NBIS Earnings Recap
Beat 3 of last 5 quarters
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Nebius's Q2 results reinforce the thesis that AI infrastructure demand remains far ahead of supply, with pricing power and prepayments supporting aggressive capacity expansion. The company's ability to raise contracted power to 5 GW and plan over 1 GW of new capacity annually positions it as a key independent player in the AI cloud buildout, alongside hyperscalers and other neoclouds. The asset-light model and auction mechanism could further accelerate capacity deployment and price discovery across the industry.
Nebius delivered another quarter of triple-digit growth, with group revenue up 454% YoY to $582M and Nebius AI revenue up 514% to $575M. Adjusted EBITDA swung to $236M (41% margin) from a loss a year ago, driven by higher utilization, the asset-light model, and recent acquisitions. The company closed four landmark deals averaging over $1B each, launched its first capacity auction (clearing 15% above prior highs), and raised its contracted power target to 5 GW. Customer prepayments hit an all-time high, and the company raised $2.8B via ATM and announced a $775M asset-backed debt facility in July.
Management reaffirmed full-year 2026 guidance: annualized run rate revenue of $7B–$9B, group revenue of $3B–$3.4B, group adjusted EBITDA margin of ~40%, and capex of $20B–$25B. They raised the year-end contracted power target to 5 GW and plan to deploy more than 1 GW of new capacity in 2027. They emphasized that 2027 capacity is largely sold out at $20M–$25M per MW with prepayments covering 50–60% of capex, but they are deliberately retaining capacity for higher-margin short-term deals and auctions. Management expects margins to improve in the second half of 2027 as owned data centers come online, and they see asset-light partnerships and high-value services (Token Factory, agentic, inference) as incremental margin drivers. Formal 2027 guidance will be provided later this year.
“And we could sell today our entire 2027 capacity on these terms if we wanted to. But we are not doing this. We see that we can achieve higher value by retaining some capacity to serve shorter-term and immediate client needs.”
on Capacity allocation strategy
“We launched our first capacity auction. It was very successful and cleared at the highest price we have seen for the Blackwell generation of chips, 15% above the highest price we ever charged before.”
on Auction pricing signal
“And we are not just reporting a strong quarter behind us. It's much more than that. We see the demand, we see the supply. We see deal terms for 2027 and beyond.”
on Demand visibility
With the Vineland, New Jersey data center site hearing adjourning without a vote, can we get an update on the site? How is capacity tracking and how could this impact plans to ramp this site?
Tom Blackwell explained the hearing is part of the normal process related to switching to Bloom fuel cells, which they believe enhances the project. Andrey Korolenko confirmed all required tranches have been delivered, construction finished earlier this summer, and Bloom deployment should be fast with no significant timeline impact.
A large share of our deals are tied to capacity arriving in late 2026 and through 2027. Given sentiment around gigawatt-scale build-out, what gives you confidence in the capacity ramp?
Andrey Korolenko said contracted power is being raised to 5 GW by end of 2026, with most coming online over the next 3–3.5 years. He cited regional expansion, a mix of grid and behind-the-meter power, the Bloom partnership, and flexibility in cloud contracts to deliver within regions as key confidence factors.
Debt markets have been volatile and all-in costs have moved higher. Are you still comfortable leaning on debt from here? Or should we expect greater use of equity through the ATM or perhaps a convertible?
Dado Alonso said the approach is to match the right financing instrument with the right assets, prioritizing cost of capital, minimizing dilution, and a strong balance sheet. He highlighted customer prepayments (>$9B expected in 2026), asset-backed financing (the $775M facility priced at SOFR+250), and flexibility with no corporate debt, while actively considering equity-linked options.