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NVIDIA Q1 Earnings Miss Expectations, Revenues Increase Y/Y
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NVIDIA Corporation (NVDA - Free Report) reported first-quarter fiscal 2026 non-GAAP earnings of 81 cents per share, which missed the Zacks Consensus Estimate by 4.71%. The reported figure soared 32.8% year over year while declining 9% sequentially.
NVDA’s fiscal first-quarter revenues climbed 69.2% year over year and 12% sequentially to $44.06 billion. The top line beat the consensus mark by 2.67%. The robust growth in the top line was mainly driven by record sales in the Data Center, Gaming, Professional Visualization, Automotive and OEM end markets.
NVIDIA's Segmental Details
NVIDIA reports revenues under two segments — Graphics and Compute & Networking.
The Graphics segment includes GeForce GPUs for gaming and personal computers, the GeForce NOW game-streaming service and related infrastructure. The segment also offers solutions for gaming platforms, Quadro GPUs for enterprise design, GRID software for cloud-based visual and virtual computing, as well as automotive platforms for infotainment systems.
Graphics accounted for 10.2% of fiscal first-quarter revenues. The segment’s top line gained 33% year over year and 36% sequentially to $4.47 billion. Our estimate for fiscal first-quarter revenues in the Graphics segment was pegged at $4.82 billion.
NVIDIA Corporation Price, Consensus and EPS Surprise
Compute & Networking represented 89.8% of fiscal first-quarter revenues. The segment comprises the Data Center platforms and systems for artificial intelligence, high-performance computing and accelerated computing.
Compute & Networking revenues soared 75% year over year and 10% sequentially to $39.6 billion. Our fiscal first-quarter revenue estimate for this segment was pegged at $38.2 billion.
Top-Line Details of NVIDIA’s Market Platform
Based on the market platform, revenues from Data Center (88.8% of revenues) jumped 73.3% year over year and 9.9% from the previous quarter to $39.1 billion. This robust rise was mainly driven by higher shipments of the Blackwell GPU computing platforms that are used for the training and inference of large language models, recommendation engines and generative AI applications. Our estimate for this end market’s fiscal first-quarter revenues was pegged at $38.5 billion. NVIDIA witnessed strong demand for its chips used in the Data Center as Microsoft, OpenAI, and Google experienced exponential token generation growth.
Gaming revenues increased 30.7% year over year and 48% sequentially to $3.76 billion, accounting for 8.5% of the total revenues. The year-over-year increase reflects strong demand from gamers, creators, and AI enthusiasts. Our estimate for the Gaming end market’s first-quarter revenues was pegged at $3.29 billion.
Professional Visualization revenues (1.2% of revenues) increased 19.2% year over year while declining 0.4% sequentially to $509 million. Our estimate for the Professional Visualization end market’s fiscal first-quarter revenues was pegged at $567.6 million.
Automotive sales (1.3% of revenues) in the reported quarter totaled $567 million, up 72.3% on a year-over-year basis while declining 0.5% sequentially. The increase was mainly driven by the continued ramp up in autonomous vehicles and new energy vehicles. Our estimate for the Automotive end market’s fiscal first-quarter revenues was pegged at $551.7 million.
OEM and Other revenues (0.3% of revenues) were up 42.3% year over year while declining 11.9% sequentially to $111 million. Our estimate for the OEM end markets’ fiscal first-quarter revenues was pegged at $120 million.
NVDA’s Operating Details
NVIDIA’s non-GAAP gross margin of 61% reflects a decline of 17.9 percentage points year over year and 12.5 percentage points sequentially. This decline was primarily due to a $4.5 billion charge related to H20 inventory and purchase commitments that became unsellable following the new U.S. export restrictions on H20 chip shipments to China.
Non-GAAP operating expenses increased 43% year over year and 6% sequentially to $3.58 billion. The increase was primarily driven by higher compensation and benefits expenses due to employee growth and compensation increases. Also, engineering development, computing and infrastructure costs for new product introductions lead to higher costs. However, as a percentage of total revenues, non-GAAP operating expenses declined to 8.1% from 9.6% in the year-ago quarter and 8.6% in the previous quarter.
The non-GAAP operating income jumped 29% year over year while declining 8.8% sequentially to $23.28 billion. Non-GAAP operating margin declined to 52.8% from the year-ago quarter’s 69.3% and the previous quarter’s 64.9%. NVIDIA’s non-GAAP net income margin of 45.2% for the first quarter contracted 13.3 percentage points year over year and 10.9 percentage points sequentially. (Find the latest EPS estimates and surprises on Zacks Earnings Calendar.)
NVIDIA’s Balance Sheet and Cash Flow
As of April 27, 2025, NVDA’s cash, cash equivalents and marketable securities were $53.7 billion, up from $43.2 billion as of Jan. 26, 2025. As of April 27, the total long-term debt was $8.46 billion, which remained unchanged sequentially.
NVIDIA generated $27.4 billion in operating cash flow, up from the year-ago quarter’s $15.35 billion and the previous quarter’s $16.6 billion. NVIDIA generated a free cash flow of $26.14 billion in the first quarter.
In the fiscal first quarter, the company returned $244 million to its shareholders through dividend payouts and repurchased stocks worth $14.1 billion. On Aug. 26, 2024, NVIDIA’s board of directors approved a new $50 billion share repurchase authorization, bringing the total authorization to $57.5 billion, which has no expiration date. As of April 27, 2025, the company has the remaining authorization of approximately $24.3 billion.
NVIDIA Initiates Q2 2026 Guidance
For the second quarter of fiscal 2026, NVIDIA anticipates revenues of $45 billion (+/-2%), marginally lower than the Zacks Consensus Estimate of $45.11 billion.
The non-GAAP gross margin is projected to be 72% (+/-50 bps). Non-GAAP operating expenses are estimated at $4 billion.
APH shares have gained 28.2% in the year-to-date period. The Zacks Consensus Estimate for APH’s full-year 2025 earnings is pegged at $2.66 per share, up by 8 cents over the past 30 days, suggesting a growth of 32.33% from the year-ago quarter’s reported figure.
JNPR shares have lost 4.1% in the year-to-date period. The Zacks Consensus Estimate for JNPR’s full-year fiscal 2025 earnings has been revised upward to $2.09 in the past 30 days, suggesting year-over-year growth of 21.5%.
UPWK shares have lost 4.6% in the year-to-date period. The Zacks Consensus Estimate for UPWK’s full-year 2025 earnings is pegged at $1.14 per share, implying a rise of 9.62% from the year-ago quarter’s levels.
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NVIDIA Q1 Earnings Miss Expectations, Revenues Increase Y/Y
NVIDIA Corporation (NVDA - Free Report) reported first-quarter fiscal 2026 non-GAAP earnings of 81 cents per share, which missed the Zacks Consensus Estimate by 4.71%. The reported figure soared 32.8% year over year while declining 9% sequentially.
NVDA’s fiscal first-quarter revenues climbed 69.2% year over year and 12% sequentially to $44.06 billion. The top line beat the consensus mark by 2.67%. The robust growth in the top line was mainly driven by record sales in the Data Center, Gaming, Professional Visualization, Automotive and OEM end markets.
NVIDIA's Segmental Details
NVIDIA reports revenues under two segments — Graphics and Compute & Networking.
The Graphics segment includes GeForce GPUs for gaming and personal computers, the GeForce NOW game-streaming service and related infrastructure. The segment also offers solutions for gaming platforms, Quadro GPUs for enterprise design, GRID software for cloud-based visual and virtual computing, as well as automotive platforms for infotainment systems.
Graphics accounted for 10.2% of fiscal first-quarter revenues. The segment’s top line gained 33% year over year and 36% sequentially to $4.47 billion. Our estimate for fiscal first-quarter revenues in the Graphics segment was pegged at $4.82 billion.
NVIDIA Corporation Price, Consensus and EPS Surprise
NVIDIA Corporation price-consensus-eps-surprise-chart | NVIDIA Corporation Quote
Compute & Networking represented 89.8% of fiscal first-quarter revenues. The segment comprises the Data Center platforms and systems for artificial intelligence, high-performance computing and accelerated computing.
Compute & Networking revenues soared 75% year over year and 10% sequentially to $39.6 billion. Our fiscal first-quarter revenue estimate for this segment was pegged at $38.2 billion.
Top-Line Details of NVIDIA’s Market Platform
Based on the market platform, revenues from Data Center (88.8% of revenues) jumped 73.3% year over year and 9.9% from the previous quarter to $39.1 billion. This robust rise was mainly driven by higher shipments of the Blackwell GPU computing platforms that are used for the training and inference of large language models, recommendation engines and generative AI applications. Our estimate for this end market’s fiscal first-quarter revenues was pegged at $38.5 billion. NVIDIA witnessed strong demand for its chips used in the Data Center as Microsoft, OpenAI, and Google experienced exponential token generation growth.
Gaming revenues increased 30.7% year over year and 48% sequentially to $3.76 billion, accounting for 8.5% of the total revenues. The year-over-year increase reflects strong demand from gamers, creators, and AI enthusiasts. Our estimate for the Gaming end market’s first-quarter revenues was pegged at $3.29 billion.
Professional Visualization revenues (1.2% of revenues) increased 19.2% year over year while declining 0.4% sequentially to $509 million. Our estimate for the Professional Visualization end market’s fiscal first-quarter revenues was pegged at $567.6 million.
Automotive sales (1.3% of revenues) in the reported quarter totaled $567 million, up 72.3% on a year-over-year basis while declining 0.5% sequentially. The increase was mainly driven by the continued ramp up in autonomous vehicles and new energy vehicles. Our estimate for the Automotive end market’s fiscal first-quarter revenues was pegged at $551.7 million.
OEM and Other revenues (0.3% of revenues) were up 42.3% year over year while declining 11.9% sequentially to $111 million. Our estimate for the OEM end markets’ fiscal first-quarter revenues was pegged at $120 million.
NVDA’s Operating Details
NVIDIA’s non-GAAP gross margin of 61% reflects a decline of 17.9 percentage points year over year and 12.5 percentage points sequentially. This decline was primarily due to a $4.5 billion charge related to H20 inventory and purchase commitments that became unsellable following the new U.S. export restrictions on H20 chip shipments to China.
Non-GAAP operating expenses increased 43% year over year and 6% sequentially to $3.58 billion. The increase was primarily driven by higher compensation and benefits expenses due to employee growth and compensation increases. Also, engineering development, computing and infrastructure costs for new product introductions lead to higher costs. However, as a percentage of total revenues, non-GAAP operating expenses declined to 8.1% from 9.6% in the year-ago quarter and 8.6% in the previous quarter.
The non-GAAP operating income jumped 29% year over year while declining 8.8% sequentially to $23.28 billion. Non-GAAP operating margin declined to 52.8% from the year-ago quarter’s 69.3% and the previous quarter’s 64.9%. NVIDIA’s non-GAAP net income margin of 45.2% for the first quarter contracted 13.3 percentage points year over year and 10.9 percentage points sequentially. (Find the latest EPS estimates and surprises on Zacks Earnings Calendar.)
NVIDIA’s Balance Sheet and Cash Flow
As of April 27, 2025, NVDA’s cash, cash equivalents and marketable securities were $53.7 billion, up from $43.2 billion as of Jan. 26, 2025. As of April 27, the total long-term debt was $8.46 billion, which remained unchanged sequentially.
NVIDIA generated $27.4 billion in operating cash flow, up from the year-ago quarter’s $15.35 billion and the previous quarter’s $16.6 billion. NVIDIA generated a free cash flow of $26.14 billion in the first quarter.
In the fiscal first quarter, the company returned $244 million to its shareholders through dividend payouts and repurchased stocks worth $14.1 billion. On Aug. 26, 2024, NVIDIA’s board of directors approved a new $50 billion share repurchase authorization, bringing the total authorization to $57.5 billion, which has no expiration date. As of April 27, 2025, the company has the remaining authorization of approximately $24.3 billion.
NVIDIA Initiates Q2 2026 Guidance
For the second quarter of fiscal 2026, NVIDIA anticipates revenues of $45 billion (+/-2%), marginally lower than the Zacks Consensus Estimate of $45.11 billion.
The non-GAAP gross margin is projected to be 72% (+/-50 bps). Non-GAAP operating expenses are estimated at $4 billion.
NVIDIA Zacks Rank & Stocks to Consider
NVIDIA currently carries a Zacks Rank #3 (Hold).
Amphenol (APH - Free Report) , Juniper Networks (JNPR - Free Report) and Upwork (UPWK - Free Report) are some better-ranked stocks that investors can consider in the broader Zacks Computer & Technology sector. APH, JNPR and UPWK sport a Zacks Rank #1 (Strong Buy) each at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
APH shares have gained 28.2% in the year-to-date period. The Zacks Consensus Estimate for APH’s full-year 2025 earnings is pegged at $2.66 per share, up by 8 cents over the past 30 days, suggesting a growth of 32.33% from the year-ago quarter’s reported figure.
JNPR shares have lost 4.1% in the year-to-date period. The Zacks Consensus Estimate for JNPR’s full-year fiscal 2025 earnings has been revised upward to $2.09 in the past 30 days, suggesting year-over-year growth of 21.5%.
UPWK shares have lost 4.6% in the year-to-date period. The Zacks Consensus Estimate for UPWK’s full-year 2025 earnings is pegged at $1.14 per share, implying a rise of 9.62% from the year-ago quarter’s levels.