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August 27, 2025 ā¢ 4 min read
NVIDIA just dropped its latest quarterly report, and the numbers continue to paint a picture of a company operating at the epicenter of the artificial intelligence revolution. For anyone following the tech sector, digging into the company's Form 10-Q filing provides a direct look at the financial engine powering the AI boom. Let's break down the key takeaways from the report for the quarter ended July 27, 2025. You can read the full filing on the SEC's website for all the details.
For the second quarter of its 2026 fiscal year, NVIDIA reported a staggering $46.7 billion in revenue, a 56% increase from the same quarter last year. This torrent of sales translated into an impressive net income of $26.4 billion, up 59% year-over-year.
To understand how NVIDIA converts its massive revenue into profit, it's helpful to see a breakdown of where the money comes from and where it goes. The following flow diagram illustrates the company's income statement for the quarter.
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The driving force behind NVIDIA's growth remains its Compute & Networking segment, which is home to its data center products. This division alone generated $41.3 billion in revenue, a 56% surge compared to the prior year.
A key detail from the report is that large cloud service providers accounted for approximately half of this data center revenue, underscoring the massive investment these tech giants are making in AI infrastructure built on NVIDIA's technology. This segment is the undisputed core of NVIDIA's business, fueled by insatiable demand for its powerful processors and networking equipment to train and run complex AI models.
While the data center is the main story, the Graphics segment also posted strong results. It brought in $5.4 billion, up 51% from a year ago. This growth was primarily driven by the company's new Blackwell architecture, which is finding its way into both high-end gaming (Gaming sub-segment: $4.3 billion) and professional design workstations (Professional Visualization sub-segment: $0.6 billion).
NVIDIA's profitability is remarkable. The company achieved a gross margin of 72.4%. After accounting for costs, it booked an operating income of $28.4 billion, a 53% jump from the previous year. This translates to an operating margin of nearly 61%, a figure that reflects the company's premium pricing power and strong market position.
The company is also heavily reinvesting its profits back into the business to maintain its technological lead. Research and development (R&D) expenses rose 39% year-over-year to $4.3 billion. This significant spend is crucial for developing the next generation of chips and software that will power future AI advancements.
However, the path forward is not without potential obstacles. The filing reiterates a significant and ongoing risk: export controls. NVIDIA notes it has been "subject to a series of shifting and expanding export control restrictions" that affect its ability to sell high-performance products to certain countries. These geopolitical tensions represent a key variable for the company's future growth trajectory.
NVIDIA's latest quarterly report showcases a company executing at an exceptionally high level. The financial results confirm its dominant role in the AI hardware market, with staggering growth in its data center business and solid performance across its other segments. The company is also returning significant value to its shareholders, repurchasing over $24 billion of its stock in the first half of the fiscal year.
While the numbers are extraordinary, the heavy investment in R&D and the highlighted risks of international trade restrictions are important factors to watch. For now, NVIDIA's financial performance demonstrates that the AI boom is not just a narrativeāit's a powerful economic force with NVIDIA firmly in the driver's seat.
Last updated: August 27, 2025