NVDA 10-Q: Smart Summary

• Fiscal year structure: Fiscal year 2027 is a 53-week year (vs. fiscal year 2026's 52-week year), both ending on the last Sunday in January; the first quarters of both fiscal years 2027 and 2026 were 13-week quarters, and the fourth quarter of fiscal year 2027 will be a 14-week quarter.
• Accounting policies: No material changes to significant accounting policies from those disclosed in the Annual Report on Form 10-K for the fiscal year ended January 25, 2026.
• Pending pronouncement: A FASB standard issued in November 2024 will require additional expense disclosures (inventory purchases, employee compensation, depreciation, and intangible asset amortization within each income statement caption) on an annual and interim basis; adoption is planned for the fiscal year 2028 annual report and is not expected to have a material impact on the Consolidated Financial Statements beyond additional disclosures.

• Expense by function: Total stock-based compensation was $1.9B for the three months ended Apr 26, 2026, up from $1.5B in the prior-year period, with R&D comprising the largest component at $1.5B (vs. $1.1B), followed by SG&A at $401M (vs. $347M), and cost of revenue at $68M (vs. $64M).
• Award activity: RSU, PSU, and market-based PSU shares outstanding rose from 189 million (weighted average grant-date fair value of $81.51 per share) as of Jan 25, 2026 to 200 million ($108.92 per share) as of Apr 26, 2026, reflecting 44 million shares granted at $181.73 per share, 31 million shares vested at $48.04 per share, and 2 million shares canceled/forfeited at $95.82 per share.
• Unearned compensation: Aggregate unearned stock-based compensation was $20.8B as of April 26, 2026, expected to be recognized over a weighted average period of 2.6 years for RSUs, PSUs, and market-based PSUs, and one year for ESPP.

• Anti-dilutive exclusions: Anti-dilutive equity awards excluded from diluted net income per share were 47 million shares for the three months ended Apr 26, 2026, compared to 62 million shares for the three months ended Apr 27, 2025.
• Dilution method: Diluted net income per share was computed using the weighted average number of common and potentially dilutive shares outstanding during the period, using the treasury stock method.

• Intangible assets, net: Total net carrying amount declined from $3.3B at Jan 25, 2026 to $3.1B at Apr 26, 2026, composed of acquisition-related intangible assets ($2.9B net) and patents and licensed technology ($221M net).
• Amortization expense: $232M in the first quarter of fiscal year 2027, up from $159M in the first quarter of fiscal year 2026.
• Future amortization: Estimated remaining amortization of $3.1B includes $689M for the remainder of fiscal year 2027, $754M in fiscal year 2028, $610M in fiscal year 2029, $516M in fiscal year 2030, $468M in fiscal year 2031, and $83M in fiscal year 2032 and thereafter.
• Goodwill: Increased by $62M from acquisitions in the first quarter of fiscal year 2027, with the addition allocated to the Compute & Networking reporting unit.

• Portfolio composition: As of Apr 26, 2026, total estimated fair value of cash equivalents and marketable securities was $88.5B, up from $65.1B as of Jan 25, 2026, with debt securities at amortized cost of $49.4B carrying net unrealized gains of $94M and net unrealized losses of $17M.
• Publicly-held equity securities: The portfolio included $27.4B subject to short-term lock-up restrictions as of Apr 26, 2026; $8.9B in long-term equity positions subject to lock-up through December 2027 is classified in Other assets; Level 2 equity securities ($9.2B) include warrants and preferred stock convertible to common stock in public companies.
• Unrealized equity gains/losses: Net unrealized gains on publicly-held equity securities held at period end were $13.4B for the first quarter of fiscal year 2027, compared to net unrealized losses of $222M for the first quarter of fiscal year 2026; these are recognized in Other income (expense), net.
• Debt security unrealized losses: All gross unrealized losses ($17M as of Apr 26, 2026; $6M as of Jan 25, 2026) were on securities in a loss position for less than 12 months, driven primarily by changes in interest rates; debt security maturities are $24.3B due in less than one year and $14.9B due in 1–5 years.

• Carrying value roll-forward: Non-marketable equity securities grew from $22.3B at the beginning of the period to $42.3B at end of the three months ended Apr 26, 2026, driven primarily by net additions of $17.9B and unrealized gains of $2.6B, partially offset by reclassifications of ($389M and impairments and unrealized losses of ($28M.
• Cumulative gains/losses: As of April 26, 2026, non-marketable equity securities carried cumulative gross unrealized gains of $5.3B and cumulative gross unrealized losses and impairments of $199M, versus $396M in gains and $110M in losses/impairments as of April 27, 2025.
• Equity method investments: As of April 26, 2026, the company holds $1B in infrastructure fund investments accounted for under the equity method, with maximum loss exposure (including invested and future committed amounts) of $2.3B.
• Investment commitments: Total investment commitments were $27B as of April 26, 2026, subject to certain contingencies, expected to be funded through the remainder of fiscal year 2027.

• Inventory growth: Total inventories rose to $25.8B as of April 26, 2026 from $21.4B as of January 25, 2026, driven by increases across all three categories; inventory provisions recorded in Cost of revenue were $800M for Q1 fiscal 2027 versus $2.3B for Q1 fiscal 2026.
• Accounts receivable concentration: 3 direct customers accounted for 30%, 18%, and 16% of accounts receivable as of April 26, 2026; as of January 25, 2026, 3 direct customers accounted for 25%, 18%, and 13%.
• Accrued liabilities spike: Total accrued and other current liabilities rose to $29.8B from $21.4B, largely due to taxes payable jumping to $10.6B from $2.7B; excess inventory purchase obligations of $3.1B reflect $300M charged to Cost of revenue in Q1 fiscal 2027 versus $3B in Q1 fiscal 2026; accrued purchase consideration of $4B relates to the Groq, Inc. non-exclusive license agreement.
• Deferred revenue and performance obligations: Combined short- and long-term deferred revenue ended April 26, 2026 at $3.1B (up from $2.6B at period start), with $2.5B of additions (including $1.7B of customer advances) and $2B recognized; as of April 26, 2026, remaining performance obligations from contracts greater than one year totaled $2.6B ($2.3B from deferred revenue plus $304M unbilled), with approximately 40% to be recognized over the next twelve months.

• Foreign currency designated hedges: Notional value of forward contracts designated as accounting hedges was $2.1B as of Apr 26, 2026 and $1.8B as of Jan 25, 2026; gains/losses are recorded in Accumulated other comprehensive income or loss and reclassified to Operating expenses when the hedged expenses are recognized. Impact on other comprehensive income or loss during the first quarter of fiscal years 2027 and 2026 was not significant, and all such instruments were determined to be highly effective.
• Foreign currency non-designated hedges: Notional value of contracts not designated as accounting hedges was $1.9B as of Apr 26, 2026 and $2.3B as of Jan 25, 2026; changes in fair value are recorded in Other income (expense), net, offsetting the change in fair value of the hedged monetary assets and liabilities. Fair values of all foreign currency contracts were not significant as of both dates, and all contracts mature within 18 months of Apr 26, 2026; expected realized gains/losses to be reclassified from Accumulated other comprehensive income or loss within the next twelve months were not significant.
• Facility lease guarantee (credit derivatives): In fiscal year 2026, NVIDIA entered into agreements guaranteeing partners' facility lease obligations in the event of default in exchange for warrants; maximum gross exposure is $3.5B, reduced as partners make payments to lessors over terms ranging from 5 to 7 years. Partners have placed $712M in escrow to mitigate NVIDIA's potential exposure; the guarantees are classified as credit derivatives with changes in fair value recognized in Other income (expense), net, and were not material.

• Debt structure: 7 tranches of unsecured senior fixed-rate notes totaling $8.5B in face value, with effective interest rates ranging from 1.64% (1.55% Notes Due 2028) to 3.73% (3.70% Notes Due 2060) and remaining terms from 0.4 years to 34.0 years; net carrying amount was $8.5B as of April 26, 2026 and $8.5B as of January 25, 2026, after unamortized debt discount and issuance costs of ($30M) and ($32M), respectively.
• Short-term vs. long-term: The $1B 3.20% Notes Due 2026 (0.4 years remaining) are classified as the short-term portion, leaving a long-term portion of $7.5B as of April 26, 2026.
• Fair value: Estimated fair value of total debt was $7.4B as of April 26, 2026 and $7.5B as of January 25, 2026, based on Level 2 inputs.
• Commercial paper & covenants: The commercial paper program had capacity of $25B with no amounts outstanding as of April 26, 2026; the company was in compliance with all required covenants (non-financial in nature) as of that date.

Commitments

• Manufacturing, supply, and capacity commitments ($119B as of April 26, 2026): $95B payable in the remainder of fiscal year 2027; remaining balance in fiscal years 2028 through 2031.
• Multi-year cloud service agreements ($30B as of April 26, 2026): Payable $6B, $7B, $7B, $5B, $3B, and $2B in remainder of FY2027, FY2028–FY2031, and FY2032+, respectively; primarily to support R&D.
• Other vendor commitments ($6B as of April 26, 2026): Majority payable through fiscal year 2027.
• Product warranty liability ($2.9B as of April 26, 2026): Up from $2.8B at quarter-start; additions in Q1 FY2027 primarily related to the Compute & Networking segment.

Legal Proceedings

• In Re NVIDIA Corporation Securities Litigation (4:18-cv-07669-HSG, class certified March 25, 2026): Alleges misleading statements on channel inventory and crypto mining GPU demand (Aug 2017–Nov 2018); class certified, NVIDIA petitioned Ninth Circuit on April 8, 2026 for permission to appeal; no accrued liability.
• In re NVIDIA Corporation Consolidated Derivative Litigation (4:19-cv-00341-HSG, filed January 18, 2019): Derivative claims for breach of fiduciary duty and Exchange Act violations re same channel inventory/crypto statements; administratively closed, not yet reopened pending resolution of securities litigation.
• Lipchitz v. Huang / Nelson v. Huang (D. Del., filed September 24, 2019): Derivative suits alleging breach of fiduciary duty, insider trading, and Exchange Act violations; stayed until final resolution of In Re NVIDIA Corporation Securities Litigation.
• Horanic v. Huang (Del. Chancery, Case No. 2023-1096-KSJM, filed October 30, 2023): Derivative claims for breach of fiduciary duty and insider trading re same crypto/inventory statements; stayed pending resolution of securities litigation; one plaintiff dismissed with prejudice August 11, 2025.

• Tax expense and rate: Income tax expense was $11.6B for Q1 fiscal 2027 vs. $3.1B for Q1 fiscal 2026; the effective tax rate rose from 14.3% to 16.6%, with the increase driven primarily by a lower percentage of tax benefits from stock-based compensation relative to the increase in income before income tax.
• Below-statutory-rate drivers: Both periods' effective rates were below the 21% U.S. federal statutory rate, primarily due to tax benefits from foreign-derived deduction eligible income, income earned in lower-tax jurisdictions, stock-based compensation, and the U.S. federal research tax credit.
• IRS examination: The company is currently under examination by the Internal Revenue Service for fiscal years 2023 and 2024.

• Share repurchases: NVIDIA repurchased 108 million shares for $20.2B in Q1 fiscal 2027, compared to 126 million shares for $14.5B in Q1 fiscal 2026; as of April 26, 2026, remaining repurchase authorization stood at $38.5B, and on May 18, 2026, the Board approved an additional $80B in repurchase authorization without expiration.
• Dividends: Cash dividends paid were $243M in Q1 fiscal 2027 and $244M in Q1 fiscal 2026; on May 18, 2026, the Board increased the quarterly cash dividend from $0.01 per share to $0.25 per share, payable June 26, 2026 to shareholders of record on June 4, 2026.

• Segment structure: NVIDIA reports 2 segments — Compute & Networking (Data Center accelerated computing, networking, AI solutions and software, automotive platforms) and Graphics (GeForce GPUs for gaming and PCs, Quadro/NVIDIA RTX GPUs for enterprise workstation graphics). The CODM (Chief Executive Officer) assesses each segment on revenue and operating income only; total assets are not reviewed on a segment basis and there are no intersegment transactions.
• Unallocated items: Stock-based compensation expense, corporate infrastructure and support costs, acquisition-related and other costs, and other non-recurring charges/benefits are not allocated to either segment. Acquisition-related intangible amortization is similarly excluded from segment results.
• Depreciation & amortization: D&A attributable to Compute & Networking was $526M (Q1 FY2027) and $296M (Q1 FY2026); D&A attributable to Graphics was $194M (Q1 FY2027) and $109M (Q1 FY2026).
• Customer concentration: For Q1 FY2027, 3 direct customers represented 21%, 17%, and 16% of total revenue, all primarily attributable to Compute & Networking. Revenue from customers headquartered outside the United States was 22% of total revenue in Q1 FY2027, down from 42% in Q1 FY2026.

• Lease portfolio: Operating leases for data centers and offices with expiration dates between fiscal years 2027 and 2075; as of April 26, 2026, total undiscounted future minimum obligations were $5.6B, with imputed interest of $1.3B, yielding a present value of $4.3B — split between short-term operating lease liabilities of $466M and long-term operating lease liabilities of $3.9B.
• Uncommenced leases: Between the second quarter of fiscal year 2027 and fiscal year 2033, NVIDIA expects to commence leases with future obligations of $32.4B, primarily for data center leases to support research and development efforts, with lease terms of 3 to 20 years.
• Lease cost and cash flows: Operating lease costs were $171M in Q1 fiscal 2027 vs. $101M in Q1 fiscal 2026; operating cash flow used for operating leases was $185M vs. $96M; operating lease assets obtained in exchange for lease obligations were $1.5B vs. $98M for the same periods.
• Lease metrics: As of April 26, 2026, weighted average remaining lease term was 10.4 years and weighted average discount rate was 4.61%, compared to 8.8 years and 4.38% as of January 25, 2026.

• Revenue driver: Revenue growth in Q1 was driven by data center products for accelerated computing and AI solutions, with Blackwell continuing to account for the majority of system shipments.
• Rubin platform outlook: NVIDIA expects the Rubin platform to start shipping in the second half of fiscal year 2027; product architecture complexity has caused and may continue to cause delays, revenue volatility, quality issues, increased inventory provisions, decreased product yields, higher material costs, and/or increased warranty costs.
• China H200 licensing: Beginning in February 2026, the USG granted licenses allowing shipment of small amounts of H200 products to specific China-based customers; to date no revenue has been generated under this program, and any H200 shipped under it will be subject to a 25% tariff upon importation into the United States.
• Ecosystem investments: In Q1 of fiscal year 2027, NVIDIA made $18.6B in investments in private companies and infrastructure funds, including AI model makers that may indirectly purchase or use its products in the cloud, as well as investments in publicly-held equity securities whose value may fluctuate significantly.
• Infrastructure and macro risks: Availability of data centers, energy, and capital for AI infrastructure buildout is described as crucial, with energy capacity expansion characterized as a complex, multi-year process; macroeconomic factors including tariffs, inflation, interest changes, capital market volatility, and geopolitical developments are cited as having direct and indirect impacts on supply chain costs, employee wages, capital equipment costs, investment values, revenue, and competitive position.

• Revenue growth: Revenue was $81.6B, up 85% year-over-year and up 20% sequentially, with operating income of $53.5B (up 147% year-over-year) and net income of $58.3B (up 211% year-over-year), yielding net income per diluted share of $2.39 (up 214% year-over-year).
• Data Center drivers: Data Center revenue of $75.2B grew 92% year-over-year and 21% sequentially, driven by the ramp of Blackwell 300 products and demand for InfiniBand, Spectrum-X Ethernet, and NVLink solutions; Hyperscaler revenue remained at approximately 50% of Data Center revenue, with the remaining 50% from AI Clouds, industrial, enterprise, and sovereign customers; no shipments of Data Center Hopper products to China occurred during the quarter, compared with $4.6B in the first quarter of fiscal year 2026.
• Edge Computing: Edge Computing revenue of $6.4B grew 29% year-over-year and 10% sequentially, driven by robust Blackwell workstation demand, partially offset by slower consumer PC demand tempered by elevated memory and systems prices.
• Margin and cost trends: Gross margin of 74.9% increased 14.4 percentage points year-over-year on lower inventory provisions, primarily due to the prior year's $4.5B charge associated with H20 excess inventory and purchase obligations, while operating expenses of $7.6B rose 52% year-over-year and 12% sequentially, driven primarily by higher compensation and benefits expense, compute and infrastructure costs, and engineering development materials.

• Compute & Networking drivers: Revenue grew 142% year-over-year to $53.3B, driven by the ramp of Blackwell systems and demand for InfiniBand, Spectrum-X Ethernet, and NVLink solutions; segment operating income also benefited from the non-recurrence of a $4.5B charge associated with H20 excess inventory and purchase obligations in the first quarter of fiscal year 2026.
• Graphics drivers: Revenue grew 79% year-over-year to $2.9B, driven by sales of the Blackwell architecture, with segment operating income growth likewise attributed to the revenue increase.

• Direct customer concentration: In Q1 fiscal year 2027, 3 direct customers represented 21%, 17%, and 16% of total revenue, all primarily attributable to the Compute & Networking segment; in Q1 fiscal year 2026, 2 direct customers represented 16% and 14% of total revenue, also attributable to the Compute & Networking segment.
• Indirect customer concentration: A significant portion of revenue comes from a limited number of indirect customers, some individually representing 10% or more of revenue; NVIDIA estimates that one AI research and deployment company contributed to a meaningful amount of revenue in Q1 fiscal year 2027 by purchasing cloud services through NVIDIA's direct customers.
• Geographic mix shift: Revenue from customers headquartered outside the United States fell sharply to 22% of total revenue in Q1 fiscal year 2027 from 42% in Q1 fiscal year 2026; NVIDIA notes that end customer location and shipping destination may differ from the headquarters location used for geographic designation.

• Cost of revenue composition: Cost of revenue consists primarily of semiconductor costs (wafer fabrication, assembly, testing, packaging), board and device costs, manufacturing support costs (labor and overhead), final test yield fallout, inventory and warranty provisions, memory and component costs, tariffs, shipping costs, acquisition-related intangible amortization, IP-related costs, and stock-based compensation for manufacturing personnel.
• Gross margin expansion: Gross margin increased to 74.9% in Q1 fiscal year 2027 from 60.5% in Q1 fiscal year 2026, primarily due to the prior year's $4.5B charge associated with H20 excess inventory and purchase obligations.
• Inventory provisions: Provisions for inventory and excess inventory purchase obligations totaled $1.1B in Q1 fiscal year 2027 versus $5.3B in Q1 fiscal year 2026 (the latter including $4.5B tied to H20); provision releases from sales of previously reserved inventory and settlement of excess purchase obligations were $103M and $436M in Q1 fiscal years 2027 and 2026, respectively, resulting in a net unfavorable gross margin impact of 1.2% and 11.0% in those respective periods.

• R&D expense: Rose 58% to $6.3B in the three months ended Apr 26, 2026 from $4B in the three months ended Apr 27, 2025, driven by a 112% increase in compute and infrastructure, a 31% increase in compensation and benefits (including stock-based compensation) from employee growth and compensation increases, and a 204% increase in engineering development materials for new product introductions.
• SG&A expense: Rose 25% to $1.3B from $1B, driven by compensation and benefits, including stock-based compensation, reflecting employee growth and compensation increases.

• Other income (expense), net: Swung from a loss of $180M to a gain of $15.9B quarter-over-quarter, a $16.1B change, driven primarily by unrealized gains on investments in publicly-held equity securities of $13.4B and non-marketable equity securities of $2.6B.
• Interest income/expense: Interest income rose $25M to $540M, while interest expense increased $39M to $102M, resulting in net interest income of $438M for the three months ended Apr 26, 2026.
• Total other income, net: Totaled $16.4B for the three months ended Apr 26, 2026, compared to $272M for the three months ended Apr 27, 2025, a $16.1B increase.

• Tax expense: Income tax expense was $11.6B in Q1 fiscal 2027 versus $3.1B in Q1 fiscal 2026, with the effective tax rate rising from 14.3% to 16.6% year-over-year.
• Rate increase driver: The higher effective rate was primarily due to a lower percentage of tax benefits from stock-based compensation relative to the increase in income before income tax.
• Below-statutory-rate drivers: Both periods' effective rates remained below the 21% U.S. federal statutory rate, benefiting from foreign-derived deduction eligible income, income earned in lower-tax jurisdictions, stock-based compensation, and the U.S. federal research tax credit.

• Liquidity position: Cash, cash equivalents, and marketable debt securities totaled $50.3B as of Apr 26, 2026, up from $49.7B as of Jan 25, 2026, with cash and cash equivalents of $13.2B and marketable debt securities of $37.1B.
• Operating cash flow: Net cash provided by operating activities was $50.3B in the three months ended Apr 26, 2026, versus $27.4B in the three months ended Apr 27, 2025, with the increase attributed to higher revenue.
• Investing cash flow: Net cash used in investing activities was $26.4B versus $5.2B in the prior-year period, primarily driven by higher purchases of equity investment securities.
• Financing cash flow: Net cash used in financing activities was $21.3B versus $15.6B in the prior-year period, mainly due to higher share repurchases.

• Liquidity position: As of April 26, 2026, the company held $50.3B in cash, cash equivalents, and marketable debt securities, plus $30.2B of marketable equity securities; management believes this is sufficient to meet operating requirements for at least the next twelve months and for the foreseeable future, including future obligations.
• Marketable securities composition: Holdings include publicly-held equity securities, U.S. government and agency debt, debt issued by highly-rated corporations, financial institutions, and foreign government entities, as well as certificates of deposit from highly-rated financial institutions, primarily denominated in U.S. dollars.
• Offshore cash and tax: Approximately $1.7B of cash, cash equivalents, and marketable debt securities held outside the U.S. have not had foreign or state taxes accrued for potential repatriation; substantially all other non-U.S. holdings are available for use in the U.S. without additional U.S. federal income taxes.
• Tax payments: No federal income tax payments were made in the first quarter of fiscal year 2027; the second quarter of fiscal year 2027 is scheduled to include two payments.

• Share repurchases: In the first quarter of fiscal year 2027, the company repurchased 108 million shares of common stock for $20.2B; as of April 26, 2026, remaining repurchase authorization stood at $38.5B, and on May 18, 2026, the Board approved an additional $80B in repurchase authorization without expiration.
• Dividends: Cash dividends of $243M were paid during the first quarter of fiscal year 2027; on May 18, 2026, the quarterly cash dividend was increased from $0.01 per share to $0.25 per share, payable June 26, 2026, to shareholders of record on June 4, 2026.
• Excise tax: The U.S. Inflation Reduction Act of 2022 imposes a 1% excise tax on certain net share repurchases made after December 31, 2022; the excise tax is included in the share repurchase cost and was not significant for the first quarter of fiscal year 2027.

• Debt maturity profile: As of April 26, 2026, net carrying amount of debt was $8.5B, comprising $1B due in one year (short-term portion), $2.8B due in one to five years, $1.3B due in five to ten years, $3.5B due in greater than ten years, and ($30M) of unamortized debt discount and issuance costs, leaving a total long-term portion of $7.5B.
• Commercial paper program: The company maintains a commercial paper program permitting issuance of unsecured notes up to $25B for general corporate purposes; as of April 26, 2026, no commercial paper was outstanding.

• Unrecognized tax benefits: Unrecognized tax benefits were $4.5B as of April 26, 2026, including related interest and penalties of $439M, recorded in non-current income tax payable; timing of any potential tax liability, interest, or penalties cannot be estimated due to uncertainties in underlying income tax positions and effective settlement timing.
• IRS examination: The company is currently under examination by the Internal Revenue Service for fiscal years 2023 and 2024.
• Contractual obligations: Other than obligations described in Notes 6 and 10, there were no material changes outside the ordinary course of business in contractual obligations from those disclosed in the Annual Report on Form 10-K for the fiscal year ended January 25, 2026.