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11:00 ET Q3 call: Americas pipeline sequential growth was the fastest seen all year; Power availability, permitting, sentiment and skilled construction labor remain “pacing items; Expects “continued significant above-market organic sales growth in 2027" with margin expansion
- Q4’s modest sequential growth reflects timing and prudence, not weaker demand: Q3 benefited from $100–150M of revenue delayed from Q2; adjusting for this brings Q3-to-Q4 growth closer to historical patterns. Guides Q4 revenue ~$4.4B, +53% y/y (~50% organic), adj EPS $2.25 and adj operating margin 25.8%. Management explicitly noted “some prudence” in the guide.
- Raises FY26 revenue to $14.65B (+$650M versus prior), ~38% organic growth; adj EPS to $7.15 (+$0.45); adj operating profit to ~$3.5B (+$190M); adj operating margin to 24% (+20bps); and adj FCF to $2.7B. Q4 regional organic growth expected in the mid-50s for both Americas and APAC, and low-20s for EMEA.
- Expects significant above-market organic sales growth in 2027, continued margin expansion despite inflation, and significant adjusted FCF. Backlog and pipeline visibility support confidence entering next year, alongside continued capacity, supply-chain and R&D investment. Management did not endorse extrapolating Q4’s organic growth rate into 2027; detailed guidance comes with Q4 results.
- Q3 organic orders more than doubled y/y, with strength across customer types, including excluding NeoCloud; management characterized this as competitive strength rather than catch-up. Americas sequential pipeline growth was the fastest of the year. EMEA pipeline approximately doubled y/y, with orders growing even faster and momentum expected well into 2027 and beyond. India and Australia remain strong; China shows encouraging green shoots.
- Power availability, permitting, sentiment and skilled-labor constraints are “pacing items,” but management sees no material, unusual project pushouts or slowdown in growth. Order horizons remain broadly unchanged at 12–18 months, rather than customers simply ordering further ahead. Backlog includes purchase orders only—not capacity agreements.
- Q2 execution constraints improved in Q3, but manufacturing complex converged infrastructure remains a learning curve—not a completed fix. Inventory growth supports both the sales ramp and greater factory resilience. New capacity is already contributing to Q3/Q4 growth, with Ireland chiller capacity on track to double by year-end and long-term supplier capacity agreements expanding. Quality trends are improving, though management acknowledged greater early-life variability as new-product mix rises.
- Americas second-half incremental margins face capacity-ramp inefficiencies and a heavier product-versus-services mix; better utilization and mix normalization offer upside. Maintains the 30–35% incremental-margin framework, nearer 30% during heavy ramps. Q4 benefits from APAC facilities reaching more normal operations and continued EMEA leverage. Expects positive FY26 price-cost, including current tariffs and countermeasures.
- 800-volt DC roadmap remains unchanged: initial rack-level configurations are in validation and expected to generate revenue during 2027; fully native end-to-end 800-volt DC enters customer validation in 2027, with market deployment in 2028. Launch planning includes dedicated production capacity and supply chains, with validation involving both hyperscalers and silicon partners.
- Liquid cooling is taking a substantially larger share of initial heat extraction; management is pleased with win rates, margins and service attachment, with the mix already reflected in guidance. NVIDIA DSX and modular converged infrastructure remain market-share and technology pull-through opportunities: pre-engineered designs can reduce design time tenfold and deployment time by up to half, accelerating customers’ time to first token.
- Raises FY26 revenue to $14.65B (+$650M versus prior), ~38% organic growth; adj EPS to $7.15 (+$0.45); adj operating profit to ~$3.5B (+$190M); adj operating margin to 24% (+20bps); and adj FCF to $2.7B. Q4 regional organic growth expected in the mid-50s for both Americas and APAC, and low-20s for EMEA.
- Expects significant above-market organic sales growth in 2027, continued margin expansion despite inflation, and significant adjusted FCF. Backlog and pipeline visibility support confidence entering next year, alongside continued capacity, supply-chain and R&D investment. Management did not endorse extrapolating Q4’s organic growth rate into 2027; detailed guidance comes with Q4 results.
- Q3 organic orders more than doubled y/y, with strength across customer types, including excluding NeoCloud; management characterized this as competitive strength rather than catch-up. Americas sequential pipeline growth was the fastest of the year. EMEA pipeline approximately doubled y/y, with orders growing even faster and momentum expected well into 2027 and beyond. India and Australia remain strong; China shows encouraging green shoots.
- Power availability, permitting, sentiment and skilled-labor constraints are “pacing items,” but management sees no material, unusual project pushouts or slowdown in growth. Order horizons remain broadly unchanged at 12–18 months, rather than customers simply ordering further ahead. Backlog includes purchase orders only—not capacity agreements.
- Q2 execution constraints improved in Q3, but manufacturing complex converged infrastructure remains a learning curve—not a completed fix. Inventory growth supports both the sales ramp and greater factory resilience. New capacity is already contributing to Q3/Q4 growth, with Ireland chiller capacity on track to double by year-end and long-term supplier capacity agreements expanding. Quality trends are improving, though management acknowledged greater early-life variability as new-product mix rises.
- Americas second-half incremental margins face capacity-ramp inefficiencies and a heavier product-versus-services mix; better utilization and mix normalization offer upside. Maintains the 30–35% incremental-margin framework, nearer 30% during heavy ramps. Q4 benefits from APAC facilities reaching more normal operations and continued EMEA leverage. Expects positive FY26 price-cost, including current tariffs and countermeasures.
- 800-volt DC roadmap remains unchanged: initial rack-level configurations are in validation and expected to generate revenue during 2027; fully native end-to-end 800-volt DC enters customer validation in 2027, with market deployment in 2028. Launch planning includes dedicated production capacity and supply chains, with validation involving both hyperscalers and silicon partners.
- Liquid cooling is taking a substantially larger share of initial heat extraction; management is pleased with win rates, margins and service attachment, with the mix already reflected in guidance. NVIDIA DSX and modular converged infrastructure remain market-share and technology pull-through opportunities: pre-engineered designs can reduce design time tenfold and deployment time by up to half, accelerating customers’ time to first token.