Nebius Group N.V. (NBIS) | The Buildout — AI Infrastructure
The Verdict
Nebius Group is an AI-native hyperscaler that operates a full-stack AI cloud platform spanning data centers, GPU compute, and software for training and inference. The core business is the Nebius AI segment, while Avride and TripleTen are portfolio investments management intends to deconsolidate.
| Market Cap | — |
| Revenue (TTM) | $878M |
| Revenue Growth | +490.8% |
| EBITDA Margin (TTM) | -0.8% |
| Net Debt | $292M |
| Earnings Beats | 3 of 5 |
| P/E (TTM) | — |
| EV/EBITDA (TTM) | — |
What We Like
- Group revenue grew 684% YoY in Q1 2026 to $399M; Nebius AI revenue grew 841% YoY to $390M.
- Nebius AI ARR reached $1.9B, up more than 50% from $1.25B in Q4 2025; management's FY2026 exit target is $7–9B.
- Contracted power is more than 3.5 GW, with >75% owned contracted capacity and a year-end target of at least 4 GW.
- Strategic contracts total up to ~$17.4B with Microsoft through 2031 and up to $27B with Meta over five years.
- Q1 2026 operating cash flow was $2.3B, driven by customer prepayments; cash and equivalents were $9.3B.
What We’re Watching
- Q2 2026 EBITDA margin is expected to fall below Q1; the promised Q3 recovery and Q4 step-up are not yet confirmed.
- Incremental 2026 capex above the prior $16–20B range is not yet fully funded.
- 2025 revenue concentration: an unnamed 'Customer D' accounted for 83% of revenue per the 20-F extract.
- NVIDIA remains a sole-source GPU supplier; custom-silicon programs are a structural risk.
The thesis is strengthening on delivery: the first Meta contract was fully delivered in Q1 2026, the first Microsoft tranche was completed in November 2025, and the contracted power target was overshot and raised. The open question is whether asset-backed financing closes in time to fund the raised $20–25B capex plan and whether Q3/Q4 capacity delivery confirms the guided margin recovery.
Earnings Beat
Group revenue was $399 million in Q1 2026, up 684% year over year, with gross margin of 20.9% and EBITDA of $113.8 million (28.5% margin). Nebius AI annualized run-rate revenue reached $1.9 billion, up from $1.25 billion the prior quarter.
| Metric | Q1 FY2026 | Q4 FY2025 | Q1 FY2025 | YoY |
|---|---|---|---|---|
| Revenue | $399M | $228M | $55M | +621.5% |
| Gross margin | 20.9% | 69.9% | 46.7% | -2580bps |
| EBITDA | $114M | −$54M | −$110M | −203.3% |
| EPS | $2.01 | $-0.99 | $-0.48 | −521.2% |
| Nebius AI annualized run-rate revenue | $1.9B | $1.25B | n/a | — |
| Contracted power | >3.5 GW | >2 GW | n/a | — |
we actually expect those margins in Q2 to go a little bit lower, returning to Q1 levels in Q3 and stepping even higher in Q4— Dado Alonso, CFO, May 13, 2026
Management tone: Management pre-empted the Q2 margin decline and disclosed that incremental capex above the prior range is not yet fully funded. It repeated that capacity is sold out and attributed the capex raise to 2027 capacity visibility, not component inflation.
Management Guidance
Management reiterated FY2026 guidance for group revenue of $3.0–3.4 billion, exit ARR of $7–9 billion, and group adjusted EBITDA margin of around 40%. It raised 2026 capex guidance to $20–25 billion and the year-end contracted power target to at least 4 GW. The CFO added that 2026 capex above the prior range is not yet fully funded.
Trajectory
Trailing quarterly revenue moved from $105.1 million in Q2 2025 to $146.1 million in Q3, $227.7 million in Q4, and $399.0 million in Q1 2026. The model-computed margin trajectory shows gross margin compressing while EBITDA margin expands; the company says capacity is sold out and customer prepayments produced $2.3 billion of operating cash flow.
The Model
The model projects FY+1 revenue of $3,250M and EBITDA of $1,300M (40.0% margin), and FY+2 revenue of $10,500M and EBITDA of $4,725M (45.0% margin). Near-term revenue is anchored by sold-out capacity and the Microsoft contract ramp, while FY+2 reflects the Meta dedicated capacity and owned-site additions.
| Metric | FY2025 | Next FY (E) | Following FY (E) |
|---|---|---|---|
| Revenue | $534M | $3.2B | $10.5B |
| YoY Growth | — | +508.4% | +223.1% |
| EBITDA | −$231M | $1.3B | $4.7B |
| EBITDA Margin | -43.3% | 40.0% | 45.0% |
Projections are the median of 5 independent model runs.
Management reiterated FY2026 guidance for group revenue of $3.0–3.4 billion, exit ARR of $7–9 billion, and group adjusted EBITDA margin of around 40%. It raised 2026 capex guidance to $20–25 billion and the year-end contracted power target to at least 4 GW. The CFO added that 2026 capex above the prior range is not yet fully funded.
What Could Go Right — and Wrong
- Asset-backed financing against the Microsoft and Meta contracts closes before the 2026 build-out peaks.
- Q3/Q4 2026 capacity additions and Microsoft deliveries land on schedule, supporting the guided margin recovery.
- Vera Rubin pre-sales in H2 2026 extend visibility into 2027.
- Token Factory, Eigen, Clarifai, and Tavily shift revenue toward stickier, higher-margin software and inference.
- Avride and TripleTen gain partners or are deconsolidated, removing group margin drag.
- Microsoft or Meta delivery delays or renegotiations impair revenue and the financing plan.
- Additional financing fails to close, forcing slower build-out or heavier ATM use.
- NVIDIA supply constraints or allocation shifts stall capacity activation.
- Power, permitting, or community-opposition delays at Pennsylvania, Alabama, Missouri, or the UK push revenue beyond 2027.
- Demand or pricing rolls over, with unsold new capacity or shorter contract durations.
Looking Ahead
The next 12 months are dominated by capacity execution. Management points to very significant Q3/Q4 2026 capacity step-ups, remaining Microsoft deliveries through end-2026, H2 2026 Vera Rubin pre-sales, and Q1 2027 Alabama and first Missouri site starts. By early 2027, the $12 billion committed Meta dedicated capacity is scheduled to begin delivery.
- Aug 12, 2026Q2 2026 results — No financial detail in source; tests Q2 margin dip and Q3/Q4 recovery language.
- H2 2026Vera Rubin pre-sales — Tests 2027 demand beyond strategic Microsoft and Meta contracts.
- Q3/Q4 2026Microsoft delivery and capacity ramp — Very significant capacity additions; most Microsoft volumes in Q3/Q4.
- FY2026Guidance outcomes — Revenue $3.0–3.4B, exit ARR $7–9B, EBITDA margin ~40%.
- Q1 2027Alabama and Missouri starts — First owned Missouri and Alabama sites expected online.
- Early 2027Meta dedicated capacity begins — $12B committed dedicated compute delivery starts early 2027.
Financials
Annual Summary
| Metric | FY2024 | FY2025 | TTM | YoY |
|---|---|---|---|---|
| Revenue | $105M | $534M | $878M | +410.7% |
| Gross Margin | 44.7% | 64.7% | 47.9% | +1,993bps |
| EBITDA | −$349M | −$231M | $2.2B | +33.8% |
| EBITDA Margin | -333.9% | -43.3% | -0.8% | +29,066bps |
| Net Income | −$651M | $102M | $836M | +115.6% |
| Free Cash Flow | −$720M | −$2.3B | −$2.2B | — |
| Net Cash | — | — | — | — |
Key Ratios (Trailing)
- P/E TTM—
- EV/EBITDA TTM—
- EV/Revenue TTM—
- Price/FCF TTM—
- Gross Margin (TTM)47.9%
- EBITDA Margin (TTM)-0.8%
- Net Margin (TTM)95.3%
- ROIC-6.3%
- SBC / Revenue8.8%
The Company
Nebius Group N.V. is a global AI cloud platform headquartered in Amsterdam and listed on Nasdaq. The core Nebius AI business produced $390 million of $399 million group revenue in Q1 2026, 98% of the total. Its stack spans data centers, GPU capacity, Token Factory managed inference, Aether software, Model Hub, Soperator, and dedicated capacity contracts with Microsoft and Meta.
The company operates owned greenfield sites and co-location facilities in Finland, France, Iceland, the UK, Israel, and the United States. It has more than 3.5 GW of contracted power, with over 75% in owned contracted capacity, and its 2026 capacity additions are back-end weighted into Q3 and Q4. Avride and TripleTen are run as portfolio investments while management seeks strategic and financial partners.
Business Segments
Competitive Landscape
The 20-F names AWS, Google Cloud, Microsoft Azure, Oracle, CoreWeave, Crusoe, Lambda Labs, Fireworks AI, Together AI, Waymo, and Zoox as competitors. Management frames Nebius's differentiation around its full-stack software, owned power position, and paired strategic hyperscaler contracts rather than bare-metal GPU rental.
- CoreWeaveNamed in 20-F as a competitor.
- CrusoeNamed in 20-F as a competitor.
- Lambda LabsNamed in 20-F as a competitor.
- AWSNamed in 20-F as a competitor.
- Microsoft AzureNamed in 20-F as competitor; Microsoft is also a customer under a dedicated capacity contract.
Supply Chain
Nebius sits between NVIDIA GPUs and data-center power upstream and hyperscaler/AI-cloud compute buyers downstream. Its strategic Microsoft and Meta offtakes sit alongside a broader AI-cloud customer base.