Summary
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NVIDIA reported Q3 FY2026 net income of $31.9B ($1.30 diluted EPS) on revenue of $57.0B, up 62% YoY, driven by Data Center compute and networking platforms for accelerated computing and AI.
Revenue growth accelerated to 62% YoY from 22% sequential, with Blackwell Ultra becoming the leading architecture, while gross margin contracted YoY due to product mix shift.
- Revenue increased 62% YoY to $57.0B, with Data Center revenue up 66% YoY to $51.2B.
- Net income rose 65% YoY to $31.9B, and diluted EPS increased 67% YoY to $1.30.
- Gross margin declined 1.2 percentage points YoY to 73.4%, as the business model transitioned from Hopper HGX systems to Blackwell full-scale datacenter solutions.
Results That Matter
| Metric | Current Period | Prior Period | Change | Investor Takeaway |
|---|---|---|---|---|
Revenue | $57.0B | $35.1B | +62.4% | Driven by Data Center compute and networking platforms for accelerated computing and AI solutions, with Blackwell architectures as the majority of Data Center revenue. |
Operating income | $36.0B | $21.9B | +64.4% | Growth driven by higher revenue, partially offset by increased operating expenses from compute infrastructure and employee growth. |
Operating margin | 63.2% | 62.3% | +0.9 ppts | Operating leverage improved as revenue growth outpaced operating expense growth. |
Diluted EPS | $1.3 | $0.78 | +66.7% | Increase driven by higher net income and a lower diluted share count from share repurchases. |
Earnings Quality & Cash Conversion
Reported net income of $31.9B includes $1.4B in other income, net, primarily from unrealized gains on publicly-held and non-marketable equity securities. Excluding these non-operating gains, core operating income was $36.0B. Gross margin was impacted by a net unfavorable 0.1 percentage point from inventory provisions and releases, compared to a 2.2 percentage point unfavorable impact in the prior year period.
Net cash provided by operating activities for the first nine months was $66.5B, representing 86% of net income, indicating strong cash generation. Free cash flow (OCF minus capex of $4.8B) was $61.7B, reflecting high conversion and significant reinvestment.
Value Drivers & Capital Allocation
In Q3, NVIDIA repurchased 70M shares for $12.6B and paid $243M in dividends. Capex was $4.8B for the first nine months, supporting infrastructure and manufacturing expansion. ROE was 26.8% on a trailing basis, down from 29.3% a year ago due to equity growth outpacing net income growth.
ROE of 26.8% (prior year: 29.3%) reflects high profitability but a declining trend as shareholders' equity grew 80% YoY to $118.9B, outpacing net income growth.
- $12.6B in share repurchases during Q3, with $62.2B remaining under authorization.
- Board approved an additional $60.0B share repurchase authorization in August 2025.
Forward Signals
Not disclosed—the filing does not provide quantitative guidance for future periods.
Known trends
- Management notes that the availability of data centers, energy, and capital to support AI infrastructure buildout is crucial, and any shortage could impact future revenue and financial performance.
- The rapid evolution of global trade policies, such as export controls and tariffs, has added complexity and increased costs throughout the supply chain, and these challenges are likely to persist.
Subsequent events
- From October 27, 2025 through November 14, 2025, NVIDIA repurchased 6M shares for $1.1B.
- In November 2025, NVIDIA entered into an agreement, subject to certain closing conditions, to invest up to $10B in Anthropic.
“Revenue growth in the third quarter was driven by data center compute and networking platforms for accelerated computing and AI solutions. Our Blackwell architectures are the majority of our Data Center revenue.”
— Management
Risks
No risk factors found
The AI couldn't extract this section from the filing. The company probably didn't report it in a standard format.
Segments
| Segment | Revenue | Operating Income | Change | Commentary |
|---|---|---|---|---|
| Compute & Networking | $50.9B | $35.7B | Revenue up 64% YoY, operating income up 62% YoY | Driven by Data Center compute (up 56% YoY) and networking (up 162% YoY) from Blackwell ramp and NVLink adoption. Segment represented 89% of total revenue. |
| Graphics | $6.1B | $2.5B | Revenue up 51% YoY, operating income up 70% YoY | Growth driven by Blackwell architecture sales in Gaming and Professional Visualization. Segment represented 11% of total revenue. |
Balance Sheet & Liquidity
Leverage: Total debt of $8.5B (including $1.0B short-term) against $60.6B in cash, cash equivalents, and marketable securities, resulting in a net cash position of $52.1B. Debt-to-equity ratio is 0.07x.
Liquidity: Cash, cash equivalents, and marketable securities totaled $60.6B as of October 26, 2025. The company also has a $575M commercial paper program with no outstanding borrowings. Management believes liquidity is sufficient for at least the next 12 months.
Working capital: Current assets $116.5B vs. current liabilities $26.1B (current ratio 4.47x). A year earlier: $80.1B vs. $18.0B (4.44x).
Maturities & covenants
- $1.0B of 3.20% notes due in 2026 (within one year).
- As of October 26, 2025, the company was in compliance with all non-financial covenants under its outstanding notes.
Notable Footnotes
| Item | Impact |
|---|---|
| H20 inventory and purchase obligation charge | A $4.5B charge was recorded in Q1 FY2026 for excess inventory and purchase obligations related to H20 products following U.S. government licensing requirements. This significantly impacted gross margin for the first nine months. |
| Manufacturing and cloud commitments | As of October 26, 2025, manufacturing production and long-term supply commitments totaled $50.3B, and multi-year cloud service agreement commitments were $26B, indicating significant future cash obligations. |
| Strategic investments | NVIDIA committed to invest $5B in Intel Corporation (subject to regulatory approval) and entered into a letter of intent to invest in OpenAI. In November 2025, it agreed to invest up to $10B in Anthropic, subject to closing conditions. |
| Facility lease guarantee | NVIDIA guaranteed a partner's facility lease obligations with a maximum gross exposure of $860M, mitigated by $470M in escrow and a cloud capacity agreement. |
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