NVIDIA Reports Strong Q1 Fiscal 2026 Results Amid Export Challenges
Jessie A Ellis May 29, 2025 12:04
NVIDIA's Q1 fiscal 2026 revenue surged by 69% year-over-year despite export restrictions to China, impacting its H20 product line. The company remains optimistic about AI-driven growth.
NVIDIA Corporation (NASDAQ: NVDA) unveiled its financial results for the first quarter of fiscal 2026, reporting a significant revenue increase despite challenges related to export restrictions. According to NVIDIA Newsroom, the company achieved $44.1 billion in revenue, marking a 12% rise from the previous quarter and a 69% increase from the same period last year.
Impact of Export Restrictions
In April 2025, NVIDIA was informed by the U.S. government that a license is now required for exporting its H20 products to China, which led to a $4.5 billion charge in the first quarter. Although sales of H20 products reached $4.6 billion, the restrictions prevented the shipment of an additional $2.5 billion worth of products. This regulatory change significantly impacted NVIDIA's gross margin, which stood at 60.5% on a GAAP basis and 61.0% on a non-GAAP basis. Excluding the charge, the non-GAAP gross margin would have been 71.3%.
Financial Performance and Outlook
NVIDIA reported a GAAP diluted earnings per share of $0.76 and a non-GAAP diluted earnings per share of $0.81. Excluding the aforementioned charge, the non-GAAP earnings per share would have been $0.96. Despite these challenges, NVIDIA remains optimistic, forecasting a second-quarter revenue of $45.0 billion, albeit with expected losses of approximately $8.0 billion in H20 revenue due to continued export restrictions.
AI Developments and Market Position
CEO Jensen Huang highlighted NVIDIA's advancements in AI technology, emphasizing the production of the Blackwell NVL72 AI supercomputer. Huang noted the growing global recognition of AI as a critical infrastructure element, akin to electricity and the internet, positioning NVIDIA as a central player in this transformation.
Sector Performance and Strategic Initiatives
Data Center revenues reached $39.1 billion, up 73% year-over-year, driven by AI infrastructure demands. NVIDIA also announced the establishment of AI supercomputing factories in the U.S., alongside strategic partnerships to accelerate AI development worldwide.
In the gaming segment, NVIDIA set a new record with $3.8 billion in revenue, marking a 42% year-over-year increase. The launch of the NVIDIA GeForce RTX™ 5070 and RTX 5060 graphics cards contributed to this growth, offering advanced graphics capabilities at competitive prices.
Despite the challenges in the automotive sector, where revenue slightly decreased, NVIDIA continues to innovate with partnerships, such as its collaboration with General Motors to enhance next-generation vehicle experiences through AI.
NVIDIA's next quarterly dividend of $0.01 per share is scheduled for July 3, 2025, reflecting the company's continued commitment to shareholder returns.
Overall, NVIDIA's strong performance in Q1 fiscal 2026 underscores its resilience and strategic focus on AI technologies, despite geopolitical and regulatory hurdles.
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