Nebius Group (NBIS) Q1 FY26 earnings call: guidance and Q&A

To what extent have you started to see the impact of stronger GPU pricing reflecting in your core AI business? Additionally, is there a way for us to think about the share of older shorter-term contracts that could benefit from this pricing dynamic?

Management confirmed strong GPU pricing, recent price increases, and continued sell-out across all chip types. They noted extending contract durations, increasing average contract values, and significant prepayments from customers, including hyperscalers, to lock in future capacity, which improves working capital and financing flexibility.

“We continue to see strong pricing across both old and new GPU generations as demand continues to exceed our available capacity. We just raised prices again in the latest quarter, and we are still selling out across all chip types at the higher prices.”

asked by Alex Duval · answered by Marc Boroditsky

Can you discuss how much our raise in CapEx is driven by higher capacity growth versus component cost inflation?

The CapEx increase is primarily driven by the need to invest ahead for 2027 capacity, for which the company has secured sites, power, and customer commitments. Component inflation for the 2026 program was a low single-digit percentage, as much of the capacity was secured at previous price levels in 2025.

“the high number reflects confidence in our contracted demand pipeline and our ability to secure the infrastructure that we were against it. It's not the cost pressure. The impact of the component inflation in our 2026 program was quite material, around low single digits as a percentage of total spend”

asked by Andrey · answered by Andrey Korolenko

Nebius said AI cloud adjusted EBITDA margin nearly doubled quarter-over-quarter to 45% in Q1, while you're targeting around 40% for the full year. What's driving the implied step down? Can you walk us through the adjusted EBITDA margin progression for the year?

Q1 margins were strong due to underlying business strength and demand. However, Q2 margins are expected to be lower due to front-loaded investments (hiring, acquisitions, product development) and back-end weighted capacity deployment. Margins are projected to return to Q1 levels in Q3 and increase further in Q4, smoothing out over the year.

“The investments land first and the capacity and the revenue it supports come online shortly after. So given the timing of our investments in Q2 and the timing of the deployment towards the end of the quarter, we actually expect those margins in Q2 to go a little bit lower, returning to Q1 levels in Q3 and stepping even higher in Q4.”

asked by James Kisner · answered by Dado Alonso

Can you talk about the timing of capacity additions beginning in Q2 and when you expect key sites such as Pennsylvania to reach full capacity?

The Pennsylvania site will have its first 250-300 MW online by the end of 2027, with 300 MW added annually to reach 1.2 GW by early 2030. Overall capacity additions for 2026 are heavily weighted towards the second half, with significant improvements in Q3 and Q4, and larger projects like Alabama and Missouri kicking in during Q1 2027.

“Pennsylvania is going to have lights up by the end of 2027 with the first around 250 to 300 megawatts probably. And then the schedule looks like adding 300 megawatts each year up to 1.2 gigawatts in total actually and 1.2 gigawatts according to our power contract we have in our concession by mid-2030 or the beginning of 2030 to be more correct, more precise.”

asked by Andrew Beale · answered by Andrey Korolenko

Can you provide more details on the recently announced Meta deal? Can you explain how the $15 billion capacity option works? Should we view this as Meta backstopping $15 billion with a set attractive margin? And if you can get a customer with better unit economics on that capacity, would you take that instead?

The $27 billion, 5-year Meta contract includes a $12 billion commitment for dedicated compute capacity starting early 2027, and a $15 billion additional capacity option. Nebius can, at its discretion, allocate this $15 billion to Meta or sell it to other AI cloud customers at potentially higher market prices. Meta's commitment allows for asset-backed financing at attractive terms, providing higher margins, less risk, and more revenue visibility.

“Meta is committed to buy up to $15 billion of any capacity in these clusters at our option during the entire 5-year contract. This commitment will likely allow us to finance the clusters with asset-based -- asset-backed financing at attractive terms, while selling them to, as I think you pointed out, to our AI cloud customers at potentially higher market prices.”

asked by Alex Platt · answered by Marc Boroditsky

Your pipeline is up 3.5x quarter-over-quarter in 1Q '26. Does this pipeline include hyperscales like Meta -- like the Meta deal? Can you also provide more details on what this number represents? And how likely are you to convert pipeline to revenue?

The 3.5x pipeline growth is for the AI cloud business and *excludes* strategic hyperscaler deals like Meta. It represents qualified opportunities across core AI cloud and Token Factory products for AI natives, software vendors, and enterprises. Nebius has maintained solid win rates, accelerated sales cycles, and increased average selling prices, indicating strong conversion to durable revenue.

“The referenced pipeline growth of 3.5x a quarter, which -- 3.5x quarter-over-quarter, which we're very proud of, is for our AI cloud business, and it does not include any strategic hyperscaler deals like the Meta deal.”

asked by Nehal Chokshi · answered by Marc Boroditsky

Could you explain the rationale behind your move to acquire Eigen AI and Clarifai? How does this move improve your AI cloud platform capabilities? To what extent does this move mean that you could improve customer stickiness?

The acquisitions of Eigen AI and Clarifai accelerate Nebius's roadmap, bringing in talented teams and strengthening inference optimization solutions. Eigen optimizes at the model level, while Clarifai optimizes at the system level, both enhancing the in-house Token Factory. These acquisitions deepen customer engagement, increase lifetime value, unlock new customer categories, and strengthen Nebius's position as a full-stack AI cloud provider.

“Eigen AI and Clarifai strengthened our inference optimization solutions. Eigen was recognized as the #1 speed inference provider by NVIDIA. While Eigen optimizes at the model level, Clarifai optimizes at the system level, and they both strengthen our in-house Token Factory offering.”

asked by Alex Duval · answered by Roman Chernin

On the $2 billion investment from NVIDIA and extended collaboration on inference and agentic software around Token Factory. What concrete deliverables should we expect over the next few quarters? And does the partnership affect the timing or scale of your Vera Rubin deployments in the second half of 2026?

The NVIDIA partnership provides differentiated supply chain certainty for future Rubin and Vera CPUs, enabling early deployment support on Nebius's cloud platform. It reinforces Nebius's position as a preferred AI infrastructure builder, aligning roadmaps for price, performance, and utilization leadership. The collaboration also expands software integration, including physical AI, inference, and agentic advancements, and Nebius recently achieved NVIDIA Exemplar Cloud status on GB300.

“We gain differentiated supply chain certainty on the future Rubin, Vera CPUs and the networking. We also have a close collaboration with NVIDIA for the design and early support of the future SKUs. As of today, this is Rubin's and Vera CPU platforms. And we are able actually to have an early deployment that supports on our cloud platform as soon as they will be publicly available.”

asked by James Kisner · answered by Andrey Korolenko