NVIDIA (NVDA): FY2025 Revenue, Margins and Cash Flow

Key financial headlines#

NVIDIA reported FY2025 revenue of $130.50B — a dramatic jump of +114.22% year‑over‑year — and net income of $72.88B (+144.89%), with gross, operating and net margins of 74.99%, 62.42% and 55.85%, respectively. These are statutory figures in NVDA's FY2025 financials (accepted 2025-02-26) and reflect both an acceleration in top‑line scale and extraordinary margin expansion compared with the prior year.

The combination of outsized profitability and very large free cash flow — FCF $60.85B, a ~46.61% FCF margin on revenue — creates an unusual profile: enterprise performance that looks like a high‑growth software winner but with capital‑intensive product cycles beneath it. At the same time, market valuation metrics implied by the provided market cap (snapshot) are elevated, setting a high bar for sustained execution.

Those numbers raise three immediate, linked questions: how repeatable is the margin structure, how durable is the cash conversion (after capex and working capital), and how is management deploying the cash pile? The rest of this analysis works through the income statement trends, cash‑flow quality, balance‑sheet changes and independently calculated ratios to make those tradeoffs explicit.

Income statement trends#

According to NVDA's FY2025 statutory filing (accepted 2025-02-26), revenue rose to $130.50B from $60.92B in FY2024 — a year‑over‑year increase of +114.22%. Gross profit expanded to $97.86B (gross margin 74.99%), operating income to $81.45B (operating margin 62.42%), and net income to $72.88B (net margin 55.85%). Those moves represent a step change from FY2023 and FY2022 and are concentrated in fiscal 2024→2025 growth and margin improvement.

The headline numbers are shown below so the trend is transparent. All values are company‑reported fiscal year figures (2022–2025).

Margin expansion is the dominant story: gross margin widened from 72.72% in FY2024 to 74.99% in FY2025 (+2.27 percentage points), while operating margin moved from 54.12% to 62.42% (+8.30 points). The operating‑leverage effect is clear because operating expenses rose in absolute terms but fell materially as a share of revenue. Operating expenses (R&D + SG&A + other operating expenses) were $16.41B in FY2025 versus $11.33B in FY2024, but as a share of revenue operating expense dropped to 12.58% of sales in FY2025 from 18.60% in FY2024.

Two granular signals explain the leverage. First, cost of revenue as a share of sales fell to 24.99% in FY2025 from 27.27% in FY2024, supporting improved gross margins. Second, R&D and SG&A increased in absolute dollars (R&D $12.91B in FY2025 vs $8.68B in FY2024) but R&D intensity fell to 9.90% of revenue in FY2025 from 14.24% in FY2024. The business scaled faster than operating expense growth, producing the pronounced jump in operating profitability.

Cash flow quality and capital allocation#

Cash generation in FY2025 was sizable and, crucially, high quality: net cash provided by operating activities was $64.09B against net income of $72.88B, yielding an operating cash conversion of +87.94% (Operating cash flow / Net income). Free cash flow was $60.85B, which is +46.61% of revenue. These figures come from NVDA's FY2025 cash‑flow statement (accepted 2025-02-26) and show that the profit figure is converting into cash at an unusually high rate for a capital equipment‑heavy business.

Free cash flow conversion (FCF / Net Income) is +83.56%, a robust indicator of earnings quality given the size of FY2025 net income. The company spent $3.24B on capital expenditures in FY2025 (CapEx ≈ 2.48% of revenue), so FCF is driven by strong EBITDA and light relative reinvestment needs in that year. The reported change in working capital shows a cash outflow (changeInWorkingCapital = -9.38B), which reduced cash flow but did not prevent very strong FCF thanks to operating strength.

Management returned a large share of free cash to shareholders in FY2025: common stock repurchased $33.71B and dividends paid totaled $0.83B (dividend payout ≈ 1.14% of FY2025 net income). Repurchases alone absorbed ~55.39% of FY2025 free cash flow (33.71 / 60.85). Net cash used in financing activities was -$42.36B, reflecting the buyback program and dividend outlays. Those deployment choices materially reduce the company’s cash balance over time relative to generated FCF and are important to monitor for sustainability and optionality.

Balance sheet evolution and liquidity#

Total assets increased to $111.60B in FY2025 from $65.73B in FY2024 — a rise of +69.85% — driven largely by higher current assets (cash, short‑term investments and receivables). Cash plus short‑term investments rose to $43.21B in FY2025 from $25.98B in FY2024. Using the common liquidity definition that includes short‑term investments, NVDA finished FY2025 with a net cash position of ~$32.94B (total debt $10.27B minus cash+STI $43.21B).

Liquidity ratios are conservative by any standard: the current ratio is 4.44x (Total current assets $80.13B / Total current liabilities $18.05B), and working capital is positive and large (current assets minus current liabilities ≈ $62.08B). Even under a narrower view that counts only cash and cash equivalents, net debt is small at $1.68B (total debt minus cash equivalents), so leverage is effectively negligible versus cash‑rich peers.

Capital structure changed materially: equity expanded to $79.33B (up from $42.98B), which increased the equity share of the balance sheet to roughly 71.07% of assets (79.33 / 111.60). Total liabilities represent about 28.93% of the balance sheet. The absolute debt load is modest (total debt $10.27B) relative to cash and earnings power, leaving the company with both flexibility and exposure to large capital returns.

Key ratios — independent calculations#

Below are independently calculated, FY2025 ratios (rounded) using NVDA's FY2025 statutory numbers (accepted 2025-02-26). Formulas are shown where helpful so every metric is traceable to raw inputs.

Methodology notes: NOPAT uses an effective tax rate derived from the income statement (income before tax vs net income). Invested capital is proxied here as total assets less current liabilities — a convention that aligns this ROIC figure with the RoIC reported in the dataset when computed on fiscal balances.

These ratios paint a consistent picture: operating performance and cash generation are exceptionally strong, but market multiples implied by the provided market capitalization are also elevated. EV/EBITDA above 50x and Price/Sales near 34x imply the market is pricing multi‑year growth and margin durability into NVDA's price.

What the numbers reveal#

First, the income statement shift from FY2023→FY2025 is structural: NVIDIA moved from mid‑teens operating margins in FY2023 to >60% in FY2025. That magnitude of operating leverage signals a business where high‑margin product mix and software/recurring elements are dominant and scaled quickly. The arithmetic shows a business that, at least in FY2025, monetized scale with limited incremental operating expense intensity.

Second, cash generation validates reported profits. With operating cash conversion +87.94% and FCF conversion +83.56%, earnings are not a paper construct; they converted to cash even after a meaningful working‑capital build (changeInWorkingCapital = -9.38B). The company’s low CapEx intensity in FY2025 (CapEx ≈ $3.24B) made cash generation particularly powerful.

Third, capital allocation is a dominant corporate action: buybacks were large ($33.71B) and consumed over half of FCF in FY2025. That materially altered the balance sheet and shareholder‑facing metrics (EPS, ROE). At the same time the firm remains essentially net cash when short‑term investments are counted (~$32.94B net cash), giving management runway for further buybacks, M&A or reinvestment — each of which has different long‑term implications for returns.

Fourth, valuation vs. fundamentals is a tension point. The company’s profitability metrics (ROIC 75.53%, ROE 91.90%) are rare at this scale. But the market is valuing those outcomes expensively: Price/Sales 33.96x, EV/EBITDA 51.05x, and P/E (market cap / net income) ≈ 60.80x. That valuation implies a high bar for multi‑year revenue growth and sustained margins; any meaningful deceleration or margin compression would have outsized effects on valuation.

What This Means For Investors#

NVDA’s FY2025 performance: $130.5B revenue, $72.9B net income, and ~46.6% free‑cash‑flow margin, underwritten by very high operating leverage and a net‑cash balance. Market multiples are elevated, so margin durability and growth continuity matter more than ever.

In practical terms, the numbers point to three monitoring priorities. First, product mix and margin sustainability — the income statement is highly mix‑sensitive. Second, capital allocation — large buybacks materially shift per‑share metrics and reduce balance‑sheet optionality if sustained. Third, working capital dynamics — the FY2025 working‑capital use of $9.38B is notable during a year of huge revenue growth and should be watched for signs of inventory or receivable buildup.

Finally, the enterprise is cash‑generative and lightly levered, which provides strategic optionality. But the current valuation embeds a high probability that FY2025 margin levels and growth rates persist; if they do not, multiples will compress. Any assessment of future upside should therefore stress‑test margin durability and capital allocation under slower growth scenarios.

Conclusions#

NVIDIA’s FY2025 financials show exceptional scale, an unusually attractive margin profile and strong cash conversion. The company generated $60.85B of free cash while running minimal net leverage, and ROIC (as calculated here) sits at ~75.5%, confirming that the underlying business earned very high incremental returns on invested capital in FY2025.

However, the financial picture contains embedded risks tied to expectations. Market multiples (EV/EBITDA ~51x, P/S ~34x, P/B ~56x) assume continued high growth and margin preservation over several years. Because FY2025 margins benefited from rapid scaling and operating leverage, the sensitivity of valuation to even modest margin or revenue changes is acute.

The numbers speak plainly: NVIDIA converted massive revenue growth into cash and shareholder distributions in FY2025, leaving a strong balance sheet but also a high valuation ceiling to clear going forward. For analysts and corporate stakeholders the priorities are explicit — track margin components, watch working‑capital trends, and follow capital‑allocation choices — because small changes in those inputs will drive large swings in value at today’s multiples.

(Prepared from NVIDIA Corporation fiscal statements for 2022–2025 supplied in the dataset: FY2025 accepted 2025‑02‑26; FY2024 accepted 2024‑02‑21; FY2023 accepted 2023‑02‑24; FY2022 accepted 2022‑03‑17.)