0001045810-26-000052
SEC filingRevenue surged 85% YoY to $81.6B driven by Data Center and Blackwell ramp, with gross margin expanding 14.4 pts.
In Q1 FY27, NVIDIA reported record revenue of $81.6B, up 85% YoY and 20% sequentially. The standout driver was the Data Center platform, which surged 92% YoY to $75.2B, fueled by the ramp of Blackwell 300 products, InfiniBand, Spectrum-X Ethernet, and NVLink solutions. Edge Computing revenue grew 29% YoY to $6.4B, supported by strong Blackwell workstation demand, partially offset by slower consumer PC demand.
Gross margin expanded dramatically to 74.9% from 60.5% a year ago, primarily due to the absence of the prior year's $4.5B charge for H20 excess inventory and purchase obligations. Sequentially, gross margin was nearly flat as Blackwell remained the majority of revenue. Operating expenses rose 52% YoY to $7.6B, driven by higher compensation and benefits, compute infrastructure, and engineering development costs.
Operating income jumped 147% YoY to $53.5B, while net income more than tripled to $58.3B (+211% YoY), including $16.0B in net unrealized gains on equity investments (primarily $13.4B from publicly-held securities and $2.6B from non-marketable securities). Diluted EPS was $2.39, up from $0.76 a year ago.
NVIDIA reports two segments: Compute & Networking and Graphics. Compute & Networking revenue increased 88% YoY to $74.6B, driven by Data Center growth. Segment operating income rose 142% to $53.3B, benefiting from scale and the non-recurrence of the H20 charge. Graphics revenue grew 58% to $7.1B, with operating income up 79% to $2.9B, both fueled by Blackwell architecture sales.
Revenue concentration remains high: three direct customers accounted for 21%, 17%, and 16% of total revenue. International revenue (headquarters outside U.S.) dropped to 22% from 42% a year ago, partly due to continued export restrictions on Data Center Hopper products to China (zero shipments vs. $4.6B in Q1 FY26).
Management highlighted several forward-looking factors. The Rubin platform is expected to start shipping in H2 FY27, though product complexity may cause production delays and revenue volatility. A new H200 licensing program for China was granted but has generated no revenue to date; any shipments will incur a 25% U.S. tariff. The rise of open-source AI models, if deployed on competitors' platforms, could reduce demand. Macroeconomic factors like tariffs, inflation, and global conflicts could impact supply chain and costs. Despite these headwinds, NVIDIA continues to invest aggressively: $18.6B in private companies and infrastructure, and $20.2B in share repurchases during Q1. The Board also authorized an additional $80B in share repurchases and raised the quarterly dividend to $0.25 per share. The company maintains strong liquidity with $50.3B in cash and marketable debt securities, and $30.2B in marketable equity securities.
Operating cash flow (CFO) of $50.3B exceeded net income of $58.3B, reflecting significant non-cash adjustments including stock-based compensation ($1.9B), deferred income taxes ($1.6B), and depreciation ($1.0B), partially offset by large gains from equity securities ($15.9B). Working capital changes consumed $3.7B, driven by increases in accounts receivable ($2.2B) and inventories ($4.4B), while accrued liabilities provided $7.8B.
Capital expenditures rose to $1.8B, representing a capex intensity (capex/CFO) of 3.6%, up from 4.5% in the prior period. Capital returns totaled $19.6B, consisting of $19.3B in share repurchases and $0.2B in dividends, significantly exceeding CFO. This indicates strong reliance on operating cash to fund capital returns, with no explicit free cash flow disclosed.
Notable anomalies include a large $15.9B gain from equity securities (non-cash), boosting net income but not cash, and a $2.2B increase in deferred income taxes, which provided a cash benefit. The substantial working capital outflow reflects rapid growth in receivables and inventory, consistent with revenue expansion.