NBIS — Nebius Group N.V.

Summary of Nebius Group Q1 2026 Earnings Call

1. Key Financial Results and Metrics:

• Revenue Growth: Group revenue increased by 684% year-over-year to $399 million, with a 75% increase from Q4. Nebius AI revenue grew 841% to $390 million, representing 98% of group revenue.
• Annualized Run Rate Revenue: Reached $1.9 billion, up from $1.25 billion in the previous quarter.
• Adjusted EBITDA: Group adjusted EBITDA was $130 million, up from $15 million in Q4 and a loss of $54 million a year ago, with a margin of 32%. Nebius AI adjusted EBITDA margin expanded to 45%.
• Net Income: Reported at $621 million, benefiting from a non-cash valuation adjustment.
• Cash Position: Cash and cash equivalents stood at $9.3 billion, supported by $2.3 billion in operating cash flow.

2. Strategic Updates and Business Highlights:

• Capacity Expansion: Contracted power capacity increased to over 3.5 gigawatts, with a target of at least 4 gigawatts for 2026. A new site in Pennsylvania is expected to support 1.2 gigawatts.
• Acquisitions: Completed three acquisitions (Tavily, Eigen, Clarifai) to enhance AI capabilities and strengthen the platform.
• Partnerships: Expanded collaboration with NVIDIA, achieving NVIDIA Exemplar Cloud status for training workloads.
• Customer Demand: Strong demand across various sectors, with a 3.5x increase in pipeline generation compared to Q4.

3. Forward Guidance and Outlook:

• CapEx Guidance: Increased to $20 billion - $25 billion for 2026, up from $16 billion - $20 billion, reflecting investments for 2027 capacity.
• Revenue Outlook: Reiterated full-year guidance for annualized run rate revenue of $7 billion - $9 billion and group revenue of $3 billion - $3.4 billion.
• Adjusted EBITDA Margin: Expected to average around 40% for the year, with a nonlinear progression anticipated due to timing of capacity deployment.

4. Bad News, Challenges, or Points of Concern:

• Capacity Constraints: While demand is high, the ability to meet this demand is contingent on timely capacity additions, which are back-end weighted for 2026.
• Market Competition: The competitive landscape remains intense, with several customers vying for available GPU capacity.
• Political Opposition: Potential challenges related to data center construction in the U.S. due to local opposition, although the company is actively engaging communities to mitigate concerns.

5. Notable Q&A Insights:

• GPU Pricing Impact: Strong pricing dynamics are evident, with both older and newer GPU generations seeing price increases due to high demand.
• Capacity Sales: The majority of future capacity is already contracted, with proactive management of allocations to meet evolving demand.
• Meta Contract Details: The $27 billion contract with Meta includes a $12 billion commitment for dedicated compute capacity and an additional $15 billion option for further capacity, which can be allocated at Nebius's discretion.
• M&A Strategy: Acquisitions are focused on enhancing capabilities and customer engagement, with an emphasis on vertical integration and addressing diverse customer needs.

Overall, Nebius Group reported a robust quarter with significant growth in revenue and margins, driven by strong demand and strategic investments, while also facing challenges related to capacity expansion and competitive pressures.