NVIDIA (NVDA) Financials

NVIDIA (NASDAQ: NVDA) continues to show strong financial performance across the last four years, with a clear trajectory of growth and expanding profitability supported by substantial operational cash flow and balance sheet strength.

Key Positive Trends:

• Consistent double-digit growth in operating revenue, rising from approximately $6 billion in Q3 2022 to over $44 billion in Q1 2026, indicating sustained expansion in business scale.
• Robust net income growth, with consolidated net income increasing from around $680 million in Q3 2022 to nearly $18.8 billion in Q1 2026, reflecting strong profitability improvements.
• Strong gross profit margins maintained, with total gross profit growing significantly in line with revenue, supported by controlled cost of revenue efforts.
• Operating income exhibited solid growth, reaching $21.6 billion in Q1 2026, evidencing effective expense management and growth in operational efficiency.
• Operating cash flow greatly increased, from $1.5 billion in Q3 2022 to over $27 billion in Q1 2026, supporting growth investments and shareholder returns without liquidity stress.
• Significant expansion in total assets, from $40.7 billion in Q3 2022 to $125.3 billion in Q1 2026, supported by strong cash & equivalents and short-term investments, highlighting strong liquidity and financial flexibility.
• Share repurchases remain substantial, with more than $14 billion spent in Q1 2026 alone, reflecting confidence in valuation and commitment to returning capital to shareholders.
• R&D expenses increased steadily, reaching nearly $4 billion in Q1 2026, demonstrating continued investment in innovation and long-term product leadership.
• Dividend payments are consistent, showing steady incremental growth in payouts per share, signaling shareholder value focus and financial health.
• Total common equity nearly doubled from around $21 billion in Q3 2022 to $83.8 billion in Q1 2026, indicating strong retained earnings and capital base growth.

Neutral Observations:

• Debt levels have remained relatively stable with long-term debt ranging around $8.4 to $10.9 billion, manageable relative to total assets and equity.
• Interest expense has remained low relative to income, under $70 million quarterly, indicating manageable borrowing costs.
• Investment activities include significant purchases and sales of investments, resulting in net negative cash flow but aligned with strategic asset management and business expansion.
• Changes in working capital fluctuate between quarters, affecting cash from operations but generally reflecting normal business cycle movements with no clear negative trend.
• Diluted shares outstanding have stayed relatively constant near 24-25 billion shares, minimizing dilution concerns for shareholders while enabling capital strategies.

Potential Risks / Negative Trends:

• Cash used in financing activities is consistently negative, mainly driven by heavy share repurchases, which could limit cash available for other corporate purposes if market conditions worsen.
• Purchase of property, plant & equipment and acquisitions steadily increase, contributing to negative investing cash flow; while investment-driven growth is positive, it requires vigilant capital allocation to maintain returns.
• Operating expenses have increased alongside revenue, especially in SG&A and R&D, which though strategic requires continuous efficiency monitoring to avoid margin pressure.
• Accumulated other comprehensive income/loss fluctuates and includes some negative amounts, indicating exposure to foreign exchange or other comprehensive losses that may impact equity variability.
• Although debt levels are stable, a relatively high level of total liabilities over equity ratio suggests the company faces ongoing financial commitments that must be balanced carefully as business scales further.

Summary:
NVIDIA demonstrates a strong financial growth trend with increasing revenues and profitability, supported by strong cash generation and a solid balance sheet. The company’s strategic investments in R&D, acquisitions, and capital expenditures support sustained innovation but require ongoing management of cash flow and financing activities. Share repurchases and dividend payments highlight shareholder value focus. Investors should watch for capital allocation discipline and manage any operating expense inflation risks going forward.