Nebius Group Q1 Earnings Call Highlights

• Nebius Upside Expands as AI Feedback Loop Intensifies

Nebius Group (NASDAQ:NBIS) reported a sharply higher first quarter for 2026 as demand for AI computing capacity continued to outpace supply, prompting management to raise its capital spending plans and expand its long-term power commitments.

Co-founder and CEO Arkady Volozh said the company is building an “AI-native hyperscaler” across four areas: capacity and scale, product functionality, customer demand and capital. He said Nebius had contracted more than 3.5 gigawatts of power, up from more than 2 gigawatts disclosed last quarter, and is now targeting at least 4 gigawatts of contracted power this year.

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The company also announced a new Pennsylvania site that is expected to support 1.2 gigawatts of power once fully operational. Volozh said this is Nebius’ second owned gigawatt-scale site in the United States, adding that owned contracted capacity now represents more than 75% of total power.

Revenue surges as AI business drives results

CFO Dado Alonso said group revenue rose 684% year over year to $399 million in the first quarter, up 75% from the prior quarter. Revenue from the Nebius AI business, which excludes consolidated investments in TripleTen and Avride, increased 841% year over year to $390 million, representing 98% of group revenue.

• Nebius Breaks Out to All-Time Highs—Here's What's Driving It.

Alonso said growth was driven by capacity scaling, strong utilization and pricing. Annualized run-rate revenue for the Nebius AI business reached $1.9 billion at the end of March, up from $1.25 billion in the previous quarter.

Group adjusted EBITDA was $130 million, compared with $15 million last quarter and a loss of $54 million a year earlier. The group adjusted EBITDA margin was 13%, while the Nebius AI business adjusted EBITDA margin expanded to 45% from 24% in the fourth quarter. Alonso said the difference between group and Nebius margins mainly reflects investments in Avride and TripleTen.

Net income was $621 million, which Alonso said benefited from a non-cash valuation adjustment tied to ClickHouse’s recent financing round.

Nebius raises 2026 capital spending outlook

Nebius raised its 2026 capital expenditure guidance to a range of $20 billion to $25 billion, up from its prior range of $16 billion to $20 billion. Volozh said the increase reflects investments in 2027 capacity that is expected to come online early next year and contribute to revenue in the first half of 2027.

In response to a question about whether the higher spending outlook reflected cost inflation or capacity growth, an executive identified as Andrey said the increase is driven by visibility into 2027 demand and the need to invest ahead of capacity coming online. He said component inflation in the 2026 program was “around low single digits” as a percentage of total spend because much of the 2026 program had been secured in 2025 at prior price levels.

Management reiterated its full-year 2026 outlook for annualized run-rate revenue of $7 billion to $9 billion, group revenue of $3 billion to $3.4 billion and group adjusted EBITDA margin of around 40%.

Alonso said quarterly adjusted EBITDA margins are expected to be nonlinear during the year because capacity additions are weighted toward the back half. He said margins may move lower in the second quarter, return to first-quarter levels in the third quarter and move higher in the fourth quarter.

Meta, Microsoft contracts support financing plans

Nebius ended the quarter with $9.3 billion in cash and cash equivalents. Alonso said the company raised $4.3 billion in gross proceeds from a private offering of convertible senior notes and received a $2 billion equity investment from NVIDIA. Operating cash flow was $2.3 billion, compared with an operating cash outflow of $198 million in the prior-year quarter, primarily driven by customer upfront payments.

Volozh said Nebius has raised more than $6 billion this year, including more than $4 billion from convertible notes and $2 billion from NVIDIA’s equity investment.

Management highlighted financing opportunities tied to contracts with Meta and Microsoft. Volozh said the recently announced Meta agreement is formally a $27 billion contract, but could be worth more to Nebius because it may help unlock asset-backed financing for the company’s multi-tenant cloud buildout.

Chief Revenue Officer Marc Boroditsky said the expanded Meta agreement is a five-year contract structured in two parts: a $12 billion commitment to dedicated compute capacity beginning in early 2027, and $15 billion of additional capacity that Nebius can either allocate to Meta or sell to AI Cloud customers at its discretion. He said the structure may allow Nebius to finance clusters on attractive terms while potentially selling capacity to AI Cloud customers at higher market prices.

Demand remains above available supply

Volozh said demand continues to broaden across industries, with the company “typically” seeing several customers competing for every GPU it brings online. He said pipeline generation in the first quarter grew about 3.5 times compared with the fourth quarter.

Boroditsky said that pipeline growth refers to the AI Cloud business and does not include strategic hyperscaler deals such as Meta. He said it includes qualified opportunities across AI Cloud and Token Factory products, as well as customer segments including AI-native companies, software vendors and enterprises.

Management cited customer activity across several areas, including Revolut using Token Factory, 1X Technologies using the company’s cloud platform for general-purpose robots, and activity in life sciences, manufacturing, energy, heavy equipment and pharmaceuticals.

Boroditsky said Nebius remains sold out and that the “vast majority” of capacity coming online over the next several quarters to 12 months is already under contract or earmarked for AI Cloud customers. He said the company is seeing “four or more customers competing for every GPU” it brings online.

Acquisitions add inference and agentic capabilities

Volozh said Nebius has made three acquisitions this year: Tavily, Eigen AI and Clarifai. He said Eigen AI and Clarifai strengthen inference optimization solutions, while Tavily extends the platform into agentic search.

Roman Chernin, chief business officer and co-founder, said Nebius uses M selectively when it accelerates the roadmap, brings proven developer adoption or adds complementary capabilities. He said software is viewed as an enabler rather than a separate revenue stream, helping customers consume Nebius’ vertically integrated infrastructure in different ways.

Chernin said inference is the fastest-growing new segment in Nebius’ stack, and Token Factory is the company’s primary inference product. He said Nebius is investing internally and through acquisitions to support popular open-source and specialized models while optimizing total cost of ownership for customers.

Nebius also said it expanded its technology partnership with NVIDIA and again achieved NVIDIA Exemplar Cloud status, this time on GB300 for training workloads. Management said NVIDIA’s investment deepens the companies’ multi-year relationship and supports future deployment plans tied to NVIDIA platforms.

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.

This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected].

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