Nebius Group (NBIS)
TL;DR
Nebius is an AI-native hyperscaler — full-stack GPU cloud (compute / storage / Token Factory / agentic) competing alongside CoreWeave and the big-3 hyperscalers. Just reported: Q1 FY2026 revenue $399M (+684% YoY, +75% QoQ), ARR $1.9B (+50% QoQ), Group adj EBITDA margin 13% (Nebius AI biz 45%) — strong inflection. Q2 guide implies margin step-down then Q3 recovery; FY26 reiterated at $7-9B ARR exit, $3-3.4B Group revenue, ~40% adj EBITDA. Stock at $209 (NM P/E(ttm), TTM OP still negative) — premium prices a $27B Meta contract, $20-25B CapEx ramp, and 4GW+ contracted power.
Summary
| Finding | Assessment |
|---|---|
| Post-Spin Stock Return | $25 (Aug 2024) → $209 (current). Up ~735% in 21 months. Q1 print added +17%. Stock now trades on ARR multiple, not P/E. |
| Business Model | AI-native hyperscaler — full-stack cloud (compute + storage + Token Factory + agentic). 98% of revenue from Nebius AI biz. Adj EBITDA 45% margin on AI biz. |
| Competitive Moat | NARROW Owns 75% of contracted power, NVIDIA Exemplar Cloud, Token Factory + acquisitions. Single GPU supplier risk; hyperscaler concentration. |
| Past Drivers | Yandex spin-out (Aug 2024), Microsoft + first Meta contracts (anchor demand), NVIDIA $2B equity (2026), 3 acquisitions (Tavily, Eigen AI, Clarifai). |
| Recent Stock Move | $85 (Q4 2025) → $209 (current). Driven by Meta $27B contract + raised CapEx guide + 45% AI biz adj EBITDA margin. |
| Revenue Trend | ACCELERATING Rev YoY: 684% (Q1 2026) → 784% (Q2 2026E). |
| Margin Trend | COMPRESSING OM%: -32% (Q1 2026) → -37% (Q2 2026E). |
| TTM OP Trajectory | DECLINING TTM OP QoQ: +1% (Q1 2026) → +39% (Q2 2026E). TTM OP -$604M (loss widening to -$837M Q2E). |
| Key Opportunities | Meta $27B contract ($12B fixed + $15B optional); 4GW+ contracted power; FY26 ARR exit $7-9B; software stack deepening. |
| Key Risks | $20-25B CapEx vs $3-3.4B Rev = 6-8x ratio; single GPU supplier; hyperscaler concentration; valuation rests on ARR not earnings. |
| Catalysts | Q2 print, Q3 capacity inflection, FY26 ARR exit $7-9B, Meta first delivery early 2027, Vera Rubin H2 2026. |
| P/E(ttm) Valuation | NM TTM OP negative. Valuation drives off ARR multiple: $209 stock × 254M shares = $53B market cap on $1.9B ARR = ~28x ARR; ~7x exit FY26 ARR midpoint. |
Q1 FY2026 Key Data
- Group revenue $399M (+684% YoY, +75% QoQ). Nebius AI biz $390M (+841% YoY, +82% QoQ, 98% of group). ARR $1.9B end-Q1, up from $1.25B in Q4 2025.
- Group adj EBITDA $130M (13% margin). Nebius AI biz adj EBITDA margin 45% (up from 24% Q4). Adj net loss -$100M; GAAP net income $621M includes ClickHouse mark-to-market gain.
- OCF $2.3B; cash $9.3B end-Q1. CapEx -$2.5B Q1. FY26 CapEx guide RAISED to $20-25B (from $16-20B). FY26 reiterated: ARR $7-9B, Rev $3-3.4B, EBITDA margin ~40%.
Key Takeaways from Earnings Call
- Meta $27B 5-yr contract is the headline. Structured as $12B fixed compute + $15B optional capacity at Nebius’ discretion to allocate to Meta OR resell to AI Cloud customers at potentially higher margins. Unlocks asset-backed financing.
- Capacity ramping — 3.5GW contracted (target 4GW year-end); new Pennsylvania 1.2GW site. Owned capacity now 75%+ of total power. Q3-Q4 are the inflection quarters for capacity deliveries. “Everything we build, we sell.”
- Capital flywheel intact. $6.3B raised this year: $4.3B converts (1.25% / 2.60% coupons) + $2B NVIDIA equity. Plus 3 acquisitions (Tavily, Eigen AI, Clarifai) for inference/agentic stack. Pipeline +3.5x QoQ.
- Margin trajectory non-linear. Q2 steps down (back-end-weighted CapEx + acquisition cost base lands first), Q3 returns to Q1 level, Q4 higher. FY26 ~40% adj EBITDA margin reiterated. Pricing rising; contract duration extending.
Key Segments and Revenue Mix (Q1 FY2026)
| Segment | Q1 2026 Revenue | % of Group | Key Details |
|---|---|---|---|
| Nebius AI (core cloud) | $390M | 98% | +841% YoY, +82% QoQ. ARR $1.9B end-Q1. Adj EBITDA margin 45%. Full-stack: bare metal + multi-tenant + Token Factory + Aster 3.5 + agentic. Customers: AI natives, Revolut, Sword Health, 1X Tech, monday.com, etc. |
| Avride + TripleTen + equity stakes | $9M | 2% | Avride (AV / delivery robots), TripleTen (edtech reskill). Equity stakes in ClickHouse + Toloka (Q1 ClickHouse mark-up drove $621M GAAP NI). Both still early-stage and EBITDA-negative. |
Group structure: Nebius AI is the cash-generating cloud business (98% of revenue and the entirety of EBITDA growth). Strategic intent: find partners for Avride / TripleTen so they can scale outside the consolidation perimeter. Equity stake mark-to-market gains (ClickHouse Q1) inflate GAAP NI vs underlying operations. Headquarters Amsterdam; listed NASDAQ. Reporting currency USD.
Business Model
SUPPLIERS
NVIDIA (GPU monopoly — $2B equity tie + Exemplar Cloud status on GB300)
Power suppliers (PA, NJ, MO, AL)
Data center sites (4GW+ contracted)
Convert debt + ABS funders
GPUs /
Power / $
→
NEBIUS
Full-stack AI cloud: compute + storage + network
Token Factory (inference) + agentic (Tavily)
Aster 3.5 platform; in-house chip ops
Owned 75%+ of contracted power
Q1 Rev $399M; ARR $1.9B; FY26 guide $3-3.4B
GPU-hours /
tokens / API
→
$ Revenue
CUSTOMERS
Hyperscalers (Meta $27B; Microsoft)
AI-natives (model builders, foundation labs)
Enterprises (Revolut, Sword Health, 1X)
Physical AI / pharma / FS / mfg / energy
Moat Assessment: NARROW
- Full-stack vertical integration. Owns 75%+ of contracted power, runs proprietary control plane (Aster), and builds in-house at chip-rack level. Token Factory + acquisitions (Tavily, Eigen AI, Clarifai) deepen software layer above the compute.
- NVIDIA preferred-partner status. Exemplar Cloud on multiple GPU gens — small group globally. $2B NVIDIA equity stake aligns supply chain certainty. Early Vera Rubin / Vera CPU collaboration.
- BUT counterweights. Single GPU supplier (NVIDIA — same as CRWV); hyperscaler dependency (Meta + Microsoft = significant revenue share); commoditization risk at the bare-metal layer; very capital intensive ($20-25B FY26 CapEx).
Stock vs. Earnings — Performance
- Stock at $209 (current), vs $27 Q4 2024 close (Yandex spin completion) — up ~675% in 15 months. The May 13 print rally added +17% on the day. P/E remains NM (TTM operating loss); valuation drives off ARR multiple + capacity contracts.
- TTM OP -$604M at Q1 2026, widening to -$837M Q2E. OM% improved from -103% Q4 2025 to -32% Q1 2026 then compresses to -37% Q2E on Q2 investment + CapEx timing. Nebius AI biz adj EBITDA margin still 45% standalone.
- Stockanalysis P/E shows NM throughout the post-spin period because TTM EPS has been negative every quarter. The Q1 FY2026 reported net income of +$621M (positive) includes a ClickHouse mark-to-market gain — not core operations.
Past Key Drivers
- Yandex spin-out completed late 2024. NBIS started from $25 base in Aug 2024; rerated to $52 by Q2 2025 and $110 by Q3 2025. The split positioned Nebius as a pure-play AI cloud with $2B+ founding cash and Amsterdam HQ.
- Microsoft + first Meta contract built credibility. Microsoft contract delivery stretches through end-2026; first Meta contract fully delivered in Q1 2026. These anchor demand wins enabled scaling from $51M Q1 2025 revenue to $399M Q1 2026 (+684%).
- NVIDIA partnership deepened in 2026. $2B equity investment + line-of-sight to 5GW of GPU commitments by end-2030. Multiple Exemplar Cloud designations (Hopper, Blackwell, GB300). Early access to Vera Rubin in H2 2026.
Quarterly Key Metrics
| USD | Q1'24 | Q2'24 | Q3'24 | Q4'24 | Q1'25 | Q2'25 | Q3'25 | Q4'25 | Q1'26 | Q2'26E |
|---|---|---|---|---|---|---|---|---|---|---|
| Quarter End | Mar24 | Jun24 | Sep24 | Dec24 | Mar25 | Jun25 | Sep25 | Dec25 | Mar26 | Jun26 |
| Stock | - | - | - | $27 | $22 | $52 | $110 | $85 | $104 | $209 |
| Stock QoQ | - | - | - | - | -17% | +132% | +113% | -23% | +22% | +101% |
| Rev YoY | - | - | - | - | - | 625% | 355% | 272% | 684% | 784% |
| OM% | - | -774% | -251% | -290% | -236% | -106% | -89% | -103% | -32% | -37% |
| R40 (RevYoY+OM%) | - | - | - | - | - | 519% | 266% | 169% | 652% | 747% |
| TTM OP ($M) | -$92 | -$204 | -$285 | -$462 | -$491 | -$490 | -$539 | -$596 | -$604 | -$837 |
| TTM OP QoQ | - | +122% | +39% | +62% | +6% | +0% | +10% | +11% | +1% | +39% |
| FCF/OP | -86% | -77% | 25% | 122% | 276% | 438% | 547% | 617% | 527% | 711% |
| Debt/EBITDA | -0.2x | -0.1x | -0.1x | -0.1x | -0.7x | -5.8x | -30.4x | -83.8x | 76.2x | 69.0x |
| P/E(ttm) | NM | NM | NM | NM | NM | NM | NM | NM | NM | NM |
Recent Stock Performance & Drivers
- Stock currently $209, vs $85 (Q4 2025 close) and $27 (Q4 2024 close). +17% on Q1 print day driven by Meta $27B contract surprise, raised CapEx guide signaling demand, and 45% Nebius AI biz adj EBITDA margin showing operating leverage.
- TTM OP -$604M at Q1 2026; FCF/OP optically 527% but that’s noise from negative TTM OP base. What matters: Q1 standalone OCF $2.3B from customer prepayments + adj EBITDA inflecting positive. Valuation drives off ARR multiple ($1.9B exit Q1 / $7-9B target).
- P/E remains NM — TTM EPS still negative across all quarters since the spin. Q1 GAAP NI of $621M was inflated by ClickHouse mark-to-market; underlying adj net loss -$100M. Until TTM operating profit turns positive (target 2027+), P/E is not a usable multiple.
Opportunities
- $27B Meta contract is structurally unique. $12B committed + $15B optional capacity at NBIS’ discretion to reallocate to AI Cloud at higher prices. Unlocks asset-backed financing at attractive rates.
- Capacity ramp + 4GW+ contracted = sold-out 2026-2027. Q3-Q4 capacity deliveries inflect. Pennsylvania 1.2GW added; Alabama + first Missouri online Q1 2027. Several customers compete for every GPU.
- Full-stack software differentiation accelerating. Token Factory + Eigen AI + Clarifai = inference layer. Tavily = agentic search. NVIDIA + Vera Rubin integration. FY26 ARR exit $7-9B reiterated.
Challenges
- CapEx-to-revenue ratio at hyper-scale. FY26 CapEx $20-25B vs Rev $3-3.4B = 6-8x. Total debt $8.5B end-Q1 (up from $4.1B Dec). Funding relies on prepayments + asset-backed financing + corporate debt.
- Customer concentration + hyperscaler dependency. Meta + Microsoft = significant revenue share. If hyperscalers in-source GPU capacity faster, growth could decelerate. AI Cloud customer base diversifying (Revolut, 1X, Sword).
- P/E remains NM; valuation rests on ARR/EBITDA forward. No GAAP earnings anchor. If margin slips, multiple compresses fast. Q2 step-down (back-end-weighted CapEx + investment timing) creates perceived “miss” risk.
Next 12 Months
- Q2 FY2026 implied step-down then Q3 recovery. Margins dip from Q1 45% Nebius AI biz EBITDA on back-end-weighted CapEx + acquisition cost base. Q3 returns to Q1 levels per management; Q4 higher. FY26 group adj EBITDA margin ~40% reiterated.
- Capacity inflection points: Q3 + Q4 capacity online; Pennsylvania first 250-300MW end-2027. Vera Rubin deployment H2 2026. Meta contract first delivery early 2027. Microsoft contract balance through end-2026.
- Funding sequence: asset-backed financing tied to Meta + Microsoft contracts, plus corporate debt and ATM program. Customer prepayments already meaningful ($4.8B deferred revenue end-Q1 vs $1.6B Dec). Cash position $9.3B currently.
Next 12-24 Months
- FY27 demand visibility from Meta + AI Cloud contracts. First-half 2027 revenue tied to current CapEx wave; $12B Meta + tail of Microsoft. AI Cloud pipeline +3.5x QoQ at qualified-opportunity level provides depth.
- Path to GAAP profitability. TTM OP still -$604M at Q1 2026, but Nebius AI biz adj EBITDA margin 45% already. Operating leverage as capacity rolls + ARR scales. Group margin trajectory toward 40-50% hyperscaler range.
- Optionality: Avride / TripleTen / equity stakes. Management signals intent to find strategic + financial partners for Avride and TripleTen. ClickHouse stake re-marked higher in Q1 (drove the $621M GAAP NI). Could unlock additional capital.
Core Metrics Scorecard
| Q3'21 | Q4'21 | Q1'22 | Q2'22 | Q3'22 | Q4'22 | Q1'23 | Q2'23 | Q3'23 | Q4'23 | Q1'24 | Q2'24 | Q3'24 | Q4'24 | Q1'25 | Q2'25 | Q3'25 | Q4'25 | Q1'26 | Q2'26E | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Quarter End | Sep21 | Dec21 | Mar22 | Jun22 | Sep22 | Dec22 | Mar23 | Jun23 | Sep23 | Dec23 | Mar24 | Jun24 | Sep24 | Dec24 | Mar25 | Jun25 | Sep25 | Dec25 | Mar26 | Jun26 |
| R40 > 40% | ✅ | ✅ | ✅ | ✅ | ✅ | |||||||||||||||
| R40 accelerate | ✅ | ✅ | ||||||||||||||||||
| TTM OP QoQ > 10% | ✅ | ✅ | ✅ | ✅ | ✅ | ✅ | ||||||||||||||
| TTM OP QoQ accelerate | ✅ | ✅ | ✅ | ✅ | ||||||||||||||||
| TTM FCF/OP > 60% | ✅ | ✅ | ✅ | ✅ | ✅ | ✅ | ✅ | |||||||||||||
| Debt/EBITDA < 3.5 | ||||||||||||||||||||
| Total passes | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | 4 | 4 | 3 | 5 |
| Stock QoQ | - | - | - | - | - | - | - | - | - | - | - | - | - | - | -17% | +132% | +113% | -23% | +22% | +101% |
| P/E(ttm) | - | - | - | - | - | - | - | - | - | - | - | - | - | NM | NM | NM | NM | NM | NM | NM |
- NBIS scorecard is distorted by pre-Aug 2024 Yandex history. Only Q3 2025 onward (4-5 passes) reflects pure-play Nebius AI cloud. 3-pass Q1 2026 reading: R40>40 ✓ + R40acc ✓ + FCF>60 ✓ pass; TTM OP-related criteria fail since TTM OP is negative.
- Debt/EBITDA < 3.5 won’t pass until TTM EBITDA turns positive at scale. Q1 ratio of 76x is meaningless when TTM EBITDA is negative. Once Nebius AI scales toward $7-9B ARR at 40% margin, TTM EBITDA flips positive and the criterion becomes evaluable.
Chart: R40 vs Stock Price (Since 2020)
Chart: Scorecard Total Passes vs Stock Price (Since 2020)
Source: SEC EDGAR 20-F filings, company earnings conference calls, shareholder letter, financial results press release.
Disclaimer: This report is for educational purposes only. NO investment advice.