Key Highlights

  • Q2 Revenue rose 454% to $582.3 million, and adjusted EBITDA swung to a $236.2 million profit from a $21.0 million loss.
  • Four AI cloud deals averaged more than $1 billion each, and about 70% of deals included upfront payments that offset part of the capex.
  • Nebius reaffirmed 2026 guidance for $7-$9 billion of year-end ARR and $20-$25 billion of capex, and raised about $5.75 billion in convertible notes.
  • Shares closed at $236.12 on Sept. 22, up about 182% year to date but roughly 21% below their 52-week high of $299.86.

Nebius Group N.V. (NASDAQ:NBIS) grew revenue more than fivefold in a year in the simplest way available to an AI cloud provider. It installed large amounts of GPU capacity, sold it quickly under big contracts, and started from a small base. In its Aug. 12 report for the quarter ended June 30, the Amsterdam-based company posted revenue of $582.3 million, compared with $105.1 million a year earlier and up 46% from the first quarter. Its core Nebius AI cloud Business produced about $575 million, or 98% of the total.

The build-out is expensive. Nebius spent about $5.66 billion on property, equipment and intangibles in the second quarter alone, and more than $8.1 billion in the first half. That spending turns into revenue only when capacity comes online. Adjusted EBITDA swung to a $236.2 million profit, a Margin of about 41%, from a $21.0 million loss a year earlier. The company still recorded a GAAP net loss from continuing operations of $190.4 million.

The shares closed at $236.12 on Sept. 22, up about 182% year to date but roughly 21% below their 52-week high of $299.86.

What Powered the Growth

Three factors did most of the work. The first is scale. Annualized run-rate revenue reached about $3 billion at the end of June, up nearly 600% from a year earlier and 56% from March. Capacity that went live late in the second quarter was expected to add revenue in the third.

The second is contract size. Nebius closed four AI cloud deals in the quarter with an average total contract value above $1 billion each, and total contract value grew nearly fourfold from the prior quarter. About 70% of the deals included upfront customer payments, which typically offset half to three-fifths of the related capital expenditure. That structure reduces how much outside capital Nebius needs for each new cluster.

The third is pricing. The company reported firmer rates for both the newest AI chips and earlier-generation GPUs. A capacity auction cleared at a record price for Blackwell chips, 15% above previous highs. Founder and CEO Arkady Volozh summed up the quarter in his Shareholder letter: "Everything we set out to do this quarter, we did."

Guidance Reaffirmed, Financing Upsized

Nebius reaffirmed its 2026 outlook: annualized run-rate revenue of $7 billion to $9 billion by year-end, group revenue of $3 billion to $3.4 billion, an adjusted EBITDA margin of about 40%, and Capital Expenditure of $20 billion to $25 billion. The company raised its year-end contracted power target to 5 GW and aims to deploy more than 1 GW of new capacity a year from 2027.

To fund that plan, Nebius priced an upsized $5.0 billion convertible note offering on Aug. 19. It comprised $3.0 billion of 0.50% notes due 2030 and $2.0 billion of 4.50% notes due 2034, and the company later reported closing with gross proceeds of about $5.75 billion. At June 30, the Balance Sheet showed $8.04 billion of cash and roughly $8.5 billion of total debt. Operating Cash Flow was about $2.25 billion in the quarter, helped by customer prepayments.

Revenue of $582.3 million beat the LSEG consensus of $572.75 million. The shares rose about 12% in premarket trading on the day of the report. For the first half, revenue totaled $981.3 million, up 529%, and adjusted EBITDA was $365.7 million compared with a $74.7 million loss a year earlier. The swing to a GAAP loss mainly reflected the absence of Investment Revaluation gains booked in the prior year and higher interest expense. The adjusted net loss narrowed to $33.2 million.

Partnerships and the Wider Group

On Sept. 8, Palantir (NASDAQ:PLTR) named Nebius its preferred sovereign AI infrastructure partner. After an integration period, Nebius compute and inference endpoints will be available inside Palantir's enterprise environment for eligible Palantir customers. The companies did not disclose financial terms, so the revenue impact is not yet clear.

Beyond the AI cloud, the group includes Avride, which develops autonomous vehicles and delivery robots, and TripleTen, an edtech platform. It also holds stakes in ClickHouse and Toloka. These businesses are small compared with the core cloud operation, but they give Nebius Assets it could monetize.

Crowded Neocloud Competition

Nebius competes with other specialized GPU cloud providers, often called neoclouds, including CoreWeave (NASDAQ:CRWV), as well as the hyperscale platforms of Amazon (NASDAQ:AMZN), Microsoft (NASDAQ:MSFT), Google (NASDAQ:GOOGL) and Oracle (NYSE:ORCL). The niche rewards whoever can secure Nvidia chips, power and Data Center sites fastest, and Nebius's target of more than 1 GW of new capacity a year is aimed squarely at that race. Its technical staff and in-house software stack are its main differentiators, while the hyperscalers have far larger balance sheets and existing customer relationships.

The Risks Behind the Growth

  • Capital intensity: Planned 2026 capex of $20 billion to $25 billion is several times expected revenue. Execution missteps or tighter Credit markets could strain funding.
  • Dilution and leverage: Convertible notes add interest costs and can convert into shares, diluting existing holders.
  • Customer concentration: Deals worth more than $1 billion each mean a small number of customers account for a large share of revenue.
  • Pricing cycles: GPU rental prices are currently rising, but new Supply or a slowdown in AI spending could reverse that. Older chips also lose value as new generations arrive.
  • GAAP losses: Adjusted EBITDA is strong, but Depreciation and interest keep reported Net Income negative.

Whether the Run Rate Can Double Again

The third-quarter report is expected around Nov. 10, subject to confirmation by the company. Investors will look for evidence that run-rate revenue is on track for the $7 billion to $9 billion year-end target, which would require it to more than double from June levels. The report should also show how much of the 5 GW contracted power target is secured, whether capex is tracking the $20 billion to $25 billion range, and whether the Palantir Partnership has started producing commercial revenue. Any further capital raises would also be closely watched.