NVIDIA Corp
NVDA10-Q,quarter ended Apr 27, 2025,filed May 28, 2025,Original on SEC.gov (opens in a new tab)
4 of 4 checkable figures match the filing, 4 of 4 risk excerpts located in the filing text
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The Print
NVIDIA reported Q1 FY2026 revenue of $44.1B, up 69% YoY, and net income of $18.8B ($0.76 diluted EPS), with gross margin contracting to 60.5% from 78.4% on a $4.5B H20 export-control charge.
Revenue increased 69% YoY to $44.1B, which management attributes to demand for its accelerated computing platform used for large language models, recommendation engines, and generative and agentic AI applications, with the Blackwell architecture ramp expanding to all customer categories. Gross margin decreased to 60.5% from 78.4%, primarily due to a $4.5B charge associated with H20 excess inventory and purchase obligations and the initial ramp of more sophisticated systems within Data Center. Net income rose 26% YoY to $18.8B.
- Revenue reached $44.1B, up 69% YoY and up 12% sequentially, driven by Data Center revenue of $39.1B (up 73% YoY).
- Net income was $18.8B ($0.76 diluted EPS), up 26% YoY, while gross margin fell to 60.5% from 78.4% a year ago.
- A $4.5B charge associated with H20 excess inventory and purchase obligations reduced gross margin by 11.0 percentage points.
- Operating cash flow was $27.4B, up from $15.3B a year ago, and the company repurchased $14.5B of stock during the quarter.
Results That Matter
- Revenue
- Current period
- $44.1B
- Prior period
- $26.0B
- Change
- +69.2%
Management attributes the increase to demand for its accelerated computing platform used for large language models, recommendation engines, and generative and agentic AI applications, with the Blackwell architecture ramp expanding to all customer categories. - Gross profit
- Current period
- $26.7B
- Prior period
- $20.4B
- Change
- +30.7%
Gross margin decreased to 60.5% from 78.4%, primarily due to a $4.5B charge associated with H20 excess inventory and purchase obligations and the initial ramp of more sophisticated systems within Data Center. - Operating income
- Current period
- $21.6B
- Prior period
- $16.9B
- Change
- +28.0%
Operating margin decreased to 49.1% from 64.9%, reflecting the gross margin decline and a 44% increase in operating expenses. - Net income
- Current period
- $18.8B
- Prior period
- $14.9B
- Change
- +26.2%
Net margin decreased to 42.6% from 57.1%, reflecting the lower operating margin and a higher effective tax rate of 14.3% versus 13.9%. - Diluted EPS
- Current period
- $0.76
- Prior period
- $0.60
- Change
- +26.7%
Diluted EPS grew in line with net income, with the diluted weighted average share count declining to 24,611 million from 24,890 million. - Basic EPS
- Current period
- $0.77
- Prior period
- $0.60
- Change
- +28.3%
Basic EPS increased with net income and a lower basic weighted average share count of 24,441 million versus 24,620 million.
| Metric | Current Period | Prior Period | Change | Investor Takeaway |
|---|---|---|---|---|
| $44.1B | $26.0B | +69.2% | Management attributes the increase to demand for its accelerated computing platform used for large language models, recommendation engines, and generative and agentic AI applications, with the Blackwell architecture ramp expanding to all customer categories. | |
| $26.7B | $20.4B | +30.7% | Gross margin decreased to 60.5% from 78.4%, primarily due to a $4.5B charge associated with H20 excess inventory and purchase obligations and the initial ramp of more sophisticated systems within Data Center. | |
| $21.6B | $16.9B | +28.0% | Operating margin decreased to 49.1% from 64.9%, reflecting the gross margin decline and a 44% increase in operating expenses. | |
| $18.8B | $14.9B | +26.2% | Net margin decreased to 42.6% from 57.1%, reflecting the lower operating margin and a higher effective tax rate of 14.3% versus 13.9%. | |
| $0.76 | $0.60 | +26.7% | Diluted EPS grew in line with net income, with the diluted weighted average share count declining to 24,611 million from 24,890 million. | |
| $0.77 | $0.60 | +28.3% | Basic EPS increased with net income and a lower basic weighted average share count of 24,441 million versus 24,620 million. |
Earnings Quality & Cash Conversion
Reported operating income of $21,638M includes a $4.5B charge associated with H20 excess inventory and purchase obligations, of which $1.9B was recorded as an inventory provision and $2.6B as an excess inventory purchase obligation charge within cost of revenue. Provisions for inventory and excess inventory purchase obligations totaled $5.3B, partially offset by a provision release of $436M; the net effect on gross margin was an unfavorable impact of 11.0%. The filing does not define an adjusted or ex-item earnings total.
Operating cash flow was 1.5x net income attributable to the parent (cash conversion); free cash flow of $26.2B (derived as operating cash flow minus the absolute selected capex cash-flow amount; not an issuer-defined or discretionary-cash measure).
Red flag
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Value Drivers & Capital Allocation
Capital returned — dividends paid $244.0M (prior $98.0M), share repurchases $14.1B (prior $7.7B); capital expenditures $1.2B (prior $369.0M) (selected cash-flow amount, not necessarily total capital investment).
Financing cash flow for 2025-01-27 to 2025-04-27 was an outflow of $15,553,000,000, compared with an outflow of $9,345,000,000 for 2024-01-29 to 2024-04-28. Both periods had net outflows.
“Cash used in financing activities increased in the first quarter of fiscal year 2026 compared to the first quarter of fiscal year 2025, mainly due to higher share repurchases.”
Filing statement
Period net income attributable to the parent / period-end equity, not annualized: 22.4% (prior at 2024-04-28: 30.3%); period net income attributable to the parent / period-end assets, not annualized: 15.0%.
Forward Signals
The filing does not provide specific revenue or earnings guidance. Management states that the H20 export licensing requirements have impacted current revenue and will also negatively affect future revenue, and that it expects to begin shipping samples and production units of its new Blackwell Ultra platforms in the second quarter of fiscal year 2026.
Known trends
- The H20 export licensing requirements have impacted our current revenue and will also negatively affect our future revenue.
- We expect to begin shipping samples and production units of our new Blackwell Ultra platforms in the second quarter of fiscal year 2026.
- Between the second quarter of fiscal year 2026 and fiscal year 2030, we expect to commence leases with future obligations of $7.4 billion primarily of data center and office operating leases, with lease terms of 2 to 15.5 years.
- We plan to make two estimated federal and state tax payments in the second quarter of fiscal year 2026, a substantial increase as compared with no estimated tax payments in the first quarter of fiscal year 2026.
Subsequent events
- From April 28, 2025 through May 23, 2025, we repurchased 19 million shares for $2.3 billion pursuant to a pre-established trading plan.
“The H20 export licensing requirements have impacted our current revenue and will also negatively affect our future revenue.”
NVIDIA Management
“We expect to begin shipping samples and production units of our new Blackwell Ultra platforms in the second quarter of fiscal year 2026.”
NVIDIA Management
Risks
Excerpts are the filing’s own words; each heading is the start of its excerpt. Selected excerpts are not a complete risk inventory.
On April 9, 2025, the U.S. government, or USG, informed us that it requires a license for export…
On April 9, 2025, the U.S. government, or USG, informed us that it requires a license for export to China (including Hong Kong and Macau) and D:5 countries, or to companies headquartered or with an ultimate parent therein, of our H20 integrated circuits and any other circuits achieving the H20’s memory bandwidth, interconnect bandwidth, or combination thereof.
We have long manufacturing lead times and build finished products and maintain inventory in advance…
We have long manufacturing lead times and build finished products and maintain inventory in advance of anticipated demand.
As of April 27, 2025, we had outstanding inventory purchase and long-term supply and capacity…
As of April 27, 2025, we had outstanding inventory purchase and long-term supply and capacity obligations totaling $29.8 billion, an increase from the prior year led by commitments, capacity and components for our Blackwell architecture.
Sales to one direct customer, Customer A, represented 16% of total revenue and sales to a second…
Sales to one direct customer, Customer A, represented 16% of total revenue and sales to a second direct customer, Customer B, represented 14% of total revenue for the first quarter of fiscal year 2026, both of which were attributable to the Compute & Networking segment.
4 of 4 excerpts located in the filing text
Segments
| Segment | Revenue | Operating Income | Revenue Change | Commentary |
|---|---|---|---|---|
| Compute & Networking | $39.6B | $22.1B | +74.6% | Includes Data Center accelerated computing platforms and AI solutions, networking, automotive platforms, Jetson robotics, and DGX Cloud; management attributes the year-over-year revenue increase to demand for its accelerated computing platform used for large language models, recommendation engines, and generative and agentic AI applications, with Data Center compute revenue up 76% YoY and networking revenue up 56% YoY. |
| Graphics | $4.5B | $1.6B | +32.8% | Includes GeForce GPUs for gaming and PCs, GeForce NOW, Quadro/NVIDIA RTX GPUs, and Omniverse Enterprise software; management attributes the year-over-year revenue increase to sales of its Blackwell architecture. |
Balance Sheet & Liquidity
Leverage: Identified debt as of 2025-04-27 (carrying amount): long-term debt including current maturities of $8.5B; noncurrent long-term debt of $8.5B. Not separately reported in this filing's standardized data: short-term borrowings. Total debt, net debt and debt-to-equity are therefore not stated.
Liquidity: Cash, cash equivalents, and marketable securities totaled $53.7B as of April 27, 2025; management states it believes it has sufficient liquidity to meet operating requirements for at least the next twelve months and thereafter for the foreseeable future.
Cash flow: Cash flow — operating $27.4B, investing $-5.2B, financing $-15.6B.
Working capital: Current assets $89.9B vs. current liabilities $26.5B (current ratio 3.39x). Prior reported balance sheet as of 2025-01-26: $80.1B vs. $18.0B (4.44x).
Maturities & covenants
- Debt maturities: $3,750M due in one to five years, $1,250M due in five to ten years, and $3,500M due in greater than ten years.
- As of April 27, 2025, we complied with the required covenants, which are non-financial in nature, under the outstanding notes.
- We have a $575 million commercial paper program to support general corporate purposes. As of April 27, 2025, we had no commercial paper outstanding.
Notable Footnotes
| Item | Impact |
|---|---|
| H20 export-control charge | A $4.5B charge associated with H20 excess inventory and purchase obligations reduced gross margin by 11.0 percentage points; H20 sales were $4.6B in Q1 FY2026 prior to the new export licensing requirements. |
| CoreWeave investment reclassification | The investment in CoreWeave was reclassified from non-marketable equity securities to marketable securities following public market trading, with a fair value of $1B as of April 27, 2025 subject to a short-term restriction on the ability to sell. |
| Purchase obligations | Total future purchase commitments were $43.5B as of April 27, 2025, including $10.6B of multi-year cloud service agreements. |
| Singapore revenue concentration | Singapore represented 20% of Q1 FY2026 total revenue based on customer billing location, though over 99% of controlled Data Center compute revenue billed to Singapore was for orders from U.S.-based customers. |
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