated supply chain large worldwide products services compromised customers data affected potential liability harm business.


defend security incidents engineer secure products enhance security reliability increased expenses. develop security measures training initiatives suppliers meet security requirements industry standards government regulations. invest training detect remediate vulnerabilities prevent vulnerabilities security controls systems software threats techniques change after incident. delays developing deploying remedial measures. reputational financial harm exploited security incident.


hold confidential sensitive personal proprietary information from partners customers. Breaches security measures vulnerabilities unapproved dissemination expose risk loss misuse litigation liability regulatory inquiries damage brand reputation harm business. hold proprietary game source code partners GFN service. Breaches security measures expose loss litigation liability. If security incident adverse consequences enforcement reporting restrictions processing indemnification obligations reputational harm diversion funds management attention financial loss loss data disruptions systems operations supply chain harms. Inability orders delayed sales lower margins lost customers affect financial results stock price reputation. data privacy security obligations stakeholders incidents negative publicity. third parties may gather sensitive information harm business.


disruptions harm revenue costs.


operations by disasters extreme weather power shortages telecommunications failures supplier disruptions terrorist attacks violence unrest military actions epidemics pandemics regulatory deterioration disasters events. corporate headquarters data center research development in California business operations goods inventory suppliers in Asia vulnerable to disasters. Catastrophic events third-party vendors infrastructure. business continuity disaster recovery planning. developments increase economic volatility. Political instability adverse developments harm business financial. geopolitical tensions conflicts China Hong Kong Israel Korea Taiwan regulatory requirements operations product demand hiring profitability. countries business with Israel. operations costs increase if disasters heat water shortages power information technology failures cyber-attacks military actions economic business labor environmental health political issues.impact on us third-party foundries suppliers unknown. disaster war us systems business declines revenue increases expenses expenditures time operations. risks affect future sales operating results.


monitoring impact geopolitical conflict Israel operations health safety 3,700 employees research development operations sales marketing networking products. operating expenses fiscal year 2024 include financial support charitable activity. global supply chain impact. employees active military duty. some absent product development operations. significant impact expense conflict could impact future product development operations revenue uncertainty.


interruptions CSPs data center co-location partners third parties insolvency impair products harm business. reliance systems exposure to interruptions defects quality. Data centers depend clean water energy. Power water shortages regulations energy impair expand capacity consume products.


Climate change business.


Climate change business customers partners vendors. Water energy critical facilities vulnerable extreme weather. Extreme heat wind dry conditions Northern California power shut offs wildfire risk adverse implications Santa Clara offices data centers employees. Climate change supply chain infrastructure political instability disrupt attrition losses costs. insurance coverage property casualty risks vary availability cost. policies large deductibles exclusions providers pay claim. Losses not covered harm financial condition.


business suppliers customers subject to climate laws regulations lawsuits. regulations carbon fuel energy taxes pollution limits sustainability disclosure supply chain direct costs manufacturing raw materials capital compliance energy costs indirect costs additional compliance costs. costs restrictions harm business expenses operations product design.


climate change face legal action reputational harm. achieve sustainability goals reputation incur costs. contractual disputes supply chain delays climate costs.


face risks business trends climate change. high energy requirements GPUs energy efficient design operation.


realize benefits investments acquisitions integrate acquired companies hurt grow business develop sell.


acquired invested continue in businesses products services technologies expand strategic objectives. Acquisitions investments involve challenges risks impair grow business develop sell financial results. transaction limit other transactions objectives. unable complete acquisitions regulatory approvals retain talent technology evolve acquisition less attractive changes reduce benefits impact business. Regulators impose conditions reduce value acquisitions. perceived ability consummate acquisitions


future acquisitions difficult complex expensive. investments in publicly traded companies create volatility generate losses value. invested in private companies strategic objectives business initiatives. early-stage companies defining strategic direction. instruments non-marketable illiquid initial investment not always return. could impairment lose investment. investment portfolio contains industry sector concentration risks decline increase losses. additional risks diversion of capital resources attention difficulty return uncertainties benefits difficulty governmental regulatory approval financing legal proceedings potential failure due diligence.


risks acquisitions include integrating technology systems products policies processes operations employees liabilities amortization expenses impairment charges goodwill write-downs assets accounting forecasting controls procedures reporting cycles operations price impact fines fees reputation harm regulatory approval issuances debt increased debt interest expense compliance covenants dilutive issuances equity securities variability performance-based consideration changes economic conditions cybersecurity risks relationships loss employees vendors customers.


acquisition systems experienced challenges lengthy costly integration delays purchasing shipping electronic data interchange suppliers customers training change management. impacted results operations.


receive revenue from limited partners distributors concentration sales customers revenue affected if lose prevented selling.


receive revenue from limited customers distribution partner network. Sales to Customer A represented 13% revenue 2024 Compute & Networking segment. channel partners selling multiple products systems. results depend on sales partner network processors. partners may purchase fewer alter purchasing patterns. sales order customers can cancel change delay commitments without penalty. partners develop solutions purchase competitors discontinue sales lose market share alter purchasing patterns. customers through OEMs ODMs system integrators distributors channel partners. indirect customer 19% revenue 2024


Compute Networking. demand goods quarter end system integrators distributors channel partners credit impact revenue. loss large customers reduction purchases inability. trade restrictions difficulties accounts receivable harm financial.


attract motivate executives employees business.


strategy attract retain motivate executives employees recruit develop talent. Labor subject factors market cost inflation workforce participation rates. Changes immigration work permit regulations employees. Competition costs cash stock compensation stock price volatility retentive value compensation decrease. dependent on executive team. succession planning transfer knowledge transitions strategic planning success.


business processes systems modification interruption disrupt internal controls.


rely internal processes systems business functions controls financial reporting Section 404 Sarbanes-Oxley Act. efficient operation scalability critical growth. design implement accounting functionality new ERP system. quality programming errors business financial results. changes costly disruptive management time. Failure controls difficulties harm results reporting obligations.


weaknesses internal controls cause investors lose confidence financial statements stock price decline. Remediation expenses fail financial statements inaccurate restate report financial results affected access capital markets restricted stock price decline subject to sanctions investigation.


operating results fluctuate below expectations analysts stock price decline.


operating results fluctuated due risk factors. investors rely past results future performance. factors affect include adjust spending development contractual obligations extended payment term arrangements payments credit insurance bad debt write-offs vendors' payment requirements •unanticipated costs environmental liabilities financial accounting standards.


factors prevent financial results. granted extended payment terms macroeconomic downturns impact payment. vendors requested shorter payment terms impact cash flow. reduce cash for business operations. expenses investments revenue growth volatility profitability. Failure meet expectations stock price decline substantial price volatility.


operations affected complex laws rules regulations political actions impact.


subject to laws regulations operations IP ownership infringement taxes import export tariffs anti-corruption business acquisitions foreign exchange cash repatriation data privacy competition antitrust advertising employment product cybersecurity environmental health safety responsible AI sustainability cryptocurrency consumer laws. Compliance onerous expensive competitive position business operations manufacture ship. no employees contractors suppliers customers agents violate laws policies controls violations fines criminal sanctions prohibitions damage reputation. Changes laws rules compliance costs restrictions manufacture supply. increased compliance costs antitrust legislation cybersecurity. AI interest regulators European Union United States Kingdom China. French Competition Authority collected information card cloud. received requests information European Union United Kingdom China sales supply foundation models investments partnerships agreements expect additional requests.Governments regulators restrictions hardware software systems frontier models generative AI. restrictions increase costs burdens new systems reduce entrants customers business financial results. Revisions laws taxation trade sanctions duties tariffs restrictions controls imports exports retaliatory actions business plans timing shipments. changes public perception impact business.


Government actions trade protection national economic security policies. tariffs import regulations export restrictions. trade economic sanctions decrees quotas barriers affect ship products provide services business without export license U. S Department of. Entity List restricted fulfill contractual obligations business. export control laws sanctions U. non-U. S laws penalties business operating results financial condition.


war Ukraine United States imposed sanctions export blocked products services Russia Belarus regions Ukraine. 2023 stopped sales Russia closed. war impacted sales EMEA.


focus risks importance AI technologies regulatory restrictions products services enabling AI restrictions offerings.


Concerns third-party use AI contrary interests misuse AI restrictions products training modifying tuning deploying LLMs. restrictions limit downstream customers acquire deploy use systems products impact business financial results.


restrictions include export controls products AI technologies. geopolitical tensions semiconductors AI GPUs export restrictions U. allies. imposed controls GPUs


likely additional controls adopted. controls prohibit exporting products markets including China impact manufacturing testing warehousing locations conditions demand impact business revenue financial results. Export controls targeting GPUs semiconductors AI likely restrict export technology products services competitive disadvantage business financial results. Export controls targeting GPUs semiconductors may users restrictions use resale repair transfer impacting business financial results. Controls impact cost provide NVIDIA AI cloud services cloud service providers customers services outside China.


Export controls disrupt supply chain distribution channels demand outside China gaming products. additional export controls demand benefiting competitors. changes export control rules impose compliance burdens impacting.


economic sanctions export controls impacted demand products impacting business financial results. Reduced demand controls excess inventory supply charges. Additional controls include export control limitations impact research development teams roadmap objectives. export restrictions impact overseas markets provoke responses foreign governments including China supply chain products reduce revenue. Regulators China inquired about sales commitments Mellanox acquisition. If failed commitments violated law penalties restrictions business operating results financial condition.


third quarter 2023 USG export restrictions licensing semiconductor supercomputing industries. restrictions impact exports chips software hardware equipment technology China Russia A100 H100 circuits systems. licensing requirements future NVIDIA circuit peak chip-to-chip I/O thresholds system. licensing requirements products networking products users China. second quarter 2024 USG additional licensing requirement A100 H100 products Middle East.


2023 USG fourth quarter 2024 exports China Country Groups D1 D5 Saudi Arabia United Arab Emirates Vietnam Israel A100 A800 H100 H800 L4 L40 RTX 4090. Country Group D5 China. October 23, 2023 effective A100 A800 H100 H800 L40S. licenses China.


export controls transitioned operations testing validation supply distribution China Hong Kong. future transitions costly time consuming affect research development supply distribution revenue. Data Center product portfolio new solutions USG license notice shipment. customer seek license. licensing process time-consuming. no USG. burdensome conditions. USG evaluating license requests closed process clear standards opportunity review. Notified Advanced Computing process approvals exports China. license process exports D1 D4 countries time-consuming license conditions outside China. requirements disproportionate impact NVIDIA


NVIDIA against competitors not new restrictions acquire licenses.


Management new licenses requirements complicated time consuming. competitive position harmed future results changes USG’s export controls expansion geographic product scope purchase competitors develop internal solution warranty extended service obligations USG grant licenses denies licenses transition costs. USG grants licenses temporary burdensome conditions. licensing requirements benefit competitors technical support cumbersome less encourage customers pursue alternatives Israel.


increasing strategic importance AI rising geopolitical tensions USG may export control rules products export restrictions licensing requirements impacting business financial results. sell inventory develop replacement products from China market other markets Middle East. USG foreign firms create large-scale GPU clusters license conditions chip tracking throttling. USG export controls gaming GPUs expands controls products disrupt supply distribution chain impact sales markets outside China U. S. Europe. Export controls disrupt supply distribution chain products warehoused Hong Kong. controls datacenter GPUs impact demand networking products. may export controls on networking products limit large clusters training. new control products NVIDIA disadvantage against competitors. Excessive export controls encourage customers outside China “design-out” U. S. semiconductors reduce compliance burden risk markets worldwide.Excessive export controls overseas governments purchase competitors NVIDIA U. S. firms harming business market position financial results. controls impact demand products China Europe Latin America Southeast Asia. controls increase risk investing U. S. semiconductor products product controls. controls increase investment foreign competitors.


restrictions Chinese government on gaming access affect Gaming revenue oversight digital Data Center revenue. government restrictions sale products components partners suppliers. announced restrictions Micron supplier. Further restrictions could impact business financial results.


business depends consistent supply overseas partners especially Taiwan. new restrictions Taiwan business financial results.


scrutiny shareholders regulators sustainability costs risks impact reputation customers suppliers.


groups investment funds market participants customers regulators corporate sustainability climate change human rights. Stakeholders sustainability practices adoption. state-level initiatives. conflict regulatory requirements expectations. sustainability practices disclosure controls


expectations fail meet corporate sustainability standards. incur costs require resources monitor practices business discontinue business policies. harm brand reputation business activities liability.


responsible use technologies AI financial harm liability.


Concerns responsible use technologies AI products reputational financial harm liability costs. building AI capabilities protections into products services offer stand-alone AI applications. AI poses legal social ethical issues presents risks adoption business. solutions controversy unintended consequences infringe copyright rights publicity controversial human rights privacy employment develop internal policies responsible development use AI may experience brand reputational harm competitive harm legal liability. Complying with regulations increase cost change impede products services. Compliance with government regulation AI. regulation increase cost research development reporting transparency requirements. regulation safety test results. changes in AI-related regulation change business practices impact financial results. failure to address concerns regulations AI could undermine public confidence slow cause reputational financial harm.


protect IP rights costs ability compete harmed unsuccessful prohibited selling products.


involved in lawsuits patent infringement IP rights violations indemnify. unfavorable ruling damages invalidation patents indemnification lost profits injunctive relief. Claims IP rights costs divert efforts management technical personnel.


commence legal proceedings protect IP rights increase operating expenses. subject countersuits. infringement claims products infringe third IP seek license rights. If obtain license liabilities suspend discontinue manufacture sale products. make royalty payments cross license technology. If arrangements not concluded business. indemnification operating expenses impact results.


rely on patents trademarks secrets nondisclosure agreements licensing arrangements laws IP. Foreign laws protect products IP rights States. piracy likely. theft unauthorized use trade secrets confidential information harm competitive position reduce acceptance investment research product marketing. risks employees hired by competitors. assess protection for innovations.


subject data privacy security laws obligations. damage reputation deter design proceedings liability.


process sensitive personal subject privacy security laws regulations standards policies contracts obligations. Concerns practices use products services


collection use retention disclosure personal information AI damage reputation affect operating results. theft loss misuse data regulatory proceedings business security costs legal claims.


United States authorities enacted data privacy laws data breach notification privacy consumer protection. states enacted privacy laws obligations businesses disclosures rights. rights access correct delete data opt-out targeted advertising profiling automated decision-making. impact business. states impose stricter requirements processing impact assessments. laws allow fines noncompliance. California Consumer Privacy Act 2018 right access delete opt-out personal information receive detailed information. fines $7,500 violation private right action data breaches. Similar laws considered other states federal local. states localities enacted measures artificial machine learning. privacy laws risk enforcement increase.


regulatory authorities legislative proposals data protection. European Union adopted General Data Protection Regulation GDPR United Kingdom adopted. GDPR handling personal data European Economic Area use protection ability access correct delete data. penalties €20 million or 4% revenue initiate. EU AI Act obligations change business practices.


transfer personal data from Europe China to United States. Certain jurisdictions data localization cross-border transfer laws. GDPR restricts transfer data outside EEA. European Commission “Standard Contractual Clauses” for data protection including United States. U. K. International Data Transfer Agreement / Addendum EU-U. S. Data Privacy Framework U. K. extension transfers. mechanisms data from EEA U. K. to United States. subject to legal challenges no. Other jurisdictions similar cross-border transfer laws residency laws increase cost complexity fines. China’s law requirements data processing localization. data transferable without approval Cyberspace Administration of China. Compliance liability prevent data impact data. inability import data United States impact business operations limit with European privacy laws increase data processing capabilities.European regulators prevented data violating limitations impact business.


bound by contractual obligations data privacy security non-compliant. privacy laws GDPR CCPA require contractual restrictions service providers. host personal data breach relationships litigation regulatory action fines. publish privacy policies marketing materials compliance certifications self principles. deficient deceptive unfair misrepresentative to investigation enforcement adverse consequences.


Data protection laws changing inconsistent with practices. obligations affect product design changes information technologies systems practices third parties data. third parties may fail comply obligations. data privacy security obligations face consequences government enforcement reporting oversight bans orders to destroy data. reputation business financial condition.


tax liabilities results impacted tax laws rates tax-related factors.


subject to complex income tax laws non taxes jurisdictions. judgment provision. under audit. estimates adverse outcome increase tax rate non-income taxes harm financial position income cash flows.


changes in tax laws. foreign increase tax liability adverse impacts results. income taxable portion treatment foreign-derived intangible income. tax rates increase FDII deduction income taxes net income cash flows. changes laws foreign Inclusive Framework Base Erosion Profit Shifting Pillar Two Model Rules. changes foreign tax laws increase tax uncertainty affect income taxes financial condition.


future tax rate affected by factors changes rates earnings tax incentives credits deductions expiration statutes limitations accounting principles adjustments expenses deductible deferred tax assets liabilities laws impact accounting business combinations changes organization. tax effects stock-based compensation volatility stock price impact tax rate. decline stock price tax benefits tax rate financial results.


risks litigation investigations.


face legal regulatory proceedings consumer competition issues business. defending securities class action lawsuit shareholders false statements channel inventory impact cryptocurrency mining GPU demand 2017 2018. Litigation regulatory proceedings uncertain adverse rulings damages fines products licensing. unfavorable outcome adverse impact. costly time-consuming disruptive operations.


indebtedness financial cash flows implementing strategy obligations.


January 28, 2024 $9. 7 billion notes due by 2060. senior notes matures repay. affect financial. $575 million commercial paper program.


indebtedness contractual restrictions cash debt principal repayments increase vulnerability economic industry conditions limit flexibility impair future financing restrict grant liens mergers dispose assets change business.


covenants control. breach covenants without waiver note holders lenders indebtedness declared


due payable. Changes credit rating impact liquidity restrict financing terms.


Delaware law certificate bylaws agreement Microsoft.


anti-takeover Delaware Corporation Law discourage change control. incorporation bylaws third party acquire majority stock. include Board Directors create preferred stock change directors amend repeal bylaws without approval inability special meetings advance notice nominations super-majority voting requirement. agreement Microsoft Xbox 30% stock Microsoft refusal. provisions delay change control discourage proxy contests difficult directors corporate actions.


infrastructure systems policies procedures cybersecurity. processes assessing identifying managing risks cybersecurity. information security management program follows ISO 27001 security measures. consult cybersecurity firms risk management experts strategy.


Identifying managing cybersecurity risk integrated systems data privacy training policies privacy laws prevent detect mitigate recover threats.


vendor risk assessment process supplier questionnaires cybersecurity risks confidential information. data privacy security controls risks. assess high-risk suppliers’ industry standards. ISO 27001 ISO 28001 C information product physical security requirements.


1A. Risk 10-K cybersecurity risks.


security cybersecurity oversight Company’s Board Directors. Audit Committee reviews security policies internal controls. receives updates from management Chief Security Officer security team. Board receives annual reports from Chief Security Officer.


security efforts managed by executive cybersecurity IT engineering operations legal professionals. established cross-functional leadership team cybersecurity threats. oversight security teams refine practices security risks changes regulations. participates response response.


designated Chief Security Officer Senior Vice President risks cybersecurity. 17 years government assignments.


headquarters Santa Clara California. own lease 3 million feet office. data center. lease data centers research sales U. S. international China India Israel Taiwan. facilities good suitable. assets operating segment. Note 3 Consolidated Financial Statements Part IV Item 15 Annual Report Form 10-K.


Note 13 Statements Part IV 15 Annual 10-K proceedings.


Registrant Equity Purchases Securities


stock traded Nasdaq Global Select Market NVDA. January 22, 1999. no market. February 16 2024 382 shareholders.


2023 repurchase $25. billion. 2024 repurchased 21 million shares $9. 7 billion. January 2024 repurchase $22. 5 billion.


repurchases open market privately negotiated Rule 10b5-1 plan structured share repurchase programs Rule 10b-18 Exchange Act subject market conditions legal requirements. NVIDIA common stock.


fiscal year 2024 paid $395 million quarterly cash dividends. future subject Board Directors determination shareholders.


table share repurchase transactions fourth quarter 2024 Shares Purchased Price Paid Share Program Dollar Value Shares billions October 30, 2023 November 26, 2023. November 27, 2023 December 24 2023. December 25, 2023 January 28, 2024.


January February repurchased. million shares. 9 billion Rule.


withhold stock shares tax RSU employee equity incentive program. 2024


7 million shares $2. billion. 4 Consolidated Financial Statements IV 15 Annual 10-K equity.


graph shareholder return common stock S&P 500 Nasdaq 100 five years 2024. $100 invested January 27, 2019 common stock S&P 500 Nasdaq 100. stock. reinvestment dividends. future performance.


1/27/19 stock indices.


FactSet financial data./2019/2020/2022 NVIDIA Corporation.#326. 26. 15#512. 28 S&P 500. 83 Nasdaq.#194.#218. 68. 67#268. 13


Discussion Financial Operations


financial condition 1A. Risk Consolidated Financial Statements Notes cautionary statements risks Annual Report Form 10-K purchase common stock.


pioneered accelerated computing. expanded fields. leveraged GPU architecture accelerated AI scientific data science AV robotics metaverse 3D.


segments Networking. Note 17 Financial Statements Part IV 15 Annual Report 10-K.


Santa Clara NVIDIA 1993 Delaware 1998.


Supply Transitions Models


Demand data center systems surged 2024. 2025 gathering demand indications transitions. products 2025. increased supply capacity purchases added vendors prepaid manufacturing agreements. volumes complexity risk. purchase commitments inventory manufacturing capacity 2024 impacted shortening lead times. arrangements. Supply Hopper improving demand strong. next-generation products supply-constrained. incur inventory provisions exceed demand.


build products maintain inventory demand. long supply capacity commitments capacity demand expectations change. risks increase shorten cycles new lines business integrate suppliers complexity.


Product transitions complex ship new. introduction cycles transitioning architecture Data Center Professional Visualization Gaming products. faster Data Center launch cadence AI opportunities. increased frequency challenges supply demand manufacturing lead times. Qualification time customers anticipating reducing inventory revenue. increasing frequency complexity quality production issues inventory warranty costs delays. Deployment new products challenges complexity timing purchases demand. managed prior transitions sold multiple architectures transitions difficult demand supply mix incur additional costs.


build technology introduce products NVIDIA Cloud services Omniverse platform LLMs generative AI models. demand estimates volatility revenue revenue. generative AI emerged demand Data Center long-term trajectory unknown.


third quarter fiscal 2023 USG announced licensing requirements exports China Russia A100 H100 integrated circuits.


July 2023 USG additional licensing A100 H100 products Middle East.


2023 USG fourth quarter 2024 exports China Country Groups D1 D5 Saudi Arabia United Emirates Vietnam Israel A100 A800 H100 H800 L4 L40 RTX 4090. Group D5 China. October 23, 2023 A100 A800 H100 H800 L40S. sales China decreased revenue 19% 2023 14% 2024.


received licenses ship restricted products China. working expand Data Center portfolio new solutions USG license notice shipment. started ship alternatives China small volumes. China mid-single digit Data Center revenue fourth quarter 2024 USG expect similar first quarter 2025. customer products may seek license no USG.


competitive position harmed results USG’s export controls. increasing importance AI rising geopolitical tensions USG may change export control rules products export restrictions licensing impacting business financial results. sell inventory develop replacement products excluding from China other impacted markets Middle East.


enhance resiliency supply chain Asia-Pacific export controls limit manufacturing locations impact business. 1A. Risk Factors Regulatory Legal Stock potential impact.


Macroeconomic factors inflation interest rates capital market volatility supply chain constraints developments demand. supply chain manufacturing costs wages capital equipment investments. product pricing. manage product availability costs with vendors.


monitoring impact geopolitical conflict Israel operations health safety 3,700 employees research development operations sales marketing networking products. operating expenses fiscal year 2024 include financial support charitable activity. global supply chain impact. employees active military duty. some absent product development operations. significant impact expense conflict could impact future product development operations revenue uncertainty.


Ended 28, 29, 2023 Revenue,922 126% Gross margin. Operating expenses,329 2%,972,224 681% Net income,760 581% diluted share. 586%


platforms acceleration. processors interconnects software algorithms systems services. Data Center Gaming Professional Visualization Automotive.


2024. billion 126%.


Data Center revenue 2024 217%. automotive healthcare. access NVIDIA AI infrastructure cloud on-premises. compute revenue 244%. Networking 133%.