I missed the call. Anybody else catch it? According to AI:
Nvidia Q2 FY2026 Earnings Call Summary
On August 27, 2025, Nvidia held its Q2 FY2026 earnings conference call, showcasing robust financial performance amid surging AI demand, though tempered by geopolitical challenges in China and a softer-than-expected Q3 guidance. CEO Jensen Huang and CFO Colette Kress highlighted the company's pivotal role in the AI industrial revolution, with record revenues driven by data center growth. The call, which skipped prepared remarks from Huang and jumped straight into Q&A, emphasized ongoing supply constraints, innovation in AI architectures, and long-term growth prospects, despite immediate market headwinds.
Financially, Nvidia reported revenue of $46.74 billion, up 56% year-over-year (YoY) and 6% sequentially, slightly beating estimates of $46.23 billion. Adjusted earnings per share (EPS) came in at $1.05, surpassing the $1.01 consensus. Data center revenue, the company's powerhouse segment, reached $41.1 billion, up 56% YoY and 5% quarter-over-quarter (QoQ), fueled by demand for accelerated computing platforms in large language models, recommendation engines, and generative AI applications. This included contributions from the new Blackwell architecture, which grew 17% sequentially and represented sales across all customer categories, with large cloud service providers (CSPs) accounting for about 50% of data center revenue. Gaming revenue rose 49% YoY to $4.3 billion, exceeding estimates, while professional visualization and automotive segments grew 32% and 69% YoY to $601 million and $586 million, respectively. Adjusted gross margins were 72.7%, including a 40 basis point benefit from releasing $180 million in previously reserved H20 inventory, sold for $650 million to an unrestricted customer outside China. Adjusted operating income climbed 51% YoY to $30.17 billion, and free cash flow stood at $13.45 billion.
For Q3, Nvidia guided revenue to $52.9 billion to $55.1 billion, plus or minus 2%, with GAAP and non-GAAP gross margins expected at 73.3% and 73.5%, respectively. This outlook excludes any H20 shipments to China, amid ongoing U.S.-China tensions, though Kress noted potential $2 billion to $5 billion in H20 sales if restrictions ease. The company anticipates exiting the year with non-GAAP gross margins in the mid-70s. Additionally, Nvidia's board approved a record $60 billion stock repurchase program, signaling confidence in its valuation.
Huang underscored the "extraordinary" demand for AI infrastructure, noting that hyperscaler capex is on track for $600 billion this year, nearly doubling in two years. He described the shift to "agentic AI," where models perform research, planning, and tool usage, requiring 100 to 1,000 times more computation than traditional chatbots, significantly reducing hallucinations. On Blackwell, Huang highlighted full-speed ramping, with production of Blackwell Ultra accelerating and demand outstripping supply: "H100s are sold out. H200s are sold out... Demand is really, really high." He also addressed custom ASICs, noting their difficulty in reaching production, reinforcing Nvidia's edge in versatile GPU platforms.
China remained a focal point, with no H20 sales to Chinese customers in Q2 due to export curbs and a recent U.S. government demand for 15% of revenue from licensed sales. Huang emphasized China's importance: "It is the second largest computing market in the world... About 50% of the world’s AI researchers in China." He advocated for U.S. companies' access, stating, "We just have to keep advocating." Kress noted Singapore's 22% of Q2 billings were mostly for U.S.-based customers.
In Q&A, analysts probed on power constraints, with Huang stressing Nvidia's efficiency: "The world...will always likely face power limitations... NVIDIA's performance per unit of energy used drives the revenue growth." On Rubin, Kress confirmed volume production next year, maintaining annual cadence. Customer concentration was disclosed, with two direct customers representing 23% and 16% of revenue.
Market reaction was mixed; shares dipped 3% in after-hours trading, reflecting the guidance miss amid high expectations. Analysts like Thomas Monteiro noted challenges without China sales: "Nvidia simply cannot sustain the type of growth priced into its valuation." Overall, the call painted Nvidia as central to an AI-driven transformation, projecting $3 to $4 trillion in AI infrastructure spend by decade's end, but geopolitical risks loom large.
