Nebius Reports 454% Revenue Growth, Eyes $7-9B Annualized Revenue Target
The AI infrastructure provider closed four deals averaging over $1 billion each while expanding its capacity pipeline to 5 gigawatts.
Landmark Deals Drive Growth
Nebius Group N.V. delivered a strong second quarter in 2026, reporting Group revenue of $582 million, up 454% year-over-year and 46% from the prior quarter (earnings call, 2026-08-12). The AI infrastructure provider's core Nebius AI business grew even faster at 514%, reaching $575 million and representing 98% of total revenue.
CEO Arkady Volozh highlighted four landmark customer agreements closed during the quarter with Reflexion, Cohere, a scaled U.S. neo-lab, and a large U.S.-based quantitative trading firm. "These deals were for an average of more than $1 billion each," Volozh said, noting they represent annual contract values of "$20 million to $25 million per megawatt, with upfront payments that cover 50%, 60% of the associated CapEx" (earnings call, 2026-08-12).
Annualized run rate revenue reached $3 billion at quarter end, up 598% year-over-year and 56% sequentially from $1.9 billion in March (earnings call, 2026-08-12).
Three-Tier Pricing Strategy
Nebius outlined a differentiated approach to monetizing its AI infrastructure through three deal types. The core business revolves around midterm contracts of one to three years with major AI companies. Volozh emphasized the company's pricing power: "We could sell today our entire 2027 capacity on these terms if we wanted to. But we are not doing this" (earnings call, 2026-08-12).
For immediate, time-bounded needs, Nebius offers shorter-duration capacity of up to six months at premium rates. "We're negotiating deals for $40 million to $50 million per megawatt range, and sometimes above," Volozh said (earnings call, 2026-08-12).
The third tier comprises long-term contracts with investment-grade customers designed to facilitate financing. The company's $775 million secured debt facility announced in July was backed by one such agreement, with CFO Dado Alonso noting that Nebius has "more than $40 billion of additional customer commitments at similar terms" available for future financing (earnings call, 2026-08-12).
Profitability and New Business Models
Group adjusted EBITDA reached $236 million at a 41% margin, improving from 32% in the first quarter. The Nebius AI business generated adjusted EBITDA of $286 million at a 50% margin (earnings call, 2026-08-12).
The company introduced an asset-light partnership model during the quarter, where partners finance, build, and operate facilities while Nebius provides its platform and customer demand. This approach "delivers us with high-margin revenue and requires minimum balance sheet capital," according to Volozh (earnings call, 2026-08-12).
Nebius also launched its first capacity auction, which "cleared at the highest price we have seen for the Blackwell generation of chips, 15% above the highest price we ever charged before" (earnings call, 2026-08-12).
Capacity Expansion and Outlook
The company raised its year-end contracted power target to 5 gigawatts and expects to deploy more than 1 gigawatt of new capacity in 2027 (earnings call, 2026-08-12). Customer prepayments reached an all-time high, with roughly 70% of Q2 deals including upfront payments that will bring in "more than $9 billion of upfront funding this year" (earnings call, 2026-08-12).
Nebius reaffirmed its full-year 2026 guidance, targeting annualized revenue of $7 billion to $9 billion, Group revenue of $3 billion to $3.4 billion, adjusted EBITDA margin of approximately 40%, and capital expenditures of $20 billion to $25 billion (earnings call, 2026-08-12).
This article was generated by MarginX from the earnings call on 2026-08-12. It is not investment advice.