Q4 2025 Summary
Published Feb 27, 2025, 3:37 AM UTC- NVIDIA's general-purpose, high-performance GPUs and rich software ecosystem give it a competitive advantage over custom ASICs: According to Jensen Huang, NVIDIA's architecture is general and flexible, capable of handling various AI models including unaggressive models, diffusion-based models, vision-based models, and multimodal models. The rich software stack and ecosystem make their GPUs the initial target for most innovations in AI algorithms. Furthermore, their performance per watt is significantly higher, translating directly to revenues for customers due to increased throughput in data centers. This performance advantage, along with their ability to rapidly deploy new architectures, positions NVIDIA strongly against competitors using custom ASICs.
- Strong and sustained demand for NVIDIA's products driven by the mainstream adoption of AI across industries: Jensen Huang states that AI has gone mainstream and is being integrated into every application and industry, including consumer services, education, healthcare, financial services, and more. NVIDIA is at the center of this development and foresees continued strong demand for their products as AI continues to grow. He also remarks that no technology has ever had the opportunity to address a larger part of the world's GDP than AI, indicating vast growth potential for NVIDIA.
- NVIDIA's rapid innovation and product roadmap with continuous new product introductions: Despite previous challenges, NVIDIA is maintaining its annual product cadence, with the upcoming launch of Blackwell Ultra in the second half of the year. The transition to Blackwell Ultra is expected to be smoother, and NVIDIA is also working closely with partners on future products like Vera Rubin, ensuring a pipeline of exciting new products. This continuous innovation keeps NVIDIA at the forefront of AI hardware development, meeting strong customer demand and driving growth.
- Gross margins are expected to remain in the low 70% range during the ramp of the new Blackwell architecture, down from the mid-70% range, with uncertainty about when they will improve, especially given unknown factors like potential tariffs. Colette Kress stated that during the Blackwell ramp, gross margins will be in the low 70s, focusing on expediting manufacturing to meet strong customer demand. Improvement to mid-70s is expected later this fiscal year but depends on cost reductions and potential tariff impacts, which remain unknown.
- Revenue from China has halved due to export controls, and future regulatory changes could further limit NVIDIA's access to the Chinese market, affecting growth prospects. Jensen Huang mentioned that China is approximately the same percentage as in Q4, about half of what it was before the export control. Shipments to China are expected to remain at the current reduced percentage absent any regulatory changes, limiting growth from this region.
- The initial launch of the Blackwell architecture experienced delays due to a hiccup that cost a couple of months, indicating potential execution or supply chain risks that could impact future product launches and NVIDIA's ability to meet demand. Jensen Huang admitted that the first Blackwell had a hiccup that probably cost a couple of months, although they have fully recovered. Such delays highlight risks that could affect upcoming ramps like Blackwell Ultra.
| Metric | YoY Change | Reason |
|---|---|---|
Total Revenue | +78% YoY (Q4 2025: $39,331M vs. Q4 2024: $22,103M) | Record revenue growth was driven by strong performance in high‐margin segments. In Q4 2025, robust gains in AI and accelerated computing—primarily via the Compute & Networking business—and geographic expansion in key markets (the United States, Taiwan, Singapore, and China) boosted total revenue significantly. |
Compute & Networking | Not explicitly provided YoY (dominant segment in Q4 2025: $36,036M) | This segment continued its dominant role by leveraging persistent demand for accelerated computing solutions and AI infrastructure. Its performance underpinned overall revenue growth, while maintaining competitiveness through a strong product mix and ongoing customer adoption. |
Data Center Revenue | Sequential increase of >15% (from $30,771M in Q3 2025 to $35,580M in Q4 2025) | Data Center revenue climbed sharply as demand for AI and high-performance computing solutions surged. This sequential jump reflects enhanced customer adoption of NVIDIA’s advanced platforms, building off its robust Q3 performance and further cementing its leadership in AI-centric data center markets. |
Operating Income | +76% YoY (Q4 2025: $24,034M vs. Q4 2024: $13,614M) | Operating income expanded significantly thanks to the dramatic revenue surge and improved efficiency. The higher revenue, particularly from high-margin segments like Compute & Networking, paired with better product mix and controlled expenses, drove margins upward and resulted in a 76% year-on-year increase. |
Net Income | Nearly +80% YoY (Q4 2025: $22,091M vs. Q4 2024) | Net income experienced an almost 80% increase fueled by the same factors driving operating income—record revenue growth and robust margin expansion driven by AI and accelerated computing solutions. The higher profitability underscores the company’s effective scaling and operational efficiencies. |
EPS | −82% YoY (declined from $4.98 in Q4 2024 to $0.90 in Q4 2025) | EPS declined sharply by 82%, primarily due to the impact of a 10-for-1 stock split that dramatically increased the share count. This accounting adjustment, rather than a drop in operational performance, explains the severe reduction in per-share earnings despite strong revenue and profit growth. |
Cash and Cash Equivalents | Increased significantly (from $9,107M in Q3 2025 to $43,210M in Q4 2025) | Liquidity improved markedly as operating cash flow strengthened, enabling cash reserves to jump despite a net overall cash flow decrease of $518M. The sharp rise reflects both robust cash generation from operations and strategic balance sheet management, even with increased working capital requirements. |
| Metric | Period | Previous Guidance | Current Guidance | Change |
|---|---|---|---|---|
Total Revenue | Q1 2026 | $37.5 billion, ±2% | $43 billion, ±2% | raised |
GAAP Gross Margin | Q1 2026 | 73% | 70.6% | lowered |
Non-GAAP Gross Margin | Q1 2026 | 73.5% | 71% | lowered |
GAAP Operating Expenses | Q1 2026 | ~$4.8 billion | ~$5.2 billion | raised |
Non-GAAP Operating Expenses | Q1 2026 | ~$3.4 billion | ~$3.6 billion | raised |
GAAP and Non-GAAP Other Income | Q1 2026 | ~$400 million | ~$400 million | no change |
GAAP and Non-GAAP Tax Rates | Q1 2026 | 16.5% | 17% | raised |
| Metric | Period | Guidance | Actual | Performance |
|---|---|---|---|---|
Total Revenue | Q4 2025 | $37.5 billion ± 2% | $39.33 billion | Beat |
GAAP Gross Margin | Q4 2025 | 73% ± 50 bps | ~73% (calculated from Total Revenue 39,331Minus COGS 10,608) | Met |
GAAP Operating Expenses | Q4 2025 | ~$4.8 billion | ~$4.69 billion (sum of SG&A 975And R&D 3,714) | Beat |
GAAP Tax Rate | Q4 2025 | 16.5% ± 1% | ~7.85% (derived from Operating Income 24,034Minus Net Income 22,091, approximating tax amount) | Beat |
| Topic | Previous Mentions | Current Period | Trend |
|---|---|---|---|
Rapid Product Innovation & Roadmap Execution | Q1 emphasized the Blackwell platform and roadmap cadence ; Q2 highlighted Blackwell’s production ramp and ecosystem integration ; Q3 discussed rapid execution with strong ramp and future plans for Blackwell Ultra and Vera Rubin | Q4 detailed record-breaking Blackwell ramp revenue and clearly outlined the seamless transition to Blackwell Ultra as well as preparations for Vera Rubin | Consistent focus with increasing emphasis on future product iterations and refined roadmap execution. |
Strong AI Demand & Accelerated Computing Adoption | Across Q1–Q3, executives noted rapidly growing demand driven by generative AI and accelerated computing adoption, with substantial data center revenue growth | Q4 reiterated record data center revenue, strong AI demand, and highlighted how Blackwell’s performance fuels industry-wide adoption | Continued robust sentiment with sustained high growth and market leadership in AI infrastructure. |
Gross Margin Pressure During New Product Transitions | Not discussed in Q1; Q2 and Q3 highlighted temporary margin pressure during the early Blackwell ramp, expecting recovery as production scales | Q4 explained margin pressures due to complex Blackwell configurations and ramp execution, yet anticipated improvement in later quarters | Ongoing challenge with consistent pressure now coupled with optimism for margin recovery as efficiencies improve. |
Supply Chain, Execution, and Product Launch Risks | Q1 acknowledged supply constraints and execution challenges; Q2 and Q3 detailed complex supply chain integration and engineering challenges in ramping Blackwell | Q4 focused on rapid supply chain recovery, detailing swift resolution of earlier hiccups and successful multi-configuration production launch | Steady focus on execution and supply chain resilience with improvements in managing risks during rapid product launches. |
Regulatory, Export Control, and Geopolitical Risks Affecting China Revenue | Q1 cited significant export control impacts and a more competitive China market ; Q2 noted revenue below historical levels; Q3 stressed cautious compliance with new policies | Q4 maintained the narrative of lower China revenue relative to past highs and continued strict export control compliance, with tariff uncertainty highlighted | Consistent cautious sentiment with ongoing regulatory challenges and clear, measured responses to geopolitical risks. |
Competitive Pressure from Custom ASICs and In-House Solutions | Q1 discussed NVIDIA’s full-stack approach as a defense against specialized ASICs, emphasizing versatility and scalability ; Q2 and Q3 did not address this topic | Q4 reintroduced the discussion, underlining NVIDIA’s general-purpose architecture, superior performance-per-watt, and deployment speed as competitive advantages | Re-emergence in Q4 with a renewed strategic emphasis on platform versatility versus narrow custom solutions. |
Shift from Legacy GPU Products to Next-Generation Architectures | Q1 highlighted backward compatibility and smooth transition from Hopper to Blackwell; Q2 and Q3 detailed the coexistence of strong Hopper demand with an aggressive Blackwell ramp | Q4 reinforced a successful transition from Hopper to Blackwell, citing record revenue from Blackwell and upcoming launches (Blackwell Ultra, Vera Rubin) | Consistent momentum with a clear evolution strategy and seamless progression to next-gen architectures. |
Customer ROI Concerns and Purchase Hesitation Amid Rapid Product Cycles | Q1 and Q2 addressed immediate ROI benefits and urgency in infrastructure adoption due to early-stage data center build-outs | Q4 did not mention ROI concerns or purchase hesitation, suggesting these issues are less top-of-mind as the product ramp gains strength | Topic has faded from current discussion, indicating improved customer confidence and reduced purchase hesitation. |
Emerging Tariff and Cost Structure Uncertainties | Q1 and Q2 did not address tariff issues; Q3 briefly mentioned compliance with potential new regulations | Q4 provided more detailed commentary on tariff uncertainties and cost structure challenges, with CFO insights on margin impact | A newer area of concern emerging in Q4, reflecting increased focus on external cost challenges and regulatory uncertainties. |
Massive Data Center Modernization and the Trillion-Dollar Accelerated Computing Opportunity | Q1–Q3 extensively discussed the transformation of traditional data centers into AI factories and a trillion-dollar opportunity in accelerated computing | Q4 did not mention these themes explicitly in the discussion | Topic has dropped from the current period, possibly indicating a shift in focus toward product-specific execution rather than broad market opportunity. |
High Performance-per-Watt Competitive Advantage Driving Customer Value | Q2 indirectly noted efficiency benefits through accelerated computing gains; Q1 and Q3 did not explicitly highlight performance-per-watt metrics | Q4 explicitly emphasized 2x to 8x performance-per-watt advantages driving ROI and revenue generation in data centers | Gained prominence in Q4, highlighting a clearer articulation of how efficiency delivers customer value. |
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Gross Margin Outlook
Q: Is Q1 the bottom for gross margins?
A: Colette stated that during the Blackwell ramp, gross margins will be in the low 70s and are expected to improve to the mid-70s later this year once Blackwell fully rounds. The focus is on expediting manufacturing to meet high demand, and there are opportunities to improve costs and margins over time. Tariffs are an unknown factor at this point. -
Demand Sustainability
Q: What gives you confidence that strong demand can sustain into next year?
A: Jensen explained that they have a good line of sight on capital investments that data centers are planning. The future of software is AI-based, running on GPUs and accelerated computing systems. He mentioned signals like demand forecasts from top partners and vibrant startups in AI. Jensen believes they are at the beginning of a new era, with AI going mainstream across industries. -
Blackwell Ultra Launch
Q: How will you manage the demand dynamics with the upcoming Blackwell Ultra launch?
A: Jensen confirmed that Blackwell Ultra is set to launch in the second half of the year. The transition from Blackwell to Ultra will be smoother since the system architecture remains the same. They are working closely with partners on this transition and are already revealing and preparing for the next product, Vera Rubin. Exciting new products will be discussed at GTC. -
China Sales and Geography Dynamics
Q: Can the U.S. pick up the slack if regulations affect other geographies like China?
A: Jensen stated that China remains approximately the same percentage as previous quarters, about half of what it was before the export control. He emphasized that AI has gone mainstream globally and is being integrated into every application, suggesting that demand is widespread across regions. -
Competition from Custom ASICs
Q: How do you view the balance between custom ASICs and your GPUs?
A: Jensen highlighted that NVIDIA's architecture is general-purpose, end-to-end, and widely accessible, with a rich software stack that supports all models. He mentioned that their performance per watt is 2x to 8x higher, translating directly to revenue for data centers due to higher throughput. The complexity of the software ecosystem and deployment challenges make their GPUs more favorable over custom ASICs. -
Enterprise Growth
Q: Did enterprise data center growth outpace hyperscalers this quarter?
A: Colette confirmed that enterprise grew 2x year-on-year, similar to hyperscalers. Both are important areas, with enterprises building AI capabilities both with cloud service providers and on their own. Jensen added that long-term, enterprise and non-CSPs will become a larger part of consumption as AI integrates into various industries. -
Infrastructure Replacement Cycle
Q: How do you view the infrastructure replacement cycle with new products coming?
A: Jensen noted that previous generations like Voltus, Pascal, and Amperes are still in use because CUDA is programmable and workloads can run on them. Existing infrastructure can be utilized for less intensive workloads, providing flexibility in deploying across different generations. -
Gross Margin Improvement Factors
Q: What gives you confidence in gross margin improvement in the back half of the year?
A: Colette mentioned that there are many moving parts, including yields, configurations, and opportunities to improve gross margins over time. They are focusing on ramping manufacturing for customers and will work on cost improvements as soon as possible. Tariffs are an unknown factor, and they are awaiting further information.