NVIDIA Corp Earnings - Q3 2025 Analysis & Highlights
Key Takeaways
NVIDIA's Q3 2026 earnings call highlighted record data center revenue driven by AI infrastructure demand, Blackwell's momentum, and strong growth in networking. Management discussed the three platform shifts fueling growth: accelerated computing, generative AI, and agentic AI. They also provided Q4 2026 revenue guidance and discussed gross margin expectations for fiscal year 2027.
Key Financial Results:
Q3 2026 revenue: $57 billion, up 62% year-over-year.
Sequential revenue growth: $10 billion or 22%.
GAAP gross margins: 73.4%.
Non-GAAP gross margins: 73.6%, exceeding outlook.
Q4 2026 revenue guidance: $65 billion, plus or minus 2%.
Business Segment Results:
Data Center revenue: Record $51 billion, up 66% year-over-year.
Compute growth: Up 56% year-over-year, driven by GB300 ramp.
Networking: More than doubled, driven by NVLink scale-up and growth across Spectrum-X Ethernet and Quantum-X InfiniBand.
Gaming revenue: $4.3 billion, up 30% year-on-year.
Professional Visualization revenue: $760 million, up 56% year-over-year.
Automotive revenue: $592 million, up 32% year-over-year, driven by self-driving solutions.
Capital Allocation:
Preparing for significant growth ahead.
Inventory grew 32% quarter-over-quarter.
Supply commitments increased 63% sequentially.
Strategic investments in companies like Anthropic, Mistral, and OpenAI to expand the NVIDIA CUDA AI ecosystem.
Industry Trends and Dynamics:
Customers are leaning into three platform shifts: accelerated computing, powerful AI models, and agentic applications.
Demand for AI infrastructure continues to exceed expectations.
Hyperscalers are transforming search, recommendations, and content understanding from classical machine learning to generative AI.
Proliferation of agentic AI across various industries and tasks.
Enterprises are leveraging AI to boost productivity, increase efficiency, and reduce costs.
Competitive Landscape:
NVIDIA believes it will be the superior choice for the $3 trillion to $4 trillion in annual AI infrastructure build by the end of the decade.
Blackwell Ultra delivered 5x faster time to train than Hopper in the latest MLPerf Training results.
Blackwell achieved the highest performance and lowest total cost of ownership across every model and use case in SemiAnalysis InferenceMAX benchmark.
NVIDIA is the only company with AI scale up, scale-out and scale across platforms.
Macroeconomic Environment:
Input costs are on the rise, but working to hold gross margins in the mid-70s for fiscal year 2027.
Growth Opportunities and Strategies:
Annual product cadence and extending performance leadership through full-stack design.
Transition to GB300 has been seamless with production shipments to major cloud service providers, hyperscalers, and GPU clouds.
Rubin platform is on track to ramp in the second half of 2026.
Strategic partnership with OpenAI to help them build and deploy at least 10 gigawatts of AI data centers.
Deep technology partnership with Anthropic to support their fast growth.
Physical AI is already a multibillion-dollar business addressing a multitrillion-dollar opportunity.
Financial Guidance and Outlook:
Q4 2026 revenue: Expected to be $65 billion, plus or minus 2%.
Q4 2026 GAAP and non-GAAP gross margins: Expected to be 74.8% and 75%, respectively, plus or minus 50 basis points.
For fiscal year 2027, working to hold gross margins in the mid-70s.
Fiscal year 2027 GAAP and non-GAAP operating expenses are expected to be approximately $6.7 billion and $5 billion, respectively.
Fiscal year 2027 GAAP and non-GAAP tax rates are expected to be 17%, plus or minus 1%, excluding any discrete items.
