Executive Summary
NVIDIA delivered a standout first quarter of fiscal 2026, underscoring the company’s leadership in AI infrastructure and inference at scale. Revenue totaled $44.06 billion, up 69% year over year, with data center revenue of $39.0 billion up 73% YoY, driven by the Blackwell ramp and the GB200/GB300 architecture family. Despite a $4.5 billion write-down related to H20 inventory tied to China export controls and an inability to ship approximately $2.5 billion in H20 in Q1, management highlighted robust demand for AI inference workloads, continued enterprise AI adoption, and a multi-year product cadence through 2028. Management emphasized the rapid transition from generative to agentic AI, a sustained trajectory for AI factory deployments, and a broad onshore manufacturing push to support AI infrastructure globally. The company reaffirmed its near-term guidance for Q2 revenue of $45 billion ±2% and signaled a path toward gross margins in the mid-70s later this year, supported by Blackwell profitability and ongoing capacity expansion. The quarter also showcased expansive discussions around sovereign AI and on-prem enterprise AI, with a roadmap spanning RTX Pro, DGX Spark, DGX Station, Omniverse, and Cosmo/ Nemo frameworks, positioning NVIDIA to monetize AI across data center, cloud, enterprise IT, industrial AI, and robotics deployments.
Key Performance Indicators
QoQ: -15.01% | YoY:26.17%
QoQ: -14.44% | YoY:28.33%
Key Insights
Revenue: $44.062B, YoY +69.18%, QoQ +12.03%; Gross Profit: $26.668B, Gross Margin 60.52%, YoY +30.69%, QoQ -7.15%; Operating Income: $21.638B, Op Margin 49.11%, YoY +27.97%, QoQ -9.97%; Net Income: $18.775B, Net Margin 42.61%, YoY +26.17%, QoQ -15.01%; EPS: $0.77, Diluted $0.76, YoY +28.33%, QoQ -14.44%; Data Center Revenue: $39.0B, +73% YoY; H20 Impact: $4.6B recognized pre-Apr 9; $4.5B inventory/purchase-commitment write-down; ~$2.5B unshipped due to export controls; Gaming Revenue: $3.8B, +42...
Financial Highlights
Revenue: $44.062B, YoY +69.18%, QoQ +12.03%; Gross Profit: $26.668B, Gross Margin 60.52%, YoY +30.69%, QoQ -7.15%; Operating Income: $21.638B, Op Margin 49.11%, YoY +27.97%, QoQ -9.97%; Net Income: $18.775B, Net Margin 42.61%, YoY +26.17%, QoQ -15.01%; EPS: $0.77, Diluted $0.76, YoY +28.33%, QoQ -14.44%; Data Center Revenue: $39.0B, +73% YoY; H20 Impact: $4.6B recognized pre-Apr 9; $4.5B inventory/purchase-commitment write-down; ~$2.5B unshipped due to export controls; Gaming Revenue: $3.8B, +42% YoY, +48% QoQ; Crow/Visual Computing: $0.509B, flat QoQ, +19% YoY; Automotive: $0.567B, -1% QoQ, +72% YoY; GAAP Gross Margin: 60.5%, Non-GAAP 61%; Excluding the H20 charge, non-GAAP gross margin would be ~71.3%; Operating Expenses: GAAP +7%, Non-GAAP +6%; Free Cash Flow: ~$26.19B; Operating Cash Flow: $27.41B; Net Cash from Ops: $27.41B; Cash End of Period: $15.23B; Net Debt: -$4.949B (net cash); Share Buybacks: $14.095B; Dividends: $2.44B; Outlook: Q2 Revenue $45B ±2%, GM ~71.8% GAAP / 72% Non-GAAP, Opex GAAP ~$5.7B, Non-GAAP ~$4.0B; Tax Rate ~16.5%; Long-term view includes AI factories and sovereign AI deployments across multiple geographies.
Income Statement
| Metric |
Value |
YoY Change |
QoQ Change |
| Revenue |
44.06B |
69.18% |
12.03% |
| Gross Profit |
26.67B |
30.69% |
-7.15% |
| Operating Income |
21.64B |
27.97% |
-9.97% |
| Net Income |
18.78B |
26.17% |
-15.01% |
| EPS |
0.77 |
28.33% |
-14.44% |
Management Commentary
- Strategy and product roadmap: Management emphasized a multi-pillar growth trajectory anchored by AI inference (Grace Blackwell), enterprise AI (RTX Pro/ DGX Spark), industrial AI (Omniverse, Isaac Groot), and sovereign AI (nation-state AI infrastructure). Jensen Huang stated, Grace Blackwell is in full production, offering a giant leap in inference performance, enabling rapid deployment across enterprise and hyperscale workloads. - Market and regulatory environment: Colette Kress and Jensen discussed the china export controls, acknowledging a $4.5B write-down and an expectation of meaningful China data center revenue decline in Q2, while signaling ongoing efforts to supply compliant data center compute products. Jensen argued that AI infrastructure is global and sovereignty-driven, noting onshore manufacturing investments in the U.S. (TSMC, Foxconn, Wistron) and a vision to build AI capacity “from chip to supercomputer, built in America, within a year.” - Demand drivers and customer momentum: Management highlighted Azure OpenAI, Microsoft, OpenAI, and Google are driving step-function increases in token generation, with major hyperscalers deploying tens of thousands of Blackwell GPUs and GB200/GB300 systems. The company cited >100 Trillion tokens processed by Microsoft in Q1 and a 30x uplift in inference throughput for GB200 with NBL72 in MLPerf benchmarks. - Execution and supply chain: Huang indicated onshore, US-based supply chain expansion and a growing backlog of AI factory orders, with over 800 AI factories in planning. He stressed the need for manufacturing capacity to meet AI demand growth and highlighted Spectrum X adoption with two significant CSP customers added in the quarter. - Competitive positioning and monetization of AI ecosystems: NVIDIA reiterated its role across AI training, inference, and agentic AI, with ecosystems like Nexmo, Nemo, and Cosmos expanding enterprise adoption and data generation, complemented by strategic partnerships (e.g., Yam Brands) to extend AI capabilities across large-scale consumer networks. Quote-based excerpt: “Grace Blackwell is in full production. We're off to the races. We now have multiple significant growth engines … Inference is exploding.” Quote-based excerpt: “Export controls should strengthen US platforms, not drive half of the world's AI talent to rivals.”
"Grace Blackwell is in full production. We're off to the races. We now have multiple significant growth engines. Inference, once the light of workload, is surging with revenue-generating AI services. AI is growing faster and will be larger than any platform shifts before, including the Internet, mobile, and cloud."
— Jensen Huang
"Export controls should strengthen US platforms, not drive half of the world's AI talent to rivals."
— Jensen Huang
Forward Guidance
NVIDIA maintains a positive near-term revenue trajectory, guiding Q2 revenue of $45B ±2% with gross margins of ~71.8% GAAP / ~72% non-GAAP and operating expenses of ~$5.7B GAAP / ~$4B non-GAAP. The primary near-term risk is China-related revenue disruption from H20 export controls, which management quantified as an approximate $8B loss in Q2, and a broader TAM impact of roughly $50B for future China-related opportunities due to lack of compliant products. The company also signals continued strong data center demand driven by Blackwell, GB200/GB300 deployments, and a broad move toward agentic AI in enterprise IT and industrial settings. Investment thesis hinges on: (1) sustained data center profitability from Blackwell and next-gen GPU architectures; (2) robust AI factory and sovereign AI deployments; (3) expanding on-prem IT stack (RTX Pro/DGX Spark/DGX Station) and ecosystem monetization via Nexmo, Nemo, and Omniverse; and (4) resilient cash flow generation enabling continued capital returns. Key monitorables: (a) China export-control policy developments and any potential product approvals; (b) ramp timing and acceptance of GB300/MBLink72 configurations; (c) incremental Spectrum X CSP engagements; (d) progress on onshore manufacturing capacity and its impact on gross margins and lead times; (e) progression of AI factory deployments and sovereign cloud partnerships.