Buried in the Filing
The H20 bill had two addresses.
A historical case study in how a product shock reaches both inventory and commitments to buy more. The split explains what a single charge can hide.
NVIDIA’s Form10-Q for the quarter ended April 27, 2025 split the $4.5bn H20 charge into a $1.9bn inventory provision and $2.6bn for excess inventory purchase obligations. The second amount concerned product orders; a warehouse-only illustration would miss it. [1]
READ THE MECHANISM
The H20 bill had two addresses.
Scroll the diagram horizontally to compare every measure. Exact values and definitions are below.
Historical: NVIDIA Q1FY2026, ended April 27, 2025
Components of the historical charge
- Total H20 charge
- $4.5bnReported quarterly expense
- H20 inventory provision
- $1.9bnProduct inventory
- H20 purchase obligations
- $2.6bnExcess inventory purchase obligations
Historical charge components. This is not a current liability balance.
Read the exact values and definitions
| Measure | Value | Basis |
|---|---|---|
| Total H20 charge | 4.5 | Reported quarterly expense |
| H20 inventory provision | 1.9 | Product inventory |
| H20 purchase obligations | 2.6 | Excess inventory purchase obligations |
Method. Use the two H20-specific footnotes, rather than the larger company-wide inventory provisions. Reconcile 1.9+2.6=4.5. Rectangle area represents each component’s share of that historical charge.
- This is the original Q1FY2026 charge, not a current liability balance or a forecast of future losses.
- NVIDIA later reported a $180m H20 inventory-reserve release in Q2FY2026. The original charge should not be presented as the net expense remaining after subsequent releases.
A product shock can arrive at two addresses. One is stock already sitting in the supply chain. The other is the commitment to acquire more. That is why the liability footnote belongs beside the inventory table when examining this case. [1]
Nexural’s read: a business can carry exposure beyond the goods visible in its inventory balance. The useful question is where the obligation sits, what conditions apply and what later releases change. A purchase commitment by itself does not establish an expected loss. [1]
The later FY2026 results reported a $180m H20 reserve release in Q2; Q3 and Q4 releases were insignificant. [2]
Inspect the sources and methods 2 source records
NVDA: primary financial disclosure
Q1FY2026 Form10-Q, Note8, Certain Balance Sheet Components: Inventories footnote1 and Accrued and Other Current Liabilities footnote1. Both explicitly identify the H20 components.
Source referenceNVIDIA FY2026 results: subsequent H20 reserve releases
Non-GAAP reconciliation footnote describing the Q1 H20 charge and Q2 $180m release; Q3/Q4 insignificant.
Source reference