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Fix the driver behind crashes, sound loss and screen glitchesFind Drivers →Repair Windows errors before they cause bigger problemsFix Now →Scan for outdated or missing drivers - takes under a minuteDriver Scan →NVIDIA’s Q2 FY2027 results show rapid revenue growth and substantial profits, but the income statement and cash-flow statement tell different parts of the story. For the quarter ended July 26, 2026, revenue was $96.221 billion, up 106% year over year and 18% sequentially. For the six months ended July 26, 2026, net income was $118.010 billion while operating cash flow was $74.421 billion. Read them together: growth and earnings show reported performance; cash conversion, working-capital needs, customer concentration, investment, and management’s dated outlook add context. None of these figures alone determines whether NVIDIA is a suitable investment or what return its shares may deliver.
What period do Nvidia’s latest figures cover?
NVIDIA’s Q2 FY2027 Form 10-Q covers the quarter and six months ended July 26, 2026. The filing is an unaudited interim report under U.S. GAAP, not a full-year report or a complete annual filing. The six-month totals below should not be treated as annual results. The company announced the quarter’s results on August 26, 2026, and filed its 10-Q on August 27, 2026. NVIDIA’s financial reports and quarterly results provide access to company materials.
Use the 10-Q for detailed statement line items and disclosures; use the earnings release for highlighted results and management’s outlook. Keep GAAP and non-GAAP measures distinct: the release reported Q2 diluted GAAP EPS of $2.46 and non-GAAP diluted EPS of $2.22. They are different measures, not interchangeable versions of one figure.
What should I look at in Nvidia’s earnings?
Start with sales, then follow how much remains after product costs and operating expenses. Compare the same quarter a year earlier to assess year-over-year change, and the preceding quarter to understand sequential movement. A single growth rate does not explain profitability or the costs required to generate it.
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| Q2 FY2027 income-statement measure | Reported result | Q2 FY2026 comparison |
|---|---|---|
| Revenue | $96.221 billion | Year-over-year increase of 106%; the release also reported 18% sequential growth |
| Gross margin | 75.0% GAAP | 72.4% |
| Operating expenses | $8.408 billion | $5.413 billion |
| Operating income | $63.734 billion | $28.440 billion |
| Net income | $59.688 billion | $26.422 billion |
| Diluted EPS | $2.46 GAAP; $2.22 non-GAAP | Do not compare or combine the two accounting measures as if they were the same |
These are NVIDIA Corporation’s reported Q2 FY2027 figures and comparisons in its 2026 filing and August 26 release. The filing’s six-month totals through July 26, 2026 were revenue of $177.837 billion, gross profit of $133.299 billion, operating income of $117.270 billion, and net income of $118.010 billion.
Revenue and segment context
The release highlighted Data Center revenue of $89.0 billion, up 117% year over year. In the 10-Q, NVIDIA reports two segment categories: Compute & Networking, with Q2 revenue of $88.299 billion, and Graphics, with $7.922 billion. Data Center is a business-area figure highlighted by the release, not a substitute for those filing segment labels. For the filing’s categories and detailed results, see the quarterly financial reports.
Gross margin: what remains after cost of revenue
Gross profit is revenue minus cost of revenue; gross margin is gross profit divided by revenue. NVIDIA reported Q2 FY2027 GAAP gross margin of 75.0%, compared with 72.4% in Q2 FY2026. The company attributed the year-over-year improvement to a better product mix from Blackwell Ultra. That is management’s explanation, not a guarantee that the margin will persist.
Cost of revenue is broader than the direct cost of a chip. NVIDIA says it includes semiconductor and board/device costs, manufacturing support, yield fallout, inventory and warranty provisions, memory and component costs, tariffs, shipping, and certain amortization and stock-based compensation. Changes in these expenses and in the products sold can affect the margin, so a reader should not interpret gross margin as a fixed markup.
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Operating expenses and income
Operating expenses rose to $8.408 billion from $5.413 billion in the year-earlier quarter, while operating income increased to $63.734 billion from $28.440 billion. NVIDIA said higher compute-infrastructure spending and compensation and benefits costs contributed to the increase in operating expenses. Compare expense growth with revenue and gross profit: this helps show whether the business is converting its larger sales base into operating earnings while also spending to support operations.
Net income includes non-operating items
Net income was $59.688 billion, but it is not all a measure of ordinary product-operation performance. Q2 other income, net was $7.773 billion, including $7.771 billion in net gains from equity securities. Those gains increased reported earnings; they are distinct from revenue and operating income and should not be read as cash generated by selling products. Looking at operating income alongside net income makes the distinction visible.
Why is Nvidia’s operating cash flow different from net income?
For the six months ended July 26, 2026, NVIDIA reported net income of $118.010 billion and net cash provided by operating activities of $74.421 billion. They measure different things. The cash-flow statement starts with net income, adjusts for non-cash expenses and gains, then accounts for timing changes in operating assets and liabilities. A company can report income before collecting the related cash, or spend cash on inventory and other assets before those costs appear in earnings.
| First-half FY2027 cash-flow reconciliation item | Amount | How to interpret it |
|---|---|---|
| Net income | $118.010 billion | Starting point for the operating cash-flow reconciliation |
| Stock-based compensation expense | $3.954 billion | Added back as a non-cash expense in the reconciliation |
| Depreciation and amortization | $2.124 billion | Added back as a non-cash expense |
| Net gains from equity securities | -$23.707 billion | Deducted in reconciling net income to operating cash flow; gains are not operating cash receipts |
| Accounts receivable | -$24.590 billion | Cash use associated with the period’s change in receivables |
| Inventories | -$10.204 billion | Cash use associated with the period’s inventory change |
| Prepaid expenses and other assets | -$6.480 billion | Cash use associated with the period’s change in these assets |
| Net cash provided by operating activities | $74.421 billion | Cash generated by operating activities after the listed and other reconciling items |
Amounts are from NVIDIA’s six-month cash-flow statement for FY2027. The table highlights selected items; it is not a complete reproduction of every reconciliation line. In particular, the $23.707 billion equity-security gain deduction is why headline net income should not be equated with cash from core operations.
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Receivables and inventory
At July 26, 2026, accounts receivable was $63.059 billion and inventory was $31.575 billion. These are balance-sheet amounts on that date, while the cash-flow reconciliation shows first-half changes. Receivables can absorb cash when sales are recognized before customers pay; inventory can absorb cash before goods are sold. Compare their movement with sales growth and operating cash flow, but do not infer a problem from a large balance alone: business scale, timing, and conditions matter.
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Capital spending and free cash flow
The investing section reported $4.434 billion in purchases related to property and equipment and intangible assets during the first six months. An illustrative analyst calculation of operating cash flow minus those purchases is $69.987 billion ($74.421 billion minus $4.434 billion). This is not a reported GAAP line and does not represent every possible definition of free cash flow. NVIDIA’s investing activities also include substantial purchases and sales of securities, so net investing cash flow should not be mistaken for capital expenditure alone.
Financing, securities, and cash balance
For the first half of FY2027, net cash used in investing activities was $35.124 billion and net cash used in financing activities was $27.459 billion. Financing included $39.044 billion in share repurchases, $6.290 billion in dividends, and $24.896 billion in net proceeds related to debt issuance. Despite cash outflows in investing and financing, cash and cash equivalents increased by $11.838 billion to $22.443 billion at period end. The balance sheet also listed $34.143 billion in marketable debt securities and $42.783 billion in marketable equity securities; these are separate from cash and cash equivalents.
Independent reader supportYour contribution helps us test, update, and keep practical guides available for everyone.What risks and disclosures should investors connect to the statements?
Customer concentration
NVIDIA disclosed that one direct customer represented 16% of Q2 FY2027 revenue. For the first half, three direct customers represented 16%, 15%, and 13% of revenue, respectively. The filing does not identify them, so their identities should not be inferred. Concentration matters because a limited number of customer relationships can make sales more sensitive to individual customers’ purchasing decisions.
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Export controls and geography
The filing warns that export controls and other government restrictions can affect NVIDIA’s ability to ship products and serve markets. The earnings release’s Q3 FY2027 outlook assumed no Data Center compute revenue from China. This is a stated outlook assumption, not a prediction that establishes what will happen in that market.
How should I read Nvidia’s outlook?
NVIDIA’s August 26, 2026 release forecast Q3 FY2027 revenue of $108.0 billion, plus or minus 2%. Management also forecast 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. The outlook assumed no Data Center compute revenue from China. These are forward-looking management estimates, not realized Q3 results or guarantees. Compare later reported results with this dated forecast, keeping GAAP and non-GAAP measures matched.
CEO Jensen Huang said 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 described accelerating demand and growth across AI labs, startups, open models, and physical AI. These comments represent Huang’s view as attributed by NVIDIA; they are not independently verified market evidence.
A practical checklist before making an investment decision
- Compare year-over-year and sequential revenue growth rather than relying on one rate.
- Track gross, operating, and net income alongside revenue, and distinguish GAAP figures from non-GAAP measures.
- Read the cash-flow reconciliation to understand the gap between net income and operating cash flow, including gains and working-capital changes.
- Compare receivables and inventory changes with growth, and consider customer concentration and capital investment when assessing cash demands and durability.
- Separate reported results from management outlook, and note the date and assumptions attached to the forecast.
These statements help explain recent performance, cash conversion, and disclosed risks. They do not by themselves establish whether NVIDIA’s share price reflects those results or predict future returns; an investment decision also requires considering valuation, uncertainty, and personal circumstances.
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