NVIDIA Doubled Revenue and Borrowed $25 Billion

本文另有中文版：輝達營收翻倍的這一季，發了 250 億美元的債

NVIDIA reported $96.2 billion of revenue and $63.7 billion of operating income for its second quarter of fiscal 2027, ended July 26, 2026, in results announced August 26, 2026. In the same quarter’s cash-flow statement, one line appeared that was empty both the prior quarter and the year-ago quarter: proceeds from debt issuance, $24.9 billion net of costs. The CFO Commentary’s entire explanation is one sentence: “We issued $25.0 billion of senior unsecured notes in the second quarter to be used for general corporate purposes.”

Not a cash shortage. Cash, cash equivalents and marketable debt securities were $56.6 billion at quarter end. The money went elsewhere first: buybacks, dividends, equity-securities purchases, a payment to Groq, Inc., and capital expenditures. What follows is the cash-flow statement, line by line, with the income statement and balance sheet put back around it.

Data Center Revenue Rose 117%, Pushing Total Revenue to $96.2 Billion

Revenue was $96,221 million, up 18% from $81,615 million the prior quarter and up 106% from $46,743 million a year earlier. GAAP and non-GAAP gross margin were both 75.0%. GAAP operating expenses were $8,408 million, up 55% year over year, split between $7,054 million of R&D and $1,354 million of SG&A. GAAP operating income was $63,734 million, up 124% year over year.

Data Center revenue was $89.0 billion, up 18% sequentially and 117% year over year. The CFO Commentary attributes the growth to “the ramp of our Blackwell Ultra infrastructure”. On China, the CFO Commentary states: “Shipments of Data Center Hopper products to China during the quarter were less than 1% of Data Center revenue.”

Starting in fiscal Q1 2027, NVIDIA reports two market platforms, Data Center and Edge Computing; within Data Center it now reports two sub-markets, Hyperscale (public clouds and the largest consumer internet companies) and ACIE — AI Clouds, Industrial, and Enterprise. The CFO Commentary discloses Hyperscale revenue of $48,710 million, up 102% year over year and 13% sequentially, and ACIE revenue of $40,313 million, up 138% year over year and 25% sequentially. It also discloses that NVIDIA reclassified one customer from ACIE to Hyperscale this quarter “due to a change in their business model”, with prior-period revenue recast accordingly. Neither sub-market figure appears in the press release itself; both come from the CFO Commentary only.

Edge Computing revenue was $7.2 billion, up 13% sequentially and 27% year over year. The CFO Commentary attributes that to “strong sales of Blackwell workstations, partially offset by slower consumer PC sales that were tempered by elevated memory and systems prices.”

The press release quotes Jensen Huang, founder and CEO of NVIDIA: “AI has reached its inflection point. It’s doing useful work. Its tokens are productive and profitable. Now, compute is revenue”. The same quote continues with Huang citing accelerating demand and a broader set of AI labs and startups building in parallel this year compared with a year ago.

*Q1 FY26 gross margin includes $4.5 billion of H20-related charges recorded that quarter. NVIDIA changed its segment framework in Q1 FY27 to two market platforms, Data Center and Edge Computing; the six earlier quarters shown here (Q3 FY25 through Q4 FY26) use the prior framework, with Data Center figures taken from each quarter’s press-release Highlights section. Non-GAAP figures have been restated since Q1 FY27 to include stock-based compensation expense.

GAAP EPS of $2.46 Topped Non-GAAP’s $2.22 on an Equity Securities Gain

GAAP diluted EPS was $2.46, up from $2.39 the prior quarter and $1.08 a year earlier. Non-GAAP diluted EPS was $2.22, up from $1.87 and $1.01; non-GAAP net income was $53,954 million.

The gap between the two is driven mainly by one reconciling item: net gains from equity securities, $7,771 million this quarter versus $15,936 million the prior quarter and $2,247 million a year earlier. That gain counts toward GAAP net income; non-GAAP excludes it. The CFO Commentary states: “Net gains from equity securities for the second quarter were $7.8 billion.”

A second factor separates the two measures going forward: NVIDIA changed its non-GAAP definition starting this fiscal year. The earnings release states: “Beginning in the first quarter of fiscal 2027, NVIDIA’s non-GAAP financial measures no longer exclude stock-based compensation expense. The historical non-GAAP financial information presented has been updated to include stock-based compensation expense.” The visible effect: Q1 FY26 non-GAAP EPS was originally reported as $0.81; the same quarter, restated in the Q1 FY27 release under the new definition, now reads $0.78. Those are not two different quarters — they are the same quarter’s number, calculated two different ways at two different points in time. GAAP’s effective tax rate was 16.5% this quarter, non-GAAP’s 16.0%.

Operating Cash Flow Fell to $24.1 Billion as Receivables Grew by $22.3 Billion

Operating cash flow was $24,077 million, down from $50,344 million the prior quarter and up from $15,365 million a year earlier. The CFO Commentary explains the direction of each move: “Cash flow from operating activities was $24.1 billion, up from $15.4 billion a year ago and down from $50.3 billion a quarter ago. The year-on-year increase reflects growth in revenue, while the sequential decrease was driven by higher working capital adjustments and cash taxes.”

Four working-capital lines moved against operating cash flow this quarter: accounts receivable, $(22,346) million, versus $(2,243) million the prior quarter; inventory, $(5,784) million, versus $(4,420) million; prepaid expenses and other assets, $(5,497) million, versus $(983) million; and accrued and other current liabilities, up only $252 million, versus $7,763 million the prior quarter.

Receivables moved the most. Accounts receivable stood at $63.1 billion at quarter end, with days sales outstanding at 60 days, up from 45 days. The CFO Commentary’s stated reason: “Accounts receivable was $63.1 billion with 60 days sales outstanding (DSO), up from 45 days sequentially, due to extended payment terms on large, multi-quarter agreements with certain investment-grade customers.” On the earnings call, according to the transcript, Colette Kress, NVIDIA’s executive vice president and chief financial officer, made the same point about extended payment terms on large purchases. Inventory reached $31.6 billion, up from $25.8 billion, which the CFO Commentary attributes to preparation “for the introduction of Vera Rubin in the third quarter.”

Capital expenditures were $2,677 million, up from $1,757 million the prior quarter and $1,894 million a year earlier. Free cash flow — operating cash flow less capital expenditures and related principal payments — was $21,341 million, down from $48,554 million the prior quarter and up from $13,450 million a year earlier.

Cash Went to Five Places: Buybacks, Dividends, Equity Securities, Groq, and Capex

Share repurchases took $19,732 million, up from $19,312 million the prior quarter and $9,721 million a year earlier. Dividends took $6,047 million, up sharply from $243 million the prior quarter and $244 million a year earlier — the difference traces to a dividend policy change: NVIDIA’s board raised the quarterly cash dividend from $0.01 to $0.25 per share on May 18, 2026, the same day it approved an additional $80.0 billion share-repurchase authorization with no expiration date.

Purchases of equity securities, an investing-activities line, took $15,822 million, up from $346 million a year earlier. A separate financing-activities line, “Groq, Inc.”, shows $2,944 million, with no comparable line a year earlier. The cash-flow statement carries a single line and a single dollar amount for that entry; neither the press release nor the CFO Commentary describes the transaction it represents. Separately, the press release notes that NVIDIA Groq 3 LPX, an interactive AI inference accelerator, is now in full production.

The same quarter’s financing activities also carry the debt-issuance line already introduced: “Proceeds related to issuance of debt, net of costs”, $24,896 million. Long-term debt on the balance sheet rose from $7,469 million at fiscal year end to $32,366 million at quarter end, an increase of $24,897 million, calculated from the reported figures — consistent with the cash-flow statement’s debt proceeds.

Buybacks, dividends, equity-securities purchases, the Groq payment, and capital expenditures together total $47,222 million, calculated from the reported figures — close to double the quarter’s $24,077 million of operating cash flow.

Cash and Marketable Debt Securities Reached $56.6 Billion; Long-Term Debt Jumped to $32.4 Billion

At quarter end, cash and cash equivalents were $22,443 million and marketable debt securities were $34,143 million. The CFO Commentary’s combined figure: “Cash, cash equivalents, and marketable debt securities were $56.6 billion, up from $53.6 billion a year ago and up from $50.3 billion a quarter ago.”

Marketable equity securities were $42,783 million at quarter end, up from $12,886 million at fiscal year start; non-marketable securities were $51,157 million, up from $22,251 million. Combined, calculated from the reported figures, equity investments totaled $93,940 million, versus $35,137 million at fiscal year start. The CFO Commentary describes the focus of these holdings: “Our equity investments are focused on AI model makers, infrastructure financiers, and other private companies, subject to certain contingencies.”

Long-term debt was $32,366 million at quarter end, versus $7,469 million at fiscal year start. Total assets were $320,272 million, up from $206,803 million at fiscal year start. All three figures are quarter-end balance-sheet levels at a point in time, not this quarter’s cash flows.

Supply Commitments Rose From $119 Billion to $279 Billion, Mostly for Memory

Beyond the financial statements, NVIDIA has entered a set of commitments that do not appear on the balance sheet’s liabilities section. The CFO Commentary states: “Our commitments increased from $119 billion last quarter to $279 billion, primarily related to the procurement of memory.”

As of July 26, 2026, NVIDIA’s disclosed future commitments, by fiscal year:

The “FY30 and later” column sums three columns of the source table — FY30, FY31, and fiscal 2032 and beyond — calculated from the reported figures.

Upcoming data center leases run up to twenty years and are expected to begin between the third quarter of fiscal 2027 and fiscal 2033. Commitments and guarantees are not liabilities on the balance sheet; they are ceilings on possible future outlays and possible future guarantee exposure.

NVIDIA Capped Its SB Energy Guarantee for OpenAI’s Ohio Campus at $105 Billion

The CFO Commentary devotes a full paragraph to why these arrangements exist: “AI clouds and model makers are seeing extraordinary demand for AI infrastructure, yet many are growing faster than their balance sheets and long-term credit profiles can support. In response, we have entered into arrangements that help select customers secure the land, power and data center capacity needed to support their growth.” Under these AI cloud agreements, NVIDIA earns revenue on the upfront sale of its infrastructure and, if certain criteria are met, participates in revenue share the AI clouds generate from their own third-party customers. NVIDIA has also signed roughly fifteen-year data center leases, expected to begin between fiscal 2028 and fiscal 2029, that it expects to reassign to third parties.

Separately, NVIDIA carries land, power, and shell guarantees for certain AI cloud partners’ data center lease obligations in the event of default, capped at a combined $3.5 billion. In August 2026, it added a much larger one. The CFO Commentary: “In August 2026, we entered into guarantees to provide credit support on the land, power, and shell buildout to secure approximately 4.25 gigawatts (GW) at SB Energy’s PORTS-Pike Technology Campus in Ohio, which will exclusively host NVIDIA infrastructure under 20-year leases to OpenAI, subject to limited exceptions. Our guarantee obligations are capped at a total of $105 billion and become effective in phases as certain conditions are met, including data centers becoming ready for service, with the first expected in fiscal 2029. Our guarantee exposure declines as OpenAI fulfills lease payments.” The CFO Commentary estimates the revenue potential on NVIDIA’s side: each generation of infrastructure deployed at PORTS-Pike could represent roughly 1.5 million NVIDIA GPUs, or approximately $150 billion to $200 billion of NVIDIA revenue. Combined, the AI-cloud guarantees and the SB Energy guarantee total $108.5 billion.

Asked about this kind of arrangement on the earnings call, according to the transcript, Kress said: “We recognize the scale of this support, and we know some will call this circular financing. We see it differently.”

Q3 Guidance Is $108 Billion; NVIDIA Assumes No China Data Center Compute Revenue

NVIDIA’s outlook for its third quarter of fiscal 2027: “Revenue is expected to be $108.0 billion, plus or minus 2%. NVIDIA is not assuming any Data Center compute revenue from China in its outlook.” “GAAP and non-GAAP gross margins are expected to be 74.0%, plus or minus 50 basis points.” GAAP and non-GAAP operating expenses are expected to be approximately $9.2 billion and $9.0 billion, respectively, and the full-year tax rate is expected to be 16.0% to 18.0%.

The China sentence has moved through three versions. The Q1 FY26 release: “This outlook reflects a loss in H20 revenue of approximately $8.0 billion due to the recent export control limitations.” The Q2 FY26 release changed that to: “The company has not assumed any H20 shipments to China in the outlook.” Starting with the Q4 FY26 release and repeated in the two releases since, including this one, the wording became the sentence quoted above — no Data Center compute revenue assumed from China.

On the earnings call, according to the transcript, Kress gave a preliminary look further out: “Looking ahead, our preliminary expectation is for fiscal year 2028 revenue to grow approximately 70% year-over-year.” Answering a question from Morgan Stanley’s Joseph Moore about supply, Huang said, according to the transcript: “The unconstrained would be a lot higher.” Huang was talking about supply in general. Memory specifically was the item Kress named on the call: “The magnitude of the price increase has exceeded our prior expectations and are headed even higher into next year.”

According to CNBC’s report of the call, Kress said capital spending among the industry’s largest cloud providers — the “top five hyperscalers” — is expected to rise to $1.3 trillion next year, from $800 billion in 2026. Analysts polled by LSEG had expected EPS of $2.10 and revenue of $92.17 billion, according to CNBC’s August 26, 2026 live blog; both figures came in above that consensus.

The Debt Line and the Commitments Table Sit in the Same Document

Back to the $24.9 billion debt line the article opened with. It is not the reverse side of the quarter’s income-statement numbers. The income statement records what NVIDIA shipped and recognized this quarter. The cash-flow statement records whether the cash came back, and where the company chose to put it first. Both are right; they answer different questions.

The company’s stated reason for the debt is general corporate purposes. A few paragraphs further down the same CFO Commentary sit the $366 billion commitments table and the $108.5 billion guarantees table. Both sit in the same document; the sequence is visible on the page. The cause is not stated.

(This quarter’s earnings release and CFO Commentary do not mention Poolside; that matter is covered in NVIDIA’s $6 Billion Poolside License Rests on One Investor Letter. Another company’s GAAP net income was also lifted this quarter by a gain on equity securities — that piece works through how a stake’s fair-value change enters the income statement; this one works through the cash-flow statement: Alphabet’s Strongest Quarter on Paper Was Also Its First Cash-Flow-Negative One. NVIDIA’s approach to securing land and power capacity for AI cloud partners connects to a separate piece on the power side of AI buildouts (in Chinese).)

Frequently Asked Questions

Q: Was NVIDIA’s EPS this quarter $2.46 or $2.22? A: Both figures are NVIDIA’s own, and they measure different things. $2.46 is GAAP diluted earnings per share, the headline number on the income statement. $2.22 is non-GAAP diluted EPS. The gap is mostly one item: a $7.8 billion net gain on equity securities this quarter, which counts toward GAAP net income but is excluded from non-GAAP. Separately, starting in fiscal Q1 2027, NVIDIA’s non-GAAP figures stopped excluding stock-based compensation expense, so prior-year non-GAAP numbers have also been restated and are not directly comparable to how they were first reported.

Q: Revenue grew 106% year over year. Why did free cash flow fall by half? A: Free cash flow was $21.3 billion this quarter, down from $48.6 billion the prior quarter. NVIDIA’s stated reason: accounts receivable grew to $63.1 billion, with days sales outstanding stretching from 45 days to 60 days because of ‘extended payment terms on large, multi-quarter agreements with certain investment-grade customers.’ Inventory also grew, to $31.6 billion, ahead of the Vera Rubin ramp. Those working-capital changes, plus higher cash taxes, pulled operating cash flow down from $50.3 billion to $24.1 billion.

Q: Why did NVIDIA issue $25 billion of notes this quarter? A: The company’s stated reason is one sentence: the notes were issued ‘for general corporate purposes.’ Neither the earnings release nor the CFO Commentary gives a more specific explanation. What is measurable is the size of the quarter’s other outlays: buybacks, dividends, equity-securities purchases, the Groq, Inc. payment, and capital expenditures add up to $47.2 billion, calculated from the reported figures — nearly double the quarter’s $24.1 billion of operating cash flow. NVIDIA still had $56.6 billion of cash and marketable debt securities at quarter end. This was not a shortage of cash; it was a quarter that chose to allocate cash to more places than it took in.

Q: Are the $279 billion of supply commitments and $108.5 billion of guarantees liabilities? A: No. Neither figure appears in the liabilities section of the balance sheet. They are ceilings on possible future spending and possible future guarantee exposure, not money already spent or contractually due today. The supply commitments are amounts NVIDIA has told suppliers it may purchase in the future, driven mainly by memory procurement, according to the CFO Commentary. The guarantees are credit support NVIDIA has extended for certain AI cloud partners’ data center obligations; the largest single guarantee, for SB Energy, is capped at $105 billion and does not begin taking effect until conditions are met, with the first phase expected in fiscal 2029.

Sources

Primary documents

• NVIDIA, NVIDIA Announces Financial Results for Second Quarter Fiscal 2027, August 26, 2026, https://nvidianews.nvidia.com/news/nvidia-announces-financial-results-for-second-quarter-fiscal-2027
• Colette Kress, NVIDIA CFO, CFO Commentary on Second Quarter Fiscal 2027 Results, August 26, 2026, https://s201.q4cdn.com/141608511/files/doc_financials/2027/Q227/Q2FY27-CFO-Commentary.pdf
• NVIDIA, NVIDIA Announces Financial Results for First Quarter Fiscal 2027, May 20, 2026, https://nvidianews.nvidia.com/news/nvidia-announces-financial-results-for-first-quarter-fiscal-2027
• NVIDIA, SEC Form 8-K, August 26, 2026, Accession No. 0001045810-26-000073

Secondary sources

• CNBC, August 26, 2026 live blog (earnings call and outlook coverage)
• Reuters, via investing.com, Nvidia forecasts 70% sales growth next year, signals AI spending boom has years left to run, August 26, 2026

This article summarises figures and statements disclosed in NVIDIA’s earnings release and CFO Commentary. It is not investment advice; the outlook figures are company expectations, not results.