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    NBIS
    Earnings call· Jun 2025(Q2 FY25)

    Nebius Group N.V. Q2 FY25 earnings call NBIS

    Aug 7, 2025 Source

    Executive summary

    Nebius Group Q2 FY25 — Strong Revenue Growth and Raised ARR Guidance

    Nebius Group delivered a strong second quarter, significantly exceeding revenue expectations and achieving early adjusted EBITDA profitability in its core AI infrastructure business. The company is aggressively expanding its data center capacity to meet surging AI compute demand, leading to a substantial increase in its year-end ARR guidance. Management is focused on scaling its platform and go-to-market strategy to capitalize on the generational opportunity in AI cloud infrastructure.

    Highlights

    5

    • Total revenue increased by 625% year-over-year and 106% quarter-over-quarter to $105.1 million.

    • Core AI infrastructure business achieved positive adjusted EBITDA ahead of expectations.

    • Annualized Run Rate (ARR) guidance for year-end raised from $750M-$1B to $900M-$1.1B.

    • Secured 220 megawatts of connected power by year-end 2025, with plans for over 1 gigawatt by end of 2026.

    • Expanded customer base with large global technology companies like Cloudflare, Prosus, and Shopify.

    Concerns

    2

    • Full-year group adjusted EBITDA is expected to remain negative despite core business profitability.

    • Timing dynamic of new GPU capacity coming online late in the year means revenue guidance for 2025 remains steady despite raised ARR guidance.

    Guidance & targets

    6
    CategoryTargetConfidence
    Annualized Run Rate Revenue
    $900M to $1.1B
    high materiality
    High
    Core Business Revenue
    $400M to $600M
    medium materiality
    High
    Group Revenue
    $450M to $630M
    medium materiality
    High
    Adjusted EBITDA (Group Level)
    Slightly positive by year-end
    medium materiality
    Medium
    Capital Expenditure
    Around $2B
    high materiality
    High
    Midterm Revenue Outlook
    Mid-single-digit billions of revenue
    high materiality
    High

    Operational metrics

    13
    Adjusted EBITDA
    PositiveAhead of expectations
    Q2 FY25

    Achieved positive adjusted EBITDA in core AI infrastructure business ahead of previous projections.

    Adjusted EBITDA Outlook
    Remain positive
    Rest of FY25

    Expected to remain positive throughout the rest of the year.

    Adjusted EBITDA Outlook
    Positive
    Starting FY26

    Expected to be positive starting next year.

    Return on CapEx (Breakeven)
    2 to 3 years
    Hopper generation

    Expected breakeven for hopper generation GPUs on a gross profit level.

    Connected Power Capacity
    220 MW
    End of FY25

    Aggressively ramping up connected power capacity.

    Active Power Capacity
    100 MW
    End of FY25

    Of the 220 megawatts of connected power, 100 megawatts will be active.

    Connected Power Capacity Target
    More than 1 GW
    End of FY26

    In the process of securing more than 1 gigawatt of power to capture industry growth next year.

    Data Center Cost of Ownership
    Around 20% lessThan market average
    Current

    Achieved by favoring greenfield sites and controlling every aspect of data center design and construction.

    Network Speed
    Doubled
    Q2 FY25

    Direct impact on MLPerf Benchmark results.

    MLPerf Benchmark Results
    —
    Q2 FY25

    Submitted MLPerf 3 and 5-0 results, revealing impressive performance for large-scale training.

    Toloka Valuation
    $30B
    Recent

    Significant upside seen in Toloka's business prospects and valuation.

    ClickHouse Valuation
    $6BUp from $2B in 2022
    Latest capital raise

    Nebius retains a minority economic interest in ClickHouse, which saw a significant valuation increase.

    Avride Valuation
    $40B-$50B
    Recent

    Avride is seen as a source of significant value for the company, with strong growth and partnerships.

    Industry KPIs

    7
    MetricValueDetails
    Capacity CAPEX$2BUSD
    Revenue growth$105.1MUSD
    Arr net new arr$430MUSD
    Customer account count—
    Large deal new logo metrics—
    Operating FCF margin rule of 40Positive
    Ai product adoption monetization—

    Product announcements

    1
    ProductTypeDetails
    Inference as a Service platformroadmap

    Deals & partnerships

    18
    CloudflareUtilizing Nebius AI infrastructure

    Cloudflare is using Nebius to power inference at the edge as part of their popular Workers API. The relationship is growing and scaling.

    ProsusNew large global technology customer

    Prosus was added as a large global technology customer, indicating growing enterprise traction.

    ShopifyUtilizing Nebius AI infrastructure and Toloka's training data

    Shopify is utilizing Nebius' AI infrastructure along with Toloka's training data to optimize every step of the merchant's journey. The relationship is growing and scaling.

    HeyGenNew AI tech startup customer

    HeyGen was added as a leading new cloud provider customer for AI tech startups.

    Lightning.AINew AI tech startup customer

    Lightning.AI was added as a leading new cloud provider customer for AI tech startups.

    PhotoroomNew AI tech startup customer

    Photoroom was added as a leading new cloud provider customer for AI tech startups.

    MistralIntegration to extend ease of use of AI cloud

    Launched integration to support developers and model builders across their workflows.

    BasetenIntegration to extend ease of use of AI cloud

    Launched integration to support developers and model builders across their workflows.

    SkyPilotIntegration to extend ease of use of AI cloud

    Launched integration to support developers and model builders across their workflows.

    Lightning AICollaboration to scale and deploy AI workloads

    Extended presence across open source tool sets and enterprise users, simplifying how teams scale and deploy AI workloads using Nebius.

    AnyscaleCollaboration to scale and deploy AI workloads

    Extended presence across open source tool sets and enterprise users, simplifying how teams scale and deploy AI workloads using Nebius.

    NvidiaExpanded AI cloud portfolio and launch partner

    Expanded AI cloud portfolio with Nvidia AI Enterprise and became a launch NCP partner for Nvidia DGX Cloud Lepton, strengthening position as a high-performance AI platform.

    Uber (Avride)Expanding coverage for delivery and robotaxi service

    Avride is expanding coverage with Uber for restaurant delivery and looking forward to launching robotaxi service with Uber later this year.

    Grubhub (Avride)Launching new university campuses for delivery

    Avride is launching new university campuses in a project with Grubhub.

    H-E-B (Avride)Grocery delivery

    Avride signed with grocery delivery for the retailer H-E-B in Texas.

    Mitsui Fudosan (Avride)Indoor robot operations in Japan

    Avride entered into a partnership with Mitsui Fudosan for indoor robot operations in Japan.

    Hyundai (Avride)Autonomous vehicle fleet expansion

    Avride is growing its fleet and expanding road tests in Dallas as partners with Hyundai.

    Bezos Expeditions and others (Toloka)Growth capital raise

    Toloka raised growth capital in a transaction led by Bezos Expeditions and others, with Nebius retaining a significant majority economic interest.

    Risks & headwinds

    1
    Tariffs on importsShort-term

    Not quantified

    Mitigation: Management is following closely; believes market will balance out; affects all players in the market.

    What to watch in Q3 FY25

    5

    Annualized Run Rate Revenue (ARR)

    Next quarter / Year-end FY25
    Current$430M (June)
    TargetProgress towards $900M-$1.1B

    Why it matters

    ARR is a key indicator of future revenue and the success of capacity expansion, especially with new GPU installations in Q4.

    Looking ahead to our increased annualized run rate revenue guidance, a significant portion of it is already under contract, which gives us a strong visibility. We also see continued strong demand in the market, and as we scale up capacity, we are able to sell it quickly.

    Q&A highlights

    5

    How does the demand environment look for the second half of the year, especially with capacity ramp-up?

    Demand was very strong in Q2, with capacity selling out quickly and peak utilization. Bringing on larger clusters attracts new large customers, diversifying the base. Strong demand supports continued capacity ramp-up, and platform maturity is improving competitive win rates.

    “As we brought on more capacity, we sold through it. And by the end of the quarter, we were at peak utilization. There's a nice trend that we're actually starting to witness. As we bring on larger clusters, we are able to bring on new large customers who want to purchase greater and greater capacity.”

    asked by Alex Duval (Goldman Sachs) · answered by Marc Boroditsky

    2 min read5 chapters

    Detailed Narrative

    01

    Aggressive Capacity Expansion for AI Compute

    Nebius is aggressively ramping up its data center capacity, expecting to secure 220 megawatts of connected power by the end of 2025, with 100 megawatts active. This includes expansions in New Jersey and Finland. The company is also in the process of securing over 1 gigawatt of power by the end of 2026, driven by strong demand for AI compute. Greenfield sites are preferred for cost control and tailored phasing📎, aiming for a 20% lower total cost of ownership than market average.

    02

    Strong Financial Performance and Profitability Ahead of Schedule

    The company reported $105.1 million in Q2 revenue, a 625% YoY and 106% QoQ increase. AI cloud infrastructure revenue grew more than 9x YoY. The core AI business achieved positive adjusted EBITDA this quarter, ahead of initial guidance, and is expected to remain positive. Group-level adjusted EBITDA is anticipated to turn positive by year-end 2025 and remain positive starting in 2026.

    03

    Software Platform Enhancements and Customer Traction

    Nebius made significant enhancements to its software cloud platform to support expanding capacity and large-scale clusters. Key improvements include doubling network speed, increasing reliability through auto-healing and health check software, and improving flexibility with S3 storage migration. The company is gaining traction with large enterprise customers like Cloudflare, Prosus, and Shopify, while continuing to serve AI tech startups such as HeyGen and Lightning.AI.

    04

    Strategic Partnerships and Global Market Expansion

    Nebius expanded its ecosystem through partnerships with Mistral, Baseten, SkyPilot, Lightning AI, and Anyscale, enhancing ease of use and developer support. The company strengthened its relationship with Nvidia, becoming a launch NCP partner for Nvidia DGX Cloud Lepton and expanding its AI cloud portfolio with Nvidia AI Enterprise. Nebius is also expanding its physical presence with new GPU clusters in the U.K. and Israel, expected to come online in early Q4, targeting vibrant local AI markets.

    05

    Inference as a Service and Go-to-Market Strategy

    The company is developing an enterprise-grade Inference as a Service platform, leveraging its full-stack capabilities to deploy and scale open-weight AI models on dedicated infrastructure. This initiative aims to address pain points in production AI like unpredictable latency and GPU bottlenecks. Nebius is also building out its go-to-market leadership team, including GMs for various regions and a VP of Sales Strategy, to proactively pursue market opportunities and expand its enterprise footprint.

    AI-generated summary of the company’s earnings call. Not investment advice.