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NVIDIA’s Q2 FY2027 results show rapid growth, 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; for the six months ended that date, operating cash flow was $74.421 billion. These are interim-period figures, not full-year results. Read revenue alongside margins and expenses, then reconcile net income to cash from operations and assess working-capital demands, customer concentration, and management’s dated outlook. The statements inform an investment decision; they do not establish that the stock is fairly valued or predict its future return.
Which NVIDIA reporting period do these figures cover?
NVIDIA’s Q2 FY2027 Form 10-Q covers the quarter and six months ended July 26, 2026. It is an unaudited interim report prepared under U.S. GAAP, so it does not include every disclosure found in a complete annual report. The six-month comparisons are against the six months ended July 27, 2025. The company published its results release on August 26, 2026, and filed the 10-Q on August 27.
Use the 10-Q for detailed statement line items and the results release for headline figures and management’s next-quarter outlook. NVIDIA’s financial reports and quarterly results provide the company’s source materials.
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What should I look at in Nvidia’s earnings?
Start with sales growth, then test whether gross profit and operating income are keeping pace. Net income is important, but can also reflect items outside ordinary product operations.
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Revenue and business mix
NVIDIA reported Q2 FY2027 revenue of $96.221 billion, up 106% year over year and 18% sequentially. The results release highlighted Data Center revenue of $89.0 billion, up 117% year over year. In the 10-Q, however, the reported segment categories are Compute & Networking and Graphics: Q2 revenue was $88.299 billion and $7.922 billion, respectively. Data Center is a business-line figure highlighted in the release; do not substitute it for the filing’s segment labels.
Year-over-year growth compares with the same quarter a year earlier and helps account for seasonal patterns. Sequential growth compares with the immediately preceding quarter and can show a change in pace, but may also reflect normal quarter-to-quarter timing. Neither rate by itself shows how profitable growth is or whether it will continue.
Gross margin: how much remains after cost of revenue
Gross profit is revenue less cost of revenue. Divide gross profit by revenue to calculate gross margin. NVIDIA’s Q2 FY2027 GAAP gross margin was 75.0%, compared with 72.4% in Q2 FY2026. NVIDIA attributed the year-over-year increase to improved mix from Blackwell Ultra.
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Random freezes, missing sound and display glitches usually trace back to one bad driver. Find and replace yours safely.Free scan · under a minuteCost of revenue includes more 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, and certain amortization and stock-based compensation. A margin change can therefore reflect product mix and several production-related costs, not simply a change in selling prices.
Operating expenses and operating income
Operating expenses were $8.408 billion in Q2 FY2027, compared with $5.413 billion a year earlier. Operating income was $63.734 billion, compared with $28.440 billion. NVIDIA said higher compute infrastructure and compensation and benefits costs contributed to the increase in operating expenses.
Operating income measures profit after cost of revenue and operating expenses, before non-operating items and taxes. As a check on how much revenue remains at this stage, divide operating income by revenue: the result is the operating margin. Compare the margin across periods as well as the dollar totals, since a larger business can report higher operating income even if its profitability per dollar of revenue falls.
Net income and non-operating gains
Net income was $59.688 billion, compared with $26.422 billion in Q2 FY2026. Diluted GAAP EPS was $2.46. The release also reported non-GAAP diluted EPS of $2.22; these are different measures, and the labels should remain attached when comparing figures.
Other income, net was $7.773 billion for the quarter, including $7.771 billion in net gains from equity securities. These gains helped increase reported net income but are not cash generated by selling products or providing services. When judging operating performance, distinguish this non-operating contribution from operating income rather than treating all net-income growth as evidence of stronger core operations.
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. The cash-flow statement starts with net income, adjusts for non-cash items and other reconciling items, and then records cash timing changes in operating assets and liabilities. The two totals answer different questions: net income is an accounting measure of earnings for the period, while operating cash flow tracks cash generated or used by operations.
Read the reconciliation, not just the bottom line
Among the first-half reconciliation items, NVIDIA added back $3.954 billion of stock-based compensation expense and $2.124 billion of depreciation and amortization. It deducted $23.707 billion of net gains from equity securities. These adjustments matter because an accounting gain need not bring in operating cash during the period, and expenses such as depreciation and stock-based compensation are treated differently in the cash-flow reconciliation than cash payments are.
Changes in operating assets and liabilities also used cash. Accounts receivable absorbed $24.590 billion, inventories $10.204 billion, and prepaid expenses and other assets $6.480 billion in the six-month cash-flow reconciliation. When a business grows quickly, cash may be tied up in unpaid customer invoices, inventory, or advance payments. Look at these balances and cash-flow movements alongside sales growth and the company’s explanations; a single period’s increase does not by itself prove a collection or inventory problem.
How do investing and financing cash flows change the picture?
Net cash used in investing activities was $35.124 billion in the first half of FY2027, while net cash used in financing activities was $27.459 billion. Do not read all investing outflows as spending on factories or equipment: the investing section also includes substantial purchases and sales of securities.
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Capital spending and an illustrative free-cash-flow calculation
NVIDIA reported $4.434 billion in purchases related to property and equipment and intangible assets. An analyst could subtract this amount from operating cash flow to produce an illustrative first-half figure of $69.987 billion ($74.421 billion minus $4.434 billion). This is a simple analyst calculation, not a reported GAAP line called free cash flow; the selected purchase items and the definition used should be made explicit when comparing it with another company or period.
Shareholder returns, debt, and cash balance
First-half financing cash flows included $39.044 billion in share repurchases, $6.290 billion in dividends, and $24.896 billion of net proceeds related to debt issuance. Cash and cash equivalents increased by $11.838 billion during the period, ending at $22.443 billion. These figures show how the company allocated or raised cash, but they should be read alongside its investment activity and balance sheet rather than in isolation.
What balance-sheet and customer 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.
Compare receivables and inventory with revenue growth and operating cash flow. Receivables indicate sales for which cash has not yet been collected; inventory represents products and materials not yet sold. Rising balances can absorb cash, but their significance depends on business conditions and timing. Consider whether balances are changing in relation to sales, and whether the cash-flow statement shows a corresponding use of cash.
Customer concentration
NVIDIA says revenue is concentrated among a limited number of direct and indirect customers. One direct customer accounted for 16% of Q2 FY2027 revenue. For the first half, three direct customers represented 16%, 15%, and 13% of revenue, respectively. The disclosure does not name these customers, so their identities should not be inferred. Concentration makes the company’s results more exposed to changes in spending by a relatively small number of buyers.
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. For its Q3 FY2027 outlook, the company assumed no Data Center compute revenue from China. Treat that as a stated assumption in management’s forecast, not as a guarantee about policy, shipments, or future revenue.
Independent reader supportYour contribution helps us test, update, and keep practical guides available for everyone.How should I use Nvidia’s next-quarter outlook?
Management’s August 26, 2026 outlook was for Q3 FY2027. It is a forecast, not realized performance or a guarantee.
| Q3 FY2027 outlook item | Management’s forecast |
|---|---|
| Revenue | $108.0 billion, plus or minus 2% |
| GAAP gross margin | 74.0%, plus or minus 50 basis points |
| Non-GAAP gross margin | 74.0%, plus or minus 50 basis points |
| GAAP operating expenses | Approximately $9.2 billion |
| Non-GAAP operating expenses | Approximately $9.0 billion |
| Data Center compute revenue from China | None assumed in the outlook |
When the next results arrive, compare actual results with this dated forecast and note whether the comparison uses GAAP or non-GAAP measures. The outlook is useful context for expectations, but the statements do not establish a company’s future stock return or whether its shares are attractively valued.
What does management’s AI commentary establish?
In the August 26 release, NVIDIA founder and CEO Jensen Huang said: “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 in AI labs, startups, open models, and physical AI. This is Huang’s characterization of the market in the company’s release, not independently verified market evidence; assess it alongside reported revenue, margins, cash flows, and the risks disclosed in the filing.
A practical way to read the statements before investing
- Set the period. Confirm whether each figure covers a quarter or six months, and identify the comparison period. Do not treat interim totals as annual results.
- Trace profitability. Compare revenue growth year over year and sequentially, then examine gross margin, operating expenses, operating income, and net income. Keep GAAP and non-GAAP measures separate.
- Inspect unusual items. Identify gains or other non-operating items that affect net income, including equity-security gains, and distinguish them from operating performance.
- Reconcile earnings to cash. Read the cash-flow statement from net income through reconciling items and working-capital changes. Ask which items account for the gap between net income and operating cash flow.
- Check cash demands and exposure. Relate receivables, inventory, capital purchases, customer concentration, and disclosed regulatory risks to the growth story.
- Compare forecast with results later. Treat guidance as a dated management expectation with stated assumptions, then compare it with the subsequent reported period.
Use the official NVIDIA financial reports and quarterly results page to open the release and filing and verify statement details directly.
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