Nebius Group N.V. Q2 FY2025 earnings call

• Revenue grew significantly, with $105.1 million reported, driven by strength in the core business. - AI cloud infrastructure revenue increased over 9x YOY due to strong customer demand. - Actively ramping up capacity: by end of 2025, 220 MW of connected power for GPU deployment, including data centers in New Jersey and Finland; nearly closed on 2 new greenfield sites in the US. - Enhanced software cloud platform to support expanding capacity and large-scale clusters. - Expanded customer base, including enterprise customers like Cloudflare, Prosus, Shopify, and native AI startups. - Raised over $4 billion in capital, with a strong balance sheet and access to noncore businesses and equity stakes.

Revenue for the quarter was $105.1 million, up 625% year-over-year and 106% quarter-over-quarter. The AI cloud infrastructure revenue increased more than 9x year-over-year. The core AI infrastructure business achieved EBITDA positivity ahead of projections. The AI cloud infrastructure segment is a key driver, with strong customer demand for copper GPUs and near peak utilization of the platform.

• ARR guidance raised from $750 million to $1 billion to $900 million to $1.1 billion. - Core business revenue guidance maintained at $400 million to $600 million. - CapEx guidance around $2 billion in 2025. - By end of 2025, 220 MW connected power, with 100 MW active; GPU installations mostly in Q4. - Aim to secure over 1 GW of power by end of 2026 to capture industry growth.

• Tariffs: Impact on business and margins, but market expected to balance out. - Dependence on capacity: Oversold previous generation GPUs, waiting for new generation Blackwells to come to market.

Q: Talk about overall demand environment and second half of year A: Marc D. Boroditsky stated the demand environment in Q2 was very strong, with more capacity bringing on new large customers, improving platform maturity, and strong demand continuing into the quarter Q: EBITDA for core business and group A: Dado Alonso said core business adjusted EBITDA positive remaining, group turning adjusted EBITDA positive by end of year but full year negative Q: ARR dynamics A: Dado Alonso mentioned ARR grew from $249 million in March to $430 million in June, positive trajectory continued into July, significant portion under contract Q: 1 gigawatt power by end of 2026 A: Marc D. Boroditsky said midterm outlook has base case for several billion revenue, not factoring large deals Q: Tariffs impact A: Tom Blackwell said monitoring tariffs, market expected to balance out Q: Return on CapEx A: Dado Alonso said hopper generation expected to break even in 2-3 years on gross profit level, Blackwells early to comment on specifics Q: U.K. and Israeli facilities A: Tom Blackwell talked about U.K. and Israel opportunities, U.K. facility coming online Q4, Israel plans Q: Financing capacity expansion A: Dado Alonso said cash on hand, opportunistic capital raising Q: Software stack improvements A: Andrey Korolenko on speed, reliability, flexibility improvements in software stack Q: Inference as a service A: Roman Chernin on developing enterprise-grade platform for open weight AI models Q: Large customer wins like Shopify A: Marc D. Boroditsky on Shopify using Nebius for merchant journey optimization, Cloudflare using for edge inference Q: Avride update A: Arkady Volozh on Avride's performance, expansion in delivery and autonomous vehicles Q: NVIDIA Lepton impact A: Roman Chernin on partnership generating pipeline, extending customer base Q: Europe AI investments A: Arkady Volozh on benefiting from Europe's AI investments, having data centers in Europe