Nebius Group Q2 2025 Earnings Report

Nebius Group EPS Results

• Actual EPS: -$0.44
• Consensus EPS: -$0.41
• Beat/Miss: Missed by -$0.03
• One Year Ago EPS: N/A

Nebius Group Revenue Results

• Actual Revenue: $47.60 million
• Expected Revenue: $95.60 million
• Beat/Miss: Missed by -$48.00 million
• YoY Revenue Growth: N/A

Nebius Group Announcement Details

• Quarter: Q2 2025
• Date: 8/7/2025
• Time: Before Market Opens
• Conference Call Date: Thursday, August 7, 2025
• Conference Call Time: 8:00AM ET

Nebius Group (NASDAQ:NBIS), a technology company, builds intelligent products and services powered by machine learning and other technologies to help consumers and businesses navigate the online and offline world. The company's services include Nebius AI, an AI-centric cloud platform that offers infrastructure and computing capability for AI deployment and machine-learning oriented solutions; and Toloka AI that offers generative AI (GenAI) solutions at every stage of the GenAI lifecycle, such as data annotation and generation, model training and fine-tuning, and quality assessment of large language model for accuracy and reliability. It also offers Avride, an autonomous driving solution which targets ride-hailing, logistics, e-commerce, and food/grocery delivery as application domains, as well as focuses on autonomous vehicles and delivery robots; and TripleTen, an EdTech service that prepares specialists for STEM roles, and equipping them with essential technology skills. The company was formerly known as Yandex N.V. and changed its name to Nebius Group N.V. in August 2024. Nebius Group N.V. was founded in 1989 and is based in Schiphol, the Netherlands.

Nebius Group Q2 2025 Earnings Call Transcript

Key Takeaways

• Positive Sentiment: Q2 revenue reached $105.1 million, reflecting 625% year-over-year growth and 106% quarter-over-quarter growth.
• Positive Sentiment: The core AI infrastructure business achieved positive adjusted EBITDA ahead of prior guidance.
• Positive Sentiment: Full-year ARR guidance was raised to $900 million–$1.1 billion, up from $700 million–$1 billion.
• Positive Sentiment: Data center capacity is being rapidly expanded to 220 MW of connected power by year-end and over 1 GW by 2026 to meet AI demand.
• Negative Sentiment: Despite core profitability, group-level adjusted EBITDA is still expected to remain negative for the full year.

Presentation

[Neil Doshi, Vice President & Head of Investor Relations at Nebius Group]

welcome to Nevius Group's second quarter twenty twenty five earnings conference call. Joining me today are Arkady Balaj, Founder and CEO and our broader management team. Our remarks today will include forward looking statements, which are based on assumptions as of today. Actual results may differ materially as the results of various factors, including those set forth in today's earnings release and in our annual report on Form 20 F filed with the SEC. We undertake no obligation to update any forward looking statements.

[Neil Doshi, Vice President & Head of Investor Relations at Nebius Group]

During this call, we will present both GAAP and certain non GAAP financial measures. A reconciliation of GAAP to non GAAP measures is included in today's earnings press release. The earnings press release, shareholder letter and accompanying investor presentation are available on our website at group.nevias.com/investorhub. And now I'd like to turn the call over to Arkady.

[Arkady Volozh, Founder, CEO & Non Independent Executive Director at Nebius Group]

Thanks, Neil, and thank you to everyone for joining the call today. I am pleased I am pleased to say that we had an excellent quarter. We more than doubled our revenue for the whole group from q one. And this quarter, we also became EBITDA positive in our core AI infrastructure business ahead of our previous projections. We could grow faster, but we were oversold on all of, our supply of previous generation hoppers, and we decided to wait for the new generation of GPUs to come.

[Arkady Volozh, Founder, CEO & Non Independent Executive Director at Nebius Group]

And finally, the new black belts are coming to the market in masses. And in parallel, we are dramatically increasing our data center capacity. That's why we expect to significantly increase our sales in the by the end of this year, and that's why we are increasing our ARR guidance for the year end from the previous 700 to $1,000,000,000 to a new guidance, which is now 900 to $1,100,000,000. More, some more color on capacity front, and I see that this is, one of the most important, updates of this call. We are aggressively ramping up.

[Arkady Volozh, Founder, CEO & Non Independent Executive Director at Nebius Group]

By the end of this year, we expect to have secured 220 megawatts of connected power that is either active or ready for GPU deployment. And this expansion includes our data centers in New Jersey and Finland. In addition, we have nearly closed on two substantial new greenfield sites in The United States. And overall, we're in the process of securing more than one gigawatt of power by the 2026 to capture industry growth next year. In addition, we made big enhancements to our software cloud platform, obviously, to support our expanding capacity and to meet the demand of those large scaling clusters.

[Arkady Volozh, Founder, CEO & Non Independent Executive Director at Nebius Group]

Also, we continue to significantly significantly expand our customer base. We started to gain real traction on the enterprise side, adding large global technology customers such as Cloudflare, Process, and Shopify. And we still remained a leading new cloud provider for so called native AI tech startups startups. Have added customers like Hygen, Lightning AI, Photo Roam, and many, many others. On the financing front, as you already know, we are fortunate to have multiple levers to finance our ambitious growth.

[Arkady Volozh, Founder, CEO & Non Independent Executive Director at Nebius Group]

We have raised over $4,000,000,000 in capital so far. We have a strong balance sheet, as you can see, and we have access to potentially billions of dollars more. Thanks to our noncore businesses and other equity stakes, such as AVRite, Clickhouse, Teloku. In short, this is an exciting time for Nebius. We are in the midst of a once in a generation opportunity.

[Arkady Volozh, Founder, CEO & Non Independent Executive Director at Nebius Group]

That's what we believe in. The demand for AI compute is strong and will just get stronger. We are rapidly increasing our capacity to pave the way for accelerated growth in 2026 and beyond. Well and with that, let me introduce our new chief financial officer, Dada Olonso. Dada, welcome again, and the floor is yours.

[Maria del Dado Alonso Sanchez, CFO at Nebius Group]

Thank you, Arkady. I'm really excited to be joining Nebius. I've long believed that AI will fundamentally transform our world, and Nebius is well positioned to make that happen. Of course, I'm also looking forward to getting to know our investors and analysts over the coming months. While the details of our Q2 financial performance can be found in our shareholder letter, I'd like to highlight a few key items and then conclude with guidance.

[Maria del Dado Alonso Sanchez, CFO at Nebius Group]

We reported $105,100,000 in revenue, up 625% year over year and up 106% quarter over quarter, driven by strength in our core business and a solid execution from our triple ten team. Our AI cloud infrastructure revenue increased more than nine times year over year, driven by strong customer demand for our corporate GPUs and near peak utilization of our platform. Even as we achieve hyper growth, we continue to operate with discipline. This focus allowed us to achieve positive adjusted EBITDA in our core business ahead of our expectations. Below the operating income loss line, we recorded a gain from revaluation of investment in equity securities related to our equity investment.

[Maria del Dado Alonso Sanchez, CFO at Nebius Group]

We also reported a gain from discontinued operations. These two non business related items made us, for the quarter, GAAP net income profitable. It is important to notice that we view these gains as one time in nature. Turning to guidance, we see very strong momentum in our business, and demand for AI compute remains exceptionally high. Given our plans to further scale our platform this year, we get updating our full year outlook.

[Maria del Dado Alonso Sanchez, CFO at Nebius Group]

For annualized run rate revenue, as Arkady already mentioned, we are raising guidance from $750,000,000 to $1,000,000,000 to $900,000,000 to $1,100,000,000 This is based on closed contracts for existing and future capacity as well as sales we anticipate for the rest of the year. For our core business revenue, we are maintaining our guidance of 400,000,000 to $600,000,000 Let me share a few points. We continue to experience strong demand and are building capacity to take advantage of the large opportunity in front of us. Of the two twenty megawatts of connected power we expect to have at the end of the year, we will have 100 megawatts of active power. And as we are building out our data center capacity, most of our GPU installations will take place in Q4.

[Maria del Dado Alonso Sanchez, CFO at Nebius Group]

So we expect our annualized run rate revenue and revenue to be back then weighted. For group revenue, we are keeping the projections that we already provided, that is, group revenue of $450,000,000 to $630,000,000 This excludes the 2025 revenue guidance of 50,000,000 to $70,000,000 we previously gave for Toloka. As we announced, effective from Q2, we have deconsolidated Toloka from the group. Turning to adjusted EBITDA. As we previously announced, we expect to be slightly positive by the end of the year at group level, but still we will be negative for the full year.

[Maria del Dado Alonso Sanchez, CFO at Nebius Group]

Finally, we are maintaining our CapEx guidance of around $2,000,000,000 in 2025. So in closing, we are experiencing hyper growth with demand to support continued strong results. We are investing in capacity to capture the large and growing opportunity in front of us and are positioning the company to become a leader in AI cloud infrastructure. Look, I truly believe the future of Nevius is incredibly bright. We're not just well positioned.

[Maria del Dado Alonso Sanchez, CFO at Nebius Group]

We have the resources, the expertise, and most importantly, the team to lead and win. Now let me turn the call over to Neil for q and a.

[Neil Doshi, Vice President & Head of Investor Relations at Nebius Group]

Great. Thank you, Dato. We've started to collect questions from the online platform, and we'll give it a minute just to consolidate. Great. Alright.

[Neil Doshi, Vice President & Head of Investor Relations at Nebius Group]

So our first question comes from our analyst from Goldman Sachs, Alex DeVall. And maybe I'll give this to Mark. You know, Mark, can you maybe talk about the overall demand environment and how does demand look like as we're moving into the second half of this year?

[Marc Boroditsky, Chief Revenue Officer at Nebius Group]

Yes. And thank you, Alex, for the question. The demand environment in the second quarter, as you can tell from our results, was very strong. As we brought on more capacity, we sold through it. And by the end of the quarter, we were at peak utilization.

[Marc Boroditsky, Chief Revenue Officer at Nebius Group]

There's a nice trend that we're actually starting to witness. As we bring on larger crust clusters, we are able to bring on new large customers who wanna purchase, greater and greater capacity. This allows us to expand and diversify our customer base and has been a clear signal there is growing opportunity in the market. This also suggests strong demand to support ramping up our capacity. If we had more capacity in the second quarter, we probably would have sold more as well.

[Marc Boroditsky, Chief Revenue Officer at Nebius Group]

At the same time, we were able to improve the maturity of our platform, which has contributed nicely to increasing our competitive win rate, all of which is continuing on into this quarter.

[Neil Doshi, Vice President & Head of Investor Relations at Nebius Group]

Great. Thanks, Mark. And that was Mark, our new chief revenue officer. A question on on EBITDA. Dato, maybe you can take this one.

[Neil Doshi, Vice President & Head of Investor Relations at Nebius Group]

You know, it's good to see positive adjusted EBITDA for the AI cloud business come in ahead of expectations. How how should we think about adjusted EBITDA for the core business and for the whole group going forwards for the remainder of this year?

[Maria del Dado Alonso Sanchez, CFO at Nebius Group]

Well, look, we are very pleased to report that our core business reached adjusted EBITDA profitability this quarter ahead of our initial guidance. And looking ahead, we expect the core business to remain positive throughout the rest of the year. At the group level, we anticipate turning adjusted EBITDA positive by the end of the year. However, for the full year, it will remain negative. That said, we expect group adjusted EBITDA to be positive starting next year.

[Neil Doshi, Vice President & Head of Investor Relations at Nebius Group]

Great. Thank you, Dato. And, Dato, maybe we'll we'll stick with you. Analyst Nehal Chokshi from Northland is asking about ARR. So, you know, really, as we as we think about ARR for the year, what what are the what are the dynamics around ARR?

[Neil Doshi, Vice President & Head of Investor Relations at Nebius Group]

And and can you give any update for ARR this quarter?

[Maria del Dado Alonso Sanchez, CFO at Nebius Group]

Sure. Thanks, Nihal. Reality is that we show strong momentum in q two with annualized run rate revenue growing from $249,000,000 in March to $430,000,000 in June. While we are not providing monthly ARR updates, I can say that this positive trajectory has continued into July. Looking ahead to our increased annualized run rate revenue guidance, a significant portion of it is already under contract, which gives us a strong visibility.

[Maria del Dado Alonso Sanchez, CFO at Nebius Group]

We also see continued strong demand in the market. And as we scale up capacity, we are able to sell it quickly. With additional capacity coming online later this year, we are confident we're on track to deliver on the revised ARR guidance.

[Neil Doshi, Vice President & Head of Investor Relations at Nebius Group]

Great. Thanks, Dato. Dato, maybe maybe staying with you, you know, from from online. Looks like our prior guidance for ARR was $7.50 to 1,000,000,000 and 400 to 600,000,000 of core business revenue. We're now increasing the ARR, to 900,000,000 to 1,100,000,000.0, but there's no change to the to the revenue guidance. Can you explain why this is?

[Maria del Dado Alonso Sanchez, CFO at Nebius Group]

Yes. Of course. The increase in our ARR guidance reflects the strong demand we are seeing in the expected delivery of additional GPU capacity later this year, particularly the Blackwell Ultras. Because much of this capacity will come online by the end of the year, the impact will show up more in ARR than within the year revenue. That timing dynamic is why we are holding our twenty twenty five revenue guidance steady.

[Maria del Dado Alonso Sanchez, CFO at Nebius Group]

That said, this late year ramp will create a strong foundation heading into 2026 and will support meaningful revenue acceleration next year.

[Neil Doshi, Vice President & Head of Investor Relations at Nebius Group]

Great. Thanks, Datto. We have a question from Alex Platt, analyst from DA Davidson. You know? And he's really asking about the the one gigawatt.

[Neil Doshi, Vice President & Head of Investor Relations at Nebius Group]

So if we're if we're getting to one gigawatt of contracted power by the '26, how should we think about revenue for next year? And, you know, how should we also think about the guidance we gave last quarter for the midterm of getting to mid single digit billions of revenue over the next few years? Maybe, Mark, do you wanna take this?

[Marc Boroditsky, Chief Revenue Officer at Nebius Group]

Certainly. And thank you, Alex, for the question. It's too early for us to provide a '26 guidance, and and we'll be returning to that question, later this year. But for now, we do wanna reaffirm our midterm outlook as, we are making very good progress towards our goals. As we said in our q one earnings call, our base case calls for several billion dollars of revenue in the midterm, which means in the next few years.

[Marc Boroditsky, Chief Revenue Officer at Nebius Group]

Our base case also assumes that we grow our capacity to support this type of revenue goal from our 25 levels. We also said this guidance does not factor in a large deal from, like, a Frontier AI lab or a hyperscaler. Those transactions would be considered incremental to this guidance. I hope everybody's gathering that our ambition is to grow much larger and much faster, and we are laying that foundation with the one gigawatt capacity that we're deploying.

[Neil Doshi, Vice President & Head of Investor Relations at Nebius Group]

Great. Thanks, Mark. The next question is around tariffs. The US is now exercising tariffs across most nations. How this impact your business and margins? Tom, do you wanna take this?

[Tom Blackwell, CCO at Nebius Group]

Yeah. Sure. I'm happy to. So, yeah, listen. I mean, I think the question of tariffs, this is obviously something that we're following closely.

[Tom Blackwell, CCO at Nebius Group]

I would say that for now, it's a bit early to say anything definitive, including based on the latest comments we saw overnight. We're still looking looking into these. But I I think the key thing is whatever is determined, you know, obviously, this is something that affects all players in our market. And, you know, while it's it's it's possible we could potentially see some short term fluctuations, we're confident that the market will be able to balance things out going forward. But, you know, as as we see more, we'll obviously update.

[Neil Doshi, Vice President & Head of Investor Relations at Nebius Group]

Thank you, Tom. Alright. We we get this question quite a bit. You know, what is what is your return on on CapEx? And, you know, Dato, maybe you can help.

[Maria del Dado Alonso Sanchez, CFO at Nebius Group]

Certainly.

[Neil Doshi, Vice President & Head of Investor Relations at Nebius Group]

Like here.

[Maria del Dado Alonso Sanchez, CFO at Nebius Group]

Certainly. Look. When we price our GPUs, we aim for healthy margins on a per hour compute basis.

[Maria del Dado Alonso Sanchez, CFO at Nebius Group]

For the hopper generation, we expect to break even in roughly two to three years on a gross profit level. That includes both the cost of hardware, but also the associated operational expenses. This estimate doesn't factor in our higher margin software and services revenue. As those scale, we see potential to shorten the return on invested capital. As for Blackwell's, we expect the price at the at the premium, so it's still early to comment on specifics at this stage.

[Neil Doshi, Vice President & Head of Investor Relations at Nebius Group]

Great. Stato. Alright. Another question from Alex Deval from Goldman, and this is around capacity and and timeline. So, you know and maybe I'll give this to Andre.

[Neil Doshi, Vice President & Head of Investor Relations at Nebius Group]

Andre, can you maybe walk us through the timeline for the infrastructure build out for this year, and and how do we get to, you know, the 220 megawatts this year and maybe some incremental color for next year?

[Andrey Korolenko, Co-Founder, Chief Product & Infrastructure Officer at Nebius Group]

Yeah. Sure, Neil. Thanks, Alex, for the question for everyone. So we are ramping up our capacity to accelerate our growth for the next year and after. First of all, we are growing with a number of the regions where we are present in 2025.

[Andrey Korolenko, Co-Founder, Chief Product & Infrastructure Officer at Nebius Group]

We are adding UK, Israel, new site in New Jersey, additional capacity in Finland. And Finland and New Jersey are our main drivers of the capacity this year. In currently, New Jersey, we have 200 megawatts in ongoing construction phase. A good part of that will be available this year and the rest in 2026. In Finland, we expect to have an additional 50 megawatts in operations this year just like we, spoke earlier.

[Neil Doshi, Vice President & Head of Investor Relations at Nebius Group]

Yep. Great.

[Neil Doshi, Vice President & Head of Investor Relations at Nebius Group]

And and, Andre, kind of another part of Alex's question is also just, you know, any any more details to, you know, for for '26 and, you know, some of the the greenfield opportunity we talked about. And, you know, maybe just lumping that in with an online question, you know, why why greenfield versus build to suit?

[Andrey Korolenko, Co-Founder, Chief Product & Infrastructure Officer at Nebius Group]

Yeah. Sure, Neil. Well, we are in advanced discussions for a couple of new greenfield sites, each one able to deliver hundreds of megawatts of power in 2026, and we sure will announce hopefully soon about that. Regarding the white greenfields versus build to suits or COLA options, we typically and we spoke about that a lot. We typically favor greenfields because we can control every aspect of the data center from the design to construction to the hardware installations and deployment and phasing. We can actually tailor the phase phasing according to our demand. And for us, it's cheaper to build than build to suit, and we are not locked into the long term leases.

[Andrey Korolenko, Co-Founder, Chief Product & Infrastructure Officer at Nebius Group]

Also, by controlling the design of the building starting from the how fiber power is piped into building and design installation of our own racks and servers, we can achieve a lower total cost of ownership, probably around 20% less than the market average.

[Neil Doshi, Vice President & Head of Investor Relations at Nebius Group]

Great. Thanks, Andre. Maybe we can give this question to our native UK person. Tom, can you maybe shed some light on on on our UK and and Israeli facilities? You know, what what do you see there?

[Neil Doshi, Vice President & Head of Investor Relations at Nebius Group]

What do we see there from an opportunity perspective in those markets? And to what extent will we have local infrastructure presence to unlock that opportune?

[Tom Blackwell, CCO at Nebius Group]

Yeah. No. Absolutely. So I suppose given my accent, I'll start with The UK. I think U UK looks great.

[Tom Blackwell, CCO at Nebius Group]

We think it's a really exciting opportunity there. I mean, obviously, I think everyone knows it's a massive AI market. We're definitely the third largest, biggest outside of US and China. We've been paying quite close attention to what the government's been doing, and they've been taking some quite impressive steps to stimulate growth generally in AI, including confirming, I think, £14,000,000,000 in private sector investment into AI in the region. So I think probably you'll many of you have noticed a couple about a month ago, we announced our intention to launch our first big facility, GPU cluster, in The UK.

[Tom Blackwell, CCO at Nebius Group]

It's just outside of London, and we expect that to be coming on stream in roughly early q early q four. So, actually, we think we're gonna be the first to deliver b three hundreds to The UK market, which we think which we think will be a a really interesting opportunity. And just generally how we're looking at the commercial opportunity there, You know, this there's a vibrant market of AI AI native startup scale ups in London and around. There's a big significant enterprise customer presence as well. I mean, you also what you've seen actually, what we've seen lately is that even some a number of the big global tech companies have been setting up regional hubs, regional r and d facilities, which we think will help to also drive the growth of the ecosystem.

[Tom Blackwell, CCO at Nebius Group]

So the other thing I would say is that as we're looking at some specific industry opportunities and creating verticals around them, and one of the most promising that we see right now among others is the health care and life science space. And, actually, we have a dedicated health care and life science team that's led out of The UK. And in fact, in this particular area, this is an area where we're working in partnership with NVIDIA, and and we'll soon be announcing some initiatives that will be helping sort of life life science startups in the sector. So UK looks great, and we're looking forward to being part of that. Likewise, Israel.

[Tom Blackwell, CCO at Nebius Group]

We think there's also a big opportunity there to sort of service what we think is really growing demand in the local AI sector. As in The UK, the government has been doing a reasonable amount to really develop the ecosystem and stimulate demand. And just generally, we see that Israel seems to be emerging as a as a quite a dynamic AI hub globally. So we'll again, with that, we've we've mentioned this previously, but we'll be launching our GPU cluster there with NVIDIA and with that coming up on stream also early q four. And just generally looking forward to be part being part of it, tapping into the grow into the growth of the AI ecosystem. We think there's a there's a big opportunity for us there.

[Neil Doshi, Vice President & Head of Investor Relations at Nebius Group]

So Great.

[Tom Blackwell, CCO at Nebius Group]

Keep you posted.

[Neil Doshi, Vice President & Head of Investor Relations at Nebius Group]

Thank you, Tom. Maybe we'll go to Datto on on this question.

[Neil Doshi, Vice President & Head of Investor Relations at Nebius Group]

You know, how how do you plan to finance the capacity expansion for this year and next year? Seems like, you know, you'll have to raise a significant amount of capital to achieve your expansion plans.

[Maria del Dado Alonso Sanchez, CFO at Nebius Group]

Sure, Linil. What we are seeing is that our business model is working well. And as we bring new capacity online, we are able to sell it efficiently, which reinforces our confidence to continue investing. Given the strength of the market, we see a clear opportunity to scale and demand our footprint in infrastructure. We have significant cash on hand and will approach any additional capital raising opportunistically depending, of course, on timing and market conditions.

[Maria del Dado Alonso Sanchez, CFO at Nebius Group]

At the moment, our focus is on securing land and power and moving quickly to reach our one gigawatt target.

[Neil Doshi, Vice President & Head of Investor Relations at Nebius Group]

Great. Thank you, Datto. Maybe, Andre, you can take this question. You know, you've announced some some important updates to the software stack. What's what's most important for your customers?

[Andrey Korolenko, Co-Founder, Chief Product & Infrastructure Officer at Nebius Group]

Sure, Neil. Well, our customers who train or run the AI models and have the AI connected tasks are generally looking for three things. They're looking for speed, reliability, and flexibility slash convenience. And this quarter, we continued to execute on those things. And the improvements were also driven and geared towards the Blackwell deploy readiness.

[Andrey Korolenko, Co-Founder, Chief Product & Infrastructure Officer at Nebius Group]

On speed, we've doubled the speed of our network, and that had a direct impact on our ML Perf benchmark results. We made a great step and improved reliability by increasing, like, result in number of mean time between failure. This was due to improvement in our core platform and deployment of our auto healing and health check software that could address potential points of failure before before nodes actually fail. We also improved flexibility. We made it easy for anyone using the s three storage, easily migrate their data to do the AI workloads on our clusters network.

[Andrey Korolenko, Co-Founder, Chief Product & Infrastructure Officer at Nebius Group]

And this makes this makes it easier for the customers to come to Nebios.

[Neil Doshi, Vice President & Head of Investor Relations at Nebius Group]

Great. Thank you, Andre. Andre, maybe sticking with you, Nehao from Northland is asking around some of the the benchmarks that we've talked about this quarter. Can you maybe elaborate a little more on the MLPerf?

[Andrey Korolenko, Co-Founder, Chief Product & Infrastructure Officer at Nebius Group]

Yeah.

[Andrey Korolenko, Co-Founder, Chief Product & Infrastructure Officer at Nebius Group]

With pleasure. Thanks, Nehal. This quarter, we submitted MLPerf training five zero results, revealing some quite impressive performance for large scale training of 3.1, the big one, four zero five billion parameters model. Basically, in cloud, as we doubled the size of our cluster, the speed scales linearly. So the most impressive part about this is that our results are comparable to bare metal benchmarks, but we accomplished this in the cloud.

[Andrey Korolenko, Co-Founder, Chief Product & Infrastructure Officer at Nebius Group]

And for the customers, this is important because it's easier, faster, and more cost effective in in in that.

[Neil Doshi, Vice President & Head of Investor Relations at Nebius Group]

Yeah. Great.

[Neil Doshi, Vice President & Head of Investor Relations at Nebius Group]

Thanks, Andre. We have a question about about our our inference as a service platform. Maybe I'll I'll ask Roma to elaborate. Roma, can you maybe talk about our inference as a service platform? And, also, you know, it looks like you've you've transitioned to a new role, so maybe you can also elaborate on on your, you know, on your new role and what you're working on.

[Roman Chernin, Chief Business Officer at Nebius Group]

Yeah. Thank you, Neil. First of all, I'm always happy to talk about inference. About my transition, we now have Mark, that is focusing on scaling our go to market and sales, and I'm happy to spend time on new initiatives. And, of course, we see more and more demand shifting to inference as all the market.

[Roman Chernin, Chief Business Officer at Nebius Group]

And the strength of Nebios is that we build a full stack. So now we are developing the next layer of our offering very naturally. We we do it to enable the AI centric ISVs, like product builders and enterprises that apply AI in their critical workflows, and we do it with our fully vertically integrated inference as a service product. We are building enterprise grade platform Mhmm. To deploy and scale open rate AI models like Lama, QAN, Flux, just released OpenAI new models, and others.

[Roman Chernin, Chief Business Officer at Nebius Group]

And we focus on high performance and reliability on dedicated infrastructure. Our platform runs on top of Nebio's proven scaled infrastructure, and we target to solve the biggest pain points in production AI, unpredictable latency, GPU bottlenecks, and, not enough flexible platforms to build on scale.

[Neil Doshi, Vice President & Head of Investor Relations at Nebius Group]

Great. Thanks, Roman. Next question is around some of the new large customer wins like Shopify. Maybe, Mark, you can take this. Was were these deals competitive?

[Neil Doshi, Vice President & Head of Investor Relations at Nebius Group]

What what are they using NetVS for? And, any more color you can provide would be would be super helpful.

[Marc Boroditsky, Chief Revenue Officer at Nebius Group]

Yes. Thank you, Neil. Probably one of the important, highlights that we're observing is as we're making our way through the market, we're actually getting interesting adoption like big customers like Shopify, and I wanna add another one to the discussion here like Cloudflare. I'm very excited about these customers. They they are leaders in their categories.

[Marc Boroditsky, Chief Revenue Officer at Nebius Group]

They are pushing the frontier of using AI to build and deliver great solutions, and I've had the privilege of partnering with both of them in the past. Shopify is, utilizing Nebius' AI infrastructure along with Toloka's training data in order to optimize every step of the merchant's journey. A very exciting opportunity for us. Likewise, Cloudflare is using Nebius to power inference at the edge, a very important part of their overall offering, as a part of their popular, workers API. Both relationships are growing, and both are scaling opportunities for us.

[Marc Boroditsky, Chief Revenue Officer at Nebius Group]

We're also seeing other similar interests from other major technology companies and leaders in their categories reinforcing the opportunity overall in the market.

[Neil Doshi, Vice President & Head of Investor Relations at Nebius Group]

Great. Thanks, Mark. Mark, we also seem to have a question just about, you know, you. Looks like, you know, since you've joined NaviGas, for the past couple months now, what have been some of your observations, and what is your strategy to bringing more long term contracts and move the company up towards the enterprise market?

[Marc Boroditsky, Chief Revenue Officer at Nebius Group]

I couldn't be more excited, I have to say, even more so than when I received the opportunity to join the company. This is a very exciting organization. We've got great technology, and that's because we have a world class leading team. It's turned out as you're hopefully hearing in today's call that the market is massive and it's growing quickly. The opportunity for Nebius is to get more structured and methodical with our go to market and to continue to build out our coverage to be able to proactively pursue the market opportunity.

[Marc Boroditsky, Chief Revenue Officer at Nebius Group]

To that end, we are building out our go to market leadership team, including adding a world class VP of sales strategy and operations who's actually starting this week. We're also adding general managers to lead our businesses in The Americas, Middle East, Asia Pacific, Japan, as well as adding leadership to take on the opportunity around strategic customers and major enterprises. In tandem, we will continue to expand our overall customer facing capacity and distribution capabilities. In the short term, we are focused on pursuing the regional markets of AI builders and targeted software vendors and select enterprise segments in order to be able to develop a strong understanding of the use cases that are winning and then a deep understanding of the overall customer journey. Midterm and longer term, we intend to cover the entire global IT market with distribution and sales capacity.

[Neil Doshi, Vice President & Head of Investor Relations at Nebius Group]

Great. Thanks, Mark. Now we we have a question from Alex, our Goldman analyst, around Blackwall demand. You know? And, Mark, you know, as as we're bringing on the Blackwalls, what is what does the demand look like for them?

[Marc Boroditsky, Chief Revenue Officer at Nebius Group]

Thank you again, Alex. A very very thoughtful set of questions today. Well, first of all, let me just clarify. We we continue to see really strong demand for the hoppers, in q two. As a matter of fact, whenever hopper capacity becomes available, we're selling it very quickly.

[Marc Boroditsky, Chief Revenue Officer at Nebius Group]

We did bring on the, the b two hundreds, and we are actively selling through them as well. Pricing trends remain relatively stable for the hoppers even in the context of Blackwell alternatives, which are actually coming through with a healthy premium relatively speaking. We're also seeing interest in the Grace Blackwells that are being implemented later this year.

[Neil Doshi, Vice President & Head of Investor Relations at Nebius Group]

Great. Thanks, Mark. Looks like we're getting a question on partnerships. Looks like you've you've added a number of partners in q two and continue to strengthen your relationship with NVIDIA. What partnerships do you think are most meaningful, and how should we measure the success of these partnerships? Maybe I'll give this to Daniel.

[Daniel Bounds, Chief Marketing Officer at Nebius Group]

Hey. Thanks, Neil. This quarter, we made strong progress expanding our reach across the AI ecosystem, through several high impact partnerships. We launched integrations with Mistral, Base 10, and Skypilot, all of which extend our ease of use of our AI cloud and dedication to our developers and model builders by supporting them across their workflows. We also partnered with Lightning AI in AnyScale extending our presence across both open source tool sets and enterprise users.

[Daniel Bounds, Chief Marketing Officer at Nebius Group]

These collaborations simplify how teams scale and deploy AI workloads using Nebius. And then on the infrastructure side, we expanded our AI cloud portfolio with NVIDIA AI enterprise and became a launch NCP partner for NVIDIA DGX Cloud Leptin, further strengthening our position as a high performance AI platform. Ultimately, we measure our success through the adoption of our partner platforms, revenue contribution, and strategic access to new user segments, all of which we've seen trending positively positively.

[Neil Doshi, Vice President & Head of Investor Relations at Nebius Group]

Great. Thank you, Daniel. Question on utilization. Can you discuss utilization trends in the quarter, or even by by by GPU family? Mark, can you take this one?

[Marc Boroditsky, Chief Revenue Officer at Nebius Group]

Absolutely. You know, as we discussed already, we are investing in and building out our infrastructure. And as we bring on more capacity, we're selling through it, and we are able to bring on bigger customers who wanna get greater capacity. We're adding more capacity this and next quarter and shifting to selling against future requirements. So, ideally, what we're building is a model where we can close and drive expansion of future capacity and future versions of GPUs.

[Neil Doshi, Vice President & Head of Investor Relations at Nebius Group]

Great. Thank you, Mark. Here's a question from Andrew Beal, our analyst from Arote, on getting large contracts. So some of your competitors are signing, you know, large multiyear deals with hyperscalers. You know, what what do you need to do to to get one of these deals, and when when can we see one of these deals? Arkady?

[Arkady Volozh, Founder, CEO & Non Independent Executive Director at Nebius Group]

Oh, yeah. Yeah. As we previously said, of course, we we see a lot of this demand coming from the top frontier AI labs. And we actually believe that this will increase in the future. Millions of new GPUs are coming to the market next year and beyond.

[Arkady Volozh, Founder, CEO & Non Independent Executive Director at Nebius Group]

In cap in order to capture this demand, actually, answering the question what what we need to do, we we're doing the main thing. We are increasing our capacity significantly, increasing this capacity. And as I said in the beginning of the call, we are just addressing this issue right now. Going forward, we hope very much to see those big customers among our class customers because finally, have capacity of their scale. And probably just to, again, to to remind that all the projections we're making this year in midterm, they do not include these big accounts and those big deals.

[Arkady Volozh, Founder, CEO & Non Independent Executive Director at Nebius Group]

So if or when they will come, it will all be incremental and will be a nice surprise, I would say.

[Neil Doshi, Vice President & Head of Investor Relations at Nebius Group]

Great.

[Arkady Volozh, Founder, CEO & Non Independent Executive Director at Nebius Group]

A little surprise.

[Neil Doshi, Vice President & Head of Investor Relations at Nebius Group]

Thank you, Arkady. A lot of questions on AV Ride including from Alex Platt and from Andrew Beal. Maybe, Arkady, you can take this. You know, can you provide an update on AV Ride and and any update regarding their strategic partnership and then really around the potential robotaxi launch in Dallas. You know, how is that trend trending?

[Arkady Volozh, Founder, CEO & Non Independent Executive Director at Nebius Group]

Well, it's to say nothing to say that we're very excited about AVRite as a company in its future taking into consideration what's going on in this industry this year. On the future of AVRite corporate structure, as we spoke many times before, we see a structure something similar to what we've done with Taloca. It's a good example of a type of a partnership we are looking for when a strong partner comes to who develop this business and who actually give up control. In the meantime, the business is performing extremely extremely well. They continue to scale.

[Arkady Volozh, Founder, CEO & Non Independent Executive Director at Nebius Group]

As you know, they have two business lines, delivery and autonomous vehicles. And both on the on the first line, robot side, AVRide is expanding their coverage with the existing partners. They they add new new new cities, new service areas, the restaurants with Uber. They're launching new university campuses in the project with Grubhub. And they're also entering the the new verticals.

[Arkady Volozh, Founder, CEO & Non Independent Executive Director at Nebius Group]

Just recently, they signed with a grocery delivery for the retailer HEB in Texas and also indoor operations in Japan that came through a partnership with Mitsu and FuruSan. On the autonomous vehicle side, Evarite is growing its fleet. As you know, they are partners with Hyundai, and they're expanding their road tests in Dallas. And they're looking forward to launch their road tax service with Uber later this year because they have they signed this partnership early. So we believe it's a great business, and we believe that this is a source of significant significant value for for our company, for the group.

[Neil Doshi, Vice President & Head of Investor Relations at Nebius Group]

Great. Thank you, Rupati. A few a few questions around our sources of funding. You know, last quarter, we talked about potentially tapping into our noncore businesses and equity investments to fund growth of the core business. Any updates that we can share? Tom, would you like to take this?

[Tom Blackwell, CCO at Nebius Group]

Yeah. I'm happy to kind of catch up on this. I mean, I think that, you know, as we talked about, first of all, I would maybe just touch briefly on, sort of two significant equity stakes. So Taloca, which you saw this quarter, actually, we were very pleased that they were able to raise growth capital in a transaction that was led by Bezos, Bezos Expeditions and others. They're doing great things, doing a lot of stuff in the kind of complex AI data task world, and and, actually, their customers are a number of the major AI labs and others.

[Tom Blackwell, CCO at Nebius Group]

You may have seen in this industry. This industry generally is is a hot one. Scale AI, which is a which is a a comp for them, recently sold about half the company at a $30,000,000,000 valuation. So we think that there is very significant upside to Teloku's business prospects and valuation. And what was important for us in that deal was that we we retained a significant majority economic interest, so we feel like we have a lot of exposure to the upside as and when we feel it's the right time to try and tap into that.

[Tom Blackwell, CCO at Nebius Group]

With regards to ClickHouse, there's also you've you've seen ClickHouse in the news in the last quarter. We retained a minority economic interest in in this business. The previous valuation, it had that had a $22,000,000,000 in a transaction in '22, but in the latest capital raise, there was a reported valuation of around 6,000,000,000. And the way that we're thinking about that stake is I think that right now, we still think there's a lot of value to be created in the business. But if there were to be a liquidity event in the coming years at a significantly higher valuation, then that's something that we would consider, and we think, potentially, that could be the source of really several billion dollars, but we'll obviously see see how the business goes.

[Tom Blackwell, CCO at Nebius Group]

And, otherwise, yeah, as you know, we have our we have our wholly owned autonomous vehicle business. I think Arcade has really probably already touched on that, but, again, they're doing really well. They've, in the last quarter, entered into partnerships with the likes of Uber, Grubhub, Rakuten, and others. You know, Waymo is obviously a comp in in that sector, and it's been valued around $4,050,000,000,000. So, you know, this is sort of the we we hope the direction that we can be going in with with this business.

[Tom Blackwell, CCO at Nebius Group]

And, actually, DA Davidson, our upcoming analyst from there, actually recently put out a a note on AB Ride setting out some of the value potential, which I refer people to. So, look, these are great businesses. We we we don't have any immediate need to do anything there. We think that there's still a lot of value to be created in all of them, and we'll we'll watch that closely.

[Tom Blackwell, CCO at Nebius Group]

But we we do very much keep this in mind as potential sources of capital that can help us accelerate investment into the core of the and AI infrastructure business.

[Neil Doshi, Vice President & Head of Investor Relations at Nebius Group]

Great. Let's see. Question on Leptin, NVIDIA Leptin. You know, what how is how is NVIDIA Leptin impacting our business? Maybe, Roma, you wanna take this?

[Roman Chernin, Chief Business Officer at Nebius Group]

Yeah. Thank you. I think that now actually, it was from the launch of Leptin marketplace. We are one of the largest partner, of NVIDIA there, and we see that, it generates quite significant pipeline of the customers who start using Viya Lept, and and then they continue directly with us. So in general, we think that this partnership is a very good extension to all the rest of the job we do together with NVIDIA.

[Roman Chernin, Chief Business Officer at Nebius Group]

And this is one of the efforts now to develop the ecosystem partnerships, the channel partnerships, and value added partners that we mentioned already on this call.

[Neil Doshi, Vice President & Head of Investor Relations at Nebius Group]

Great. Thank you, Roma. And maybe our last question, Europe is ramping up its AI investments. Do you expect to benefit from this, maybe through public or private partnerships, Arkady?

[Arkady Volozh, Founder, CEO & Non Independent Executive Director at Nebius Group]

In short, the answer is yes, of course. A bit longer answer is that we're very well connected in Europe. We came from Europe. We have and we'll have even more data centers in Europe. And I don't know.

[Arkady Volozh, Founder, CEO & Non Independent Executive Director at Nebius Group]

I'm sure that we will be we are actually we will stay we'll be one of the major AI infrastructure builder in Europe.

[Neil Doshi, Vice President & Head of Investor Relations at Nebius Group]

Great.

[Arkady Volozh, Founder, CEO & Non Independent Executive Director at Nebius Group]

One of our key markets.

[Neil Doshi, Vice President & Head of Investor Relations at Nebius Group]

Thank you, Arkady. Alright. I think that's that's a wrap for today.

[Neil Doshi, Vice President & Head of Investor Relations at Nebius Group]

Thank you everyone for joining. We wanna appreciate everyone for attending our call, and we'll be talking to you all soon. Thanks.

Participants

Executives

• Neil Doshi, Vice President & Head of Investor Relations
• Arkady Volozh, Founder, CEO & Non Independent Executive Director
• Maria del Dado Alonso Sanchez, CFO
• Marc Boroditsky, Chief Revenue Officer
• Tom Blackwell, CCO
• Andrey Korolenko, Co-Founder, Chief Product & Infrastructure Officer
• Roman Chernin, Chief Business Officer
• Daniel Bounds, Chief Marketing Officer