Q3 2026 earnings call, November 12, 2026

Nebius reported a record third quarter with revenue of $980.8 million, up 571% year on year and 68% from the second quarter. The call also carried a negative: delays at third-party colocation sites, including New Jersey, pushed part of this year's planned capacity into the second quarter of 2027. The company lowered the top end of its 2026 revenue guidance to $3.0 billion to $3.2 billion from $3.0 billion to $3.4 billion, and raised 2026 CapEx to around $27 billion from $20 billion to $25 billion. Management framed the changes as timing rather than demand. CEO Arkady Volozh said: "The demand for AI is real and substantial. Everything else, like building the capacity and financing it, is just a task."

Prepayments now cover more than 100% of CapEx and payback shortens

The most important new data point was the change in customer financing terms. Volozh said prepayments on new contracts now cover more than 100% of the capital needed to bring contracted capacity online, up from 50% to 60% in the second quarter. More than 90% of the contract value signed in Q3 carried a prepayment, and the weighted average share of prepayment to total contract value rose by about 20 percentage points from Q2. CFO Dado Alonso said coverage has continued to rise on agreements signed so far in Q4. Prepayments also now attach to capacity the company has already deployed, so they fund the build-out as a whole rather than project by project.

Pricing and payback moved the same way. Q3 agreements closed above $25 million per megawatt, up from $20 million to $25 million in Q2, and payback on new capacity shortened to 1 year and 7 months from 1 year and 10 months. Volozh said: "Our customers are paying more, they pay earlier and they're committing for longer, and we are getting our capital back faster." Marc Boroditsky said Nebius raised prices at the start of September and added higher prepaid terms and longer duration on a new tranche of capacity. Since the start of Q3, customers have committed more than $12 billion of contract value, including multibillion-dollar 5-year agreements. Volozh said the company is already signing multibillion-dollar agreements in Q4.

Management said the mix gives it control over funding. Ophir Nave said that when interest rates on corporate debt are high, Nebius can allocate more capacity to longer-term contracts with large prepayments. If markets improve, it can raise corporate debt opportunistically and keep more capacity for shorter-term and spot sales. Boroditsky said directly that the company could lean on prepayments to cover additional cash needs.

2026 guidance trimmed, ARR guidance dropped

Alonso said the shifted third-party capacity is the reason for the lower 2026 revenue range. The company still expects a group adjusted EBITDA margin of about 40% for the year and 5 gigawatts of contracted power by year-end, up from more than 4 gigawatts today. It now expects annualized run-rate revenue to exceed $7 billion for February, even before New Jersey ramps to full capacity, and will stop guiding to ARR after this update. Alonso said the metric rests on a single month and that new partnership revenue can add choppiness to it, adding that revenue and pretax earnings are the more appropriate way to evaluate the company as it matures.

Q3 CapEx was about $7.3 billion. Cash and equivalents stood at $7.4 billion at quarter-end.

Vineland delay traced to power

Asked about delays, Andrey Korolenko said the Vineland, New Jersey site slipped because of power. Nebius pivoted to Bloom generation in the summer, planning to bridge with temporary generation from DataOne. In late Q3, DataOne wound that down faster than expected. "We are expediting the Bloom deployment as much as possible, but we still will have a gap due to this situation," Korolenko said. He added that tranches continued to be delivered to Microsoft through Q3 and will continue in November and December. Volozh said the site is built with third-party contractors, where "many more things may go wrong," and that in August Nebius was told the original diesel generator plan would not work. Bloom power is now on site, and Nebius plans to use more Bloom generation at other sites. Volozh said no capacity has been canceled and customers have been kept informed.

2027: revenue to quadruple, pretax breakeven in Q4

Nebius guided 2027 revenue to $12 billion to $13 billion, about 4x, with CapEx of $40 billion to $45 billion sized for more than 1 gigawatt of new capacity. It expects pretax breakeven in the fourth quarter of 2027, on 5-year depreciation of servers and network equipment, as its own sites ramp. Alonso said 75% to 85% of the CapEx range is expected to be funded by prepayments and asset-backed financing against investment-grade contracts. He expects customer prepayments of $17 billion to $20 billion in 2027, "not a ceiling," versus more than $10 billion in 2026.

Management described the revenue guide as conservative. Alonso said it assumes conservative timing on capacity, and Nave said it includes very significant delay assumptions and no revenue from asset-light or other partnerships. Most 2027 capacity will come from owned sites, which Korolenko said gives greater control than colocation. He named Alabama, Missouri, two Finland projects and Pennsylvania. Alonso said that if capacity arrives on time, revenue could exceed the guide, and that clients are already seeking 2028 capacity while 2027 prices rise. On margins, he said 2027 direction is up because owned sites carry no third-party rent. He did not guide Q4 2026 margin, but noted that Q4 will carry the cost of sites arriving ahead of revenue, and said Q3 included revenue recognized at a point in time that does not recur in the same form.

Funding toolkit

Nebius closed a $775 million asset-backed facility in July at SOFR plus 250 basis points, secured against long-term agreements with an investment-grade customer, and said it has more than $40 billion of similar committed revenue. In August it completed a $5.75 billion convertible senior notes offering. Under its at-the-market program it sold 4.6 million Class A shares in Q3 at a weighted average $229.1, for net proceeds of about $1.0 billion, with 7.6 million shares remaining. Alonso called the ATM "a flexible tool, not a commitment." Volozh said the long-term Microsoft and Meta agreements can support further asset-backed financing.

$325 million of nonrecurring revenue from the first asset-light deal

Q3 included about $325 million of nonrecurring revenue from the first asset-light transaction, in which partners fund capacity and Nebius deploys its architecture and AI cloud platform. Nave said revenue is recognized both when the architecture and supply chain are locked and when capacity comes online and is sold. He expects such deals to become a regular part of the business as they grow. AI Cloud revenue was $973.8 million, up 643%, and group adjusted EBITDA was $465.8 million, a 47.5% margin versus 40.6% in Q2. AI Cloud margin was 53.2%, up from 50%.

Customer mix and backlog

Databricks, Datadog and Snowflake signed multiyear agreements for the first time in the quarter, and Boroditsky added Palantir, which selected Nebius as its preferred AI cloud to pair Token Factory with Foundry for sovereign AI use cases. He said enterprise momentum is picking up but is "still well behind the overall potential that we all expect in the market." The large majority of the $12 billion of new contract value came from AI natives, mostly customers that started on the platform through auctions or other workloads and are now scaling. Responding to an analyst's note that RPO rose only 3% despite the $12 billion, Boroditsky said several agreements were signed after quarter-end and will appear in next quarter's commitments, and that momentum has continued into Q4.

Token Factory and the software stack

Volozh said Token Factory, the managed inference platform, is on track to reach multi-hundred-million-dollar ARR at better margins because it runs on Nebius's own GPUs rather than rented capacity. Roman Chernin said it is priced per token and offers day-0 support for new models, routing and caching, custom kernels, quantization and post-training. He said it is growing very fast from a low base, with customers including Revolut, Higgsfield and Applied Compute. Nebius was a day-0 partner for models from Meta, Reflection and NVIDIA, will be first to support NVIDIA's Groq 3 LPX, and recently acquired Inferize, which addresses cold-start problems for spiky workloads, following earlier Eigen and Clarifai deals. Chernin said accelerating open-model adoption is positive because it widens the universe of customers and partners.

Supply chain and policy

Korolenko said power is the industry's main challenge, but that chip supply is secured: Nebius has confirmed all supply for 2027 and has completed R&D, integration and benchmarking for Vera CPUs, Vera Rubin GPUs and Groq. On local politics, Tom Blackwell said Nebius, which has no Texas presence, does not anticipate meaningful timeline impact from the changed political landscape in the roughly half-dozen states where it operates or builds, adding that questions about data centers come from both parties.