Nvidia has changed how it describes free cash flow, saying it will return capital to shareholders from free cash flow net of strategic uses. The wording effectively treats its substantial equity investments in other AI-related companies like capital expenditures.
The change could affect Nvidia’s $235 billion share repurchase program, although the company’s official free-cash-flow calculation remains unchanged.
If equity-investment outflows and employee stock compensation were deducted, free cash flow for the first half of the fiscal year would have been approximately $21.7 billion. That would be 69% below the reported figure. Nvidia reported $69.9 billion in free cash flow for the period.
The change in wording suggests that cash available for buybacks may be considerably lower than traditional metrics imply as Nvidia invests in building out its AI network.