Summary
Full summaryThe Print
NVIDIA reported Q2 FY2026 net income of $26.4B ($1.08 diluted EPS) on revenue of $46.7B, up 56% YoY, driven by Data Center demand for Blackwell architecture.
Revenue growth accelerated sequentially (up 6% QoQ) and YoY (up 56%), driven by Blackwell ramp, while gross margin contracted due to product mix.
- Revenue increased 56% YoY to $46.7B, with Data Center revenue up 56% YoY to $41.1B.
- Net income rose 59% YoY to $26.4B, and diluted EPS increased 61% YoY to $1.08.
- Gross margin declined 270 bps YoY to 72.4%, reflecting a mix shift to full-scale Blackwell datacenter systems.
Results That Matter
| Metric | Current Period | Prior Period | Change | Investor Takeaway |
|---|---|---|---|---|
Revenue | $46.7B | $30.0B | +55.7% | Driven by demand for accelerated computing platform used for large language models, recommendation engines, and generative and agentic AI applications. |
Operating income | $28.4B | $18.6B | +52.7% | Revenue growth and operating leverage, partially offset by higher operating expenses. |
Operating margin | 60.8% | 62.1% | −1.3 ppts | Operating expenses grew 38% YoY, outpacing revenue growth, driven by compute/infrastructure costs and compensation. |
Diluted EPS | $1.1 | $0.67 | +61.2% | Net income growth and share repurchases reduced diluted share count by 1.3% YoY. |
Earnings Quality & Cash Conversion
Reported net income includes $2.2B in other income (primarily unrealized gains on publicly-held equity securities). Excluding this, operating income was $28.4B, up 53% YoY. The H20 inventory charge of $4.5B in Q1 did not recur in Q2; instead, a $180M release of previously reserved H20 inventory was recognized.
Value Drivers & Capital Allocation
Capital returned — dividends paid $244.0M (prior $246.0M).
Aggressive share repurchases ($24.2B in H1 FY2026) and a new $60B buyback authorization signal management's confidence in sustained cash generation. Capex increased to $3.1B, reflecting investments in U.S. manufacturing and AI infrastructure.
Return on equity was 26.4% (prior 28.5%); return on assets 18.8%.
- On August 26, 2025, the Board approved an additional $60.0 billion in share repurchase authorization, without expiration, bringing total available to $71.2 billion.
Forward Signals
Not provided in the filing.
Known trends
- Management expects continued Blackwell ramp and transition to Blackwell Ultra platforms, with potential revenue volatility from product transitions and supply-demand management challenges.
- Export controls and geopolitical tensions, including the rescinded AI Diffusion IFR and its replacement rule, create uncertainty around future product restrictions and licensing requirements.
Subsequent events
- From July 28 through August 26, 2025, NVIDIA repurchased 20 million shares for $3.5 billion.
- On August 26, 2025, the Board approved an additional $60.0 billion share repurchase authorization.
“We continue to ramp our Blackwell architecture, which grew 17% sequentially, including our newest architecture, Blackwell Ultra.”
— Management
Risks
No risk factors found
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Segments
| Segment | Revenue | Operating Income | Change | Commentary |
|---|---|---|---|---|
| Compute & Networking | $41.3B | $28.4B | +56.3% | 88% of segment revenue, 69% operating margin — Revenue growth driven by demand for accelerated computing platforms for AI, with Data Center compute revenue up 50% YoY and networking up 98% YoY, fueled by Blackwell ramp and NVLink/InfiniBand/Ethernet adoption. |
| Graphics | $5.4B | $2.2B | +50.6% | 12% of segment revenue, 41% operating margin — Revenue growth driven by strong sales of Blackwell architecture in Gaming (up 49% YoY) and Professional Visualization (up 32% YoY). |
Balance Sheet & Liquidity
Leverage: Total debt of $8.5B against $100.1B in shareholders' equity; net cash position of $48.3B (cash + marketable securities - debt).
Liquidity: $56.8B in cash, cash equivalents, and marketable securities; no commercial paper outstanding; sufficient liquidity for at least the next 12 months.
Working capital: Current assets $102.2B vs. current liabilities $24.3B (current ratio 4.21x). A year earlier: $80.1B vs. $18.0B (4.44x).
Maturities & covenants
- $1.0B of 3.20% notes due 2026; no financial covenants; all covenants complied with as of July 27, 2025.
Notable Footnotes
| Item | Impact |
|---|---|
| H20 inventory charge and subsequent release | A $4.5B charge in Q1 FY2026 for excess H20 inventory and purchase obligations; in Q2, $180M release from sale of H20 to an unrestricted customer outside China. |
| Share repurchase authorization increase | On August 26, 2025, the Board approved an additional $60.0 billion in share repurchase authorization, bringing total available to $71.2 billion. |
| Customer concentration in accounts receivable | Three direct customers accounted for 23%, 19%, and 14% of accounts receivable as of July 27, 2025, increasing credit risk concentration. |
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AI-generated. Informational only, not investment advice. May be incomplete or contain errors. The authoritative source is always the original SEC filing.