Q3 FY2026 results
| Metric | Result | Change |
|---|---|---|
| Consolidated Revenue | $29.6 billion | up 86% year-on-year |
| Operating Income | $20.1 billion | up 92% year-on-year |
| AI Semiconductor Revenue | $16.7 billion | up 221% year-on-year |
| Infrastructure Software Revenue | $8.8 billion | up 29% year-on-year |
| Operating Margin | 68% | record |
| Non-GAAP EPS | $3.32 | up 96% year-on-year |
Guidance and outlook
- For Q4 '26, we expect consolidated revenue to grow to $34.8 billion, up 93% year-on-year.
- We expect Q4 AI revenue to be $21.7 billion, up 236% year-on-year.
- We expect Q4 operating margin to be approximately 66% of revenue.
- We forecast Q4 Infrastructure Software revenue to stabilize at approximately $8.7 billion.
How management sounded
Confident (+8 on our -10 to +10 scale). Management reported record financial results and raised its fiscal 2026 AI revenue outlook while providing a multi-year growth trajectory through 2028. Management sounded more upbeat than on 92% of the 190 calls we cover; most companies sound positive on their own calls, so the comparison says more than the label.
Q&A summary
Supply Constraints
Asked: Morgan Stanley asked about supply bottlenecks and variables that could drive numbers higher.
Answer: Management noted they have secured supply for their outlook but acknowledged that customer deployment timelines for data centers remain a key variable.
Gigawatt Deployment
Asked: Bernstein asked about the gigawatt count for 2027 and 2028 and revenue per gigawatt.
Answer: Management stated that while they see 30 gigawatts of potential demand, they are using a conservative estimate for production deployment and noted revenue per gigawatt remains in the $20 billion to $30 billion range.
Networking Adoption
Asked: JPMorgan asked about the adoption of Tomahawk 6 and Tomahawk Ultra.
Answer: Management reported that Tomahawk 6 is deployed across most AI hyperscalers and that Tomahawk Ultra is seeing unexpected adoption for scale-up applications.
Financing Backstop
Asked: Melius asked about off-balance sheet risk for financing agreements.
Answer: Management stated they have nothing new to announce and evaluate strategic financing on a deal-by-deal basis.
What to watch before the next call
- The ability to scale supply chain capacity for leading-edge wafers, substrates, and HBM memory.
- The timing of customer data center construction, specifically land, power, and shell availability.
- The progress of the Singapore substrate factory production ramp.
