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Nvidia to include stock-based compensation in non-GAAP metrics starting Q1 fiscal 2027
Wednesday, February 25, 2026 at 09:46 PM
Nvidia announced a change to its financial reporting starting in the first quarter of fiscal year 2027, where it will begin including stock-based compensation expense within its non-GAAP financial metrics.
Context
Nvidia will begin including stock-based compensation (SBC) in its non-GAAP financial metrics starting in Q1 fiscal 2027. Previously excluded from adjusted results, SBC is a significant expense used to attract and retain top-tier talent. By incorporating these costs, Nvidia aims to provide a more comprehensive view of its operational performance, though the shift will likely lower reported non-GAAP earnings and gross margins compared to historical reporting methods.
This transition is notable given the scale of the company’s equity awards. Nvidia reported approximately $4.74 billion in SBC for fiscal 2025, with recent quarterly expenses reaching $1.65 billion. While the accounting change may create a visual headwind for adjusted profitability, it follows a record fiscal 2026 where annual revenue surged to $215.9 billion.
For Q1 fiscal 2027, Nvidia projected revenue of $78.0 billion, reflecting continued dominance in the AI supply chain. Investors must now recalibrate their valuation models to account for these included expenses, ensuring accurate year-over-year comparisons as the company enters its next growth phase.
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