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Outbyte Driver Updater FREEScan for outdated or missing drivers - takes under a minuteDriver Scan →Outbyte PC Repair FREEClear out junk files and repair common Windows errorsFree Scan →NVIDIA’s Q2 FY2027 results show rapid revenue growth, a 75.0% GAAP gross margin and substantial operating cash flow—but those figures answer different questions. Read the income statement to assess profitability, then trace net income through the cash-flow statement to see how much cash operations generated and what absorbed it. The figures below cover the quarter ended July 26, 2026, or the six months ended that date; they are not full-year results. The Form 10-Q is an unaudited interim report, not a complete annual report.
What period do Nvidia’s latest figures cover?
NVIDIA’s Q2 FY2027 quarter ended July 26, 2026. Its results release was dated August 26, and its Form 10-Q was filed August 27. Quarter figures below are compared with Q2 FY2026 where relevant. Cash-flow and other six-month figures cover the six months ended July 26, 2026, with the comparative period ending July 27, 2025. These periods should not be mistaken for a fiscal-year total. The company’s financial reports and quarterly results provide the release and filing; the 10-Q is prepared under U.S. GAAP and is unaudited.
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What should I look at in Nvidia’s earnings?
Start with sales, then follow the income statement down from gross profit to operating income and net income. Growth in revenue is meaningful, but it does not by itself show whether margins are improving or how much profit came from the core business.
Revenue and business mix
NVIDIA reported Q2 FY2027 revenue of $96.221 billion, up 106% year over year and 18% sequentially. The earnings release highlighted Data Center revenue of $89.0 billion, up 117% year over year. In the 10-Q, the company reports two segment categories: Compute & Networking, with $88.299 billion in revenue, and Graphics, with $7.922 billion. Data Center is a business line highlighted in the release; it is not a substitute for the filing’s segment labels.
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Check both year-over-year and sequential growth. The year-over-year comparison puts the quarter against the same quarter a year earlier, while sequential growth compares with the immediately preceding quarter. Neither comparison alone establishes whether the pace will continue.
Gross profit and gross margin
Gross profit is revenue less cost of revenue. Divide gross profit by revenue to calculate gross margin, the share of sales remaining after those direct costs. NVIDIA’s Q2 FY2027 GAAP gross margin was 75.0%, compared with 72.4% in Q2 FY2026. The company attributed the year-over-year increase to improved mix from Blackwell Ultra.
Cost of revenue is broader than the chip itself: NVIDIA says it includes semiconductor and board/device costs, manufacturing support, yield fallout, inventory and warranty provisions, memory and component costs, tariffs, shipping, certain amortization and stock-based compensation. Changes in these costs and in product mix can affect gross margin even when revenue rises.
Operating expenses and operating income
Operating expenses were $8.408 billion in Q2 FY2027, versus $5.413 billion a year earlier. Operating income—the profit left after cost of revenue and operating expenses—was $63.734 billion, versus $28.440 billion. NVIDIA said higher compute infrastructure and compensation and benefits costs contributed to the rise in operating expenses.
Net income and non-operating items
Net income was $59.688 billion, compared with $26.422 billion in Q2 FY2026. GAAP diluted earnings per share were $2.46. The release also reported non-GAAP diluted EPS of $2.22; that is a separate, company-defined measure and should not be combined with or presented as GAAP EPS.
Net income includes items beyond ordinary operating profit. For Q2 FY2027, other income, net was $7.773 billion, including $7.771 billion of net gains from equity securities. Those gains increased reported income, but they are not cash generated by selling products or providing services. For the six months, net gains from equity securities were $23.707 billion.
Why is Nvidia’s operating cash flow different from net income?
Net income for the first six months of FY2027 was $118.010 billion, while net cash provided by operating activities was $74.421 billion. The cash-flow statement starts with net income, adjusts for non-cash and other reconciling items, and then accounts for changes in operating assets and liabilities. The two totals measure different things, so inspect the reconciliation rather than expecting them to match.
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Among the first-half adjustments were $3.954 billion of stock-based compensation expense and $2.124 billion of depreciation and amortization. The statement deducted $23.707 billion of net gains from equity securities in reconciling net income to operating cash flow. This is a key reason earnings and operating cash flow can diverge: an accounting gain can lift net income without being an operating cash receipt.
Working capital and cash absorbed
Changes in operating assets and liabilities also affected cash. The first-half cash-flow statement reflects uses of $24.590 billion for accounts receivable, $10.204 billion for inventories and $6.480 billion for prepaid expenses and other assets. Receivables can rise when sales are recorded before customers pay; inventory can tie up cash before products are sold. Such increases deserve attention alongside rapid sales growth, but their significance depends on business conditions and timing.
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Investing, financing and cash balance
NVIDIA used $35.124 billion in investing activities and $27.459 billion in financing activities during the first half. Investing included $4.434 billion of purchases related to property and equipment and intangible assets, as well as substantial purchases and sales of securities. Therefore, total investing cash flow should not be treated as a capital-expenditure figure.
As an analyst calculation, operating cash flow of $74.421 billion minus those $4.434 billion property, equipment and intangible-asset purchases equals $69.987 billion. This illustrative subtraction is not a reported GAAP line and is not a complete measure of all investment needs.
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1Scan for outdated or missing drivers - takes under a minute2Repair Windows errors before they cause bigger problems3Fix the driver behind crashes, sound loss and screen glitchesFinancing included $39.044 billion in share repurchases, $6.290 billion in dividends and $24.896 billion in net proceeds related to debt issuance. Cash and cash equivalents increased by $11.838 billion during the six months, ending at $22.443 billion.
Independent reader supportYour contribution helps us test, update, and keep practical guides available for everyone.What balance-sheet figures and risks should I check?
At July 26, 2026, NVIDIA reported $22.443 billion in cash and cash equivalents, $34.143 billion in marketable debt securities, $42.783 billion in marketable equity securities, $63.059 billion in accounts receivable and $31.575 billion in inventories. Consider receivables and inventory alongside revenue growth and operating cash flow: rising balances can consume cash, though a single period does not establish a trend or prove a collection or inventory problem.
Customer concentration
NVIDIA says revenue is concentrated among a limited number of direct and indirect customers. One direct customer accounted for 16% of Q2 revenue. For the first six months, three direct customers accounted for 16%, 15% and 13% of revenue, respectively. The filing does not name those customers, so their identities should not be inferred. Concentration is relevant because a change in purchasing by a large customer could matter disproportionately.
Export controls and geography
The 10-Q discusses export controls and other government restrictions as risks to the company’s ability to ship products and serve markets. NVIDIA’s Q3 FY2027 outlook assumed no Data Center compute revenue from China. That is an assumption in management’s dated forecast, not a statement of realized Q3 results.
How should I interpret Nvidia’s outlook?
Management’s August 26, 2026 outlook for Q3 FY2027 was revenue of $108.0 billion, plus or minus 2%; GAAP and non-GAAP gross margins of 74.0%, plus or minus 50 basis points; GAAP operating expenses of approximately $9.2 billion; and non-GAAP operating expenses of approximately $9.0 billion. It also assumed no Data Center compute revenue from China. These are forecasts with assumptions, not actual results or guarantees. Compare a later reported quarter with this specific outlook rather than treating the forecast as performance already achieved.
CEO Jensen Huang described the company’s view in the release: “AI has reached its inflection point. It’s doing useful work. Its tokens are productive and profitable. Now, compute is revenue.” He also said demand was accelerating and described growth across AI labs, startups and physical AI. These are Huang’s characterizations, not independent measurements of market demand.
How to use the statements before investing
A disciplined read keeps profitability, cash generation, balance-sheet demands and expectations distinct. For this quarter, examine year-over-year and sequential growth; compare gross, operating and net margins; trace first-half net income through the operating cash-flow reconciliation; and set receivables and inventories against sales growth. Then compare actual results with the dated company outlook when those results become available. The statements help explain reported performance and risks, but they do not establish whether the shares are fairly valued or predict future returns.
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