NVDA beat EPS estimates (2.22 vs 2.09)

Transcript

1. #1Jensen Huang · founder and CEO of NVIDIA

   AI has reached its inflection point. It’s doing useful work. Its tokens are productive and profitable. Now, compute is revenue,

2. #2qna

   Q2 Fiscal 2027 Summary | | | | | | | | | | | | | | | | | | GAAP | ($ in millions, except earnings per share) | Q2 FY27 | Q1 FY27 | Q2 FY26 | Q/Q | Y/Y | Revenue | $96,221 | $81,615 | $46,743 | 18 | % | 106 | % | Gross margin | 75.0 | % | 74.9 | % | 72.4 | % | 0.1 pts | 2.6 pts | Operating expenses | $8,408 | $7,621 | $5,413 | 10 | % | 55 | % | Operating income | $63,734 | $53,536 | $28,440 | 19 | % | 124 | % | Net income | $59,688 | $58,321 | $26,422 | 2 | % | 126 | % | Diluted earnings per share | $2.46 | $2.39 | $1.08 | 3 | % | 128 | % |

3. #3prepared remarks

   | | | | | | | | | | | | | | | | | | Non-GAAP | ($ in millions, except earnings per share) | Q2 FY27 | Q1 FY27 | Q2 FY26 | Q/Q | Y/Y | Revenue | $96,221 | $81,615 | $46,743 | 18 | % | 106 | % | Gross margin | 75.0 | % | 75.0 | % | 72.5 | % | — | 2.5 pts | Operating expenses | $8,232 | $7,449 | $5,361 | 11 | % | 54 | % | Operating income | $63,956 | $53,783 | $28,541 | 19 | % | 124 | % | Net income | $53,954 | $45,548 | $24,763 | 18 | % | 118 | % | Diluted earnings per share | $2.22 | $1.87 | $1.01 | 19 | % | 120 | % |

4. #4prepared remarks

   Outlook NVIDIA’s outlook for the third quarter of fiscal 2027 is as follows: • Revenue is expected to be $108.0 billion, plus or minus 2%. NVIDIA is not assuming any Data Center compute revenue from China in its outlook. • GAAP and non-GAAP gross margins are expected to be 74.0%, plus or minus 50 basis points. • GAAP and non-GAAP operating expenses are expected to be approximately $9.2 billion and $9.0 billion, respectively. For the full year fiscal 2027, NVIDIA expects GAAP and non-GAAP tax rates to be between 16.0% and 18.0%, excluding any discrete items and material changes to NVIDIA’s tax environment. Highlights Data Center • Second-quarter revenue was $89.0 billion, up 18% from the previous quarter and up 117% from a year ago. • Announced the NVIDIA Vera Rubin platform is ramping into full production with racks running at partners including CoreWeave, Google Cloud, Microsoft Azure, Oracle Cloud Infrastructure and Nebius. • Revealed that NVIDIA Spectrum™-6 switch systems — supporting both pluggable and co-packaged optics as part of the NVIDIA Vera Rubin platform — are arriving across the world’s gigascale AI factories. • Unveiled NVIDIA Vera, the first CPU built for…

5. #5prepared remarks

   expanded NVIDIA Agent Toolkit with NVIDIA PhysicsNeMo and new and updated NVIDIA CUDA-X™ libraries. • Launched NVIDIA BioNeMo™ Agent Toolkit, which provides domain-specific tools and skills for the agentic life sciences era. • Formed the Open Secure AI Alliance with industry leaders to advance AI safety and security. • Revealed that NVIDIA GPUs with Confidential Computing are now used for confidential inference in Apple’s Private Cloud Compute. • Expanded Korea’s AI factory ecosystem through strategic partnerships with SK Telecom, NAVER and Brookfield to build sovereign AI infrastructure at gigawatt scale on the NVIDIA DSX platform, as part of a broader NVIDIA-powered national AI push across Korea’s industries and research institutions. • Announced a multiyear technology partnership with SK hynix to advance next-generation memory for the global AI factory buildout. • Partnered with the Japan government and industrial leaders to launch the world’s first national AI infrastructure; revealed that Japan’s leading enterprises, startups and research institutions are building industry-specialized AI models with NVIDIA Nemotron™ open models. • Announced that the NVIDIA Vera Rubin p…

6. #6prepared remarks

   CFO Commentary Commentary on the quarter by Colette Kress, NVIDIA’s executive vice president and chief financial officer, is available at https://investor.nvidia.com. Conference Call and Webcast Information NVIDIA will conduct a conference call with analysts and investors to discuss its second quarter fiscal 2027 financial results and current financial prospects today at 2 p.m. Pacific time (5 p.m. Eastern time). A live webcast (listen-only mode) of the conference call will be accessible at NVIDIA’s investor relations website, https://investor.nvidia.com. The webcast will be recorded and available for replay until NVIDIA’s conference call to discuss its financial results for its third quarter of fiscal 2027. Non-GAAP Measures To supplement NVIDIA’s condensed consolidated financial statements presented in accordance with GAAP, the company uses non-GAAP measures of certain components of financial performance. These non-GAAP measures include non-GAAP gross profit, non-GAAP gross margin, non-GAAP operating expenses, non-GAAP operating income, non-GAAP other income (expense), net, non-GAAP net income, non-GAAP net income, or earnings, per diluted share, and free cash flow. For NVI…

7. #7prepared remarks

   For further information, contact: | | | | | | | | | Toshiya Hari | | Mylene Mangalindan | Investor Relations | | Corporate Communications | NVIDIA Corporation | | NVIDIA Corporation | IR@nvidia.com | | press@nvidia.com |

8. #8prepared remarks

   Certain statements in this press release including, but not limited to, statements as to: the buildout of AI factories; expectations with respect to growth, performance and benefits of NVIDIA’s products, services and technologies, including Blackwell and Vera Rubin, and related trends and drivers; expectations with respect to supply and demand for NVIDIA’s products, services and technologies, including Blackwell and Vera Rubin, and related matters including inventory, production and distribution; expectations with respect to NVIDIA’s third party arrangements, including with its collaborators and

9. #9prepared remarks

   partners; expectations with respect to our investments; expectations with respect to our financing arrangements; expectations with respect to technology developments, and related trends and drivers; future NVIDIA cash dividends or other returns to stockholders; NVIDIA’s financial and business outlook for the third quarter of fiscal 2027 and beyond; projected market growth and trends; expectations with respect to AI and related industries; and other statements that are not historical facts are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, which are subject to the “safe harbor” created by those sections based on management’s beliefs and assumptions and on information currently available to management and are subject to risks and uncertainties that could cause results to be materially different than expectations. Important factors that could cause actual results to differ materially include: global economic and political conditions; NVIDIA’s reliance on third parties to manufacture, assemble, package and test NVIDIA’s products; the impact of technological deve…

10. #10prepared remarks

    NVIDIA CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF INCOME (In millions, except per share data) (Unaudited) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Three Months Ended | | Six Months Ended | | | | July 26, | | July 27, | | July 26, | | July 27, | | | | 2026 | | 2025 | | 2026 | | 2025 | | | | | | | | | | | Revenue | $ | 96,221 | | | $ | 46,743 | | | $ | 177,837 | | | $ | 90,805 | | Cost of revenue | 24,079 | | | 12,890 | | | 44,538 | | | 30,284 | | Gross profit | 72,142 | | | 33,853 | | | 133,299 | | | 60,521 | | | | | | | | | | | | Operating expenses | | | | | | | | | Research and development | 7,054 | | | 4,291 | | | 13,375 | | | 8,280 | | | Sales, general and administrative | 1,354 | | | 1,122 | | | 2,654 | | | 2,163 | | | | Total operating expenses | 8,408 | | | 5,413 | | | 16,029 | | | 10,443 | | | | | | | | | | | | Operating income | 63,734 | | | 28,440 | | | 117,270 | | | 50,078 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Other income, net | 7,773 | | | 2,766 | | | 24,140 | | | 3,039 | | | | | | | | | | | | Income before income tax | 71,507 | | | 31,206 | | | 141,410 | | | 53,117 | | Income tax expense | 11,…

11. #11prepared remarks

    | | | | | | | | | | | | | | | | | | | NVIDIA CORPORATION | | CONDENSED CONSOLIDATED BALANCE SHEETS | | (In millions) | | (Unaudited) | | | | | | | | | | | | July 26, | | January 25, | | | | | 2026 | | 2026 | | ASSETS | | | | | | | | | | | | Current assets: | | | | | | Cash and cash equivalents | $ | 22,443 | | | $ | 10,605 | | | | Marketable debt securities | 34,143 | | | 39,065 | | | | Marketable equity securities | 42,783 | | | 12,886 | | | | Accounts receivable, net | 63,059 | | | 38,466 | | | | Inventories | 31,575 | | | 21,403 | | | | Prepaid expenses and other current assets | 3,409 | | | 3,180 | | | | | Total current assets | 197,412 | | | 125,605 | | | | | | | | | | Property and equipment, net | 14,285 | | | 10,383 | | | Operating lease assets | 5,390 | | | 2,867 | | | Goodwill | 21,125 | | | 20,832 | | | Intangible assets, net | 2,998 | | | 3,306 | | | Deferred income tax assets | 12,159 | | | 13,258 | | | Non-marketable securities | 51,157 | | | 22,251 | | | Other assets | 15,746 | | | 8,301 | | | | | Total assets | $ | 320,272 | | | $ | 206,803 | | | | | | | | | | LIABILITIES AND SHAREHOLDERS' EQUITY | | | | | | | | | Current liabilities: |…

12. #12prepared remarks

    | | | | | | | | | | | | | | | | | | | | | | | | NVIDIA CORPORATION | CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | (In millions) | (Unaudited) | | Three Months Ended | | Six Months Ended | | July 26, | | July 27, | | July 26, | | July 27, | | 2026 | | 2025 | | 2026 | | 2025 | Cash flows from operating activities: | | | | | | | | Net income | $ | 59,688 | | | $ | 26,422 | | | $ | 118,010 | | | $ | 45,197 | | Adjustments to reconcile net income to net cash | | | | | | | | provided by operating activities: | | | | | | | | Stock-based compensation expense | 2,027 | | | 1,624 | | | 3,954 | | | 3,099 | | Depreciation and amortization | 1,127 | | | 668 | | | 2,124 | | | 1,280 | | Deferred income taxes | (602) | | | 18 | | | 982 | | | (2,160) | | Gains from equity securities, net | (7,771) | | | (2,247) | | | (23,707) | | | (2,073) | | Other | 315 | | | (100) | | | 222 | | | (196) | | Changes in operating assets and liabilities, net of acquisitions: | | | | | | | | Accounts receivable | (22,346) | | | (5,675) | | | (24,590) | | | (4,743) | | Inventories | (5,784) | | | (3,622) | | | (10,204) | | | (4,880) | | Prepaid expenses and other assets | (5,497) | | | 387 | …

13. #13prepared remarks

    | | | | | | | | | | | | | | | | | | | | | | | | Cash flows from financing activities: | | | | | | | | Proceeds related to issuance of debt, net of costs | 24,896 | | | — | | | 24,896 | | | — | | Proceeds related to employee stock plans | — | | | — | | | 515 | | | 370 | | Payments related to repurchases of common stock | (19,732) | | | (9,721) | | | (39,044) | | | (23,815) | | Dividends paid | (6,047) | | | (244) | | | (6,290) | | | (488) | | Payments related to employee stock plan taxes | (2,402) | | | (1,848) | | | (4,531) | | | (3,380) | | Groq, Inc. | (2,944) | | | — | | | (2,944) | | | — | | Principal payments on property and equipment and intangible assets | (59) | | | (21) | | | (92) | | | (73) | | | | | | | | | | Other | 112 | | | — | | | 31 | | | — | | Net cash used in financing activities | (6,176) | | | (11,834) | | | (27,459) | | | (27,386) | | | | | | | | | | Change in cash and cash equivalents | 9,206 | | | (3,595) | | | 11,838 | | | 3,050 | | Cash and cash equivalents at beginning of period | 13,237 | | | 15,234 | | | 10,605 | | | 8,589 | | Cash and cash equivalents at end of period | $ | 22,443 | | | $ | 11,639 | | | $ | 22,443 | | | $ | 11,639 | | …

14. #14prepared remarks

    | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | NVIDIA CORPORATION | | RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES | | ($ In millions, except per share data) | | (Unaudited) | | | | | | | | | | | | Three Months Ended | | Six Months Ended | | | | July 26, | | April 26, | | July 27, | | July 26, | | July 27, | | | | 2026 | | 2026 | | 2025 | | 2026 | | 2025 | | | | | | | | | | | | | GAAP cost of revenue | | $ | 24,079 | | | $ | 20,458 | | | $ | 12,890 | | | $ | 44,538 | | | $ | 30,284 | | GAAP gross profit | | $ | 72,142 | | | $ | 61,157 | | | $ | 33,853 | | | $ | 133,299 | | | $ | 60,521 | | GAAP gross margin | | 75.0 | % | | 74.9 | % | | 72.4 | % | | 75.0 | % | | 66.6 | % | | Acquisition-related and other costs (A) | | 46 | | | 47 | | | 49 | | | 93 | | | 170 | | | Other | | — | | | 28 | | | — | | | 28 | | | 4 | | Non-GAAP cost of revenue | | $ | 24,033 | | | $ | 20,383 | | | $ | 12,841 | | | $ | 44,417 | | | $ | 30,110 | | Non-GAAP gross profit | | $ | 72,188 | | | $ | 61,232 | | | $ | 33,902 | | | $ | 133,420 | | | $ | 60,695 | | Non-GAAP gross margin* | | 75.0 | % | | 75.0 | % | | 72.5 | % | | 75.0 | % | | 66.8 | % | | | | | …

15. #15prepared remarks

    | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | GAAP net cash provided by operating activities | | $ | 24,077 | | | $ | 50,344 | | | $ | 15,365 | | | $ | 74,421 | | | $ | 42,779 | | | Purchases related to property and equipment and intangible assets | | (2,677) | | | (1,757) | | | (1,894) | | | (4,434) | | | (3,122) | | | Principal payments on property and equipment and intangible assets | | (59) | | | (33) | | | (21) | | | (92) | | | (73) | | Free cash flow | | $ | 21,341 | | | $ | 48,554 | | | $ | 13,450 | | | $ | 69,895 | | | $ | 39,584 | | | | | | | | | | | | | | *Includes H20 charges/(releases), net, which were $4.5 billion and none for the first quarter, and ($180 million) and insignificant for the second quarter, of fiscal years 2026 and 2027, respectively. | **Tax expense included represents impact from OBBBA (One Big Beautiful Bill Act). |

16. #16prepared remarks

    | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | (A) Acquisition-related and other costs are comprised of amortization of intangible assets, transaction costs, and certain compensation charges and are included in the following line items: | | | | | Three Months Ended | | Six Months Ended | | | | | July 26, | | April 26, | | July 27, | | July 26, | | July 27, | | | | | 2026 | | 2026 | | 2025 | | 2026 | | 2025 | | | Cost of revenue | | $ | 46 | | | $ | 47 | | | $ | 49 | | | $ | 93 | | | $ | 170 | | | | Research and development | | $ | 170 | | | $ | 167 | | | $ | 29 | | | $ | 337 | | | $ | 57 | | | | Sales, general and administrative | | $ | 6 | | | $ | 5 | | | $ | 8 | | | $ | 11 | | | $ | 17 | | | | | | | | | | | | | | | | (B) Comprised of net (gains)/losses on equity derivatives, interest expense related to acquisition consideration discount to be paid in the future, share of net (earnings)/losses related to equity method investments, and dividend income on equity securities. | | | | | | | | | | | | | | |

17. #17prepared remarks

    | | | | | | | | | | | | NVIDIA CORPORATION | RECONCILIATION OF GAAP TO NON-GAAP OUTLOOK | | | | | | Q3 FY2027 Outlook | | | | ($ in billions) | GAAP gross margin | | 74.0 | % | | Impact of acquisition-related costs and other costs | | — | | Non-GAAP gross margin | | 74.0 | % | | | | | GAAP operating expenses | | $ | 9.2 | | | Acquisition-related costs and other costs | | (0.2) | | Non-GAAP operating expenses | | $ | 9.0 | | | | | |