Nebius Group Q3 Earnings Call Highlights

Key Points

• Q3 revenue surged 571% year over year to $980.8 million, with adjusted EBITDA reaching $465.8 million. About $325 million of revenue came from a non-recurring initial asset-light partnership transaction.
• Data-center construction and power delays led Nebius to narrow its 2026 revenue outlook to $3.0 billion–$3.2 billion, while raising expected 2026 capital spending to about $27 billion. The company said affected capacity has shifted into 2027, not been canceled.
• Nebius forecasts $12 billion–$13 billion in 2027 revenue and pre-tax break-even in that year’s fourth quarter, alongside $40 billion–$45 billion in capital spending. Strong customer prepayments and asset-backed financing are expected to fund 75%–85% of 2027 capex.

Nebius Group NASDAQ: NBIS reported a sharp rise in third-quarter revenue as it added AI computing capacity, but trimmed the top end of its 2026 revenue outlook after delays at some third-party data centers pushed capacity deliveries into 2027.

The AI infrastructure provider expects revenue to reach $12 billion to $13 billion in 2027, roughly four times its revised 2026 outlook, and to break even on a pre-tax earnings basis in the fourth quarter of next year. It also plans to spend $40 billion to $45 billion on capital expenditures in 2027 as it adds more than a gigawatt of capacity.

CEO Arkady Volozh said demand for AI capacity remains strong and that customers are committing for longer periods, at higher prices and with larger upfront payments. But he acknowledged that construction delays are affecting Nebius as well as the broader industry.

Revenue Growth Includes Asset-Light Contribution

Third-quarter group revenue rose 571% from a year earlier to $980.8 million, and increased 68% from the second quarter. Nebius AI Cloud generated $973.8 million, or approximately 99% of group revenue.

The quarter included approximately $325 million of non-recurring revenue from the initial phase of an asset-light partnership model. Under that approach, partners fund capacity using Nebius architecture and its AI Cloud platform. CFO Dado Alonso said Nebius earns revenue both when it enables the architecture and platform on a partner’s capacity and when that capacity comes online.

COO Ophir Nave said the transaction was the company’s first under the model. He added that the 2027 revenue outlook does not include potential revenue from asset-light arrangements and other partnerships.

Adjusted EBITDA rose to $465.8 million from a loss of $5.2 million a year earlier. The group’s adjusted EBITDA margin was 47.5%, up from 40.6% in the second quarter. Alonso cautioned against analyzing any single quarter in isolation, noting that new sites can incur costs before generating revenue and that the third quarter included revenue recognized at a point in time.

Delays Narrow 2026 Outlook

Nebius now expects 2026 revenue of $3 billion to $3.2 billion, compared with its prior range of $3 billion to $3.4 billion. It maintained its forecast for a full-year adjusted EBITDA margin of approximately 40%, while raising its expected capital spending to about $27 billion from $20 billion to $25 billion.

Volozh said some colocation sites, including in New Jersey, are behind schedule, shifting some planned revenue into 2027. Alonso said some third-party capacity had shifted into the second quarter of 2027. Volozh said customers had been informed and that none of the affected capacity had been canceled.

At the Vineland site, Chief Infrastructure and Product Officer Andrey Korolenko said the delay stemmed primarily from power availability. He said DataOne decided to wind down temporary generation faster than expected while Bloom generation was being deployed. Bloom generation is live at the site, Korolenko said, but needs to ramp up. Nebius continued delivering capacity to Microsoft during the third quarter and expects further deliveries in November and December, he added.

Nebius expects annualized run-rate revenue to exceed $7 billion for the month of February. Alonso said the company will stop providing guidance for that metric after the update and will instead focus on revenue and pre-tax earnings.

Prepayments and Financing Support Expansion

Volozh said agreements closed in the third quarter were priced above $25 million per megawatt, compared with $20 million to $25 million in the second quarter. He also said prepayments on new contracts covered more than 100% of the capital needed to bring the contracted capacity online, up from 50% to 60% in the prior quarter.

More than 90% of contract value signed in the third quarter carried a prepayment, Alonso said. Nebius expects $10 billion in committed customer prepayments in 2026 and $17 billion to $20 billion in 2027. The company expects prepayments and asset-backed financing against existing investment-grade contracts to fund 75% to 85% of its 2027 capital spending range.

Nebius ended the third quarter with $7.4 billion in cash and cash equivalents. Alonso also cited a $775 million asset-backed facility closed in July, a $5.75 billion convertible senior notes offering completed in August and approximately $1 billion in net proceeds from share sales under the company’s at-the-market program during the quarter.

Chief Revenue Officer Marc Boroditsky said customers committed more than $12 billion in contract value since the start of the third quarter, including multi-billion-dollar, five-year agreements. Several were signed after quarter-end and will appear in the following quarter’s reported commitments, he said. Boroditsky added that the large majority of the $12 billion came from AI-native customers.

Owned Sites and Software in Focus

Nebius expects most of its planned 2027 capacity additions to come from owned sites, which management said provide more control over delivery and a stronger margin profile than colocation facilities. Korolenko identified projects in Alabama, Missouri and Finland as expected contributors to 2027 revenue, with Pennsylvania expected to contribute to future revenue as well.

Volozh also said managed inference platform Token Factory is on track to reach a multi-hundred-million-dollar annualized revenue run rate. Chief Business Officer Roman Chernin said the service, which is priced per token, is growing quickly from a low base and benefits from running on Nebius’ own infrastructure.

The company expects its fourth-quarter 2027 pre-tax break-even target to reflect a five-year depreciation period for servers and network equipment. As AI supply and demand eventually become more balanced, Volozh said, Nebius is investing simultaneously in capacity, software and its go-to-market operation.

About Nebius Group (NASDAQ:NBIS)

Nebius Group is a technology company focused on building infrastructure for artificial intelligence. Its core business, Nebius, offers cloud computing services and access to accelerated computing resources designed to help developers and organizations train and run AI models. The company also has businesses in areas including data services for AI, autonomous mobility and online education. Based in Amsterdam, Nebius serves customers internationally and is developing data center and computing capacity to support its AI cloud services.

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