Summary of NVIDIA's Q1 Fiscal 2026 Conference Call Company Overview - **Company**: NVIDIA - **Fiscal Quarter**: Q1 of Fiscal 2026 - **Date of Call**: May 28, 2025 Key Industry Insights - **Data Center Revenue**: Reached $39 billion, a 73% year-on-year growth driven by AI workloads transitioning to inference and AI factory build-outs [2][3] - **Export Controls Impact**: New U.S. export controls on the H20 GPU, specifically designed for the China market, resulted in a $4.5 billion inventory write-down and a loss of $2.5 billion in potential revenue for Q1 [2][13] - **China Market**: The loss of access to the China AI accelerator market, projected to grow to nearly $50 billion, poses a significant risk to NVIDIA's business [2][19] Financial Performance - **Revenue Breakdown**: - Q1 recognized $4.6 billion in H20 revenue before export controls [2] - Anticipated total revenue for Q2 is $45 billion, with a significant decline in China data center revenue expected [11][12] - **Gross Margins**: GAAP gross margin at 60.5%, non-GAAP at 61%. Excluding the $4.5 billion charge, non-GAAP gross margins would have been 71.3% [11] - **Shareholder Returns**: NVIDIA returned a record $14.3 billion to shareholders through share repurchases and dividends [11] Product and Technology Developments - **Blackwell Architecture**: Contributed nearly 70% of data center compute revenue, with significant improvements in manufacturing yields and ramp-up rates [3][4] - **Inference Demand**: Strong demand for inference, with Microsoft processing over 100 trillion tokens in Q1, a five-fold increase year-on-year [4] - **AI Factory Deployments**: Nearly 100 NVIDIA-powered AI factories in operation, doubling year-on-year, with significant growth in GPU usage per factory [5] Strategic Partnerships and Market Position - **Collaborations**: Partnerships with major companies like Microsoft, OpenAI, and Yum Brands to enhance AI capabilities across various sectors [6][10] - **Networking Solutions**: Revenue from networking grew 64% quarter-over-quarter to $5 billion, with significant adoption of Spectrum X among major cloud service providers [7][28] Future Outlook - **Guidance for Q2**: Expected revenue decline in China data center revenue, with a loss of approximately $8 billion in H20 revenue anticipated [11][18] - **Long-term Growth**: NVIDIA's roadmap extends through 2028, with a focus on AI infrastructure, enterprise AI, and industrial AI [4][30] - **AI as Infrastructure**: The company emphasizes the importance of AI as essential infrastructure, similar to electricity and the internet, with a significant build-out expected globally [22][25] Additional Insights - **Export Control Concerns**: The U.S. export restrictions are seen as detrimental to American competitiveness in the global AI market, potentially benefiting foreign competitors [13] - **Emerging AI Technologies**: The introduction of reasoning AI models is driving a surge in inference demand, with significant implications for compute requirements [14][19] - **Investment in Manufacturing**: NVIDIA is investing in onshore manufacturing capabilities to strengthen its supply chain and support AI infrastructure development [15][26] This summary encapsulates the critical points discussed during NVIDIA's Q1 Fiscal 2026 conference call, highlighting the company's performance, strategic direction, and the broader implications for the AI industry.

Core Insights - Glean, an AI startup, has raised $150 million in funding, achieving a valuation of $7.2 billion, significantly up from $4.6 billion in September 2022 [2][3] - The funding round was led by Wellington Management, with participation from existing investors like Sequoia Capital, indicating strong confidence in Glean's growth trajectory [3] - Glean aims to use the new funds to accelerate product development, expand its partner ecosystem, and pursue international growth [3] Company Overview - Founded in 2019, Glean started with enterprise search and has since developed products like Glean Assistant and Glean Agents, leveraging RAG technology for AI-driven enterprise search [4][6] - Glean Search allows employees to find data across internal documents and the web, while Glean Assistant automates daily tasks and provides data analysis through natural language queries [6] - Glean Agents enables the creation of AI agents for tasks like debugging software code, supporting over 100 million agents annually [6] Market Position and Growth - Glean's business model reflects a broader shift in the enterprise AI sector, moving from pilot projects to widespread deployment of autonomous agents [7] - The company has seen rapid revenue growth, with annual recurring revenue (ARR) increasing from $55 million to $100 million [7] - Glean's client base includes Fortune 500 companies like Dell, showcasing its strong market presence [7] AI Implementation in Enterprises - Arvind Jain, Glean's CEO, emphasizes the importance of a robust data infrastructure for effective AI applications, including deep integration with enterprise systems and a solid security framework [8][9] - The challenges of enterprise AI deployment stem from the private and context-dependent nature of enterprise data, requiring an understanding of organizational structure and user roles [9] - Jain suggests that AI entrepreneurs should focus on solving specific business problems rather than starting with AI technology itself, building trust with enterprises through clear value propositions [10]

Investment Rating - The industry investment rating is "Recommended," indicating an expected increase in the industry index by more than 5% over the next 3-6 months compared to the benchmark index [37]. Core Insights - NVIDIA reported FY26Q1 revenue of $44.1 billion, a year-over-year increase of 69% and a quarter-over-quarter increase of 12%, significantly exceeding market expectations of $43.3 billion and company guidance of $43.0±2 billion. This growth was primarily driven by the data center business, which generated $39.1 billion in revenue, up 73% year-over-year and 10% quarter-over-quarter [3][7]. - The Blackwell architecture contributed approximately 70% of the data center computing revenue, marking the fastest ramp-up in GPU production in the company's history [4]. - The company expects FY26Q2 revenue to be $45.0 billion, with a potential loss of $8.0 billion in revenue due to recent export control restrictions affecting the H20 product line [5][8]. Summary by Sections 1. Performance Overview - FY26Q1 revenue reached $44.1 billion, with data center revenue at $39.1 billion, reflecting a 73% year-over-year growth. The GAAP and non-GAAP gross margins were 60.5% and 61.0%, respectively. Excluding a $4.5 billion expense, the non-GAAP gross margin would have been 71.3% [3][7]. - The diluted earnings per share were $0.76 (GAAP) and $0.81 (non-GAAP), with a potential adjusted non-GAAP EPS of $0.96 when excluding the aforementioned expense [3][7]. 2. Business Segment Performance - **Data Center**: Revenue reached a record high of $39.1 billion, with computing revenue at $34.2 billion (up 76% YoY) and networking revenue at $4.957 billion (up 56% YoY) [4]. - **Gaming**: Revenue was $3.763 billion, showing a 42% year-over-year increase, driven by strong adoption of Blackwell architecture GPUs [4]. - **Professional Visualization**: Revenue was $509 million, with a 19% year-over-year increase, although it remained flat quarter-over-quarter due to tariff-related uncertainties [4]. - **Automotive and Robotics**: Revenue was $567 million, reflecting a 72% year-over-year increase, driven by strong demand for autonomous driving and electric vehicles [4]. 3. Future Guidance - The company anticipates FY26Q2 revenue of $45.0 billion, accounting for an estimated $8.0 billion loss in H20 revenue due to export restrictions. Expected gross margins are projected at 71.8% (GAAP) and 72.0% (non-GAAP) [5][8].

Core Viewpoint - NVIDIA's CEO Jensen Huang expressed concern over the H20 export restrictions impacting the company's access to the Chinese AI market, which is valued at $50 billion, while highlighting the robust demand for AI processing capabilities driven by the Blackwell chip production [1][8][45]. Group 1: Financial Performance and Market Impact - NVIDIA's Q1 revenue reached $44 billion, a 69% year-over-year increase, despite the challenges posed by export restrictions [25]. - The company anticipates a loss of $8 billion in H20 revenue due to new export limitations, significantly affecting future business prospects in the Chinese market [8][43]. - The data center revenue grew by 73% year-over-year, driven by the rapid ramp-up of the Blackwell product line [5][27]. Group 2: AI Demand and Technological Advancements - There is an explosive growth in AI inference demand, with token generation increasing by 500% year-over-year, particularly in complex AI workloads [12][29]. - The Blackwell architecture is designed to support this demand, offering a throughput that is 40 times higher than the previous Hopper architecture [12][10]. - The average deployment rate for major hyperscale customers is nearly 1,000 NVL72 racks per week, indicating strong market adoption [10][28]. Group 3: Strategic Insights on AI Market - Huang emphasized that winning the Chinese AI market is crucial for global leadership, as it houses half of the world's AI researchers [3][45]. - The company is exploring options to create attractive solutions for the Chinese market in light of the export restrictions [8][46]. - The rise of open-source AI models like DeepSeek and Qwen is seen as a strategic advantage for the U.S. in maintaining its leadership in AI technology [13][46]. Group 4: Future Outlook and Growth Engines - NVIDIA is optimistic about future growth, citing multiple key growth engines including surging inference demand, sovereign AI initiatives, and enterprise AI [19][49]. - The company plans to achieve $45 billion in revenue for Q2, with expected gross margins of 71.8% [20][43]. - The establishment of AI factories globally is seen as a foundational step in building the necessary infrastructure for AI deployment across industries [15][62].

Core Viewpoint - NVIDIA's FY26Q1 revenue reached $44.062 billion, representing a year-over-year increase of 69.18% and a quarter-over-quarter increase of 12.03%, exceeding guidance expectations [1][10] Group 1: Financial Performance - FY26Q1 revenue of $44.062 billion surpassed guidance of $43 billion, with a non-GAAP gross margin of 61% and a margin of 71.3% after excluding H20-related expenses [1][10] - The company incurred $4.5 billion in expenses due to H20 product inventory surplus and procurement obligations, which was lower than expected due to the reuse of some materials [1][11] - FY26Q2 revenue guidance is set at $45 billion, reflecting an expected loss of approximately $8 billion in H20 revenue [4][24] Group 2: Business Segments - Data Center revenue reached $39 billion, up 73% year-over-year and 10% quarter-over-quarter, driven by demand for AI applications [3][10] - Gaming and AI PC revenue hit a record $3.8 billion, up 42% year-over-year and 48% quarter-over-quarter, primarily due to Blackwell architecture products [2][18] - Professional Visualization revenue was $509 million, up 19% year-over-year, while Automotive revenue was $567 million, up 72% year-over-year [3][20] Group 3: Market Dynamics - The Chinese AI chip market is estimated at $50 billion, but the H20 export ban has significantly impacted NVIDIA's operations in China [5][25] - The introduction of the GB200 NVL architecture is expected to support large-scale workloads and reduce inference costs [5][12] - The company is expanding its manufacturing capabilities in the U.S., with TSMC building six fabs in Arizona and partnerships with Foxconn for AI supercomputer production [5][28] Group 4: Future Outlook - The company anticipates a recovery in gross margin to 75% by the end of the year, driven by improved profitability from Blackwell products [4][24] - The AI industry is expected to experience exponential growth, with significant demand for inference AI driving the need for increased computational power [40][36] - The company is well-positioned to capitalize on the growing AI infrastructure investments globally, with a focus on local deployments and integration with existing IT systems [32][40]

5月1日，旧金山。SaaStr Annual 2025 开幕前夕，一场 面向企业AI Agent与B2B领域创业者与投资人 的闭门私享 会即将启幕。 Runa Capital 是一家全球性早期风险投资基金，专注于 B2B软件、深科技、金融科技基础设施 ，投资了 MariaDB （全球领先的开源数据库平台）。 DCM Ventures 是一家跨境布局、管理超40亿美元资产的顶级风险投资机构，专注投资美洲、亚洲和新兴市场的创 新企业。投资了 Bill.com 、 Kuaishou快手 、 Musical.ly（TikTok前身）等 。 Susa Ventures 是一家 硅谷顶尖 Pre-Seed/Seed 阶段投资机构，以高质量深度陪伴创业者著称。压中了 Together AI 、 Robinhood 、 Flexport等 。 Sierra Ventures 是一家成立于1982年的老牌早期基金，专注于 企业软件、数据基础设施与深科技 领域。曾经投资 了 Elastic 、 Intuit等。 嘉宾阵容 在生成式AI和智能体逐步渗透企业 场景的当下， Z Potentials 联合Runa Capital、DC ...