01—Abstract
Summary
Summary of the 10-Q filed August 27, 2025. Cited figures are marked; the original filing is the authoritative source.
NVIDIA Corporation reported robust financial results for the fiscal second quarter ending July 27, 2025, showcasing significant year-over-year growth.
Revenue surged by 56% to $46.74 billiona, primarily driven by the Compute & Networking segment, which saw a 56% increase to $41.33 billion. This strong performance underscores the sustained high demand for NVIDIA's accelerated computing and AI solutions, particularly within data centers. The company's strategic focus on advanced architectures, including the Blackwell GPU ramp, continues to fuel its top-line growth.
Despite impressive revenue expansion, gross margin experienced a slight year-over-year decline to 72.4%b from 75.1%, attributed to the product mix shift towards full-scale datacenter systems. However, operating expenses increased by 38%, largely due to investments in R&D and higher compensation.
Net income grew an impressive 59% year-over-year to $26.42 billionc, translating to a diluted EPS of $1.08. NVIDIA also demonstrated strong cash generation, with net cash from operating activities reaching $42.78 billion for the first half of the fiscal year, alongside a substantial increase in its share repurchase program, reflecting confidence in its financial position and commitment to shareholder returns.
02—Key points
Key Highlights
- Revenue for the quarter reached $46.74 billion, a 56% increase year-over-year, driven by strong demand in the Compute & Networking segment.
- Data Center revenue grew 56% year-over-year to $41.1 billion, fueled by accelerated computing and AI applications, with the Blackwell architecture ramp contributing significantly.
- Gross margin was 72.4%, a decrease from 75.1% in the prior year, primarily due to a shift in product mix towards full-scale datacenter systems.
- Net income surged by 59% year-over-year to $26.42 billion, with diluted EPS of $1.08.
- Operating expenses increased by 38% year-over-year, mainly due to higher R&D spending and increased compensation and benefits.
- The company announced a significant increase in its share repurchase authorization to $60.0 billion, demonstrating a strong commitment to returning capital to shareholders.
- Despite challenges related to U.S. export controls, the company generated $42.78 billion in net cash from operating activities for the first half of the fiscal year.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in Q2 FY2026, NVIDIA Corp kept $0.57.
- Revenue$46.74B100.0%
- Cost of revenue−$12.89B27.6%
- Gross profit$33.85B72.4%
- Operating costs−$5.41B11.6%
- Operating income$28.44B60.8%
- Interest, other & tax−$2.02B4.3%
- Net income$26.42B56.5%
04—Financials
Financial Highlights
Figures from 10-QQ2 FY2026filed August 27, 2025Financial Statements
Q2 FY2026 against Q2 FY2025
| Line item | Q2 FY2026Q2 FY2025 | Change |
|---|---|---|
| Revenue | $46.74B$30.04B | +55.6% |
| Cost of Revenue | $12.89B$7.47B | +72.6% |
| Gross Profit | $33.85B$22.57B | +50.0% |
| R&D Expenses | $4.29B$3.09B | +38.9% |
| SG&A Expenses | $1.12B$842.00M | +33.3% |
| Operating Expenses | $5.41B$3.93B | +37.7% |
| Operating Income | $28.44B$18.64B | +52.6% |
| Net Income | $26.42B$16.60B | +59.2% |
| EPS (Basic) | $1.08$0.68 | +58.8% |
| EPS (Diluted) | $1.08$0.67 | +61.2% |
| Shares Outstanding (Basic) | 24.37B24.58B | −0.9% |
| Shares Outstanding (Diluted) | 24.53B24.85B | −1.3% |
05—Questions
Frequently Asked Questions
What were the main drivers of NVIDIA's revenue growth in this quarter?
NVIDIA's revenue growth was primarily driven by the strong demand for its accelerated computing and AI solutions within the Compute & Networking segment, particularly for data center applications. The ongoing ramp of its Blackwell architecture and networking products, including NVLink and InfiniBand, also contributed significantly.
How is NVIDIA managing the impact of U.S. export controls on its business, especially concerning China?
NVIDIA is navigating U.S. export controls by seeking licenses for certain products, such as the H20 chip, to export to specific customers. While the company incurred charges related to H20 inventory due to diminished demand for certain markets, it has received licenses for some sales outside of China and continues to monitor and adapt to evolving U.S. government regulations. The company also noted potential future license requirements and the rescission of the 'AI Diffusion' IFR, with the scope of the replacement rule remaining uncertain.
What is the trend in NVIDIA's gross margin, and what factors are influencing it?
NVIDIA's gross margin decreased year-over-year to 72.4% from 75.1%. This is primarily attributed to a shift in revenue mix towards full-scale datacenter systems, which have different cost structures compared to the previous year's product mix. Additionally, inventory provisions, including a significant charge related to H20 excess inventory, impacted gross margin, though a release of previously reserved inventory for sales outside of China provided some offset.
What is NVIDIA's capital allocation strategy, particularly regarding share repurchases and dividends?
NVIDIA continues to actively return capital to shareholders. The company repurchased $24.2 billion of its common stock in the first half of the fiscal year and announced an additional $60.0 billion share repurchase authorization, bringing the total available for repurchase to $71.2 billion. The company also paid cash dividends totaling $488 million in the first half of the fiscal year, with future dividend payments subject to Board approval.
06—Continue