Company DCF analysis file
NVIDIA DCF Analysis
NVIDIA’s DCF needs a supply-funded product case, not only a Data Center revenue growth rate. Product costs, research, inventory and receivable funding can move differently from reported earnings. The complete fiscal-year figures below connect those operating economics to cash before any forecast or discount-rate assumption is introduced.
Read the full product and engineering cost base
Fiscal years ended January 26, 2025 and January 25, 2026; consolidated company. Amounts use the monetary scale stated in each table caption. Source: annual financial statements. Reported lines retain the issuer’s scope; derived ratios use the displayed denominators.
| Measure | FY2025 | FY2026 |
|---|---|---|
| Revenue | 130,497 | 215,938 |
| Cost of revenue | 32,639 | 62,475 |
| Gross profit | 97,858 | 153,463 |
| R&D | 12,914 | 18,497 |
| Sales / general / administrative | 3,491 | 4,579 |
| Operating income | 81,453 | 130,387 |
| Net income | 72,880 | 120,067 |
| Gross margin: derived | 75.0% | 71.1% |
| Operating margin: derived | 62.4% | 60.4% |
A higher revenue level does not guarantee the previous gross margin. Connect the product mix and supply-cost assumptions to gross profit, then retain the engineering and commercial support needed by that product plan. A terminal margin should not silently assume away the costs of a new architecture or inventory exposure.
Supply commitments and inventory accounting require a separate payment and sell-through explanation. A provision can change reported cost before every related payment or disposal occurs. Removing a charge from a forecast therefore needs a corresponding analysis of remaining inventory and purchase obligations, rather than an automatic permanent cash add-back.
Use end-market concentration without inventing segment cash margins
The annual end-market table supplies these revenues. End-market categories and reportable segments are different classifications; they are not interchangeable profit or cash statements.
| End market | Revenue |
|---|---|
| Data Center | 193,737 |
| Gaming | 16,042 |
| Professional Visualization | 3,191 |
| Automotive | 2,349 |
| OEM / Other | 619 |
| Consolidated | 215,938 |
Data Center represents 89.7% of the total after rounding. Build the assumed installed demand, customer deployment timing and supply capability supporting that concentration. Do not assign a cash margin to an end market simply by multiplying its sales by the consolidated margin.
Trace earnings into cash and reinvestment
Reconciliation source: annual earnings and cash-flow statements. Subtotals below are checkpoints, not extra amounts to add. Grouped adjustments are calculated from the disclosed cash-flow lines.
| Step | FY2026 |
|---|---|
| Operating income | 130,387 |
| Other income net | 11,063 |
| Income tax | -21,383 |
| Net income: subtotal | 120,067 |
| Depreciation / amortization | 2,843 |
| Other non-cash / reconciliation | -4,243 |
| Operating assets / liabilities | -15,949 |
| Operating cash: subtotal | 102,718 |
| Property / equipment / intangible purchases | -6,042 |
| After these purchases: derived | 96,676 |
Other reconciliation groups share compensation, equity-security gains, deferred tax and the cash statement’s other adjustment. Operating-balance changes include the receivable and inventory build as well as supplier and other liabilities. Cash conversion therefore needs its own schedule even when the product earnings case is strong.
The displayed investment deduction includes the specified intangible purchases as well as property and equipment. The remainder precedes other investing and financing flows; it is not automatically cash available to common shareholders. Reconcile any business purchases, investment holdings and remaining commitments separately before making an equity-value bridge.
Stress the gross margin on the same revenue population
Illustration: reduce gross margin by one percentage point on fixed FY2026 revenue, with research and selling costs unchanged. This isolates product-cost pressure; it is not a forecast of an export-policy outcome, product mix or customer demand.
| Measure | Historical basis | Illustrative case |
|---|---|---|
| Revenue | 215,938 | 215,938 |
| Gross profit | 153,463 | 151,303.6 |
| Operating income | 130,387 | 128,227.6 |
The pre-tax operating reduction is $2,159.38 million, displayed to one decimal. Carry any inventory, supplier-payment and collection consequences through the cash case. An accounting margin change and a funding delay need not have the same timing or persistence.
Keep interim reporting separate from the annual basis
Q2 FY2027 covers 2026-04-27 through 2026-07-26 and was released 2026-08-26. Revenue was $96,221 million in this quarter. Source: official Q2 FY2027 results.
This later fiscal quarter is separate from the full-year cost base. Its gross-margin recovery does not rewrite the complete-year result. A forward case needs a bridge from the annual closing inventory, receivables and supply obligations to the stated valuation date.
Turn the financial basis into a DCF case
| Decision | Treatment |
|---|---|
| Operating case | Link end-market demand to the products, deployment timing and supply economics that support it. |
| Research and cost | Retain engineering and commercial costs needed by the assumed product cycle; define any normalization explicitly. |
| Cash conversion | Forecast inventory, receivables, supplier payments and commitments rather than treating profit as cash. |
| Investment | Deduct the chosen physical/intangible investment scope once and keep other investing flows separate. |
| Valuation | Match operating tax and cash definition to the discount rate, then reconcile dated financing claims, available cash and dilution. |
A conventional enterprise bridge starts with operating earnings after an explicit operating tax assumption, adjusts appropriate non-cash allocations and deducts reinvestment and operating funding. Starting from reported operating cash requires a financing and tax reconciliation. The terminal case must sustain both the product cycle and the working capital needed by its assumed scale.
The NVIDIA company analysis explains the wider operating context. Use the company forecast tool and DCF calculator with explicit assumptions. Use the historical financials to define an explicit operating and reinvestment case, then supply valuation-date capital costs, claims and diluted shares. Check that each cash claim is counted once before deriving a per-share value.
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