Key Highlights

  • NBIS reported second-quarter 2026 Revenue of $582.3 million, up 454 percent year over year and beating the $569.9 million estimate by 2.18 percent.
  • Adjusted EPS of negative $0.68 missed the negative $0.67 estimate by 1.49 percent, even as adjusted EBITDA swung to $236 million from a $21 million loss a year earlier.
  • Annualized run-rate revenue reached $3 billion, up 598 percent year over year, with management reaffirming full-year guidance of $7 billion to $9 billion.
  • The company raised its year-end contracted power target to 5 gigawatts and closed four billion-dollar-plus customer deals during the quarter.

Revenue Growth Accelerates on AI Cloud Demand

Nebius Group N.V. (NASDAQ:NBIS) reported second-quarter revenue growth of 454 percent, with its core AI cloud Business climbing 514 percent to $575 million and accounting for 98 percent of the group total. Management attributed the surge to capacity added earlier in the year, higher infrastructure utilization, and early contributions from its asset-light Token Factory offering and recent acquisitions. Annualized run-rate revenue, a forward-looking measure of contracted business, reached $3 billion at the end of June, up 56 percent from the prior quarter alone.

The pace of growth has repeatedly outstripped the company's ability to bring new capacity online, with executives noting that available capacity continues to sell out as soon as it is deployed. That dynamic has allowed Nebius to hold back a portion of its 2027 capacity rather than pre-selling it, betting that shorter-duration, premium-priced contracts will generate higher returns than long-term commitments signed today. The approach carries execution risk, however, since it depends on sustained Demand growth and timely data-center construction across multiple regions.

Profitability Expands, but Losses Persist at the Bottom Line

Group adjusted EBITDA rose to $236 million, a 41 percent margin, compared with a loss of $21 million in the prior-year quarter, driven by the Nebius AI segment's 50 percent EBITDA margin. Despite this operating improvement, adjusted per-share losses widened slightly beyond estimates, reflecting continued heavy Investment in capacity build-out and early-stage units such as Avride and TripleTen. Management indicated it expects the AI cloud business to continue representing the large majority of group profitability as those newer ventures scale.

The company closed four landmark deals during the quarter, each exceeding $1 billion in value, at yields of $20 million to $25 million per megawatt with upfront prepayments covering 50 to 60 percent of associated Capital spending. A newly launched capacity auction cleared 15 percent above the highest price ever charged for Blackwell-generation chips, suggesting pricing power that could support margins further, though sustained strength will likely depend on how quickly hyperscalers and other entrants add competing supply.

Funding Diversifies as Capital Needs Grow

Customer prepayments reached an all-time high in the quarter, with roughly 70 percent of new deals including upfront payments, and management expects more than $9 billion of prepayment funding in 2026. Operating Cash Flow totaled $2.3 billion, and the company ended the period with $8 billion in cash. Nebius also raised approximately $2.8 billion through its at-the-market Equity program and completed its first asset-backed Debt facility, a $775 million issuance priced at a modest spread over benchmark rates and secured against contracted cash flows.

With more than $40 billion in committed Backlog available to borrow against, management described the financing model as scalable, though continued reliance on external capital to fund capital expenditures of $20 billion to $25 billion this year could pressure the Balance Sheet if contract terms or debt markets shift unfavorably.

Conclusion

Nebius enters the second half of 2026 with reaffirmed guidance and a capacity pipeline that management believes could support more than a gigawatt of new build-out annually starting next year. The company's ability to sustain premium pricing through its auction and short-term contract mechanisms may continue to support Margin expansion, though this remains contingent on demand holding at current levels. Execution risk around data-center permitting, equipment deployment timelines, and financing costs could weigh on the pace of growth, and formal 2027 guidance is not expected until later this year, leaving some uncertainty around the durability of current contract economics.