How will Nebius finance the $16 billion to $20 billion CapEx guidance for 2026?

Ophir Nave explained that 60% or more will come from cash on hand, core business cash flows, and significant upfront payments from long-term contracts. The remaining will be financed through corporate debt, asset-backed financing, and potentially opportunistic use of their ATM equity program, while maintaining a healthy balance sheet. “This cash flows will actually finance the majority, actually around 60%, maybe even more of all of our CapEx needs in 2026.”

How to bridge from 800 MW-1 GW connected power to 3 GW contracted power by year-end?

Andrey Korolenko explained that the company is accelerating build-out and deployment for 2026 and beyond, with a mix of smaller and larger projects coming online. They have multiple ongoing projects beyond the 9 announced sites, some of which may materialize this year, contributing to the higher contracted power target. “So basically, we expect that the calculations will help us grow faster starting in Q2 this year and ramping throughout the year. And our own projects, which are substantial in size will really start to ramp up in 2027 and beyond.”

Which is more meaningful, ARR or revenue, given Q4 revenue was light but ARR was ahead? And explain the difference between $7-9B ARR and $3-3.4B revenue guidance for 2026.

Dado Alonso stated that ARR is the better metric in a hypergrowth phase. The difference in 2026 guidance is due to the deployment schedule of capacity, with the majority coming online in the second half of the year, and large enterprise partnerships still ramping. Revenue simply reflects the ramp-up. “As we are in a hypergrowth phase, ARR is the better metric. Now on the next question around the difference between ARR and revenue guidance, let me say that first and foremost, at Nebius, we are really taking a prudent approach to our revenue guidance as we communicated.”

NBIS

Nebius Group (NBIS) Q4 FY25 earnings call: guidance and Q&A

Earnings call· Dec 2025 (Q4 FY25)· Information Technology· Feb 12, 2026

Source: earnings call transcript

Executive summary

Nebius Group Q4 FY25 — Exceeds ARR Guidance, Projects Hypergrowth with Significant CapEx

Nebius Group concluded a strong Q4 FY25, surpassing its ARR guidance and achieving positive group adjusted EBITDA, driven by robust demand for its AI cloud services. The company is accelerating its capacity build-out with significant CapEx plans for FY26, aiming to capture a substantial market opportunity while maintaining a disciplined approach to financing. Management expressed high confidence in achieving its ambitious FY26 ARR target, supported by strong pipeline growth and increasing contract durations.

Highlights

Annualized Run Rate Revenue (ARR) for the core business reached $1.2 billion at the end of December 2025, exceeding the high end of Q3 guidance.
Group adjusted EBITDA inflected positively in Q4 FY25, consistent with guidance, driven by core cloud business strength.
Core AI cloud business revenue grew 830% year-over-year and 63% quarter-over-quarter, with adjusted EBITDA margin expanding to 24%.
Secured over 2 gigawatts of contracted power by February 2026, ahead of the 2.5 gigawatts target for year-end 2025.
Average contract duration for new cloud customers grew by 50% and average selling prices increased by over 50% in Q4, reflecting strong demand and pricing power.

Concerns

EBIT is expected to remain at a loss in FY26 due to significant capacity expansion and R&D investments.
Q4 FY25 group revenue of $228 million came in the middle of guidance, with some analysts noting it was light versus consensus.

Guidance & targets

Category	Target	Timeline	Confidence
Annualized Run Rate Revenue (ARR)	$7 billion to $9 billion high materiality	Q4 · 2026	High
Contracted power	>3 gigawatts high materiality	Q4 · 2026	High
Available data center capacity	800 megawatts to 1 gigawatt high materiality	Q4 · 2026	High
Full-year revenue	$3 billion to $3.4 billion high materiality	FY26 · 2026	High
Group adjusted EBITDA margin	approximately 40% high materiality	FY26 · 2026	High
EBIT	remain at the loss medium materiality	FY26 · 2026	High
Medium-term EBIT target	20% to 30% with the potential to go higher medium materiality	Medium-term	High
Capital expenditure	$16 billion to $20 billion high materiality	FY26 · 2026	High

NBIS operating KPIs by quarter

NBIS operating KPIs stated on its earnings calls, by fiscal quarter
KPI	Jun 2025 Q2 FY25	Sep 2025 Q3 FY25	Jun 2026 Q2 FY26	Change vs prior quarter
Annual recurring revenue (ARR)	$430M Reality is that we show strong momentum in Q2 with annualized run rate revenue growing from $249 million in March to $430 million in June. Source: earnings call transcript	$551M Annualized run rate revenue for the core business at the end of September was $551 million. Source: earnings call transcript	$3B Annualized run rate revenue reached $3 billion at the end of June, up 598% and increased 56% from $1.9 billion at the end of March. Source: earnings call transcript	+444.5%

Operating figures the company stated on at least two of the calls shown, checked against each call's transcript. Click a figure to read the sentence. A dash means it was not stated that quarter.

Orderbook & backlog

Annualized Run Rate Revenue (ARR) $1.2 billion end of December 2025

exceeded high end of Q3 guidance range of $1.1 billion

For the core business.

Contracted power >2 gigawatts February 2026

ahead of previous target of 2.5 gigawatts by year-end

Capacity utilization sold out Q1 2026

Even before capacity comes online, it's often sold out.

Product announcements

Product	Type	Timeline	Details
Token Factory	launch	recently launched
Aether releases	launch	recently launched

Deals & partnerships

Tavily acquisition

Tavily is an agentic search company that connects AI agents to the web. It fits Nebius's strategy to be a platform for AI developers, deepening customer engagement and stickiness.

Capital programs

New data centers announced

9 new data centers announced across the globe to accelerate capacity plans. A mix of smaller and larger projects.

Meta contract capacity deployment completed

Benefit:fully deployed

All contracted tranches delivered on time, now in full servicing stage. Expected to recognize 12 months of revenue for first tranche and 11 months for second tranche.

Microsoft contract capacity deployment underway

Spent to date: first tranche delivered in November (on time)

First tranche delivered on time, remaining capacity on schedule. Expected to begin contributing to revenue at full annual run rate in 2027.

Risks & headwinds

EBIT loss FY26

expected to remain at a loss

Mitigation:Investing in capacity expansion, GPU deployment, and R&D with attractive returns expected to lead to medium-term EBIT target of 20-30%.

Data center equipment shortages

headlines of data center equipment shortages in the market

Mitigation:Portfolio of sites to avoid dependency on a single project; full stack cloud flexibility to move loads; contracted majority of long lead items for own sites; secured necessary components for Microsoft and Meta contracts in H2 2025 before price increases.

Q&A highlights

What market signals support Nebius's aggressive AI cloud investments?

Arkady highlighted broad AI adoption in daily life and corporations, and specific signals from large accounts, AI start-ups evolving into enterprises, and growing enterprise AI adoption. He cited examples of start-ups scaling from hundreds to tens of thousands of GPUs.

“Some start-ups disappeared, but some of them are becoming real companies, real enterprises of the future. And they started getting traction. Their products became more and more -- they're more and more used by their customers, and they're scaling quickly, scaling with real revenues, real demand.”

asked by Investor on portal · answered by Arkady Volozh

2 min read 6 chapters

Detailed narrative

Strong Demand and Capacity Expansion

Nebius Group experienced robust demand for its AI cloud services, with capacity sold out in Q3, Q4 2025, and Q1 2026. This strong demand, coupled with increasing contract durations and average selling prices, is driving an accelerated capacity expansion plan. The company announced 9 new data centers and raised its 2026 contracted power forecast to over 3 gigawatts, up from 2.5 gigawatts previously.

Financial Outperformance and Strategic Investments

The company exceeded its Q3 ARR guidance, reaching $1.2 billion by December 2025, and achieved positive group adjusted EBITDA in Q4. Despite projecting an EBIT loss for 2026 due to substantial CapEx of $16 billion to $20 billion, management is confident in attractive returns and a medium-term EBIT target of 20-30%. These investments are aimed at scaling capacity, deploying GPUs, and enhancing the technology stack.

Customer Evolution and Market Trends

Nebius is observing a significant trend where AI start-ups are evolving into real enterprise-scale companies, with their demand for GPUs growing from hundreds to tens of thousands. Enterprises are also increasingly integrating AI into vital business processes, leading to growing contracts and longer durations. This broad-based demand across hyperscalers, AI start-ups, and enterprises underpins the company's aggressive growth strategy.

Strategic Acquisitions and Product Development

Nebius continues to expand its platform organically and through targeted acquisitions. The recent launch of Token Factory showcases its in-house capabilities, while the acquisition of Tavily adds agentic search capabilities and brings 700,000 developers to its ecosystem. These moves are designed to deepen customer engagement, increase stickiness, and strengthen its position as a full-stack AI cloud provider.

Capital Structure and Funding Strategy

The company ended 2025 with $3.7 billion in cash and generated $834 million in Q4 operating cash flow, primarily from upfront payments. Approximately 60% of the 2026 CapEx is already funded. Nebius plans to optimize its capital structure by exploring corporate debt and asset-backed financing, while being mindful of shareholder dilution.

Existing equity stakes in companies like ClickHouse (valued at ~$15 billion) also provide future capital sources.

Depreciation Schedule Update

Starting Q1 2026, Nebius is updating its depreciation schedule for assets from 4 years to 5 years. This change reflects current market conditions and utilization commitments, aligning with accounting practices and maintaining a conservative approach.

Summary of the company's earnings call; see how call summaries are prepared. Not investment advice.