NVIDIA Reports Q1 Fiscal 2026 Earnings with Mixed Results
NVIDIA Corporation (NVDA) announced non-GAAP earnings of 81 cents per share for the first quarter of fiscal 2026, falling short of the Zacks Consensus Estimate by 4.71%. This represents a 32.8% increase year over year but a 9% decline sequentially.
In terms of revenue, NVIDIA’s first-quarter sales rose 69.2% year over year and 12% sequentially, totaling $44.06 billion. This exceeded the consensus estimate by 2.67%. The growth was primarily fueled by record sales across Data Center, Gaming, Professional Visualization, Automotive, and OEM sectors.
Segment Performance Overview
NVIDIA categorizes its revenues into two segments: Graphics and Compute & Networking.
The Graphics segment, which includes GeForce GPUs for gaming, accounted for 10.2% of total revenues. This segment generated $4.47 billion, marking a 33% year-over-year increase and a 36% rise sequentially. The estimated revenue for this segment was $4.82 billion.
NVIDIA Corporation Price, Consensus and EPS Surprise
NVIDIA Corporation price-consensus-eps-surprise-chart | NVIDIA Corporation Quote
The Compute & Networking segment represented 89.8% of total revenues, achieving $39.6 billion—up 75% year over year and 10% sequentially. The forecast for this segment’s revenue was $38.2 billion.
Market Platform Revenue Breakdown
Data Center revenues, which make up 88.8% of total revenues, grew 73.3% year over year to $39.1 billion. This surge was driven by increased shipments of Blackwell GPU computing platforms used in AI applications. The revenue estimate for this market was $38.5 billion.
Gaming revenues also saw a rise of 30.7% year over year and 48% sequentially, reaching $3.76 billion—accounting for 8.5% of total revenues. The estimate for this segment was $3.29 billion.
Professional Visualization revenues increased by 19.2% year over year to $509 million but dipped 0.4% sequentially. The estimate for this segment was $567.6 million.
Automotive sales totaled $567 million—a 72.3% increase year over year but down 0.5% sequentially. The estimate for this sector was $551.7 million.
OEM and Other revenues reached $111 million, reflecting a 42.3% year-over-year gain but down 11.9% sequentially. The estimated revenue was $120 million.
NVIDIA’s Operating and Financial Metrics
NVIDIA’s non-GAAP gross margin was 61%, down 17.9 percentage points year over year, mainly due to a $4.5 billion charge related to unsellable inventory due to new export restrictions on H20 chips to China.
Non-GAAP operating expenses rose 43% year over year to $3.58 billion, driven by increased employee compensation and development costs. Nevertheless, as a percentage of total revenues, operating expenses fell to 8.1% from 9.6% in the previous year.
NVIDIA’s non-GAAP operating income increased 29% year over year to $23.28 billion, with an operating margin of 52.8%, down from 69.3% year over year. The non-GAAP net income margin was 45.2%, contracting 13.3 percentage points year over year.
Balance Sheet and Cash Flow Analysis
As of April 27, 2025, NVIDIA held $53.7 billion in cash and marketable securities, an increase from $43.2 billion on January 26, 2025. Long-term debt remained unchanged at $8.46 billion.
NVIDIA generated $27.4 billion in operating cash flow, up from $15.35 billion in the previous year, with free cash flow totaling $26.14 billion.
During the first quarter, NVIDIA returned $244 million to shareholders in dividends and repurchased $14.1 billion in stocks. Earlier, a share repurchase authorization of $50 billion was approved, raising the total to $57.5 billion, with about $24.3 billion remaining as of April 27, 2025.
Q2 2026 Guidance
Looking ahead, NVIDIA projects second-quarter revenues of $45 billion (+/-2%), slightly below the Zacks Consensus Estimate of $45.11 billion. The company anticipates a non-GAAP gross margin of 72% (+/-50 bps) and operating expenses of $4 billion.
NVIDIA’s Market Position
NVIDIA holds a Zacks Rank of #3 (Hold).
Investors may also consider stocks such as Amphenol, Juniper Networks, and Upwork, all currently rated Zacks Rank #1 (Strong Buy).
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This article was originally published on Zacks Investment Research (zacks.com).
The views and opinions expressed herein are those of the author and do not necessarily reflect those of Nasdaq, Inc.
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