Nvidia's fiscal 2026 earnings show revenue grew 65% but gross margin fell to 71.1% from 75.0%
Revenue reached $215.938 billion as Nvidia's data center business expanded, but gross margin fell to 71.1% from 75.0% as cost of revenue rose.
Based on a filing dated .
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Nvidia reported fiscal year 2026 results for the year ended January 25, 2026, showing total revenue of $215.938 billion, a 65% increase from $130.497 billion in fiscal year 2025. Net income represented 55.6% of revenue, down slightly from 55.8% in the prior year.
Revenue growth concentrated in data center and networking
Compute & Networking segment revenue increased to $193.479 billion from $116.193 billion, a 67% increase. Within that segment, Data Center computing revenue grew 59%, driven by demand for the Blackwell computing platform. Data Center networking revenue grew 142%, driven by NVLink compute fabric for GB200 and GB300 systems and growth in Ethernet and InfiniBand platforms. Graphics segment revenue increased 57% to $22.459 billion from $14.304 billion.
Customer concentration and international revenue
One customer represented 22% of total revenue in fiscal 2026, while another represented 14%. In fiscal 2025, one customer had represented 12% of total revenue, with two others each representing 11%. Revenue from customers headquartered outside the United States was 31% of total revenue in fiscal 2026, down from 41% in fiscal 2025.
Gross margin declined as inventory provisions mounted
Gross margin fell to 71.1% in fiscal 2026 from 75.0% in fiscal 2025. Cost of revenue represented 28.9% of revenue, compared to 25.0% in the prior year. Provisions for inventory and excess inventory purchase obligations totaled $7.2 billion in fiscal 2026, compared to $3.7 billion in fiscal 2025. Nvidia had recorded a $4.5 billion charge associated with H20 excess inventory and purchase obligations in the first quarter of fiscal year 2026. Sales of previously reserved inventory and settlements of excess inventory purchase obligations resulted in a provision release of $1.5 billion in fiscal 2026, against $689 million in fiscal 2025.
Operating expenses and profitability
Research and development expenses increased 43% to $18.497 billion from $12.914 billion. Within R&D, compute and infrastructure costs increased 79%. Sales, general and administrative expenses increased 31% to $4.579 billion from $3.491 billion. Operating income represented 60.4% of revenue in fiscal 2026, down from 62.4% in fiscal 2025.
Tax expense and effective rate
Income tax expense was $21.4 billion in fiscal 2026, compared to $11.1 billion in fiscal 2025. Nvidia's effective tax rate was 15.1% in fiscal year 2026, compared to 13.3% in fiscal year 2025. The One Big Beautiful Bill Act legislation was enacted into law in July 2025 and contains changes to U.S. federal income tax laws that Nvidia recognized in fiscal year 2026 results. Nvidia recorded unrecognized tax benefits of $4.0 billion as of January 25, 2026, including $374 million in related interest and penalties. Nvidia released $711 million of valuation allowance for state deferred tax assets. The Internal Revenue Service is examining Nvidia for fiscal years 2023 and 2024.
Cash generation and capital deployment
Operating cash flow was $102.718 billion in fiscal year 2026, compared to $64.089 billion in fiscal year 2025. Investing cash outflows were $52.228 billion in fiscal 2026, compared to $20.421 billion in fiscal 2025. Capital expenditures were $6.1 billion in fiscal year 2026, compared to $3.4 billion in fiscal year 2025. Financing cash outflows were $48.474 billion in fiscal 2026, compared to $42.359 billion in fiscal 2025.
Nvidia repurchased 282 million shares for $40.4 billion in fiscal year 2026. From January 26, 2026 through February 20, 2026, Nvidia repurchased 8 million shares for $1.5 billion. On August 26, 2025, Nvidia's Board of Directors approved an additional $60.0 billion in share repurchase authorization without expiration. Nvidia had $58.5 billion remaining in authorized share repurchase capacity as of January 25, 2026. Nvidia paid cash dividends to shareholders of $974 million in fiscal year 2026.
Balance sheet and liquidity
Combined cash, cash equivalents, and marketable securities totaled $62.556 billion as of January 25, 2026. Cash and cash equivalents alone totaled $10.605 billion, compared to $8.589 billion as of January 26, 2025. Marketable securities totaled $51.951 billion, compared to $34.621 billion a year earlier. Nvidia holds approximately $1.7 billion in cash, cash equivalents, and marketable securities outside the United States for which no related foreign or state taxes have been accrued if repatriated to the U.S.
Nvidia's total long-term debt was $8.468 billion as of January 25, 2026. Nvidia increased its commercial paper program authorization to $25.0 billion in January 2026, with no commercial paper outstanding as of January 25, 2026.
Other income and securities
Other income, net was $9.022 billion in fiscal year 2026, compared to $1.034 billion in fiscal year 2025, primarily driven by unrealized gains in non-marketable and publicly-held equity securities. Interest income increased to $2.300 billion in fiscal year 2026 from $1.786 billion in fiscal year 2025.
Nvidia executed a non-exclusive license agreement with Groq in fiscal year 2026.