Financial Highlights
- Revenue: $44.1 billion, up 12% sequentially from Q4 Fiscal 2025 and up 69% year-over-year from Q1 Fiscal 2025.
* Data Center Revenue: $39.1 billion, reflecting a 10% increase from the prior quarter and a 73% increase from the same quarter last year.
* Gross Margins: GAAP gross margin was 60.5%, and non-GAAP gross margin was 61.0%. Excluding a $4.5 billion charge related to H20 inventory and purchase obligations, non-GAAP gross margin would have been 71.3%.
* Earnings Per Share: GAAP diluted earnings per share were $0.76, and non-GAAP diluted earnings per share were $0.81. Excluding the H20-related charge and its tax impact, non-GAAP diluted earnings per share would have been $0.96.
* H20 Impact: NVIDIA incurred a $4.5 billion charge due to excess H20 inventory and purchase obligations following new U.S. export licensing requirements for H20 products in China, announced on April 9, 2025. H20 product sales reached $4.6 billion in Q1 before the restrictions took effect, but an additional $2.5 billion in H20 revenue could not be shipped due to the new rules.
Strategic Developments
NVIDIA’s H20 chip, designed for AI and high-performance computing, faced significant sales restrictions in China due to new U.S. export controls. CEO Jensen Huang commented, “The $50 billion China market is effectively closed to U.S. industry. The H20 export ban ended our Hopper data center business in China. We cannot reduce Hopper further to comply. We are exploring limited ways to compete, but Hopper is no longer an option. China’s AI moves on with or without U.S. chips.”
Despite this, NVIDIA’s AI infrastructure demand remains robust. Huang noted, “Our breakthrough Blackwell NVL72 AI supercomputer — a ‘thinking machine’ designed for reasoning — is now in full-scale production across system makers and cloud providers. Global demand for NVIDIA’s AI infrastructure is incredibly strong. AI inference token generation has surged tenfold in one year, and as AI agents become mainstream, demand for AI computing will accelerate. Countries recognize AI as essential infrastructure, and NVIDIA stands at the center of this transformation.
Dividend
NVIDIA will pay a quarterly cash dividend of $0.01 per share on July 3, 2025, to shareholders of record as of June 11, 2025.
Q2 Fiscal 2026 Outlook
* Revenue: Expected to be $45.0 billion, plus or minus 2%, reflecting an estimated $8.0 billion revenue loss due to H20 export restrictions.
* Gross Margins: GAAP gross margin expected at 71.8%, and non-GAAP gross margin at 72.0%, plus or minus 50 basis points. NVIDIA aims to achieve mid-70% gross margins later in fiscal 2026.
* Operating Expenses: GAAP operating expenses expected at $5.7 billion, and non-GAAP at $4.0 billion. Full-year fiscal 2026 operating expense growth is projected to be in the mid-30% range.
* Other Income and Expense: Expected income of approximately $450 million, excluding gains and losses from non-marketable and publicly-held equity securities.
* Tax Rate: GAAP and non-GAAP tax rates expected at 16.5%, plus or minus 1%, excluding discrete items.
Market Reaction
Following the earnings announcement, NVIDIA’s stock rose over 4% in after-hours trading on May 29, 2025, reflecting investor confidence in the company’s growth trajectory despite the challenges in China.
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