NVIDIA doubled its revenue again, and the balance sheet under it now carries $93.9bn of other companies' securities against $35.1bn at the year end

Revenue for the three months to 26 July was $96,221m, against $46,743m a year earlier. That is an increase of 106 percent, and of 18 percent on the $81,615m of the previous quarter. Data Center revenue was $89.0bn, up 117 percent year over year. Operating income was $63,734m and gross margin was 75.0 percent on both a GAAP and a non-GAAP basis.

Then there is the line underneath.

The line below operations

Other income, net, was $7,773m for the quarter, against $2,766m in the same quarter last year. The reconciliation in the same release identifies almost all of it: gains from equity securities, net, of $7,771m, which the company removes to arrive at non-GAAP other income of $300m.

Over six months the figure is $23,707m of equity gains inside $24,140m of other income. The first quarter alone carried $15,936m of it.

This is why the two profit measures sit the wrong way round. GAAP net income was $59,688m. Non-GAAP net income, which strips those gains out, was $53,954m. Diluted earnings per share were $2.46 on a GAAP basis and $2.22 on a non-GAAP basis, and the ordinary arrangement, in which the adjusted number is the flattering one, is reversed here.

For scale, other income of $7,773m is $635m less than everything NVIDIA spent on research and development and on sales, general and administrative costs put together, which was $8,408m.

What the securities lines now hold

Two balance sheet lines carry the holdings. Marketable equity securities stood at $42,783m on 26 July, against $12,886m at the fiscal year end on 25 January. Non-marketable securities stood at $51,157m against $22,251m. Together the two lines come to $93,940m, against $35,137m at the year end, and that arithmetic is ours rather than the company's.

The cash flow statement shows the buying. Purchases of equity securities were $15,822m in the quarter and $42,404m over six months, against $346m and $1,245m in the equivalent periods a year ago. Sales brought in $7,215m in the quarter.

The funding shows there too. Long-term debt was $32,366m at the quarter end, against $7,469m at the fiscal year end, and the statement of cash flows records $24,896m of proceeds from the issuance of debt during the three months. There was no such line a year earlier.

Cash

Net cash provided by operating activities was $24,077m in the quarter. In the first quarter it was $50,344m. Free cash flow was $21,341m against $48,554m.

The statement gives the movements without explaining them. Accounts receivable moved by $22,346m inside the quarter and stood at $63,059m at the end of it, against $38,466m at the fiscal year end. Inventories moved by $5,784m and stood at $31,575m against $21,403m. Total assets were $320,272m against $206,803m in January.

NVIDIA returned approximately $26.0bn to shareholders during the quarter through repurchases and dividends, and says approximately $99.0bn remains under its authorisation. The next quarterly dividend is $0.25 a share, payable on 1 October to holders of record on 10 September.

The outlook, and the sentence attached to it

Third quarter revenue is expected to be $108.0bn, plus or minus 2 percent. The release then states that NVIDIA is not assuming any Data Center compute revenue from China in that outlook.

Gross margins are guided to 74.0 percent, plus or minus 50 basis points, on both bases, which is a step down from the 75.0 percent just reported. GAAP operating expenses are guided at approximately $9.2bn and non-GAAP at approximately $9.0bn. The company expects full year GAAP and non-GAAP tax rates of between 16.0 and 18.0 percent, excluding discrete items.

One accounting change is worth carrying into any comparison with older numbers. From the first quarter of fiscal 2027, NVIDIA's non-GAAP measures no longer exclude stock-based compensation expense, and the company says the historical non-GAAP information it presents has been restated to include it.