Nebius Group N.V. (NBIS) Earnings

Management highlights

### Capacity & Scale Expansion - Total contracted power increased from over 2 gigawatts at end-Q4 2025 to over 3.5 gigawatts by end-Q1 2026, with a new full-year target of at least 4 gigawatts of contracted power - Announced a new 1.2 gigawatt owned site in Pennsylvania, the company's second gigawatt-scale owned U.S. site; over 75% of total contracted power is now company-owned to support full-stack platform efficiency - 2026 capital expenditure (CapEx) guidance was raised to $20-$25 billion, up from the prior $16-$20 billion range, to fund 2027 capacity expansion for which customer commitments are already secured ### Product & Platform Development - Building an end-to-end AI-native full-stack hyperscaler, with cloud services covering the entire AI lifecycle from bare metal compute to multi-tenancy, inference and agentic workloads - Launched S3 version 3.5 in Q1, and completed three strategic acquisitions: Tavili (to extend platform capabilities for agentic search), Agen AI and Clarify (to strengthen inference optimization for the company's Token Factory offering, with Agen AI's Eigen recognized as the top-speed inference provider by NVIDIA) - Re-earned NVIDIA Exemplar Cloud status for GBC training workloads, making Nebious one of a small group of providers to hold this status across multiple GPU generations ### Demand & Customer Growth - Q1 pipeline generation grew 3.5x QoQ to a company record, with demand broadening across industries; the company typically sees multiple customers competing for every new GPU brought online, and all current capacity is sold out - Added new diversified customers across use cases, including Revolut (fintech), 1x Technologies (physical AI), life sciences startups, and enterprise clients in manufacturing, energy, heavy equipment, and pharmaceuticals - Secured a major $27 billion five-year expanded contract with Meta, including a $12 billion firm commitment for 2027 delivery and a $15 billion optional capacity commitment that gives Nebious flexibility to allocate capacity to higher-priced AI cloud customers if market demand remains strong ### Capital & Financing - Raised over $6 billion in new capital year-to-date, including $4 billion in convertible notes and a $2 billion equity investment from NVIDIA, ending the quarter with $9.3 billion in cash - The Meta contract is expected to unlock billions in low-cost asset-backed financing, with additional financing opportunities available from existing contracts with Mentum and Microsoft - Additional potential funding sources include customer prepayments, corporate debt, asset-backed financing, and the company's unused at-the-market equity program

Guidance

- Full year 2026 guidance is reaffirmed: annualized run rate revenue of $7-$9 billion, total group revenue of $3-$3.4 billion, and group adjusted EBITDA margin of ~40%. - 2026 CapEx guidance is upwardly revised to $20-$25 billion, up from the prior range of $16-$20 billion, to fund additional 2027 capacity expansion for which customer commitments are already in place; this additional capacity will start contributing to revenue in H1 2027. - Quarterly adjusted EBITDA margin is expected to follow a non-linear progression in 2026: margins will decline slightly in Q2 due to the back-half weighted timing of new capacity deployment and up-front investments, return to Q1 2026 levels in Q3, and rise further in Q4. The full year 40% margin guidance remains on track. - New capacity deployment in 2026 is heavily weighted to the second half of the year, with the most significant capacity additions coming in Q3 and Q4 2026. The Pennsylvania site will reach full 1.2 gigawatt capacity by early 2030, with the first 250-300 megawatts coming online by the end of 2027.

Segment performance

Nebious Group reported total Q1 2026 revenue of $399 million, representing a 684% year-over-year (YoY) increase and a 75% quarter-over-quarter (QoQ) increase. The core Nebius AI business segment, which excludes consolidated early-stage investments in 1010 and 80Right, generated $390 million in revenue, which is 98% of total group revenue. Nebius AI revenue grew 841% YoY and 82% QoQ, with an annualized run rate revenue of $1.9 billion at quarter end, up more than 50% from $1.25 billion in Q4 2025. Group adjusted EBITDA was $130 million, up from a $54 million loss YoY and $15 million last quarter, for an adjusted EBITDA margin of 32%. The Nebius AI segment achieved an adjusted EBITDA margin of 45%, up from 24% in Q4 2025. The margin gap between the group and core business comes from ongoing operating investments in the early-stage 1010 and 80Right segments. Net income for the quarter was $621 million, driven by a non-cash positive valuation adjustment on the company's GeekHouse investment. Cash and cash equivalents totaled $9.3 billion at quarter end, with operating cash flow of $2.3 billion, up from a $198 million outflow YoY, primarily driven by customer prepayments.

Risks & headwinds

- Local political opposition to U.S. data center construction is an active risk that the company is managing through transparent community engagement, long-term partnership building, and highlighting the energy efficiency and local economic benefits of its facilities. - GPU supply access remains a competitive advantage, and any disruption to the company's strategic supply relationship with NVIDIA could impact capacity expansion plans. - Actual future results may differ materially from forward-looking statements due to inherent risks and uncertainties, as outlined in the company's Form 20-F filing. - Timing delays in new site development and capacity deployment could impact near-term revenue and margin performance, though the company has kept all contracted delivery commitments to date for Meta and Microsoft.

Analyst Q&A

• Q: How is stronger GPU pricing impacting your business, and what share of older contracts can benefit from current pricing dynamics? /

  A: Management reports strong pricing across all GPU generations, with demand continuing to outpace available capacity. The company raised prices again in Q1 and still sold out all capacity at the new higher price points. In addition to price gains, average contract durations, average contract values, and customer prepayments are all increasing, as customers lock in capacity, improving Nebious' working capital position.

• Q: What portion of the 2026 CapEx guidance increase comes from higher capacity growth versus component cost inflation? /

  A: The entire CapEx increase is driven by stronger visibility into 2027 customer demand, requiring earlier investment now to bring larger capacity online in H1 2027. Component cost inflation only had a low single-digit percentage impact on the 2026 total CapEx plan, as most 2026 component purchases were secured in 2025 at prior price levels.

• Q: Why is the full year group adjusted EBITDA margin guidance of 40% below Q1's Nebius AI margin of 45%? What does margin progression look like through 2026? /

  A: The step down reflects timing, not a structural issue. Up-front investments in hiring, acquisitions, and product development are recorded earlier, while new capacity and the associated revenue comes online later in the year. Q2 margins will dip slightly due to the back-end weighted capacity rollout, before returning to Q1 levels in Q3 and rising further in Q4, putting the full year on track to hit the 40% group margin guidance.

• Q: Can you explain the structure and benefits of the new $27 billion Meta contract? /

  A: The five-year contract includes a $12 billion firm commitment for dedicated capacity starting in 2027, plus a $15 billion optional capacity commitment that lets Nebious choose to allocate capacity to Meta or sell to higher-priced AI cloud customers at its discretion. Meta's commitment allows Nebious to access low-cost asset-backed financing for the capacity, while retaining upside from strong market pricing, leading to higher margins and lower risk than alternative build plans.