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    NBIS
    Earnings call· Sep 2025(Q3 FY25)

    Nebius Group N.V. NBIS

    Nov 11, 2025 Source

    Executive summary

    Nebius Group Q3 FY25 — Strong Demand Drives Capacity Expansion and Mega Deals

    Nebius Group delivered robust Q3 FY25 results, driven by overwhelming demand for its AI cloud capacity, leading to significant new mega-deals with Meta and Microsoft. The company is aggressively expanding its infrastructure to meet this demand, which remains the primary bottleneck to revenue growth. Management is focused on balancing rapid expansion with disciplined capital allocation and maintaining healthy unit economics, while also diversifying its customer base beyond hyperscalers to include AI startups and enterprises.

    Highlights

    5

    • Q3 Group revenue grew 355% year-over-year to $146 million, exceeding expectations.

    • Secured a new $3 billion deal with Meta over 5 years, adding to the previously announced Microsoft deal ($17.4B-$19.4B).

    • Accelerated capacity plans, targeting 2.5 gigawatts of contracted power and 800 megawatts to 1 gigawatt of connected power by end of 2026.

    • Core infrastructure business adjusted EBITDA margin expanded to nearly 19% quarter-over-quarter.

    • Pipeline generation expanded 70% quarter-on-quarter, generating $4 billion in Q3.

    Concerns

    3

    • Q3 incremental ARR was $12 million, down from $180 million in the prior quarter, primarily due to capacity constraints.

    • Full-year 2025 group revenue guidance tightened to $500 million to $550 million, with pacing to the midpoint due to capacity timing.

    • CapEx guidance for 2025 raised significantly from $2 billion to $5 billion to secure critical infrastructure.

    Guidance & targets

    7
    CategoryTargetConfidence
    Annualized run rate revenue (ARR)
    $7 billion to $9 billion
    high materiality
    High
    Full year group revenue
    $500 million to $550 million
    high materiality
    Medium
    Annualized run rate revenue (ARR)
    $900 million to $1.1 billion
    high materiality
    High
    Adjusted EBITDA (group level)
    slightly positive
    medium materiality
    Medium
    CapEx
    circa $5 billion
    high materiality
    High
    Contracted power capacity
    2.5 gigawatt
    high materiality
    High
    Connected power capacity
    800 megawatts to 1 gigawatt
    high materiality
    High

    Segment performance

    1
    SegmentRevenueYoYQoQMargin
    Core Infrastructure Business
    Accounted for nearly 90% of total revenue. Adjusted EBITDA margin expanded quarter-over-quarter.
    Adjusted EBITDA margin: 19%
    		—400%40%19%

    Operational metrics

    3
    Pipeline generation
    70%QoQ
    Q3 FY25

    Opportunities by customers wanting to buy from Nebius.

    Pipeline generated
    $4 billion
    Q3 FY25

    Generated in Q3, but only a portion could be converted due to capacity constraints.

    ATM equity program authorization
    25 million
    FY25

    To be put in place on November 12, 2025, with a prospectus supplement filing. Will be evaluated regularly based on capital needs, with a focus on being dilution-sensitive.

    Industry KPIs

    3
    MetricValueDetails
    Capacity CAPEX2.5 gigawatt contracted; 800 megawatts to 1 gigawatt connectedGW/MW
    Revenue growth$146 millionUSD
    Arr net new arr$551 million (ending ARR); $12 million (net-new ARR)USD

    Product announcements

    2
    ProductTypeDetails
    Aether (Enterprise-ready cloud platform version 3.0)launch
    Nebius Token Factorylaunch

    Deals & partnerships

    2
    MetaProvision of AI cloud capacity$3 billion5 years

    Deal size was limited by available capacity. Announced in Q3 FY25.

    MicrosoftProvision of AI cloud capacity$17.4 billion to $19.4 billion

    Announced in September 2025. First tranche just delivered. New Jersey facility's first tranche handed over to Microsoft.

    Risks & headwinds

    3
    Capacity bottleneckNear-term and medium-term

    Limited Q3 incremental ARR to $12 million; revenue growth limited by capacity coming online.

    Mitigation: Accelerated capacity plans to 2.5 GW contracted and 800 MW-1 GW connected power by end of 2026; increased 2025 CapEx to $5 billion; securing land, power, and supply chain.

    Supply chain constraintsNear-term

    Key challenge to increasing capacity.

    Mitigation: Managed in the past with expertise in data center building and operations; focusing on growing and making the capacity roadmap reliable.

    Potential GPU oversupplyComing year (2026)

    Market question raised by analyst.

    Mitigation: Management believes market will remain supply-constrained in 2026. Conservative, staged CapEx approach (land/power, connected power, then GPUs) to avoid overspending and maintain financial health.

    What to watch in Q4 FY25

    5

    Q4 incremental ARR

    next quarter
    Current$12 million (Q3 FY25)
    TargetSignificantly higher

    Why it matters

    Indicates the effectiveness of capacity expansion in driving near-term revenue growth.

    However, as we're bringing on a lot of capacity in Q4, you should see that incremental ARR in Q4 will be significantly higher.

    Q&A highlights

    6

    Can you provide more details on the new Meta deal, why they chose Nebius, and how to model it?

    The $3 billion Meta deal was limited only by available capacity, indicating higher potential demand. It follows the Microsoft deal, fulfilling a promise of more large contracts. These mega-deals are important for financing the core AI cloud business, which serves AI startups and enterprises.

    “After we announced Microsoft in September, we said that we will have more deals of this kind, more large deals. And actually delivering on that promise.”

    asked by Alex Platt · answered by Arkady Volozh

    2 min read5 chapters

    Detailed Narrative

    01

    Capacity Expansion and Strategic Investments

    Nebius is aggressively expanding its data center capacity to meet surging AI demand, which is currently the main bottleneck to revenue growth. The company plans to increase contracted power to 2.5 gigawatts and connected power to 800 megawatts to 1 gigawatt by the end of 2026. This expansion includes new facilities in Israel, the U.K., and New Jersey, with Finland phases coming online in Q4. The CapEx for 2025 has been raised to $5 billion to secure critical infrastructure, reflecting strong conviction in the demand outlook.

    02

    Mega-Deal Strategy and Financing

    The company announced a new $3 billion deal with Meta over five years, following a $17.4 billion to $19.4 billion deal with Microsoft. These mega-deals are crucial for financing the core AI cloud business, providing attractive economics and cash flow. To support aggressive growth plans, Nebius will utilize corporate debt, asset-backed financing, and an at-the-market (ATM) equity program for up to 25 million Class A shares, while remaining dilution-sensitive.

    03

    Product Innovation and Market Diversification

    Nebius launched Aether, an enterprise-ready cloud platform version 3.0, to extend its addressable market to large enterprise customers with enhanced compliance and security. Additionally, Nebius Token Factory was introduced as a production-scale inference platform for open-source models, enabling organizations to run models like Llama and OpenAI OSS with guaranteed performance. These product innovations aim to differentiate Nebius and support a broader range of customers beyond hyperscalers, including AI native start-ups like Cursor AI, Black Forest Labs, and World Labs.

    04

    Demand Environment and GPU Strategy

    Demand for AI capacity remains extremely strong across all GPU types, including Hopper and the new Blackwell generation (B200s, B300s, GB300s). Nebius is preselling much of its new capacity before facilities even open, with the Finland data center launching GB300s in Q4. Management believes the market will remain supply-constrained through 2026 and is adopting a conservative, staged CapEx approach to mitigate risks of overspending and maintain financial health amidst the rapid AI evolution.

    05

    Capital Allocation and Shareholder Value

    The company is focused on maximizing shareholder value through disciplined capital structure. While pursuing aggressive growth, Nebius prioritizes deals with the best margins and aims for healthy unit economics. The ATM program provides flexible access to capital, complementing asset-backed debt and corporate debt, ensuring funding for future growth opportunities while managing dilution.

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