NVIDIA CORPORATION Forward-Looking Statements
This Quarterly Report on Form 10-Q contains forward-looking statements which are based on our management's beliefs and assumptions and on information currently available to our management. In some cases, you can identify forward-looking statements by terms such as "may," "will," "should," "could," "goal," "would," "expect," "plan," "anticipate," "believe," "estimate," "project," "predict," "potential" and similar expressions intended to identify forward-looking statements. These statements involve known and unknown risks, uncertainties and other factors, which may cause our actual results, performance, time frames or achievements to be materially different from any future results, performance, time frames or achievements expressed or implied by the forward-looking statements. We discuss many of these risks, uncertainties and other factors in this Quarterly Report on Form 10-Q and in our Annual Report on Form 10-K for the fiscal year endedJanuary 30, 2022 in greater detail under the heading "Risk Factors" of such reports. Given these risks, uncertainties and other factors, you should not place undue reliance on these forward-looking statements. Also, these forward-looking statements represent our estimates and assumptions only as of the date of this filing. You should read this Quarterly Report on Form 10-Q completely and with the understanding that our actual future results may be materially different from what we expect. We hereby qualify our forward-looking statements by these cautionary statements. Except as required by law, we assume no obligation to update these forward-looking statements publicly, or to update the reasons actual results could differ materially from those anticipated in these forward-looking statements, even if new information becomes available in the future.
All references to "NVIDIA," "we," "us," "our" or the "Company" mean
NVIDIA, the NVIDIA logo, GeForce, GeForce NOW, Mellanox, NVIDIA AI Enterprise, NVIDIA DGX, NVIDIA DRIVE Orin, NVIDIA Grace, NVIDIA Hopper, NVIDIA Omniverse, NVIDIA OVX, NVIDIA RTX, NVIDIA Spectrum and Quadro, are trademarks and/or registered trademarks ofNVIDIA Corporation inthe United States and/or other countries. MAXQ® is the registered trademark of Maxim Integrated Products, Inc. Other company and product names may be trademarks of the respective companies with which they are associated. Features, pricing, availability, and specifications are subject to change without notice. The following discussion and analysis of our financial condition and results of operations should be read in conjunction with the risk factors set forth in Item 1A. "Risk Factors" of our Annual Report on Form 10-K for the fiscal year endedJanuary 30, 2022 and Part II, Item 1A. "Risk Factors" of this Quarterly Report on Form 10-Q and our Condensed Consolidated Financial Statements and related Notes thereto, as well as other cautionary statements and risks described elsewhere in this Quarterly Report on Form 10-Q, before deciding to purchase or sell shares of our common stock.
Overview
Our Company and Our Businesses
NVIDIA pioneered accelerated computing to help solve the most challenging computational problems. Since our original focus on PC graphics, we have expanded to several other large and important computationally intensive fields. Fueled by the sustained demand for exceptional 3D graphics and the scale of the gaming market, NVIDIA has leveraged its GPU architecture to create platforms for scientific computing, AI, data science, autonomous vehicles, robotics, and augmented and virtual reality.
Our two operating segments are "Graphics" and "Compute & Networking," as described in Note 15 of the Notes to Condensed Consolidated Financial Statements.
Headquartered in
Recent Developments, Future Objectives and Challenges
Termination of the Arm Share Purchase Agreement
OnFebruary 8, 2022 , NVIDIA and SoftBank announced the termination of the Share Purchase Agreement whereby NVIDIA would have acquired Arm from SoftBank. The parties agreed to terminate because of significant regulatory challenges preventing the completion of the transaction. We recorded an acquisition termination cost of$1.35 billion in the first quarter of fiscal year 2023 reflecting the write-off of the prepayment provided at signing inSeptember 2020 . 21
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Demand
Demand for our products is based on many factors, including our product introductions and transitions, time to market, competitor product releases and announcements, competing technologies, and changes in macroeconomic conditions, including rising inflation, all of which can impact the timing and volume of our revenue. Product transitions are complex and can negatively impact our revenue as we manage shipments of prior architecture products and channel partners prepare and adjust to support new products. GPUs have use cases in addition to their designed and marketed use case, such as for digital currency mining, including blockchain-based platforms such as Ethereum. It is difficult for us to estimate with any reasonable degree of precision the past or current impact of cryptocurrency mining, or forecast the future impact of cryptocurrency mining, on demand for our products. Volatility in the cryptocurrency market, including new compute technologies, price changes in cryptocurrencies, government cryptocurrency policies and regulations, new cryptocurrency standards, and changes in the method of verifying blockchain transactions, have impacted and can in the future impact cryptocurrency mining and demand for our products and can further impact our ability to estimate demand for our products. Changes to cryptocurrency standards and processes including, but not limited to, the pending Ethereum 2.0 standard may decrease the usage of GPUs for Ethereum mining as well as create increased aftermarket resales of our GPUs, impact retail prices for our GPUs, increase returns of our products in the distribution channel, and may reduce demand for our new GPUs. We have introduced LiteHash Rate , or LHR, GeForce GPUs with limited Ethereum mining capability and provided CMP products in an effort to address demand from gamers and direct miners to CMP. Beginning in the second quarter of fiscal year 2022, most desktop NVIDIA Ampere architecture GeForce GPU shipments were LHR in our effort to direct GeForce to gamers. Attempts in the aftermarket to improve the hash rate capabilities of our LHR cards have been successful and our gaming cards may become more attractive to miners, increasing demand for our gaming GPUs and limiting our ability to supply our gaming cards to non-mining customers. We cannot predict whether our strategy of using LHR cards and CMP will achieve our desired outcome. Additionally, consumer and enterprise behavior during the COVID-19 pandemic has made it more difficult for us to estimate future demand and may have changed pre-pandemic behaviors. These challenges may be more pronounced or volatile in the future on both a global and regional basis and may continue in the future when the effects of the pandemic subside. Restrictions that may be imposed or reinstated as the pandemic continues may negatively impact customer demand for our products. Recent lockdown measures due to COVID-19 containment efforts inChina , as well as the war inUkraine , have impacted end customer sales inChina and EMEA, respectively, and we expect this impact to continue into the second quarter of fiscal year 2023. During the first quarter of fiscal year 2023, we paused all direct sales inRussia . Direct sales toRussia in fiscal year 2022 were immaterial. Our revenue to partners that sell intoRussia may be negatively impacted due to the war inUkraine and we estimate that in fiscal year 2022,Russia accounted for approximately 2% of total end customer sales and 4% of Gaming end customer sales. In estimating demand and evaluating trends, we make multiple assumptions, any of which may prove to be incorrect. Supply Our manufacturing lead times are very long and in some cases extend twelve months or longer, which requires us to make estimates of customers' future demand. These conditions could lead to a significant mismatch between supply and demand, giving rise to product shortages or excess inventory, and make our demand forecast more uncertain. To shorten shipment lead times and deliver more quickly to our customers, we may build finished products and maintain inventory for anticipated demand that does not materialize. During fiscal year 2022, we made substantial strides in broadening our supply base to scale our company and better serve customer demand. Recent COVID-19-related disruptions and lockdowns inChina have created and are expected to continue to create supply and logistics constraints. The war inUkraine has further strained global supply chains and could result in a shortage of key materials that our suppliers, including our foundry partners, require to satisfy our needs. We expect continued supply constraints for some of our products, such as Networking, through the end of the second quarter of fiscal year 2023 and potentially beyond. We have placed orders for certain supply in advance of our historical lead times, paid premiums and provided deposits to secure future supply and capacity, and may need to continue to do so in the future. Placing orders in advance of our historical lead times to secure supply and services in a constrained environment may result in excess inventory, cancellation penalties or other charges if there is a partial or complete reduction in long-term demand for our products. These actions may also increase our product costs, in addition to increased overall costs as a result of rising inflation. Increased costs for wafers, components, logistics, and other supply chain expenses, driven in part by inflation, have negatively impacted and may continue to impact our gross margin. Given our long lead times on inventory purchasing, we may order components before our product design is finalized and changes to the product design or to end demand, which may be perishable or may disappear, could trigger excess inventory. Our supply deliveries and production may be non-linear within a quarter or year which could cause changes to expected revenue or cash flows. 22
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COVID-19
The COVID-19 pandemic continued during fiscal year 2023. Most of our employees continue to work remotely and we have paused most business travel. Our Professional Visualization market platform benefited from demand for workstations as enterprises support hybrid work environments. Recent COVID-19-related disruptions inChina are creating supply and logistics constraints and impacting end customer sales. As our offices begin to reopen, we expect to incur incremental expenses as we resume onsite services and related in-office costs. As the COVID-19 pandemic continues, the timing and overall demand from customers, and the limited availability of supply chain, logistical services and component supply may have a material net negative impact on our business and financial results.
We believe our existing balances of cash, cash equivalents and marketable securities, along with commercial paper arrangements, will be sufficient to satisfy our working capital needs, capital asset purchases, dividends, debt repayments and other liquidity requirements associated with our existing operations.
First Quarter of Fiscal Year 2023 Summary
Three Months Ended
May 1, 2022 January 30, 2022 May 2, 2021 Quarter-over-Quarter Change Year-over-Year Change
($ in millions, except per share data)
Revenue $ 8,288 $ 7,643 $ 5,661 8 % 46 %
Gross margin 65.5 % 65.4 % 64.1 % 10 bps 140 bps
Operating expenses $ 3,563 $ 2,029 $ 1,673 76 % 113 %
Income from operations $ 1,868 $ 2,970 $ 1,956 (37) % (4) %
Net income $ 1,618 $ 3,003 $ 1,912 (46) % (15) %
Net income per diluted share $ 0.64 $ 1.18 $ 0.76 (46) % (16) %
We specialize in markets where our computing platforms can provide tremendous
acceleration for applications. These platforms incorporate processors,
interconnects, software, algorithms, systems, and services to deliver unique
value. Our platforms address four large markets where our expertise is critical:
Gaming, Data Center, Professional Visualization, and Automotive.
Revenue for the first quarter of fiscal year 2023 was
Gaming revenue was up 31% from a year ago and up 6% sequentially. The year-on-year increase reflects higher sales of GeForce GPUs based on our NVIDIA Ampere architecture. The sequential increase was driven by higher sales of GeForce GPUs for laptops and SOCs for game consoles.
Our GPUs are capable of cryptocurrency mining, though we have limited visibility into how much this impacts our overall GPU demand. Volatility in the cryptocurrency market - such as the recent declines in cryptocurrency prices or changes in method of verifying transactions, including proof of work or proof of stake - can impact demand for our products and our ability to accurately estimate it. Most desktop NVIDIA Ampere architecture GeForce GPU shipments were LiteHash Rate to help direct GeForce GPUs to gamers. Data Center revenue was up 83% from a year ago and up 15% sequentially. These increases were primarily driven by sales of NVIDIA Ampere architecture GPUs and DGX systems used across both training and inference. Growth was led by cloud computing and hyperscale customers for workloads such as natural language processing and deep recommenders.
Professional Visualization revenue was up 67% from a year ago and down 3% sequentially. The year-on-year increase was driven by sales of NVIDIA Ampere architecture products with growth in workstations as enterprises supported hybrid work environments. The sequential decrease was due to lower sales of desktop workstation GPUs, partially offset by higher sales of notebook workstations GPUs.
Automotive revenue was down 10% from a year ago and up 10% sequentially. The
year-on-year decrease was due to automakers' supply constraints and the decline
of legacy cockpit revenue. The sequential increase was driven by AI cockpit
revenue.
23
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OEM and Other revenue was down 52% from a year ago and down 18% sequentially.
The year-on-year decrease was due to a decline in CMP revenue, which was nominal
in the quarter compared with $155 million from a year ago. The sequential
decrease was driven by lower entry level notebook GPU sales.
GAAP gross margin was up 140 basis points from a year ago, primarily due to a higher-end mix of GeForce GPUs within Gaming and the reduced impact of acquisition-related costs. Sequentially, GAAP gross margin was up 10 basis points due to increased contribution of, and favorable product mix changes within, Data Center, partially offset by higher sales of SOCs for game consoles.
GAAP operating expenses were up 113% from a year ago and up 76% sequentially and include a$1.35 billion acquisition termination charge related to the Arm transaction. These increases were also driven by employee growth, compensation-related costs and engineering development costs. We have been successful in hiring this year and expect to slow hiring in the second half of fiscal year 2023 as we integrate our new employees. Income from operations was$1.87 billion , down 4% from a year ago and down 37% sequentially. Net income was a$1.62 billion . Net income per diluted share was$0.64 , down 16% from a year ago and down 46% sequentially. Cash, cash equivalents and marketable securities were$20.34 billion , up from$12.67 billion a year ago and down from$21.21 billion a quarter ago. The year-on-year increase reflects operating cash flow generation and$5.00 billion of debt issuance proceeds. The sequential decrease reflects share repurchases and advanced payments on supply agreements.
During the first quarter of fiscal year 2023, we returned
On
Market Platform Highlights
In our Data Center market platform, we announced the NVIDIA Hopper GPU architecture and its first products based on the architecture including the NVIDIA H100 Tensor Core GPU and the fourth-generation NVIDIA DGX system. Additionally, we announced the NVIDIA Grace CPU Superchip; unveiled the NVIDIA Spectrum-4 end-to-end 400Gbps networking platform; and announced NVIDIA OVX server reference design for digital twins and other Omniverse applications.
In our Gaming market platform, we introduced the GeForce RTX 3090 Ti enthusiast-class desktop GPU; announced that there are now over 180 laptop models featuring RTX 30-series GPUs and our energy efficient, thin & light Max-Q technologies; announced that 15 new game titles added support for NVIDIA RTX features, bringing the total to over 250 games and applications; and expanded the GeForce NOW cloud gaming service library with over 100 games, bringing the total to over 1,300. In our Professional Visualization market platform, we added new NVIDIA Ampere architecture RTX GPUs for workstations and announced that Amazon Robotics is building AI-enabled digital twins of its warehouses using NVIDIA Omniverse Enterprise.
In our Automotive market platform, we started production of the NVIDIA DRIVE
Orin autonomous vehicle SOC and announced wins with
Financial Information by Business Segment and Geographic Data
Refer to Note 15 of the Notes to Condensed Consolidated Financial Statements for disclosure regarding segment information.
Critical Accounting Policies and Estimates
Refer to Part II, Item 7, "Critical Accounting Policies and Estimates" of our Annual Report on Form 10-K for the fiscal year endedJanuary 30, 2022 . There have been no material changes to our Critical Accounting Policies and Estimates. 24
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Results of Operations
The following table sets forth, for the periods indicated, certain items in our
Condensed Consolidated Statements of Income expressed as a percentage of
revenue.
Three Months Ended
May 1, May 2,
2022 2021
Revenue 100.0 % 100.0 %
Cost of revenue 34.5 35.9
Gross profit 65.5 64.1
Operating expenses
Research and development 19.5 20.4
Sales, general and administrative 7.1 9.2
Acquisition termination cost 16.3 -
Total operating expenses 42.9 29.6
Income from operations 22.6 34.5
Interest income 0.2 0.1
Interest expense (0.8) (0.9)
Other, net (0.2) 2.4
Other income (expense), net (0.8) 1.6
Income before income tax 21.8 36.1
Income tax expense 2.3 2.3
Net income 19.5 % 33.8 %
Revenue
Revenue by Reportable Segments
Three Months Ended
May 1, May 2, $ %
2022 2021 Change Change
($ in millions)
Graphics $ 4,616 $ 3,451 $ 1,165 34 %Compute & Networking 3,672 2,210 1,462 66 % Total
$ 8,288 $ 5,661 $ 2,627 46 % Graphics - Graphics segment revenue increased by 34% in the first quarter of fiscal year 2023 compared to the first quarter of fiscal year 2022. We continue to benefit from increased sales of our NVIDIA Ampere architecture products. The increase in Gaming revenue during the first quarter of fiscal year 2023 resulted from a combination of factors including: the ramp of new RTX 30 Series GPUs; the release of new games supporting ray tracing; the rising popularity of gaming, eSports, content creation and streaming; the demand for new and upgraded systems to support the increase in remote work; and the ability of end users to engage in cryptocurrency mining. Compute & Networking - Compute & Networking segment revenue increased by 66% for the first quarter of fiscal year 2023 compared to the first quarter of fiscal year 2022, driven primarily by sales of NVIDIA Ampere architecture products to hyperscale customers for cloud computing and workloads such as natural language processing and deep recommender models, as well as to vertical industries. The increase also reflects an increase in sales of networking products. CMP contributed an insignificant amount in the first quarter of fiscal year 2023 compared to$155 million in the prior year. 25 --------------------------------------------------------------------------------
Concentration of Revenue
Revenue from sales to customers outside ofthe United States accounted for 77% and 86% of total revenue for the first quarter of fiscal years 2023 and 2022, respectively. Revenue by geographic region is allocated to individual countries based on the location to which the products are initially billed even if the revenue is attributable to end customers in a different location.
No customer represented 10% or more of total revenue for the first quarter of fiscal years 2023 or 2022.
Gross Margin Our overall gross margin increased to 65.5% for the first quarter of fiscal year 2023 from 64.1% for the first quarter of fiscal year 2022, reflecting a higher-end mix of GeForce GPUs within our Graphics segment and a reduced impact to gross margin for acquisition-related costs. Inventory provisions totaled$90 million and$58 million for the first quarter of fiscal years 2023 and 2022, respectively. Sales of inventory that was previously written-off or down totaled$15 million and$21 million for the first quarter of fiscal years 2023 and 2022, respectively. As a result, the overall net effect on our gross margin was an unfavorable impact of 0.9% and 0.6% in the first quarter of fiscal years 2023 and 2022, respectively. Graphics - The gross margin of our Graphics segment increased during the first quarter of fiscal year 2023 compared to the first quarter of fiscal year 2022, primarily due to a higher-end mix within GeForce GPUs.
Compute & Networking - The gross margin of our Compute & Networking segment decreased during the first quarter of fiscal year 2023 compared to the first quarter of fiscal year 2022, primarily due to lower contribution of prior architecture boards compared to NVIDIA Ampere architecture systems.
Operating Expenses
Three Months Ended
May 1, May 2, $ %
2022 2021 Change Change
($ in millions)
Research and development expenses $ 1,618 $ 1,153 $ 465 40 %
% of net revenue 20 % 20 %
Sales, general and administrative expenses 592 520 72 14 %
% of net revenue 7 % 9 %
Acquisition termination cost 1,353 - 1,353 100 %
% of net revenue 16 % - %
Total operating expenses $ 3,563 $ 1,673 $ 1,890 113 %
Research and Development
Research and development expenses increased by 40% during the first quarter of
fiscal year 2023 compared to the first quarter of fiscal year 2022, primarily
driven by compensation-related costs, including for employee growth and
stock-based compensation, and engineering development costs.
Sales, General and Administrative
Sales, general and administrative expenses increased by 14% during the first quarter of fiscal year 2023 compared to the first quarter of fiscal year 2022, primarily driven by compensation-related costs, associated with employee growth and stock-based compensation, partially offset by lower legal fees.
Acquisition Termination Cost
We recorded an acquisition termination cost related to the Arm transaction of$1.35 billion in the first quarter of fiscal year 2023 reflecting the write-off of the prepayment provided at signing inSeptember 2020 . 26 --------------------------------------------------------------------------------
Other Income (Expense), Net
Interest income consists of interest earned on cash, cash equivalents and
marketable securities. Interest income was
Interest expense is primarily comprised of coupon interest and debt discount amortization related to our notes. Interest expense was$68 million and$53 million during the first quarter of fiscal years 2023 and 2022, respectively. The increase in expense reflects interest on the$5.00 billion note issued inJune 2021 . Other, net, consists primarily of realized or unrealized gains and losses from investments in non-affiliated entities and the impact of changes in foreign currency rates. Other, net, was an expense of$13 million and income of$135 million during the first quarter of fiscal years 2023 and 2022, respectively. Changes in other, net, compared to the first quarter of fiscal year 2022 were primarily driven by mark-to-market impact from public trading equity investments and changes in value from our non-affiliated private investments. Refer to Note 8 of the Notes to Condensed Consolidated Financial Statements for additional information regarding our investments in non-affiliated entities.
Income Taxes
We recognized an income tax expense of$187 million and$132 million for the first quarter of fiscal years 2023 and 2022, respectively. The income tax expense as a percentage of income before income tax was 10.3% and 6.5% for the first quarter of fiscal years 2023 and 2022, respectively. The increase in our effective tax rate was primarily due to an increase in the amount of earnings subject toU.S. tax, the Arm acquisition termination cost recorded in the first quarter of fiscal year 2023 which did not result in any material tax benefit, and a decreased impact of tax benefit from theU.S. federal research tax credit, partially offset by the increased benefits from the foreign-derived intangible income deduction and stock-based compensation. If our stock price declines, the future tax benefits from stock-based compensation may decline, resulting in an increase in tax expense.
Liquidity and Capital Resources
May 1, 2022 January 30, 2022
(In millions)
Cash and cash equivalents $ 3,887 $ 1,990
Marketable securities 16,451 19,218
Cash, cash equivalents and marketable securities
21,208
Three Months Ended
May 1, 2022 May 2, 2021
(In millions)
Net cash provided by operating activities $ 1,731 $ 1,874
Net cash provided by (used in) investing activities
(1,272)
Net cash used in financing activities$ (2,446) $
(471)
As ofMay 1, 2022 , we had$20.34 billion in cash, cash equivalents and marketable securities, a decrease of$0.87 billion from the end of fiscal year 2022. Our investment policy requires the purchase of highly rated fixed income securities, the diversification of investment types and credit exposures, and certain maturity limits on our portfolio. Cash provided by operating activities decreased in the first quarter of fiscal year 2023 compared to the first quarter of fiscal year 2022, primarily due to advanced payments on supply agreements in the first quarter of fiscal year 2023 partially offset by an increase in net income adjusted for certain non-cash items, such as the Arm acquisition termination cost of$1.35 billion during the first quarter of fiscal year 2023. Cash provided by investing activities increased in the first quarter of fiscal year 2023 compared to cash used in the first quarter of fiscal year 2022, primarily driven by higher marketable securities sales and maturities and lower purchases of marketable securities. 27 -------------------------------------------------------------------------------- Cash used in financing activities increased in the first quarter of fiscal year 2023 compared to the first quarter of fiscal year 2022, which primarily reflects share repurchases in the first quarter of fiscal year 2023.
Liquidity
Our primary sources of liquidity are our cash and cash equivalents, our marketable securities, and the cash generated by our operations. As ofMay 1, 2022 , we had$20.34 billion in cash, cash equivalents, and marketable securities. Our marketable securities consist of debt securities issued by theU.S. government and its agencies, highly rated corporations and financial institutions, and foreign government entities, as well as certificates of deposit issued by highly rated financial institutions. These marketable securities are primarily denominated inU.S. dollars. Refer to Note 7 of the Notes to Condensed Consolidated Financial Statements for additional information. We believe that we have sufficient liquidity to meet our operating requirements for at least the next twelve months, and for the foreseeable future, including our future supply obligations and additional supply. We continuously evaluate our liquidity and capital resources, including our access to external capital, to ensure we can finance our future capital requirements. We have approximately$1.38 billion of cash, cash equivalents, and marketable securities held outside theU.S. for which we have not accrued any related foreign or state taxes if we repatriate these amounts to theU.S. Other than that, substantially all of our cash, cash equivalents and marketable securities held outside of theU.S. as ofMay 1, 2022 are available for use in theU.S. without incurring additionalU.S. federal income taxes. We utilized almost all of our accumulatedU.S. federal research tax credits during fiscal year 2022, resulting in higher cash tax payments starting in fiscal year 2023. In addition, beginning in fiscal year 2023, the 2017 Tax Cuts and Jobs Act requires taxpayers to capitalize research and development expenditures and to amortize domestic expenditures over five years and foreign expenditures over fifteen years. This will impact cash flows from operations and will result in significantly higher cash tax payments starting in fiscal year 2023.
Capital Return to Shareholders
During the first quarter of fiscal year 2023, we returned$2.00 billion in share repurchases and$100 million in cash dividends. OnMay 23, 2022 , our Board of Directors increased and extended our share repurchase program to repurchase additional common stock up to a total of$15 billion throughDecember 2023 . Our cash dividend program and the payment of future cash dividends under that program are subject to the continuing determination by our Board of Directors that the dividend program and the declaration of dividends are in the best interests of our shareholders.
Outstanding Indebtedness and Commercial Paper
As of
•$1.25 billion of Notes Due 2023;
•$1.25 billion of Notes Due 2024;
•$1.00 billion of Notes Due 2026;
•$1.25 billion of Notes Due 2028;
•$1.50 billion of Notes Due 2030;
•$1.25 billion of Notes Due 2031;
•$1.00 billion of Notes Due 2040;
•$2.00 billion of Notes Due 2050; and
•$500 million of Notes Due 2060.
We have a
Contractual Obligations
We have unrecognized tax benefits of$800 million , which includes related interest and penalties of$67 million recorded in non-current income tax payable as ofMay 1, 2022 . We are unable to reasonably estimate the timing of any potential tax liability, interest payments, or penalties in individual years due to uncertainties in the underlying income tax positions and the timing of the effective settlement of such tax positions. We are currently under examination by the 28
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Internal Revenue Service for our fiscal years 2018 and 2019. Refer to Note 6 of the Notes to Condensed Consolidated Financial Statements for further information.
Other than the contractual obligations described above, there were no material changes outside the ordinary course of business in our contractual obligations from those disclosed in our Annual Report on Form 10-K for the fiscal year endedJanuary 30, 2022 . Refer to Item 7, "Management's Discussion and Analysis of Financial Condition and Results of Operations - Liquidity and Capital Resources" in our Annual Report on Form 10-K for the fiscal year endedJanuary 30, 2022 for a description of our contractual obligations. For a description of our operating lease obligations, long-term debt, and purchase obligations, refer to Note 3, Note 12, and Note 13 of the Notes to Condensed Consolidated Financial Statements, respectively.
Climate Change
To date, there has been no material impact to our results of operations associated with global sustainability regulations, compliance, costs from sourcing renewable energy or climate-related business trends. There are no material current climate change regulations impacting us, however, we are monitoring potential regulation changes inCalifornia ,the United States , theUnited Kingdom , theEuropean Union and other jurisdictions. We believe that climate change has not had a material impact to our revenue to date. We have not experienced any significant physical effects of climate change to date on our operations and results, nor any significant impacts on the cost or availability of insurance. In fiscal year 2024, we plan to launch Earth-2, an AI supercomputer dedicated to predicting the impacts of climate change.
Adoption of New and Recently Issued Accounting Pronouncements
Refer to Note 1 of the Notes to Condensed Consolidated Financial Statements for a discussion of adoption of a new and recently issued accounting pronouncement.
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