NVIDIA Q1 Earnings Call Highlights

Key Points

• NVIDIA posted record Q1 fiscal 2027 results, with revenue of $82 billion, up 85% year over year, while operating income and free cash flow also hit new highs. Data center revenue was the main driver at $75 billion, up 92% from a year earlier.
• Blackwell demand and AI infrastructure growth remained exceptionally strong, with executives saying the platform has been adopted by major hyperscalers, cloud providers, model makers, and sovereign customers. NVIDIA also highlighted rapid growth in networking and AI cloud demand, along with expanding deployments across dozens of countries.
• The company issued a bullish outlook and expanded shareholder returns, guiding second-quarter revenue to $91 billion, plus or minus 2%, and reaffirming mid-70s gross margins. NVIDIA also announced a higher dividend, an $80 billion share repurchase authorization, and said it plans to return roughly 50% of free cash flow to shareholders this year.

NVIDIA NASDAQ: NVDA reported record first-quarter fiscal 2027 results, with revenue, operating income and free cash flow all surpassing prior company highs, as executives said demand for AI infrastructure continued to accelerate across hyperscale cloud providers, AI cloud companies, sovereign customers and enterprise users.

Colette Kress, NVIDIA’s executive vice president and chief financial officer, said total revenue reached $82 billion, up 85% from a year earlier and 20% sequentially. The quarter marked NVIDIA’s third straight period of year-over-year acceleration and its 14th consecutive quarter of sequential growth. Kress said the $13.5 billion sequential revenue increase was also a company record.

“We capitalized on the inflection in inference demand by ramping Blackwell systems across our diverse end customer base, from hyperscalers to model makers to AI cloud providers and sovereign customers,” Kress said.

Data Center Revenue Drives Results

Data center revenue was $75 billion, up 92% year-over-year and 21% sequentially. Kress said the increase was driven by continued strength in NVIDIA’s Blackwell architecture, with demand for GB300 and NVL72 systems described as “particularly strong.”

For modeling purposes, Kress said data center computing revenue was $60 billion, up 77% year-over-year, while data center networking revenue was $15 billion, nearly tripling from the year-ago period. She also said Spectrum-X, NVIDIA’s Ethernet platform built for AI, is now “larger than all Ethernet network peers combined,” while InfiniBand grew more than fourfold year-over-year, helped by deployments of next-generation XDR technology.

NVIDIA introduced a new reporting framework that divides the business into two market platforms: Data Center and Edge Computing. Within Data Center, the company will report two sub-markets: Hyperscale and ACIE, which includes AI clouds, industrial and enterprise customers. Kress said hyperscale revenue was $38 billion, representing about half of data center revenue and up 12% sequentially. ACIE revenue was $37 billion, up 31% sequentially, including AI cloud revenue that more than tripled year-over-year.

Jensen Huang, NVIDIA’s president and chief executive officer, said the new segmentation is intended to help investors better understand the expanding diversity of AI demand. He described hyperscale clouds as one major segment, while AI native clouds, enterprise on-premises systems, industrial deployments and sovereign AI represent another large and fast-growing opportunity.

“AI is very diverse and computing is diverse,” Huang said, pointing to use cases across language models, 3D graphics, life sciences, material sciences, energy, manufacturing, robotics and telecom networks.

AI Infrastructure Demand and Blackwell Ramp

Kress said the number of partner data centers exceeding 10 megawatts has nearly doubled in one year to more than 80 sites. Sovereign revenue increased more than 80% year-over-year, and NVIDIA AI infrastructure is now deployed across nearly 40 countries, which she said represent $50 trillion in gross domestic product.

The company pointed to ongoing demand from major AI customers and cloud providers. Kress said Blackwell has been adopted and deployed by “every major hyperscaler, every cloud provider, and every major model maker.” She cited OpenAI’s GPT-5.5 launch, Microsoft’s Fairwater AI data center, AWS plans to add more than 1 million Blackwell and Rubin GPUs starting this year, and Google’s plans to offer Blackwell in its cloud with confidential computing capability.

Kress also said NVIDIA has deepened its collaboration with Anthropic and will support the company’s compute capacity through AWS, Azure, CoreWeave, SpaceXAI and others.

Huang said NVIDIA expects to grow faster than hyperscale capital expenditures because its data center business extends beyond the largest cloud platforms. He said AI native clouds, enterprise deployments, industrial data centers and sovereign AI clouds represent a fragmented but significant second category of demand.

“If they don’t have the compute, they won’t have the revenues,” Huang said of hyperscalers and AI providers. “Compute is revenues. Compute is profit.”

Vera Rubin and CPU Opportunity

NVIDIA executives also emphasized the upcoming Vera Rubin platform and the role of CPUs in agentic AI systems. Kress said NVIDIA remains on track to begin production shipments of Vera Rubin in the second half of the year, starting in the third quarter. She said the ramp should continue into the fourth quarter, with the first quarter of next year expected to be “very big as well.”

Kress said Vera, built on custom Arm cores and co-designed with Rubin GPUs and NVLink, is expected to deliver up to 1.5 times faster performance per core, two times performance per watt and four times density per rack compared with x86-based alternatives. She said Vera opens a new $200 billion total addressable market for NVIDIA and that the company has visibility to nearly $20 billion in total CPU revenue this year.

Asked about that figure, Huang said the $20 billion refers to standalone CPU revenue, not CPUs bundled as part of Vera Rubin. He said Vera will be used in multiple ways, including as part of Vera Rubin, as a standalone CPU, and in configurations with CX9 for storage, security, compute isolation and confidential computing.

Huang said agentic AI workloads require CPUs for orchestration, input/output, memory management and tool use, while GPUs handle “the thinking” involved in inference.

“We’re going to need a lot more CPUs and Vera was designed to be an agentic CPU,” Huang said.

Edge Computing and Supply Chain

NVIDIA’s Edge Computing platform generated $6.4 billion in revenue, up 10% sequentially and 29% year-over-year. Kress said robust Blackwell workstation demand contributed to growth, while consumer demand declined modestly because of higher memory and system prices.

The company said physical AI revenue exceeded $9 billion over the last 12 months. Kress pointed to NVIDIA’s partnership with Uber to power robotaxi fleets across nearly 30 cities and four continents by 2028, as well as robotics work across industrial, surgical and humanoid applications.

Kress said NVIDIA increased total supply, including inventory, purchase commitments and prepaids, to $145 billion in the quarter. While she said the company is not immune to supply challenges, she said NVIDIA remains confident in its ability to support growth.

Margins, Capital Returns and Outlook

GAAP gross margin was 74.9%, and non-GAAP gross margin was 75%, largely flat sequentially as Blackwell systems continued to account for most shipments. GAAP and non-GAAP operating expenses rose 12% sequentially, primarily because of higher compensation and increased compute and infrastructure costs. Free cash flow reached a record $49 billion, up from $35 billion in the prior quarter.

Kress initially said NVIDIA was increasing its quarterly dividend from $0.01 to $0.20 per share. During the question-and-answer session, Huang corrected that figure, saying the dividend was being increased from $0.01 to $0.25 per share. Kress also announced an $80 billion share repurchase authorization in addition to $39 billion remaining under the current plan. She said NVIDIA plans to return roughly 50% of free cash flow to shareholders this year.

For the second quarter, NVIDIA guided for revenue of $91 billion, plus or minus 2%, with sequential growth expected to be driven primarily by data center. The company projected GAAP and non-GAAP gross margins of 74.9% and 75%, respectively, plus or minus 50 basis points, and said it still expects full-year gross margins in the mid-70s.

Kress said NVIDIA is not including any China data center compute revenue in its outlook. Although the U.S. government has approved licenses for H200 shipments to China-based customers, she said the company has not generated revenue from those licenses and remains uncertain whether imports will be allowed into China.

Huang closed the call by saying demand has “gone parabolic” because “agentic AI has arrived,” adding that NVIDIA’s platform is positioned across frontier AI models, hyperscale clouds, AI data centers, edge systems and its new Vera CPU opportunity.

About NVIDIA NASDAQ: NVDA

NVIDIA Corporation, founded in 1993 and headquartered in Santa Clara, California, is a global technology company that designs and develops graphics processing units (GPUs) and system-on-chip (SoC) technologies. Co-founded by Jensen Huang, who serves as president and chief executive officer, along with Chris Malachowsky and Curtis Priem, NVIDIA has grown from a graphics-focused chipmaker into a broad provider of accelerated computing hardware and software for multiple industries.

The company's product portfolio spans discrete GPUs for gaming and professional visualization (marketed under the GeForce and NVIDIA RTX lines), high-performance data center accelerators used for AI training and inference (including widely adopted platforms such as the A100 and H100 series), and Tegra SoCs for automotive and edge applications.

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