Forward-Looking Statements This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, which are subject to the “safe harbor” created by those sections based on management’s beliefs and assumptions and on information currently available to management. In some cases, you can identify forward-looking statements by terms such as “may,” “will,” “should,” “could,” “goal,” “would,” “expect,” “plan,” “anticipate,” “believe,” “estimate,” “project,” “predict,” “potential” and similar expressions intended to identify forward-looking statements. These statements involve known and unknown risks, uncertainties and other factors, which may cause our actual results, performance, time frames or achievements to be materially different from any future results, performance, time frames or achievements expressed or implied by the forward-looking statements. We discuss many of these risks, uncertainties and other factors in this Quarterly Report on Form 10-Q and our Annual Report on Form 10-K for the fiscal year ended January 25, 2026 in greater detail under the heading “Risk Factors” of such reports. Given these risks, uncertainties, and other factors, you should not place undue reliance on these forward-looking statements. Also, these forward-looking statements represent our estimates and assumptions only as of the date of this filing. You should read this Quarterly Report on Form 10-Q completely and understand that our actual future results may be materially different from what we expect. We hereby qualify our forward-looking statements by these cautionary statements. Except as required by law, we assume no obligation to update these forward-looking statements publicly, or to update the reasons actual results could differ materially from those anticipated in these forward-looking statements, even if new information becomes available in the future. All references to “NVIDIA,” “we,” “us,” “our” or the “Company” mean NVIDIA Corporation and its subsidiaries. In addition, statements that “we believe” and similar statements reflect our beliefs and opinions on the relevant subject. These statements are based upon information available to us as of the filing date of this Quarterly Report on Form 10-Q, and while we believe such information forms a reasonable basis for such statements, such information may be limited or incomplete, and our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all potentially available relevant information. These statements are inherently uncertain, and investors are cautioned not to unduly rely upon these statements. © 2026 NVIDIA Corporation. All rights reserved. The following discussion and analysis of our financial condition and results of operations should be read in conjunction with the risk factors set forth in Item 1A. “Risk Factors” of our Annual Report on Form 10-K for the fiscal year ended January 25, 2026 and Part II, Item 1A. “Risk Factors” of this Quarterly Report on Form 10-Q and our Condensed Consolidated Financial Statements and related Notes thereto, as well as other cautionary statements and risks described elsewhere in this Quarterly Report on Form 10-Q and our other filings with the SEC, before deciding to purchase, hold, or sell our securities. Overview Our Company and Our Businesses NVIDIA pioneered accelerated computing to help solve the most challenging computational problems. Since our original focus on PC graphics, we have expanded to several other large and important computationally intensive fields. Fueled by the sustained demand for exceptional 3D graphics and the scale of the gaming market, NVIDIA has leveraged its GPU architecture to create platforms for scientific computing, AI, data science, autonomous vehicles, robotics, and digital twin applications. NVIDIA is now a data center-scale AI infrastructure company reshaping all industries. Our two operating segments are “Compute & Networking” and “Graphics.” Refer to Note 13 of the Notes to Condensed Consolidated Financial Statements in Part I, Item 1 of this Quarterly Report on Form 10-Q for additional information. Headquartered in Santa Clara, California, NVIDIA was incorporated in California in April 1993 and reincorporated in Delaware in April 1998. Recent Developments, Future Objectives and Challenges Revenue growth in the second quarter and the first half of fiscal year 2027 was driven by data center products for accelerated computing and AI solutions. Blackwell continued to account for the majority of our system shipments. Our next-generation Data Center architecture, Vera Rubin, began production shipments in the third quarter of fiscal year 2027. We will be shipping both Blackwell and Rubin systems in the future and are currently experiencing certain supply constraints. Demand estimates for our products can be inaccurate and create volatility in our revenue or supply levels. To secure inventory and capacity to meet demand for the next several years, we have entered into significant commitments and may continue to enter into manufacturing and supply agreements for both current and future products, and we continue to expand our supplier base. The scale and size of our production needs and the complexity of producing our data center systems has caused and could in the future cause delays in production, challenges in managing supply and demand, revenue volatility, quality issues, increased inventory provisions, decreases in product yields, higher material 25 costs, and increased warranty costs. We have significantly increased our supply and capacity commitments from $119 billion last quarter to $279 billion as of July 26, 2026 to meet future demand. Refer to Note 10 of the Notes to Condensed Consolidated Financial Statements included in Part 1, Item 1 of this Quarterly Report on Form 10-Q. Customers may postpone purchasing new architectures due to the lack of availability of data center infrastructure to deploy our products, constraints on capital to have sufficient funding to purchase our products, or may adopt new technologies more gradually than anticipated, affecting our revenue timing and supply chain expenses. The availability of land, power, shell, and capital is crucial to support the buildout of a full data center inclusive of NVIDIA AI infrastructure by our customers and partners, and any shortage of these or other necessary resources could impact our future revenue and financial performance. Expanding land, power, shell, and energy needs to meet demand is a complex, multi-year process that involves significant regulatory, technical, and construction challenges. In addition, access to capital can be particularly constrained for less-capitalized companies, which may face difficulties securing financing for large-scale infrastructure projects. We believe AI clouds and AI model makers have significant demand for training and inference compute and currently lack the ability to secure long-term infrastructure contracts and investment-grade financing capacity to secure the AI infrastructure necessary to grow. These limitations could delay customer and partner deployments or reduce the scale of accelerated computing and AI adoption and may impact the growth of our revenue. We have undertaken initiatives to address these challenges including securing and providing guarantees of land, power, shell, and capacity of select data center infrastructure that customers require to deploy our products. We expect to focus our data center infrastructure initiatives on exceptional sites and apply the same discipline to these initiatives as we do to our supply-chain management by securing critical inputs when we have visibility into customer demand and when doing so enables long-term productive capacity. We expect our large cloud service provider customers and investment grade enterprises to continue to secure land, power, and shell commitments independently. Our land, power, and shell commitments and guarantees may impact our financial results and are dependent on the performance of our customers and partners. In August 2026, we entered into guarantees with SB Energy Corp. to provide credit support on the land, power, and shell buildout at SB Energy’s PORTS Technology Campus in Pike County, Ohio, covering leases for approximately 4.25 gigawatts of IT load. The campus will exclusively host our compute under 20-year leases to OpenAI, subject to limited exceptions, with our obligation capped at $105 billion in the aggregate, subject to certain conditions including SB Energy, the lessor, satisfying applicable ready-for-service conditions. Each guarantee generally becomes effective upon commencement of the applicable lease, with corresponding guarantee amounts increasing as each of nine data centers is placed in service, which is expected to begin in fiscal year 2029. Our exposure declines as OpenAI fulfills its lease payments. Our guarantees are limited to defined portions of lease and power payments and not the full cost of the site or all of the tenant’s obligations. The guarantees terminate upon certain events, including OpenAI achieving a satisfactory credit rating or after each respective lease term has completed. We also hold an option, exercisable in our sole discretion, to provide additional credit support in phases for approximately 3.8 additional gigawatts as the site scales. Refer to Note 10 of the Notes to Condensed Consolidated Financial Statements in Part 1, Item 1 of this Quarterly Report on Form 10-Q. We have made, and may continue to make, investments and commitments in our ecosystem to enhance our growth opportunities, cultivate our ecosystem, and strengthen our competitive position. These include equity investments of $99 billion and equity investment commitments of $25 billion as of July 26, 2026. In the second quarter of fiscal year 2027, we introduced a new business model with certain select AI cloud partners, to enable broader access to our data center infrastructure products to serve AI startups, model builders, enterprises, research organizations, and sovereign customers. We believe these AI cloud partners have strong customer demand and robust sales pipelines but are constrained by the large-scale infrastructure that is required to meet that demand. Through this model, we expect our AI cloud partners will be able to deploy incremental NVIDIA AI infrastructure, enabling them to serve a broader set of customers and address expanding demand for AI compute. Under these agreements, AI clouds procure our data center infrastructure products and we commit to cloud service agreements, which the AI clouds can unilaterally stop providing to us and sell to third-party customers at more advantageous rates. Our commitments, which are typically six years in duration, totaled $36 billion as of July 26, 2026, and decrease as capacity is used by third-party customers or by us for our research and development efforts. If certain criteria are met, we will participate in revenue share generated by the AI clouds from third-party customers, which may contribute to revenue in the future. If market conditions change, it may negatively impact our financial results. Refer to Note 10 of the Notes to Condensed Consolidated Financial Statements in Part 1, Item 1 of this Quarterly Report on Form 10-Q. In August 2026, we entered into memorandums of understanding with several large capital providers to establish independent financing platforms designed to mobilize more than $500 billion of third-party capital over time to support the deployment of AI infrastructure. These and other preliminary arrangements may not lead to definitive agreements. These arrangements are designed for our ecosystem partners and customers to build and gain access to AI infrastructure with the corresponding funding structures independently underwritten and provided by the capital providers. At our option, we may provide limited residual-value support for a portion of specific projects, subject to disciplined risk management and project-by-project evaluation. Open-source foundation models are rapidly growing in popularity with developers worldwide. We believe the demand for open-source foundation models and applications promotes use of our products worldwide. If these models and 26 applications are primarily deployed on competitors’ platforms, they could reduce demand for our offerings. Any regulatory control or other restriction that limits our ability to provide products and services that support third-party applications and models could have a material impact on our business, operating results, and financial condition. The U.S. government, or USG, granted licenses that would allow us to ship small amounts of H200 products to specific China-based customers, but such sales were restricted by the PRC government, and we have been unable to sell all the products for which we have licenses. During the first half of fiscal year 2027, we incurred a $0.4 billion charge associated with H200 for excess inventory and purchase obligations, as the demand for H200 products diminished. After incurring that charge, we have made a fraction of the allowed shipments under the USG’s H200 licensing program. Those shipments account for less than 1% of Data Center revenue in our most recent quarter. The licenses require that the H200s go through an inspection process in the United States prior to any shipment to the customer. As a result, any H200s shipped under the new licensing program are subject to a 25% tariff upon importation into the United States. We have been unable to pass along any of the tariff to our customers, and do not anticipate doing so in the event we are able to sell licensed products into the China market. Our global supply chain for networking products, including our Israel operations, with approximately 6,200 employees, supporting research and development, operations, and sales and marketing, has not been significantly impacted by the conflict in the Middle East. If the conflict escalates or extends, it could affect future product development, supply chain, and revenue, and create business uncertainty. Macroeconomic factors, including tariffs, inflation, interest rate changes, capital market volatility, global supply chain constraints, and global economic and geopolitical developments and conflicts, have direct and indirect impacts on our results of operations, particularly demand for our products. While difficult to isolate and quantify, these macroeconomic factors impact our supply chain and manufacturing costs, employee wages, costs for capital equipment, the value of our investments, revenue, and competitive position. Our product and solution pricing generally does not fluctuate with short-term changes in our costs. Within our supply chain, we continuously manage product availability and costs with our vendors. Refer to Part II, Item 1A, “Risk Factors” for a discussion of these factors and other risks. Second Quarter of Fiscal Year 2027 Summary Three Months Ended Quarter-over-Quarter Change Year-over-Year Change Jul 26, 2026 Apr 26, 2026 Jul 27, 2025 ($ in millions, except per share data) Revenue $ 96,221 $ 81,615 $ 46,743 18 % 106 % Gross margin 75.0 % 74.9 % 72.4 % 0.1 pts 2.6 pts Operating expenses $ 8,408 $ 7,621 $ 5,413 10 % 55 % Operating income $ 63,734 $ 53,536 $ 28,440 19 % 124 % Net income $ 59,688 $ 58,321 $ 26,422 2 % 126 % Net income per diluted share $ 2.46 $ 2.39 $ 1.08 3 % 128 % We specialize in markets where our computing platforms can provide tremendous acceleration for applications. These platforms incorporate processors, interconnects, software, algorithms, systems, and services to deliver unique value. Our platforms address large markets where our expertise is critical: Data Center and Edge Computing. Three Months Ended Quarter-over-Quarter Change Year-over-Year Change Jul 26, 2026 Apr 26, 2026 Jul 27, 2025 ($ in millions) Revenue by Market Platform (1) (2) Data Center $ 89,023 $ 75,246 $ 41,096 18 % 117 % Hyperscale 48,710 43,050 24,168 13 % 102 % AI Clouds, Industrial, & Enterprise 40,313 32,196 16,928 25 % 138 % Edge Computing 7,198 6,369 5,647 13 % 27 % Total revenue $ 96,221 $ 81,615 $ 46,743 18 % 106 % (1) In the first quarter of fiscal year 2027, we changed our presentation of revenue by market platform and the comparable periods have been recast. (2) During the second quarter of fiscal year 2027, we reclassified a company from ACIE to Hyperscale due to a change in their business model and recast the prior period revenue associated with this company. 27 Revenue was $96.2 billion, up 106% from a year ago and up 18% sequentially. Data Center revenue was $89.0 billion, up 117% from a year ago and up 18% sequentially, driven by the ramp of our Blackwell Ultra infrastructure. Hyperscale revenue more than doubled from a year ago and increased 13% sequentially on the strength of Blackwell Ultra. ACIE revenue increased 138% from a year ago and 25% sequentially driven by end-demand from AI natives, enterprises, and sovereign customers, as well as hyperscalers utilizing AI clouds. Shipments of Data Center Hopper products to China during the second quarter of fiscal year 2027 were less than 1% of Data Center revenue. Edge Computing revenue was $7.2 billion, up 27% from a year ago and up 13% sequentially. The increases were driven by strong sales of Blackwell workstations, partially offset by slower consumer PC sales that were tempered by elevated memory and systems prices. Gross margin increased from a year ago on improved mix from Blackwell Ultra. Gross margin was approximately flat sequentially as our Blackwell architecture remains the vast majority of our revenue. Operating expenses were up 55% from a year ago and up 10% sequentially. These increases were driven by higher compute infrastructure and compensation and benefits costs. Financial Information by Business Segment and Geographic Data Refer to Note 13 of the Notes to Condensed Consolidated Financial Statements in Part I, Item 1 of this Quarterly Report on Form 10-Q for disclosures regarding segment information. Critical Accounting Policies and Estimates Refer to Part II, Item 7, “Critical Accounting Policies and Estimates” of our Annual Report on Form 10-K for the fiscal year ended January 25, 2026. There have been no material changes to our Critical Accounting Policies and Estimates. Results of Operations The following table sets forth, for the periods indicated, certain items in our Condensed Consolidated Statements of Income expressed as a percentage of revenue. Three Months Ended Six Months Ended Jul 26, 2026 Jul 27, 2025 Jul 26, 2026 Jul 27, 2025 Revenue 100.0 % 100.0 % 100.0 % 100.0 % Cost of revenue 25.0 27.6 25.0 33.4 Gross profit 75.0 72.4 75.0 66.6 Operating expenses Research and development 7.4 9.2 7.5 9.1 Sales, general and administrative 1.4 2.4 1.5 2.4 Total operating expenses 8.8 11.6 9.0 11.5 Operating income 66.2 60.8 66.0 55.1 Other income, net 8.1 6.0 13.6 3.4 Income before income tax 74.3 66.8 79.6 58.5 Income tax expense 12.3 10.2 13.2 8.7 Net income 62.0 % 56.6 % 66.4 % 49.8 % Revenue and Reportable Segments Revenue by Reportable Segments Three Months Ended Six Months Ended Jul 26, 2026 Jul 27, 2025 $ Change % Change Jul 26, 2026 Jul 27, 2025 $ Change % Change ($ in millions) Compute & Networking $ 88,299 $ 41,331 $ 46,968 114 % $ 162,850 $ 80,920 $ 81,930 101 % Graphics 7,922 5,412 2,510 46 % 14,987 9,885 5,102 52 % Total $ 96,221 $ 46,743 $ 49,478 106 % $ 177,837 $ 90,805 $ 87,032 96 % 28 Operating Income by Reportable Segments Three Months Ended Six Months Ended Jul 26, 2026 Jul 27, 2025 $ Change % Change Jul 26, 2026 Jul 27, 2025 $ Change % Change ($ in millions) Compute & Networking $ 62,696 $ 28,363 $ 34,333 121 % $ 116,031 $ 50,417 $ 65,614 130 % Graphics 3,899 2,242 1,657 74 % 6,840 3,882 2,958 76 % Total $ 66,595 $ 30,605 $ 35,990 118 % $ 122,871 $ 54,299 $ 68,572 126 % Compute & Networking revenue – The year-over-year increase in the second quarter and first half of fiscal year 2027 was driven by the ramp of our Blackwell Ultra infrastructure. Graphics revenue – The year-over-year increase in the second quarter and first half of fiscal year 2027 was driven by sales of our Blackwell architecture. Reportable segment operating income – The year-over-year increase in Compute & Networking segment operating income in the second quarter of fiscal year 2027 was driven by the growth in revenue. The year-over-year increase in Compute & Networking segment operating income in the first half of fiscal year 2027 was driven by the growth in revenue and the non-recurrence of a $4.5 billion charge associated with H20 excess inventory and purchase obligations in the first quarter of fiscal year 2026. The year-over-year increase in Graphics segment operating income in the second quarter and first half of fiscal year 2027 was driven by the growth in revenue. Concentration of Revenue We refer to customers who purchase products directly from NVIDIA as direct customers, such as AIBs, distributors, ODMs, OEMs, CSPs, AI model makers, and system integrators. Certain direct customers may use either internal resources or third-party system integrators to complete their build. We refer to indirect customers as those who purchase products through our direct customers; indirect customers include CSPs, AI clouds, AI model makers, enterprises, and public sector entities. Our revenue is concentrated among a limited number of direct and indirect customers and this trend may continue. Direct Customers – For the second quarter of fiscal year 2027, one direct customer represented 16% of total revenue, which was primarily attributable to the Compute & Networking segment. For the first half of fiscal year 2027, three direct customers represented 16%, 15%, and 13% of total revenue, all of which was primarily attributable to the Compute & Networking segment. For the second quarter of fiscal year 2026, two direct customers represented 23% and 16% of total revenue, all of which was primarily attributable to the Compute & Networking segment. For the first half of fiscal year 2026, two direct customers represented 20% and 15% of total revenue, all of which was primarily attributable to the Compute & Networking segment. Indirect Customers – Indirect customer revenue is an estimation based upon multiple factors including customer purchase order information, product specifications, internal sales data, and other sources. Indirect customers primarily purchase our products through system integrators and distributors. We generate a significant amount of our revenue from a limited number of indirect customers, some individually representing 10% or more of our revenue. Certain companies purchase cloud and related services through various direct and indirect customers. We estimate that one AI research and deployment company contributed a meaningful amount of our revenue by purchasing cloud services from our customers in the second quarter and first half of fiscal year 2027. Revenue by geographic region is designated based on the location of the headquarters of direct customers. The end customer and shipping location may be different from our direct customers’ headquarters location. Revenue from sales to customers headquartered outside of the United States accounted for 38% and 30% of total revenue for the second quarter and first half of fiscal year 2027, respectively, and 30% and 35% of total revenue for the second quarter and first half of fiscal year 2026, respectively. Gross Profit and Gross Margin Gross profit consists of total net revenue less cost of revenue. Cost of revenue consists primarily of the cost of semiconductors (including wafer fabrication, assembly, testing, and packaging), board and device costs, manufacturing support costs (including labor and overhead associated with such purchases), final test yield fallout, inventory and warranty provisions, memory and component costs, tariffs, and shipping costs. Cost of revenue also includes acquisition-related intangible amortization expense, IP-related costs, and stock-based compensation related to personnel associated with manufacturing operations. 29 Gross margin increased to 75.0% for the second quarter of fiscal year 2027 compared to 72.4% for the second quarter of fiscal year 2026, and 75.0% for the first half of fiscal year 2027 compared to 66.6% for the first half of fiscal year 2026 due to improved mix from Blackwell Ultra. Gross margin for the first half of fiscal year 2026 was also impacted by a $4.5 billion charge associated with H20 excess inventory and purchase obligations. Provisions for inventory and excess inventory purchase obligations totaled $985 million and $2.1 billion for the second quarter and first half of fiscal year 2027, respectively. Sales of previously reserved inventory and settlements of excess inventory purchase obligations resulted in a provision release of $177 million and $280 million for the second quarter and first half of fiscal year 2027, respectively. The net effect on our gross margin was an unfavorable impact of 0.8% and 1.0% in the second quarter and first half of fiscal year 2027, respectively. Provisions for inventory and excess inventory purchase obligations totaled $1.0 billion and $6.3 billion for the second quarter and first half of fiscal year 2026, respectively, including $4.5 billion associated with H20 excess inventory and purchase obligations for the first quarter of fiscal year 2026. Sales of previously reserved inventory and settlements of excess inventory purchase obligations resulted in a provision release of $501 million and $937 million for the second quarter and first half of fiscal year 2026, respectively. The net effect on our gross margin was an unfavorable impact of 1.1% and 5.9% in the second quarter and first half of fiscal year 2026, respectively. Operating Expenses Three Months Ended Six Months Ended Jul 26, 2026 Jul 27, 2025 $ Change % Change Jul 26, 2026 Jul 27, 2025 $ Change % Change ($ in millions) Research and development $ 7,054 $ 4,291 $ 2,763 64 % $ 13,375 $ 8,280 $ 5,095 62 % Sales, general and administrative 1,354 1,122 232 21 % 2,654 2,163 491 23 % Total operating expenses $ 8,408 $ 5,413 $ 2,995 55 % $ 16,029 $ 10,443 $ 5,586 53 % The increases in research and development expenses for the second quarter and first half of fiscal year 2027 were primarily driven by a 127% and 120% increase in compute infrastructure, respectively, and a 30% increase in each fiscal year 2027 period in compensation and benefits, including stock-based compensation, reflecting employee growth and compensation increases. The increases in sales, general and administrative expenses for the second quarter and first half of fiscal year 2027 were primarily driven by compensation and benefits, including stock-based compensation, reflecting employee growth and compensation increases. Other Income, Net Three Months Ended Six Months Ended Jul 26, 2026 Jul 27, 2025 $ Change Jul 26, 2026 Jul 27, 2025 $ Change ($ in millions) Interest income $ 496 $ 592 $ (96) $ 1,037 $ 1,108 $ (71) Interest expense (227) (62) (165) (329) (124) (205) Gains from equity securities, net 7,771 2,247 5,524 23,707 2,073 21,634 Other (267) (11) (256) (275) (18) (257) Other income, net $ 7,773 $ 2,766 $ 5,007 $ 24,140 $ 3,039 $ 21,101 Other income, net, primarily consists of realized or unrealized gains and losses from investments in non-marketable securities and publicly-held equity securities. Gains from equity securities, net, were primarily driven by unrealized gains in equity securities. Refer to Notes 5 and 6 of the Notes to Condensed Consolidated Financial Statements in Part I, Item 1 of this Quarterly Report on Form 10-Q for additional information. 30 Income Taxes Income tax expense was $11.8 billion and $4.8 billion for the second quarter, and $23.4 billion and $7.9 billion for the first half, of fiscal years 2027 and 2026, respectively. Income tax as a percentage of income before income tax was 16.5% and 15.3% for the second quarter, and 16.5% and 14.9% for the first half, of fiscal years 2027 and 2026, respectively. The effective tax rate increased primarily due to a lower percentage of tax benefits from stock-based compensation, foreign-derived deduction eligible income, and the U.S. federal research tax credit relative to the increase in income before income tax. Our effective tax rates for the first half of fiscal years 2027 and 2026 were lower than the U.S. federal statutory rate of 21% primarily due to tax benefits from foreign-derived deduction eligible income, income earned in jurisdictions that were subject to taxes at rates lower than the U.S. federal statutory tax rate, stock-based compensation, and the U.S. federal research tax credit. Refer to Note 11 of the Notes to Condensed Consolidated Financial Statements in Part I, Item 1 of this Quarterly Report on Form 10-Q for additional information. Liquidity and Capital Resources Jul 26, 2026 Jan 25, 2026 (In millions) Cash and cash equivalents $ 22,443 $ 10,605 Marketable debt securities 34,143 39,065 Cash, cash equivalents, and marketable debt securities $ 56,586 $ 49,670 Six Months Ended Jul 26, 2026 Jul 27, 2025 (In millions) Net cash provided by operating activities $ 74,421 $ 42,779 Net cash used in investing activities $ (35,124) $ (12,343) Net cash used in financing activities $ (27,459) $ (27,386) Our fixed-income security investments include highly rated, diversified investment types and credit exposures with shorter maturities. Cash provided by operating activities increased in the first half of fiscal year 2027 compared to the first half of fiscal year 2026 due to higher revenue, partially offset by an increase in accounts receivable due to extended payment terms on large multi-quarter agreements with certain investment-grade customers. Cash used in investing activities increased in the first half of fiscal year 2027 compared to the first half of fiscal year 2026, primarily driven by higher investment purchases, partially offset by sales and maturities. Cash used in financing activities was flat in the first half of fiscal year 2027 compared to the first half of fiscal year 2026, mainly due to higher share repurchases, dividends, and a payment related to Groq, Inc. in the first half of fiscal year 2027, offset by higher cash proceeds from debt issuance. Liquidity Our primary sources of liquidity include cash, cash equivalents, marketable debt and equity securities, and cash generated by our operations. As of July 26, 2026, we had $56.6 billion in cash, cash equivalents, and marketable debt securities as well as $42.8 billion of marketable equity securities. We believe that we have sufficient liquidity to meet our operating requirements for at least the next twelve months and for the foreseeable future, including our future obligations. We continuously evaluate our liquidity and capital resources, including our access to external capital, to ensure we can finance future capital requirements and commitments. Our marketable securities as of July 26, 2026, consist of publicly-held equity securities and debt securities issued by the U.S. government and its agencies. These marketable securities are primarily denominated in U.S. dollars. Refer to Note 5 of the Notes to Condensed Consolidated Financial Statements in Part I, Item 1 of this Quarterly Report on Form 10-Q for additional information. At the end of the first half of fiscal year 2027, substantially all of our cash, cash equivalents, and marketable debt securities held outside the U.S. were available for use in the U.S. without incurring additional U.S. federal income taxes. 31 The exception is approximately $1.7 billion, for which we have not accrued the related foreign or state taxes that repatriation would trigger. We made two federal income tax payments in the second quarter of fiscal year 2027, as compared with no estimated tax payments in the first quarter of fiscal year 2027. Capital Return to Shareholders In the second quarter and first half of fiscal year 2027, we repurchased 94 million and 203 million shares of our common stock for $19.7 billion and $39.8 billion, respectively. On May 18, 2026, our Board of Directors approved an additional $80.0 billion in share repurchase authorization, without expiration. As of July 26, 2026, we were authorized, subject to certain specifications, to repurchase up to $99.3 billion of our common stock. We may execute repurchases from time to time, subject to market conditions, operating requirements and other investment opportunities, in the open market, in privately-negotiated transactions, pursuant to a Rule 10b5-1 trading plan or in structured share repurchase agreements in compliance with Rule 10b-18 of the Exchange Act. Our share repurchase program may be suspended at any time at our discretion. We paid cash dividends to our shareholders of $6.0 billion and $6.3 billion during the second quarter and first half of fiscal year 2027, respectively. On May 18, 2026, we increased our quarterly cash dividend from $0.01 per share to $0.25 per share. The payment of future cash dividends is subject to our Board of Directors’ continuing determination that the declaration of dividends is in the best interests of our shareholders. The U.S. Inflation Reduction Act of 2022 requires a 1% excise tax on certain share repurchases in excess of shares issued for employee compensation made after December 31, 2022. The excise tax is included in our share repurchase cost and was not significant for the second quarter and first half of fiscal year 2027. Outstanding Indebtedness and Commercial Paper Program In June 2026, we issued an aggregate of $25.0 billion of senior unsecured notes across seven tranches for general corporate purposes. Our aggregate debt maturities as of July 26, 2026, by year payable, were as follows: Jul 26, 2026 (In millions) Due in one year $ 1,000 Due in one to five years 15,000 Due in five to ten years 7,500 Due in greater than ten years 10,000 Unamortized debt discount and issuance costs (134) Net carrying amount $ 33,366 Less short-term portion 1,000 Total long-term portion $ 32,366 We have a commercial paper program to support general corporate purposes, pursuant to which we may issue unsecured paper notes, from time to time or all at once, up to $25.0 billion. As of July 26, 2026, no commercial paper was outstanding. Refer to Note 9 of the Notes to Condensed Consolidated Financial Statements in Part I, Item 1 of this Quarterly Report on Form 10-Q for further discussion. Material Cash Requirements and Other Obligations For descriptions of our long-term debt and commitments and obligations used to secure supply to produce our products, procure data center infrastructure to support our research and development efforts, and provide certain guarantees to support our customers’ and partners’ buildouts of data center infrastructure, refer to Notes 8, 9, 10, and 14 of the Notes to Condensed Consolidated Financial Statements in Part I, Item 1 of this Quarterly Report on Form 10-Q. We expect to continue investing in our ecosystem. Refer to Note 6 for additional information regarding our non-marketable investments. 32 Unrecognized tax benefits were $5.0 billion, which included related interest and penalties of $503 million, and were recognized in non-current income tax payable as of July 26, 2026. We are unable to estimate the timing of any potential tax liability, interest payments, or penalties in individual years due to uncertainties in the underlying income tax positions and the timing of the effective settlement of such tax positions. We are currently under examination by the Internal Revenue Service for our fiscal years 2023 and 2024. Refer to Note 11 of the Notes to Condensed Consolidated Financial Statements in Part I, Item 1 of this Quarterly Report on Form 10-Q. Other than the contractual obligations described in Note 10 of the Notes to Condensed Consolidated Financial Statements in Part I, Item 1 of this Quarterly Report on Form 10-Q, there were no material changes outside the ordinary course of business in our contractual obligations from those disclosed in our Annual Report on Form 10-K for the fiscal year ended January 25, 2026. Refer to Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations - Liquidity and Capital Resources” in our Annual Report on Form 10-K for the fiscal year ended January 25, 2026, for a description of our contractual obligations. We have entered and may in the future enter into commitments, guarantees, and other commercial agreements, including long-term capacity purchase obligations, financial guarantees, and other forms of credit support and financing arrangements to support our customers’ and partners’ buildout of data center infrastructure. Financing arrangements with certain investment-grade customers, including extended payment terms under large, multi-quarter agreements, will continue to affect the timing of our operating cash flows. Adoption of New and Recently Issued Accounting Pronouncements There has been no adoption of any new and recently issued accounting pronouncements.