Nebius Group Q4 Earnings Call Highlights

Key Points

• Nebius delivered a strong Q4 with $228 million in group revenue (up 547% YoY), a $1.2 billion core AI cloud ARR, 830% core cloud revenue growth YoY, and a positive adjusted EBITDA inflection with core cloud adjusted EBITDA margin rising to 24%.
• Management reiterated a target of $7 billion to $9 billion ARR by end-2026 and guided 2026 revenue to $3.0–$3.4 billion with a group adjusted EBITDA margin of ~40%, while planning $16–$20 billion of CapEx in 2026 and expecting to fund roughly 60%+ of it from cash flows after ending 2025 with $3.7 billion in cash and $834 million of operating cash flow in Q4.
• Nebius is rapidly expanding capacity—raising contracted power guidance to >3 gigawatts and targeting 800 megawatts to 1 gigawatt of available data center capacity by year-end—while already servicing major hyperscaler contracts (Meta fully deployed; Microsoft tranches underway with a full run rate expected in 2027).

Nebius Group NASDAQ: NBIS reported a sharp acceleration in revenue and annualized run-rate revenue (ARR) in the fourth quarter of 2025, while management emphasized continued demand strength, sold-out capacity, and a stepped-up investment plan aimed at scaling data center power and GPU deployments through 2026 and beyond.

Management highlights strong demand and sold-out capacity

Founder and CEO Arkady Volozh said 2025 was “a very strong year,” citing rapid scaling of compute capacity and progress toward building a hyperscale AI cloud platform. He said demand remains robust, with Nebius “sold out of capacity in Q3 and Q4” and “already now in Q1 of 2026, also sold out.” Volozh added that capacity is often fully committed even before it comes online.

Against that backdrop, Volozh said the average contract duration for new cloud customers grew by 50% and that GPU pricing “didn’t fall, even on previous generations,” as some in the industry may have expected. He described startups scaling from hundreds of GPUs to “tens of thousands” as they gain traction, while enterprise customers increasingly use AI for vital business processes.

Q4 results: revenue growth, ARR beats, and EBITDA inflection

CFO Dado Alonso said Nebius exceeded its ARR guidance and achieved positive adjusted EBITDA at the group level. For Q4, the company reported:

• Group revenue of $228 million, up 547% year-over-year and 56% sequentially from Q3.
• Core AI cloud ARR of $1.2 billion at the end of December, exceeding the high end of the prior guidance range of $1.1 billion.
• Core AI cloud revenue growth of 830% year-over-year and 63% quarter-over-quarter, which management attributed to high utilization, strong pricing, and execution.

On profitability, Alonso said operating leverage and spending discipline supported progress on the bottom line. Group adjusted EBITDA “inflected positively” in Q4, consistent with prior guidance. He also noted the adjusted EBITDA margin in the core cloud business expanded to 24% in Q4 from 19% in Q3.

Balance sheet, cash flow, and funding approach

Alonso said Nebius ended 2025 with $3.7 billion in cash and cash equivalents and generated $834 million in operating cash flow in Q4, which he said was “primarily comprised of upfront payments from our long-term agreements.” He added that these early cash flows are expected to continue through 2026 as the company executes against commitments, providing “significant visibility into future cash flow.”

In the Q&A, COO Ofir Nave expanded on how Nebius expects to finance its 2026 capital program. He said the company plans to fund CapEx first from cash flows, including cash already received and expected from favorable long-term contract terms. Nave said those cash flows would finance the majority of 2026 needs—“around 60%, maybe even more.”

Nave also said Nebius currently has no corporate-level debt, no asset-backed financing, and no bank revolver “by choice,” but expects to move toward a more “optimal capital structure” in 2026 that includes debt. Management pointed to exploring corporate debt and asset-backed financing, while noting the company’s at-the-market (ATM) equity program has not been used and there were no concrete near-term plans to use it.

2026 outlook: revenue, margin, and CapEx ramp

Management reiterated its target of reaching $7 billion to $9 billion in annualized run-rate revenue by the end of 2026. For the full year 2026, Alonso guided to $3.0 billion to $3.4 billion in revenue, explaining that the difference between ARR targets and annual revenue reflects the timing of capacity deployments, with the majority expected to be installed in the second half of the year.

Alonso also guided to a group adjusted EBITDA margin of approximately 40% for 2026 and said EBIT is expected to remain a loss as the company expands capacity, deploys GPUs, and increases AI and R&D investments. He reiterated a medium-term EBIT target of 20%–30%, with potential to go higher.

The company also said it will update its depreciation schedule beginning in Q1 2026 from four years to five years, citing market observations and utilization commitments.

For investment levels, management guided to $16 billion to $20 billion of CapEx in 2026. Nave said Nebius’ vertically integrated model drives a CapEx split across securing power (less than 1%), building data centers (about 20%), and deploying GPUs (the remainder). He said the company deploys GPUs over short time periods when it has strong visibility into demand, pricing, and margins.

Capacity expansion, power targets, and hyperscaler commitments

Volozh said Nebius announced nine new data centers globally and raised its forecast for contracted power in 2026 to “more than 3 gigawatts,” up from an earlier target of 2.5 gigawatts by year-end. He said Nebius had already contracted more than 2 gigawatts as of February.

In Q&A, management addressed how contracted power relates to connected capacity. Executive Andrey said Nebius remained on track for its 800 megawatts to 1 gigawatt available data center capacity goal around year-end, supported by a mix of smaller and larger projects, with some larger sites coming online late in the year. He added that colocation is expected to help growth beginning in Q2, while larger self-developed projects are expected to ramp meaningfully in 2027 and beyond.

On hyperscaler commitments, management said:

• Meta: capacity was fully deployed in early February, and Nebius is now fully servicing the contract. Alonso said the company expects to recognize 12 months of revenue for the first tranche and roughly 11 months for the second tranche in 2026.
• Microsoft: the first tranche was delivered on time in November, with remaining tranches scheduled throughout 2026 and “more than half” in the second half. Alonso said Microsoft is expected to contribute at a full annual run rate starting in 2027 once all tranches are deployed.

Responding to questions about meeting the $7 billion to $9 billion ARR target, management said the target is not dependent on signing new mega-deals, citing planned capacity, an existing pipeline, and go-to-market execution. Executives said Nebius is leaning into specific verticals including healthcare, life sciences, media and entertainment, physical AI, and retail, while remaining opportunistic on large strategic customers.

Management also discussed supply chain risks. Andrey said the company’s strategy is to maintain a portfolio of sites so it is not dependent on any single project, and said Nebius had already contracted the majority of long-lead items for its own sites. He added the company secured necessary components in 2025 for the full scope of the Microsoft and Meta contracts before price increases.

Separately, Nebius announced an investor relations leadership transition: Neil Doshi will move into a strategy function role, and Gili Naftalovich will become vice president of investor relations.

About Nebius Group NASDAQ: NBIS

Nebius Group N.V., 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.

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