Nvidia's GAAP EPS of $2.46 Came In Above Its Non-GAAP $2.22. A $7.77 Billion Equity Gain Explains the Inversion.

by Henry Nakamura · August 27, 2026

Earnings Reporter, Earnings Dispatch

Nvidia reported results for its fiscal second quarter, which ended July 26, 2026, after the closing bell on Wednesday, Aug. 26. Revenue was $96.221 billion, up 106% from the year-ago quarter and up 18% from the preceding quarter, according to the company's press release.

The company reported GAAP diluted earnings per share of $2.46 and non-GAAP diluted earnings per share of $2.22. That ordering is worth pausing on. In the overwhelming majority of quarters, at Nvidia and elsewhere, the adjusted figure sits above the GAAP figure, because adjusted presentations strip out costs. Here the GAAP number is the larger of the two, by $0.24 a share, or about 10.8% of the adjusted figure.

Against the company's own forecast, the revenue line came in well clear. In its first-quarter release dated May 20, 2026, Nvidia itself guided fiscal second-quarter revenue to "$91.0 billion, plus or minus 2%." The reported $96.221 billion is about 5.7% above that $91.0 billion midpoint.

On consensus, the Zacks Consensus Estimate stood at $91.8 billion of revenue and $2.09 per share, per a Zacks Equity Research article published Aug. 24 and accessed Aug. 27. Zacks did not state whether its $2.09 per-share mark was compiled on a GAAP or a non-GAAP basis, so the comparison should be read with that caveat; both of Nvidia's reported per-share figures came in above it. Estimate compilers differ, and a mark from another compiler may not match.

Where the inversion comes from

The reconciliation printed in the release runs from GAAP net income of $59.688 billion to non-GAAP net income of $53.954 billion. The release presents a subtotal it labels total pre-tax impact of non-GAAP adjustments of negative $7.251 billion, then an income tax impact of non-GAAP adjustments of $1.517 billion, then a line for tax expense from the OBBBA carrying no amount for the quarter. Inside the pre-tax subtotal, three items appear: a $7.771 billion subtraction for gains from equity securities, net; $222 million of acquisition-related and other costs; and a $298 million line labelled Other. Those three sum to the negative $7.251 billion subtotal, and the subtotal plus the tax line reconciles exactly to the non-GAAP figure.

In other words, the single dominant reconciling item is a gain, not a cost. Nvidia's GAAP results absorbed $7.771 billion of net gains on equity securities during the quarter, and the non-GAAP presentation removes them. That is what pushes the adjusted bottom line $5.734 billion below the GAAP bottom line, and it is why the per-share ordering flips.

There is a second reason the adjusted figure has so little to lift it, and the release states it outright. In a footnote, Nvidia says that "[b]eginning in the first quarter of fiscal 2027, NVIDIA's non-GAAP financial measures no longer exclude stock-based compensation expense." The company reported $2.027 billion of stock-based compensation expense for the quarter in its cash flow statement, and under the changed policy that amount is not added back anywhere in the reconciliation. The operating-income figures are consistent with that: GAAP operating income of $63.734 billion sits only $222 million below non-GAAP operating income of $63.956 billion, a gap that matches the acquisition-related and other costs line exactly. Readers used to seeing multibillion-dollar stock-compensation add-backs in a large-cap technology reconciliation should note that this presentation, by the company's stated policy, no longer contains one.

The revenue lines

In the financial tables themselves, the release carries a single undifferentiated revenue line of $96.221 billion. The platform detail appears in the narrative portion of the announcement, and there it runs to two figures: Data Center revenue of $89.0 billion, up 117% year over year and 18% sequentially, and Edge Computing revenue of $7.2 billion, up 27% year over year and 13% sequentially. The two sum to the $96.2 billion total. Gaming, Professional Visualization and Automotive, the categories Nvidia reported for years, are not named anywhere in the release.

One element of the platform detail is thinner than it was three months ago. Nvidia's first-quarter release, dated May 20, 2026, used the same two-platform framework but broke the Data Center figure into components, reporting Data Center compute revenue of $60.4 billion and Data Center networking revenue of $14.8 billion within a $75.2 billion Data Center total. The August release contains no such split. Readers tracking the networking line quarter to quarter will not find a comparable figure in this announcement.

The Data Center figure ran ahead of the compiled expectation as well. The Zacks Consensus Estimate for data center revenue was $85.14 billion in that Aug. 24 article, putting the reported $89.0 billion about $3.9 billion above it.

Margins moved up year over year on both bases. GAAP gross margin was 75.0%, against 72.4% in the year-ago quarter; non-GAAP gross margin was also 75.0%, against 72.5% a year earlier. Sequentially the GAAP figure rose from 74.9%, while the non-GAAP figure was unchanged at 75.0%.

Nvidia said it returned $26.0 billion to shareholders during the quarter through repurchases and dividends, with $99.0 billion remaining under its authorization, and declared a quarterly cash dividend of $0.25 per share payable Oct. 1, 2026.

Founder and chief executive Jensen Huang said in the release that artificial intelligence has reached its inflection point, that it is doing useful work, that its tokens are productive and profitable, that compute is now revenue and that demand is accelerating. That is the company's own characterisation of its quarter, offered in its own announcement, and is reported here as such rather than as an independent assessment.

The US market was open at the time of writing, roughly 11:15 a.m. ET on Thursday, Aug. 27, so no closing price is available for the session and none is given here.