Here is a summary and commentary on NVIDIA's Q3 Fiscal 2026 results (for the quarter ended October 31, 2025).
Executive Summary: NVIDIA Q3 FY26 (Oct 2025)
NVIDIA's Q3 FY26 results shattered expectations, demonstrating a powerful re-acceleration of growth and showcasing a business model with virtually unmatched scale and profitability. The company is not just maintaining its dominance in the AI era but is actively accelerating it.
Key Financial Snapshot (vs. Previous Quarter & Year-Ago Quarter)
Detailed Commentary
1. Explosive Top-Line Growth Re-acceleration
The most headline-grabbing figure is the 21.9% quarter-on-quarter revenue jump. After two quarters of solid but single-digit sequential growth, this surge indicates the beginning of a major new product cycle (likely the full-scale ramp of the Blackwell architecture). The 62.5% year-over-year growth on an already massive revenue base is unprecedented for a company of NVIDIA's size, underscoring that AI demand is far from saturated; it is intensifying.
2. Super-Profitability and Operational Leverage
NVIDIA’s profitability remains in a league of its own. The key takeaway is that profits are growing faster than revenue on a yearly basis.
Margin Expansion: Despite the explosive growth, the company managed to expand its PBT margin by 3.0 percentage points compared to the same quarter last year. This is a classic sign of extreme operational leverage and pricing power.
Pricing Power: It confirms that NVIDIA's customers are willing to pay a premium for its performance-leading technology, allowing it to command ultra-high margins even as it scales.
3. Resilience and a New Profitability Plateau
The results confirm that the margin compression seen in Q1 FY26 (Apr 2025) was a temporary blip, likely related to the cost of ramping new products. The recovery and stabilization of Net Profit Margin around 56% in the last two quarters signal that this level of ultra-high profitability is sustainable for the current cycle. The business model has proven its resilience.
Conclusion & Investment Perspective
NVIDIA's Q3 FY26 report is a clear "beat and raise" story that should dispel any doubts about the sustainability of the AI investment cycle. The company is successfully navigating its product transition, and the demand for its AI infrastructure appears to be infinite for the foreseeable future.
For Investors: The narrative has evolved from "Is this a bubble?" to "How long can this growth last?". The expansion of profit margins during hyper-growth justifies a premium valuation, as earnings per share are growing at an even more dramatic rate than the stock price.
For the Industry: NVIDIA is not just a chip supplier; it is a foundational technology platform. These results solidify its position as the primary gatekeeper and enabler of the global AI economy, with a competitive moat that appears to be widening.
In short, NVIDIA delivered a quarter that exceeded even the highest expectations, combining staggering growth with superstar profitability. It was a definitive demonstration of its undisputed leadership in the AI revolution.
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All historical figures were recalculated using the new constant diluted NOSH of 24,804 million shares, after the significant 1 for 10 stock split.
The key change is the massive increase in the constant share count from 2,494M to 24,804M, which reflects a significant stock split. This will drastically lower the adjusted EPS and share price for all years, but the P/E ratio, being a ratio, should remain a meaningful comparable metric.
Here is the revised table:
Calculation Notes:
Adjusted EPS = Net Profit / 24,804 million
Adjusted Share Price = (Actual Share Price * Reported NOSH) / 24,804 million
Adjusted P/E Ratio = Adjusted Share Price / Adjusted EPS
The FY2025 Diluted EPS of $2.94 provided is consistent with the calculation: $72,880M Net Profit / 24,804M Shares = ~$2.94.
Key Observations with the New 24,804M Share Basis:
Impact of the Stock Split: The adjusted EPS and share prices are now much lower (roughly 1/10th of their previous values) because we are spreading the company's market value and earnings over ten times as many shares. This reflects the reality of NVIDIA's post-split share structure.
P/E Ratios Remain Identical: Crucially, the Adjusted P/E Ratio for every year is exactly the same as in the previous calculation. This confirms that the P/E ratio is independent of the number of shares; it is a function of the total market capitalization and total earnings. This makes it a reliable metric for comparison across time, even after stock splits.
FY2025 Valuation Context: With an adjusted P/E of 60.9, NVIDIA's current valuation is higher than its pre-AI average but significantly lower than the peak of 132.7 in FY2023. This suggests the market has re-rated the stock to a high but more sustainable multiple, now that the astronomical earnings growth has been realized and is expected to continue.
Historical Perspective: The table now accurately frames NVIDIA's entire journey on a per-share basis that is directly comparable to the price an investor would pay for one share of NVIDIA today (~$178.88). It shows that an equivalent $1.64 per-share investment at the end of FY2015 would be worth $178.88 today, representing a life-changing return.
Here is a clear breakdown of the quarterly Revenue, PBT (Pretax Income), and Net Earnings for NVIDIA's last five quarters, followed by an analysis of the growth trends.
Quarterly Financial Snapshot (USD Millions)
1. Quarter-on-Quarter (QoQ) Growth Analysis
This analysis looks at the sequential growth from one quarter to the next.
Revenue:
Q1 FY26 (Apr) vs Q4 FY25 (Jan): +12.0% (from $39,331M to $44,062M)
Q2 FY26 (Jul) vs Q1 FY26 (Apr): +6.1% (from $44,062M to $46,743M)
Q3 FY26 (Oct) vs Q2 FY26 (Jul): +21.9% (from $46,743M to $57,006M)
Comment: Revenue growth accelerated dramatically in the most recent quarter (Q3 FY26). After two quarters of solid but decelerating sequential growth, the company saw a massive re-acceleration, indicating a significant new wave of demand.
PBT (Pretax Income) & Net Earnings:
Q1 FY26 (Apr): Both PBT and Net Earnings saw a significant sequential decline (-13.1% and -15.0% respectively). This suggests that period had higher costs or investments that temporarily compressed margins, even as revenue grew.
Q2 FY26 (Jul): A powerful rebound occurred, with PBT growing 42.4% and Net Earnings growing 40.7% sequentially. This indicates excellent operational leverage and margin recovery.
Q3 FY26 (Oct): The strong growth continued, with PBT up 21.6% and Net Earnings up 20.8% from the previous quarter.
Comment: Profitability has been volatile but is on a powerful upward trajectory. The dip in Q1 FY26 appears to have been a temporary blip, with the following two quarters showing exceptional profit growth, outstripping revenue growth in Q2.
2. Year-on-Year (YoY) Growth Analysis (Latest Quarter vs. Same Quarter Last Year)
This compares the most recent quarter (31-Oct-2025 / Q3 FY26) to the same quarter in the previous fiscal year (31-Oct-2024).
Revenue: $57,006M vs $35,082M
Growth: +62.5%
Comment: This is an extraordinary growth rate. It demonstrates that the demand for NVIDIA's products, particularly in AI and Data Centers, is not just sustaining but accelerating dramatically compared to a year ago, which was already a period of hyper-growth.
PBT (Pretax Income): $37,936M vs $22,316M
Growth: +70.0%
Comment: Profit growth is outpacing revenue growth on a YoY basis. This signifies significant operating leverage and improving profitability, as the company scales its operations efficiently.
Net Earnings: $31,910M vs $19,309M
Growth: +65.3%
Comment: The immense growth in net earnings confirms the scalability of NVIDIA's business model. The company is successfully converting its explosive revenue growth into even faster profit growth, highlighting its pricing power and operational efficiency.
Overall Commentary
NVIDIA's latest quarterly results (Q3 FY26) are nothing short of spectacular. The company is experiencing a second wave of hyper-growth, shattering its own already lofty records.
Accelerating Dominance: The +62.5% YoY revenue growth is a clear signal that the AI boom is far from over; it is intensifying. The sequential growth of nearly 22% also dispels any notion of a "plateau."
Extreme Profitability: The fact that profits are growing faster than revenue (70% PBT growth vs 62.5% revenue growth) is a key indicator of a superior business model. It shows NVIDIA has immense pricing power and can manage costs effectively even while scaling at an unprecedented pace.
Volatility vs. Trend: While the QoQ profit dip in April 2025 (Q1 FY26) was notable, it has been decisively overshadowed by the explosive recovery and growth in the subsequent quarters. The overall trend remains sharply upward.
In summary, NVIDIA is not merely maintaining its dominance but is actively accelerating it. The business is firing on all cylinders, with demand and profitability reaching new, previously unimaginable levels.
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Here is a detailed analysis of the PBT (Pretax Income) Margin and Net Profit Margin for each of the last five quarters.
First, let's calculate the margins and present them in a table.
Quarterly Margin Analysis (USD Millions)
1. Quarter-on-Quarter (QoQ) Margin Analysis
This analysis looks at the sequential change in profitability.
The Q1 FY26 (Apr 2025) Anomaly:
There was a significant margin compression in this quarter. Both PBT and Net Profit Margins fell sharply from the previous quarter (PBT Margin dropped from 64.1% to 49.7%).
Reason: As indicated by the data, this was likely due to a substantial increase in Cost of Goods Sold (COGS), which grew 64% QoQ in this quarter. This could be attributed to higher component costs, a product mix shift towards new, more expensive-to-produce architectures (like Blackwell), or one-time inventory/launch-related charges.
Powerful Rebound and Stabilization:
In Q2 FY26 (Jul 2025), margins rebounded dramatically, with PBT Margin jumping to a record 66.8%. This indicates that the issues in Q1 were temporary, and NVIDIA demonstrated incredible pricing power and cost management to restore its ultra-high profitability.
In the most recent quarter, Q3 FY26 (Oct 2025), margins have stabilized at an exceptionally high level (~66.6% PBT, 56.0% Net), very similar to Q2. This suggests that the Q2 rebound was not a one-off and that this level of profitability is sustainable for the current product cycle.
2. Year-on-Year (YoY) Margin Analysis (Latest Quarter vs. Same Quarter Last Year)
This compares the profitability of the most recent quarter (Q3 FY26) with the same quarter a year ago (Q3 FY25).
PBT Margin: 66.6% in Q3 FY26 vs. 63.6% in Q3 FY25
Net Profit Margin: 56.0% in Q3 FY26 vs. 55.0% in Q3 FY25
Analysis: This is a critical finding. Despite the company growing revenue by an astounding 62.5% year-over-year, it has simultaneously expanded its profit margins. This is a classic sign of operational leverage and immense pricing power. It means that incremental revenue is coming in at even higher profitability, likely due to a more favorable product mix (e.g., higher sales of AI systems and software) and economies of scale.
Overall Commentary
Exceptional Profitability: NVIDIA has cemented a profitability profile that is virtually unmatched by large-scale manufacturing companies. Consistently maintaining net profit margins above 55% is extraordinary.
Resilience and Pricing Power: The temporary margin dip in Q1 FY26 tested NVIDIA's business model. The swift and powerful rebound in the following quarters proves the resilience of its margins and its unparalleled pricing power in the market. Customers are willing to pay a premium for its performance-leading AI accelerators, allowing it to absorb cost fluctuations.
Sustainable Super-Profits: The stabilization of margins at these new, slightly higher levels in Q2 and Q3 FY26 suggests that this is not a peak but a new plateau. The company has successfully navigated the transition to its new product architecture while improving its bottom line.
The Core Driver: The YoY margin expansion amidst hyper-growth is the most telling metric. It demonstrates that NVIDIA is not just riding a demand wave but is actively shaping it to become a more profitable company. This justifies its valuation, as earnings are growing faster than revenue.
In conclusion, NVIDIA's margin story is one of robust health and strength. After a temporary, explainable setback, its profitability has not only recovered but has surpassed previous highs, establishing a new benchmark for financial performance in the tech industry.
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