NVIDIA Quarterly Report: Q2 FY2026

Key insights

7 takeaways

01
NVIDIA reported quarterly revenue of $96.2 billion, representing a 106% increase year-over-year and an 18% sequential growth.
02
Data Center revenue reached $89.0 billion, a 117% year-over-year increase driven by the ramp of Blackwell Ultra infrastructure.
03
The company significantly increased its supply and capacity commitments to $279 billion as of July 26, 2026, up from $119 billion in the previous quarter, to meet future demand.
04
Net income for the first half of fiscal year 2027 reached $118.0 billion, compared to $45.2 billion in the same period of the prior year.
05
Edge Computing revenue grew 27% year-over-year to $7.2 billion, bolstered by strong sales of Blackwell workstations despite slower consumer PC sales.
06
Shipments of Data Center Hopper products to China accounted for less than 1% of total Data Center revenue during the second quarter of fiscal year 2027.
07
The company's effective tax rate for the first half of fiscal year 2027 was 16.5%, an increase from 14.9% in the same period of the prior year.

Summary

NVIDIA's quarterly filing for the period ended July 26, 2026 (labeled Q2 FY2026 in some titles but corresponding to fiscal 2027) documents a step change in scale driven by AI infrastructure demand, alongside a sharp rise in off-balance-sheet and ecosystem exposure. Revenue reached $96.2 billion, up about 106% from $46.7 billion a year earlier, with gross margin of 75.0%, operating income of $63.7 billion, and net income of $59.7 billion ($2.46 per diluted share). Data Center contributed $89.0 billion, split between Hyperscale ($48.7 billion) and AI Clouds, Industrial & Enterprise ($40.3 billion). Blackwell still dominates shipments, Vera Rubin began production shipments, and supply remains constrained. First-half net income of $118.0 billion was lifted by $24.1 billion of other income, mostly unrealized equity gains.

Cash generation and capital returns were substantial. First-half operating cash flow was $74.4 billion, and the company repurchased $39.8 billion of stock, added $80 billion to its authorization (leaving $99.3 billion), and raised its quarterly dividend from $0.01 to $0.25. It also issued $25 billion in senior notes in June 2026. Total assets rose to $320.3 billion, with inventories at $31.6 billion and non-marketable securities at roughly $48–51 billion.

The central strategic theme is NVIDIA's growing financial support for customers' buildouts. Supply and capacity commitments jumped from $119 billion to $279 billion, total commitments reached $366 billion, and maximum guarantee exposure stands at $108.5 billion, including up to $105 billion for an OpenAI-linked SB Energy campus in Ohio. Equity investments, cloud capacity purchase obligations, and financing MOUs add further exposure.

Risks include customer concentration (one customer at 16% of revenue), antitrust scrutiny across several jurisdictions, and tightening export controls. NVIDIA considers itself effectively foreclosed from China's data center market, with H200 sales under 1% of Data Center revenue and a 25% tariff it cannot pass through.