Nvidia 10-Qquarter ended 2026-07-26
Positive
Blackwell Ultra shipments drove Data Center growth as supply commitments rose and an Ohio campus guarantee expanded buildout exposure.
Filed 2026-08-26 16:36 ET
Key figures · Q2 FY2027 · period ended 2026-07-26
- Revenue$96.2BYoY +105.9%QoQ +17.9%
- Operating income$63.7BYoY +124.1%QoQ +19.0%
- Net income$59.7BYoY +125.9%QoQ +2.3%
- Total assets$320.3BYoY +127.6%QoQ +23.4%
- Total debt$33.4BYoY +294.1%QoQ +293.9%
How total debt adds up Long-term debt $32,366M + Short-term debt $1,000M Total debt $33,366M Lines as the filer presents them on its balance sheet.
- Shareholders' equity$229.0BYoY +128.7%QoQ +17.1%
- Tangible book value$204.9BYoY +118.8%QoQ +19.5%
How this filing reads
- Health+0.7$56.6B liquidity comfortably covers $33.4B debt; H1 FCF remains substantial.
- Momentum+0.9Quarterly revenue grew 106% and operating income grew 124%, showing sharply accelerating business performance.
- Outlook+0.4Management expects Blackwell and Rubin shipments; the $105B guarantee increases deployment and counterparty exposure.
Executive Summary
NVIDIA’s quarter ended 07/26/2026 was driven by the Blackwell system ramp and demand from hyperscalers, AI clouds, and enterprise customers: revenue more than doubled Y/Y while gross margin reached 75.0%. The operating business generated substantial profit, but reported earnings also benefited from large equity-investment gains, and receivables and inventory absorbed cash. NVIDIA is committing heavily to supply and customer infrastructure—including a post-quarter guarantee capped at $105B—to support future growth. For investors, the opportunity is sustained demand for AI compute; the test is whether customer deployments and cash collection keep pace with those commitments.
Key Financial Highlights
| Metric | Quarter ended 07/26/2026 | H1 FY2027 or period-end | Investor interpretation |
|---|---|---|---|
| Revenue | $96.2B, +106% Y/Y | $178B, +96% Y/Y | Growth remains concentrated in AI infrastructure. |
| Gross profit | $72.1B; margin 75.0% vs 72.4% | $133B; margin 75.0% | Mix improved; the H1 comparison also benefits from a prior-year inventory charge. |
| Operating income | $63.7B, +124% Y/Y | $117B | Revenue growth substantially outpaced operating-expense growth. |
| GAAP net income | $59.7B, +126% Y/Y | $118B | Includes material equity-investment gains. |
| Total assets | — | $320B | Includes significant investments and growing working capital. |
| Total equity | — | $229B | Provides balance-sheet capacity for expansion. |
| Tangible common equity | — | $205B | Equity less $21.1B of goodwill and $3.00B of net intangible assets. |
- Revenue mix: Data Center contributed $89.0B in Q2, or 92.5% of revenue; AI Clouds, Industrial & Enterprise grew 138% Y/Y to $40.3B, widening demand beyond hyperscalers.
- Earnings quality: Net equity-security gains were $7.77B in Q2 and $23.7B in H1. H1 operating cash flow (OCF) was $74.4B vs $118B of net income; receivables and inventory absorbed $24.6B and $10.2B, respectively, while equity gains were noncash in OCF. After $4.43B of capital expenditures, free cash flow (FCF) was $70.0B.
- Capital return: H1 repurchases of $39.8B covered 203M shares, while shares outstanding fell 157M, from 24.304B to 24.147B, net of issuance. Stock-based compensation was $3.95B; H1 dividends paid were $6.3B.
- Financing and liquidity: June’s $25.0B senior-note issuance raised net carrying debt to $33.4B from $8.47B at FY2026 year-end. Cash and marketable debt securities totaled $56.6B.
Business Developments
Management attributes growth to Blackwell Ultra shipments and expects to ship both Blackwell and Vera Rubin systems after Rubin production shipments began in Q3 FY2027. The shift toward complete AI systems increases NVIDIA’s opportunity per deployment, but also its dependence on manufacturing capacity, memory, and customers’ ability to build powered data centers.
Supply and capacity commitments rose to $279B from $119B in the prior quarter. NVIDIA is also supporting selected AI-cloud partners through cloud-service commitments and infrastructure investment. In August, it entered conditional guarantees capped at $105B for an Ohio campus intended to host NVIDIA compute under OpenAI leases, with initial service expected from FY2029. Management’s stated aim is to enable infrastructure buildout; the investor consequence is greater exposure to deployment timing and counterparties alongside potential product demand.
Risk Assessment
- Export controls and China: U.S. licensing and PRC restrictions effectively bar a competitive China data-center offering; licensed H200 shipments were less than 1% of Q2 Data Center revenue, and related H1 inventory and purchase-obligation charges were $0.4B.
- Infrastructure commitments and guarantees: Disclosed future commitments total $366B, including $279B for supply and capacity; the subsequent Ohio guarantee is capped at $105B, exposing NVIDIA to delays, weak utilization, or counterparty failure.
- Supply execution: Securing capacity ahead of demand increases exposure to component shortages, production defects, cost overruns, and inventory provisions if product plans or customer orders change.
- Customer concentration and collections: One direct customer supplied 16% of Q2 revenue; extended payment terms on large agreements contributed to the receivables increase and can delay cash conversion.
- Investment valuations: Public equity holdings expose earnings to market-price swings, while limited market evidence complicates valuation of private holdings.
- Legal and regulatory scrutiny: Competition inquiries and a certified securities class action could impose costs or business restrictions; no liability was accrued for the described proceedings.
- Debt and refinancing: $33.5B of senior-note principal outstanding adds debt-service and refinancing exposure, although the $25.0B commercial-paper program had no balance outstanding.
This 10-Q lists only the risk factors that changed since the annual report. Full list: FY2026 10-K.
Strategic Outlook and Investor Actionables
NVIDIA is using its financial capacity to secure supply and help finance the infrastructure needed to deploy its systems. That approach can extend growth if demand converts into completed, paying installations; it can magnify losses if buildouts stall or investment valuations reverse. Next period, monitor:
- Data Center growth and gross margin: sustained shipments and margins would support the system-ramp thesis; slower growth alongside provisions would challenge it.
- OCF vs net income: a narrowing gap, especially through better receivables collection, would strengthen earnings quality.
- Commitments and deployments: track growth in supply, cloud, and guarantee exposure against data-center commissioning and customer utilization.
Figures are computed from the filing's XBRL data; the summary and scores are written by an AI model reading the filing.
Model 004 · prompt 9e47f58d3c