Total Revenue

+69% (from $26,044M to $44,062M)

Accelerated growth was driven by a robust ramp-up in accelerated computing and AI solutions – notably, the Data Center segment’s expansion, including the adoption of the Blackwell architecture, pushed revenue significantly higher than in Q1 FY2025. " "

Operating Income

+28% (to $21,638M)

Despite operating expenses growing, overall revenue surged by 69% YoY. Improved segment performance in Compute & Networking and Graphics drove higher operating income compared to the previous period—even though cost pressures and increasing investments partially dampened margin improvements. " "

Net Income

+26% (to $18,775M)

Net income growth reflects the strong top‐line performance from exponential revenue gains and a favorable mix of high‐margin products, even as rising costs (e.g. increased tax expenses and production costs) limited margin expansion compared to Q1 FY2025. " "

Gross Profit Margin

Declined to ~60.6% (from ~78% previously)

The margin contraction was primarily due to a steep rise in the Cost of Revenue—including a notable $4.5B H20 charge linked to excess inventory and purchase obligations amid new export licensing requirements—plus higher costs associated with launching sophisticated Data Center systems, in contrast to the higher margins enjoyed in Q1 FY2025. " "

Regional Revenue (United States)

+54% YoY (to $20,739M)

U.S. orders grew significantly driven by strong demand for accelerated computing and AI infrastructure; increased reliance on domestic sales and expanding Compute & Networking investments boosted U.S. revenue compared to a lower base in Q1 FY2025. " "

Regional Revenue (Taiwan)

+64% YoY (to $7,158M)

The robust performance in Taiwan was largely due to high demand for compute and networking products for Data Center applications. This represents a significant upward shift from the previous period, reflecting global growth in advanced semiconductor solutions. " "

Regional Revenue (Singapore)

+123% YoY (to $9,017M)

Centralized invoicing practices drove revenue attribution to Singapore—over 99% of controlled Data Center compute revenue from U.S. orders was billed to Singapore—amplifying the growth compared to Q1 FY2025 where the invoicing base was lower. " "

Regional Revenue (China)

+122% YoY (to $5,522M)

Despite export licensing challenges for certain product lines, demand for AI solutions and Data Center offerings led to a significant uptick in revenue from China compared to last year, as growth in non-H20 product segments helped offset restrictions. "

R&D Expenses

+46% YoY (to $3,989M)

Increased investment in innovation—including a surge in engineering development, higher compute and infrastructure expenditures, and a rise in compensation and benefits—propelled R&D expenses higher relative to Q1 FY2025, as NVIDIA continued to drive new product introductions. " "

SG&A Expenses

+34% YoY (to $1,041M)

Growth in SG&A expenses was primarily driven by increased compensation and benefits (including stock-based compensation) to support an expanding workforce and larger administrative operations, reflecting the company’s scaling initiatives compared to the previous period. " "

Total Revenue

Q2 2026

$43 billion ±2% "

$45 billion ±2% "

raised

GAAP Gross Margin(s)

Q2 2026

70.6% ±50 bps "

71.8% ±50 bps "

raised

Non-GAAP Gross Margin(s)

Q2 2026

71% ±50 bps "

72% ±50 bps "

raised

GAAP Operating Expenses

Q2 2026

~$5.2 billion "

~$5.7 billion "

raised

Non-GAAP Operating Expenses

Q2 2026

~$3.6 billion "

~$4 billion "

raised

GAAP and Non-GAAP Other Income/Expenses

Q2 2026

~$400 million "

~$450 million "

raised

GAAP and Non-GAAP Tax Rates

Q2 2026

17% ±1% "

16.5% ±1% "

lowered

GPU Architecture and Product Roadmap Evolution

In Q2–Q4 2025, NVIDIA consistently discussed the ramp of Blackwell (including transitions from Hopper, introduction of GB200/GB300 systems, annual product cadence, and performance improvements), with detailed commentary on system architecture upgrades and roadmap planning. " " " "

In Q1 2026, the focus remains on a rapid Blackwell ramp—with emphasis on Blackwell’s record pace, detailed improvements in performance (1.5x improvement in a month), introduction of GB200 NVL and GB300 systems, and a firm commitment to an annual product cadence extending through 2028. " " "

Consistent focus on evolving GPU architecture with strong positive sentiment. The narrative has shifted toward even faster ramp-up and improved performance metrics, reinforcing NVIDIA’s long‐term roadmap.

Data Center Modernization and Shift to Accelerated Computing

Across Q2–Q4 2025, executives detailed the modernization of data centers driven by accelerated computing. They emphasized infrastructure transformation through both AI factory deployment and the integration of GPUs (with data center revenue milestones, networking innovations, and legacy system coexistence). " " " "

Q1 2026 continued this theme by highlighting dramatic Data Center revenue growth (e.g. 73% YoY growth), massive adoption of Blackwell driving nearly 70% of compute revenue, and the rise of AI factories—with NVIDIA underscoring AI as essential infrastructure. " " " " "

Ongoing and expanding emphasis on data center modernization. The narrative shows continued momentum and even greater integration of accelerated computing, underpinning NVIDIA’s leadership in transforming global data centers.

Generative and Reasoning AI Demand Growth

In Q2–Q4 2025, NVIDIA discussed high generative AI demand along with the onset of reasoning AI—citing examples of foundation models that require far more compute, widespread adoption of generative applications, and early moves into reasoning tasks (e.g. long thinking, multi-step inference). " " " " "

Q1 2026 emphasized a “step function demand” for reasoning AI, with detailed mention of models requiring 100x to 1,000x more tokens per task, along with specialized infrastructure (e.g. Grace Blackwell NVLink72) to enable these capabilities. This marks a stronger focus on reasoning AI beyond generative applications. " "

Evolution from generative to stronger focus on reasoning AI. While generative demand remains important, Q1 2026 reflects a shift to emphasize the transformational, compute–intensive nature of reasoning AI, indicating a deepening in product positioning.

China Market, Export Controls, and Regulatory Challenges

In Q2–Q4 2025, discussions mentioned competitive conditions in China, adherence to export controls (with moderate mention of regulatory factors and tariffs), and how these measures affected market share and shipment percentages. " " " " " "

In Q1 2026, export controls become a major focus. NVIDIA detailed the severe impact on its H20 GPUs—recognizing $4.6B in revenue pre–control, a $4.5B inventory write–down, inability to ship $2.5B revenue, and a forecasted $8B revenue loss in Q2—signaling deep challenges in the nearly $50B China market. " " " " " "

Increased negative sentiment. While the topic was discussed moderately in previous periods, Q1 2026 shows heightened emphasis on the financial and strategic impact of export controls, marking it as a material adverse issue moving forward.

Gross Margin Pressure and Cost Structure Concerns

Q2–Q4 2025 calls highlighted gross margin pressures due to new product mix (especially from Blackwell ramp), complexities in manufacturing, and higher operating expenses; however, executives expressed plans to improve margins as production scales and yields improve. " " " " " " "

In Q1 2026, NVIDIA reported GAAP gross margins of 60.5% (with non–GAAP margins adjusted upward when excluding a $4.5B charge) and expects gradual margin improvement driven by Blackwell profitability while managing higher operating expenses. " "

Persistent pressure with cautious optimism. The margins continue to be under pressure due to mix and charges, but expectations for recovery and modest sequential improvements signal a measured, positive outlook.

Supply Chain and Product Launch Execution Risks

In Q2–Q4 2025, NVIDIA detailed the complexity of ramping Blackwell products (complex systems, integration challenges, and dependency on multiple partners), along with initial hiccups and evolving risk management strategies across product launches. " " " " " " " "

Q1 2026 reflects confidence in supply chain expansion and product launch execution. The call highlighted an expanding U.S.–based supply chain, record–setting Blackwell ramp, and successful mitigation of previous export control challenges through agile production strategies. " "

Continued effective execution. While past earnings calls stressed complexity and risks, Q1 2026 conveys improved capabilities and execution confidence, indicating that supply chain challenges are being effectively managed.

Market Leadership and Expanding Order Momentum

In Q2–Q4 2025, NVIDIA repeatedly underscored its market leadership through record Data Center revenue, rapid adoption of Hopper and Blackwell products, and expansive orders from hyperscalers, enterprise, and emerging markets (including sovereign AI initiatives). " " " " " "

In Q1 2026, the tone remains upbeat with an emphasis on unprecedented order momentum, leadership in AI infrastructure (with record Blackwell GPU shipments, growing AI factory build–outs, and expanding global footprint), and strong customer commitment. " " "

Steady and strong momentum. The narrative consistently reinforces NVIDIA’s dominant market position, with Q1 2026 reaffirming its leadership through continued order growth and strategic expansion.

Advanced Networking Solutions Adoption

Across Q2–Q4 2025, the emphasis was on substantial growth in advanced networking—highlighting Spectrum-X’s explosive uptake, increased InfiniBand revenue, and integration with major CSPs and OEM partners. " " " "

In Q1 2026, networking revenue rebounded with a 64% QoQ increase to $5B. New product enhancements including NVLink Fusion, Spectrum-X, and Ethernet improvements were detailed; these technologies are critical for scaling AI clusters and enhancing throughput. " "

Consistent and robust growth. The focus on advanced networking continues with stronger performance metrics in Q1 2026, underlining its strategic role in AI and data center infrastructure.

H20 Product Revenue Challenges and Inventory Write-Downs

No mention in Q2–Q4 2025 earnings calls.

Q1 2026 introduced a significant discussion on H20 challenges. The call detailed severe export control impacts on the China–specific H20 GPU—with a $4.5B inventory write–down, inability to ship $2.5B revenue, and projected further revenue losses—highlighting both financial and strategic setbacks. " " "

New and highly negative topic. This issue emerged only in Q1 2026, marking an abrupt and impactful challenge that was not previously discussed, reflecting a deteriorating outlook in the China market.

Customer ROI and CapEx Investment Concerns

In Q2 and Q4 2025 discussions, customer ROI and large CapEx investments were linked to NVIDIA’s superior performance per watt and the transformative promise of accelerated computing, which promised high returns and justified large infrastructure investments. " " Q3 2025 did not emphasize this topic.

Q1 2026 did not mention customer ROI or CapEx investment concerns.

Topic dropped in current period. While prior discussions (especially in Q2 and Q4) stressed the strong ROI and necessary CapEx investment for accelerated computing, Q1 2026 saw no mention—suggesting a shift in focus toward operational execution and market challenges rather than customer investment rationale.

Evolving Competitive Dynamics: Decline of Custom ASIC Emphasis

In Q4 2025, Jensen Huang highlighted NVIDIA's general-purpose GPU architecture and its superior software ecosystem in contrast to custom ASICs, noting that the complexity of deploying ASICs made NVIDIA’s solutions a preferred choice. " Q2 and Q3 2025 did not address this theme.

Q1 2026 did not discuss the decline of custom ASIC emphasis.

Less emphasis in current period. The competitive dynamics topic was only addressed in Q4 2025. Its absence in Q1 2026 suggests that NVIDIA’s focus has shifted toward other urgent issues (such as export controls and supply chain execution), potentially indicating that the ASIC vs. GPU debate is de–prioritized amid broader market challenges.