💻 What the Company Does (NVIDIA 10-K Analysis)
NVIDIA Corporation (NVDA) designs graphics processing units (GPUs)—specialized chips that started in graphics but are now widely used for artificial intelligence (AI), data centers, and high-performance computing.
- GPUs are chips built to process many tasks in parallel, which is useful for AI workloads.
- NVIDIA positions itself as a full-stack computing platform, meaning it provides hardware, software, and systems that work together.
- Its business is anchored by two major segments: Data Center (AI infrastructure) and Gaming (PC gaming GPUs).
Plain English: NVIDIA makes the chips and software that help power AI systems, cloud data centers, and gaming computers.
📊 Financial Highlights (FY 2026)
Based on NVIDIA’s FY2026 10-K financial statements, the company reported large year-over-year expansion in both revenue and profitability.
- Revenue increased from $130,497m (FY2025) to $215,938m (FY2026).
- Operating income increased from $81,453m (FY2025) to $130,387m (FY2026).
- Net income increased from $72,880m (FY2025) to $120,067m (FY2026).
- Diluted EPS rose from $2.94 (FY2025) to $4.90 (FY2026).
- Operating cash flow reached $102,718m in FY2026.
Plain English: NVIDIA grew very fast in FY2026, and its profits and cash generation increased even faster than sales.
⚠️ Key Risks (Company-Specific)
NVIDIA’s 10-K highlights risks that are closely tied to its industry and operating model.
- Export controls and geopolitical restrictions (government limits on selling advanced chips to certain countries) can reduce where NVIDIA can sell or require product changes.
- Manufacturing and supply chain concentration (reliance on external partners for fabrication and advanced packaging) can create shipment delays or capacity constraints.
- Demand volatility in AI infrastructure can lead to fluctuations in ordering patterns, especially when large customers adjust capital spending timelines.
- Competition spans chips, systems, and software platforms, including alternatives such as custom silicon designed by large customers.
- Execution and security risks include product roadmap timing, quality and reliability requirements in data centers, and cybersecurity threats.
Plain English: NVIDIA’s biggest risks are about where it can sell, whether it can ship enough, and how steady AI infrastructure demand remains.
🧭 MD&A Highlights (What Management Emphasized)
In Management’s Discussion and Analysis (MD&A), management focused on the operational drivers behind FY2026 results.
- Growth driver: Data Center demand tied to large-scale AI deployments.
- Profitability: Strong margins and operating leverage (profits growing faster than revenue as the business scales).
- Cash generation: Significant operating cash flow supporting both investment and capital returns.
- Capital allocation: Continued investment in R&D (research and development) and infrastructure, alongside share repurchases and dividends.
- Working capital changes: Higher accounts receivable and inventory levels consistent with rapid growth.
Plain English: Management says AI-related Data Center demand powered FY2026 growth, while the company scaled profitably and generated large amounts of cash.
✅ Takeaway (Beginner-Friendly)
NVIDIA’s FY2026 10-K describes a company that scaled rapidly in revenue, profitability, and cash flow, driven largely by AI and Data Center demand. The balance sheet strengthened, with significant liquidity and relatively low leverage. At the same time, management emphasizes company-specific risks tied to export controls, supply chain dependencies, and the pace and timing of AI infrastructure spending.
Income Statement Summary
(Unit: $m, EPS in $)
| FY 2024 | FY 2025 | FY 2026 | |
|---|---|---|---|
| Revenue | 60,922 | 130,497 | 215,938 |
| Cost of Goods Sold | 16,621 | 32,639 | 62,475 |
| Gross Profit | 44,301 | 97,858 | 153,463 |
| SG&A | 2,654 | 3,491 | 4,579 |
| Operating Income | 32,972 | 81,453 | 130,387 |
| Non-Operating Income/Expense | 846 | 2,573 | 11,063 |
| Interest Income/Expense | 609 | 1,539 | 2,041 |
| Income Before Tax | 33,818 | 84,026 | 141,450 |
| Income Tax | 4,058 | 11,146 | 21,383 |
| Net Income | 29,760 | 72,880 | 120,067 |
| EPS | 1.19 | 2.94 | 4.90 |
Plain English: Revenue more than tripled over two years, rising from $60,922m in FY2024 to $215,938m in FY2026. Operating income expanded even faster due to strong margin leverage. Net income reached $120,067m in FY2026. This reflects structural margin expansion, not just top-line growth. The business scaled efficiently.
Key Financial Ratios
(Unit: %, except where noted)
| Ratio | FY 2024 | FY 2025 | FY 2026 |
|---|---|---|---|
| ROE | 69.2% | 91.9% | 76.3% |
| ROA | 45.3% | 65.3% | 58.1% |
| ROTC | 64.0% | 92.8% | 79.1% |
| ROIC | 64.8% | 79.5% | 64.8% |
| Gross Margin | 72.7% | 75.0% | 71.1% |
| Operating Margin | 54.1% | 62.4% | 60.4% |
| Pretax Margin | 55.5% | 64.4% | 65.5% |
| Net Margin | 48.9% | 55.9% | 55.6% |
| Debt-to-Equity (D/E) | 22.6% | 10.7% | 5.4% |
| Net Debt / EBITDA (x) | 0.07x | -0.04x | -0.03x |
| Interest Coverage (x) | 128.3x | 329.8x | 503.4x |
| Current Ratio | 417.1% | 444.2% | 390.4% |
| Quick Ratio | 367.4% | 388.3% | 323.9% |
| Fixed Asset to Long-term Capital | 7.7% | 7.1% | 6.3% |
Plain English: NVIDIA is operating at extremely high profitability levels. Operating margins exceed 60% in FY2025–FY2026. Leverage has declined sharply, with D/E falling to 5.4%. Net Debt / EBITDA is negative, meaning the company holds more cash than debt. This is a fortress balance sheet.
📝 Disclaimer
This article is intended for educational purposes only. It does not constitute financial, investment, or legal advice. All investment decisions involve risks, and readers should conduct their own research or consult with a licensed financial advisor.
👉 NVIDIA Corporation (NVDA) FY 2026 10-K Analysis (Filed 2026) | Explained for Beginners