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> Immediately accretive to NVIDIA’s non-GAAP gross margin and EPS Can someone explain this? (From the bullet points of the article) I looked up the definition
by maxioatic 6y ago
> Immediately accretive to NVIDIA’s non-GAAP gross margin and EPS
Can someone explain this? (From the bullet points of the article)
I looked up the definition of accretive: "characterized by gradual growth or increase."
So it seems like they expect this to increase their margins. Does that mean ARM had better margins than NVIDIA?
Edit: I don't know what non-GAAP and EPS stand for
- pokot0 6y agoGAAP is an accounting set of rules, EPS is Earning per Share. Basically means they think it will increase their gross margin and EPS but you can't sue them if it does not.
- ericmay 6y agoEPS -> earnings per share Non-GAAP -> doesn’t follow generaly accepted accounting practices. There are alternative accounting methods. GAAP is very US-centric (not good or bad, just stating a fact).
- salawat 6y agoThough note the intent of GAAP is to cut down on "creative accounting" which can tend to mislead.
- tyingq 6y agoI would guess they do have higher margins since they are mostly selling licenses and not actual hardware. This article is old, but suggests a 48% operating margin: https://asia.nikkei.com/NAR/Articles/ARM-posts-strong-profit-margin-on-chip-royalties https://asia.nikkei.com/NAR/Articles/ARM-posts-strong-profit...
- bluejay2 6y agoYou are correct that it means they expect margins to increase. One possibility is that ARM has higher margins as you mentioned. Another is that they are making some assumptions about how much they can reduce certain expenses by, and once you factor in those savings, margins go up.