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NVIDIA CORP (NVDA)·Q1 2026 Earnings Summary

Executive Summary

  • NVIDIA delivered Q1 FY26 revenue of $44.1B, up 69% YoY and 12% QoQ; non-GAAP EPS was $0.81 and GAAP EPS $0.76, with gross margin depressed by a $4.5B H20 charge tied to new China export licensing requirements .
  • Results beat Wall Street consensus on revenue ($44.06B actual vs $43.25B estimate*) and EPS ($0.81 non-GAAP actual vs $0.75 estimate*), while gross margin missed due to the H20 charge (60.5% GAAP vs 67.1% estimate*). Excluding the charge, non-GAAP GM would have been 71.3% and EPS $0.96 .
  • Data Center revenue reached $39.1B (+73% YoY, +10% QoQ) on accelerating Blackwell ramp, with networking at $5.0B (+64% QoQ) and Gaming at a record $3.8B (+48% QoQ) .
  • Q2 FY26 guidance: revenue $45.0B ±2%, GAAP/non-GAAP GM ~71.8%/72.0%, GAAP/Non-GAAP OpEx ~$5.7B/$4.0B, OI&E ~$450M, tax rate ~16.5%; outlook reflects ~$8B H20 revenue loss from export limits and the offsetting ramp in Blackwell .

Values retrieved from S&P Global*.

What Went Well and What Went Wrong

What Went Well

  • Blackwell ramp and AI factory demand: “Global demand for NVIDIA’s AI infrastructure is incredibly strong… AI inference token generation has surged tenfold… and as AI agents become mainstream, the demand for AI computing will accelerate.” — Jensen Huang .
  • Segment outperformance: Data Center $39.1B (+73% YoY, +10% QoQ) with compute $34.2B (+76% YoY, +5% QoQ) and networking $5.0B (+56% YoY, +64% QoQ); Gaming a record $3.8B (+42% YoY, +48% QoQ) .
  • Cash generation and returns: Operating cash flow $27.4B (Q1) and free cash flow $26.1B; returned $14.3B to shareholders via $14.1B buybacks and $244M dividends .

What Went Wrong

  • H20 export-control shock: $4.5B charge on excess inventory and purchase obligations; unable to ship additional $2.5B H20 revenue in Q1, with ~$8B loss embedded in Q2 outlook .
  • Gross margin compression: GAAP GM fell to 60.5% (vs 73.0% prior quarter), primarily due to the H20 charge and initial ramp of more sophisticated systems in Data Center .
  • China headwind: Data Center revenue from China decreased sequentially and is expected to be meaningfully lower in Q2; management has limited options to supply compliant products under revised rules .

Financial Results

Income Statement vs Prior Periods and Consensus

MetricQ1 FY25 (Oldest)Q4 FY25Q1 FY26 (Actual)Q1 FY26 (Consensus*)
Revenue ($USD Billions)$26.044 $39.331 $44.062 $43.255*
GAAP Gross Margin %78.4% 73.0% 60.5% 67.07%*
Non-GAAP Gross Margin %78.9% 73.5% 61.0% —
GAAP Diluted EPS ($)$0.60 $0.89 $0.76 —
Non-GAAP Diluted EPS ($)$0.61 $0.89 $0.81 $0.75*

Values retrieved from S&P Global*.

Note: Excluding H20 charge and related tax impact, Q1 FY26 non-GAAP GM would have been 71.3% and EPS $0.96 .

Revenue by Reportable Segments

Segment ($USD Millions)Q1 FY25 (Oldest)Q4 FY25Q1 FY26
Compute & Networking$22,675 $36,036 $39,589
Graphics$3,369 $3,295 $4,473
Total$26,044 $39,331 $44,062

Revenue by Market Platform

Platform ($USD Millions)Q1 FY25 (Oldest)Q4 FY25Q1 FY26
Data Center$22,563 $35,580 $39,112
Compute$19,392 $32,556 $34,155
Networking$3,171 $3,024 $4,957
Gaming$2,647 $2,544 $3,763
Professional Visualization$427 $511 $509
Automotive$329 $570 $567
OEM and Other$78 $126 $111
Total$26,044 $39,331 $44,062

KPIs and Balance Sheet Metrics

KPIQ4 FY25 (Oldest)Q1 FY26
Cash, Cash Equivalents & Marketable Securities ($B)$43.2 $53.7
Operating Cash Flow ($B)$16.6 $27.4
Free Cash Flow ($B)$15.5 $26.1
Accounts Receivable ($B)$23.1 $22.1
DSO (Days)53 46
Inventory ($B)$10.1 $11.3
DSI (Days)86 59
Inventory & Capacity Purchase Commitments ($B)$30.8 $29.8
Supply & Capacity Prepayments ($B)$5.1 $4.2
Other Non-Inventory Purchase Obligations ($B)$14.3 $13.7
Shareholder Returns ($B)$8.1 (Q4 buybacks+dividends) $14.3 (Q1)

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
RevenueQ1 FY26$43.0B ±2% ——
GAAP Gross Margin %Q1 FY2670.6% ±50 bps ——
Non-GAAP Gross Margin %Q1 FY2671.0% ±50 bps ——
GAAP Operating ExpensesQ1 FY26~$5.2B ——
Non-GAAP Operating ExpensesQ1 FY26~$3.6B ——
OI&E (GAAP/Non-GAAP)Q1 FY26~$400M ——
Tax Rate (GAAP/Non-GAAP)Q1 FY2617.0% ±1% ——
RevenueQ2 FY26—$45.0B ±2% (incl. ~$8.0B H20 loss) Raised vs prior-quarter guide level
GAAP Gross Margin %Q2 FY26—71.8% ±50 bps Raised vs Q1 guide
Non-GAAP Gross Margin %Q2 FY26—72.0% ±50 bps Raised vs Q1 guide
GAAP Operating ExpensesQ2 FY26—~$5.7B Higher sequentially
Non-GAAP Operating ExpensesQ2 FY26—~$4.0B Higher sequentially
OI&E (GAAP/Non-GAAP)Q2 FY26—~$450M Higher vs Q1 guide
Tax Rate (GAAP/Non-GAAP)Q2 FY26—16.5% ±1% Lower vs Q1 guide

Earnings Call Themes & Trends

TopicPrevious Mentions (Q3 FY25)Previous Mentions (Q4 FY25)Current Period (Q1 FY26)Trend
Blackwell ramp & AI factoriesBlackwell in full production; samples to CSPs; demand “staggering” $11B Blackwell revenue; ramp moderates GM to low-70s near-term Fastest ramp; GB200 NVL72 generally available; major hyperscalers deploying ~1,000 NVL72 racks/week Accelerating
Reasoning AI & inferenceTest-time scaling emerging; inference growth Inference and reasoning highlighted as scaling laws Step-function increase in token generation; GB200/NVL72 delivers up to 30x throughput on MLPerf Accelerating
Networking (Spectrum-X, NVLink)Spectrum-X revenue +3x YoY; NVLink scale-up Networking attach robust; transition to NVLink 72 & Spectrum-X Networking +64% QoQ; NVLink shipments >$1B; Spectrum-X annualizing >$8B, added Google Cloud & Meta Strong adoption
China/export controlsChina % well below pre-controls; compliant Hopper shipments China approx same percentage but ~half of pre-controls H20 export license shock; $4.5B charge; Q2 China data center meaningfully down Headwind
Onshore manufacturing—Scaling complex racks; global partners Building U.S. factories; Foxconn Texas/Houston; goal to build supercomputers in America within a year Expanding
Sovereign AIIndia/Japan initiatives EU/France initiatives New projects in Saudi Arabia, UAE, Taiwan; ~100 AI factories in flight Expanding
Gross margin trajectory75% non-GAAP; shift to complex systems slightly lowers GM Low-70s during ramp, mid-70s later Ex-H20, GM would be 71.3%; guiding ~72% Q2 and mid-70s later this year Improving

Management Commentary

  • “Our breakthrough Blackwell NVL72 AI supercomputer — a ‘thinking machine’ designed for reasoning— is now in full-scale production across system makers and cloud service providers” — Jensen Huang .
  • “On average, major hyperscalers are each deploying nearly 1,000 NVL72 racks or 72,000 Blackwell GPUs per week and are on track to further ramp output this quarter” — Colette Kress .
  • “We incurred a $4.5 billion charge… associated with H20 excess inventory and purchase obligations… we were unable to ship an additional $2.5 billion of H20 revenue in the first quarter” — Colette Kress .
  • “We are continuing to work toward achieving gross margins in the mid-70% range late this year” — Colette Kress .

Q&A Highlights

  • China/H20 impact: Q1 recognized $4.6B H20 revenue, +$4.5B write-down; Q2 outlook reflects ~$8B H20 revenue loss; TAM of China AI accelerators ~$50B now inaccessible under current limits .
  • Sequential growth drivers: Blackwell ramp offsets China decline; Q2 guide implies non-China strength and improved profitability from Blackwell .
  • Networking adoption: Spectrum-X Ethernet scaling to millions of GPUs; NVLink is a new growth vector with >$1B shipments in Q1; attach rates improving .
  • Gross margin trajectory: Low-70s during ramp; targeted mid-70s later this year as yields, cost optimizations and configuration mix improve .
  • Sovereign AI pipeline: Multiple large national AI factories announced/underway (Saudi Arabia, UAE, Taiwan), supporting sustained demand visibility .

Estimates Context

  • Q1 FY26 actuals vs consensus: Revenue $44.06B vs $43.25B estimate*; Non-GAAP EPS $0.81 vs $0.75 estimate*; GAAP GM 60.5% vs 67.1% estimate* (H20 charge driven shortfall) .
  • Q2 FY26 forward: Guide $45.0B ±2% aligns with consensus GM (~72%*) and implies continued Blackwell-driven strength despite ~$8B H20 revenue loss .

Values retrieved from S&P Global*.

Key Takeaways for Investors

  • Structural demand: Blackwell ramp, reasoning AI, and AI factory build-outs across hyperscalers and sovereigns support multi-quarter revenue visibility despite China headwinds .
  • Near-term margin inflection: Ex-H20, Q1 non-GAAP GM ~71.3%; guided ~72% in Q2 with path to mid-70s later this year as systems mature — a key EPS driver .
  • Networking leverage: NVLink and Spectrum-X adoption is accelerating; networking revenue inflecting and should scale with AI factory deployments .
  • Cash flow capacity: $27.4B operating cash flow in Q1 and $26.1B FCF provide ample capital for supply chain scale-up, onshore manufacturing commitments, and shareholder returns .
  • China exposure contained: Q2 guide embeds ~$8B H20 loss; non-China demand (CSPs, enterprise, sovereign AI) is offsetting — focus on compliance while exploring limited options .
  • Trading implications (short term): Expect narrative focus on margin recovery, Blackwell supply ramp pace, and sovereign AI orders; watch for updates on GB300 sampling and NVL72 deployment rates .
  • Thesis (medium term): NVIDIA’s full-stack leadership (hardware, networking, software) and annual cadence (Blackwell → Ultra → Vera Rubin) underpin sustained share and monetization across training and increasingly compute-intensive inference .

Appendix: Additional Relevant Press Releases (Q1 FY26 period)

  • Foxconn/Taiwan AI factory: 10,000 Blackwell GPUs to power national AI infrastructure; GB300 NVL72 racks with NVLink, Quantum IB, Spectrum-X .
  • Saudi Arabia partnerships: HUMAIN to build up to 500MW AI factories; SDAIA and Aramco Digital initiatives .
  • DGX Cloud Lepton marketplace: connects developers to tens of thousands of Blackwell GPUs across global NCPs .
  • DGX Spark/Station for desktop AI supercomputing: GB10/GB300 systems extend enterprise/local AI compute .
  • Quantum-AI supercomputer in Japan (ABCI-Q): 2,020 H100s with Quantum-2 IB integrated via CUDA-Q .

Values retrieved from S&P Global* for any consensus metrics.