NBIS Earnings, What the Latest Results Mean for Investors

Quick Answer

Nebius Group (NASDAQ: NBIS) has delivered a series of exceptionally strong earnings reports through 2025 and into 2026, with revenue growth ranging from 355% to 766% year-over-year across recent quarters. The company has repeatedly raised its outlook, now targeting $7–9 billion in annualized run-rate revenue for 2026, up from the $750 million–$1 billion ARR guidance set for December 2025.

For investors, the core takeaway is that Nebius is scaling its AI infrastructure business at a pace that few public companies have matched, though this growth comes with massive capital expenditure requirements—$20–25 billion planned for 2026 alone—and negative GAAP earnings per share in recent quarters.

Key Facts

Q3 2025 revenue grew 355% year-over-year to $146 million, with the core infrastructure business growing 400% year-over-year
Core business run-rate revenue reached $551 million at the end of September 2025
ARR guidance was raised to $900 million–$1.1 billion in Q2 2025, then to $750 million–$1 billion by December 2025, and later to $7–9 billion for 2026
Q4 2025 revenues grew 547% year-over-year
Q1 2026 EPS of -$0.33 beat analyst expectations of -$0.73 by 54.93%
2026 CapEx guidance raised to $20–25 billion, up from the prior range of $16 billion
Adjusted EBITDA margin for the AI business expanded to 45%, up from 24% in Q4
Stock performance: YTD +194.27%, 1-year +226.98%, 3-year +1,623.69%
Q2 2025 revenue rose 625% year-over-year to $105.1 million
Q2 2026 earnings scheduled for August 12, 2026 (today)

The Arc of Growth From Re-Launch to Hyper-Scale

Nebius Group's earnings trajectory over the past two years reads less like a conventional technology company's financial history and more like the scaling curve of a startup that found product-market fit in the most capital-intensive sector of the current tech cycle: AI infrastructure.

The Rebound Quarter Q3 2024

The base from which all subsequent growth is measured comes from Q3 2024, when the company reported revenue of $43.3 million—a 766% year-over-year increase at the time. The company held approximately $2.3 billion in cash and was in the early stages of what management described as rapid AI infrastructure expansion.

This quarter established the pattern that would define subsequent reports: extraordinary percentage growth, heavy investment, and a clear narrative about AI infrastructure demand outstripping supply.

The Acceleration Phase 2025 Quarters

By Q1 2025, revenue had grown 385% year-over-year to $55.3 million, with $2 billion in planned capital expenditures. The company was also preparing for the deconsolidation of Toloka, an AI data labeling business, which would sharpen the focus on the core infrastructure operations.

Q2 2025 marked a significant inflection point. Revenue more than doubled sequentially to $105.1 million, a 625% year-over-year increase.

Management raised ARR guidance to $900 million–$1.1 billion, signaling confidence that demand would continue to outpace the company's ability to build capacity. Net income reached $502.5 million for the quarter, though this figure included items related to discontinued operations.

Perhaps most notably, the core business achieved positive adjusted EBITDA—a milestone that validated the underlying economics of the AI infrastructure model. Q3 2025 delivered another step-change.

Revenue reached $146 million, up 355% year-over-year. The core infrastructure business, which accounted for nearly 90% of total revenue, grew 400% year-over-year and 40% sequentially.

Run-rate revenue for the core business at the end of September stood at $551 million. Management projected $750 million–$1 billion in ARR by December 2025—guidance that would prove conservative.

The Step-Change Q4 2025 and Beyond

Q4 2025 revenues soared 547% year-over-year, and the company's 2026 ARR target of $7–9 billion represented a roughly 10-fold increase from the run-rate reported just months earlier. This guidance revision reflected not just current demand but contracted capacity coming online.

As management noted during earnings calls, everything the company builds is effectively sold in advance, providing near-term visibility into future revenue associated with planned investments. Q1 2026 continued the trend, with the company reporting an EPS of -$0.33, which beat analyst estimates of -$0.73 by nearly 55%.

While earnings per share remained negative—reflecting the enormous depreciation and interest costs associated with building data centers—the consistent pattern of beating estimates suggested that analysts were still calibrating to the speed of the company's execution.

What's Driving the Numbers The AI Infrastructure Business Model

Understanding Nebius's earnings requires understanding the business model underneath the growth figures. This is not a software company with high margins and low capital intensity.

It is a physical infrastructure business operating at the intersection of cloud computing, GPU deployment, and AI model training.

Capacity as the Binding Constraint

The single most important fact from the earnings calls is that "everything we build with is sold." This statement captures the fundamental supply-demand imbalance in AI compute. Nebius does not build speculative capacity and then market it to customers.

Rather, customers commit to capacity before it comes online, and the company's growth is constrained primarily by its ability to build data centers, source GPUs, and bring power online. This dynamic explains the aggressive capital expenditure program.

The company raised 2026 CapEx guidance to $20–25 billion, up from a prior range of $16 billion. Management explicitly stated that this increase reflects investments in 2027 capacity that will come online early next year, with revenue contributions expected in the first half of 2027.

The Margin Story

The financial narrative is not solely about revenue growth. The adjusted EBITDA margin for the AI business expanded to 45%, up from 24% in Q4 of the prior year.

This improvement is significant for two reasons. First, it demonstrates operating leverage.

As utilization rates approach peak levels—the company has reported near-peak platform utilization—fixed costs are spread across a larger revenue base. The infrastructure business has high fixed costs (facilities, power contracts, equipment) and relatively low marginal costs once capacity is deployed.

Second, the margin expansion provides evidence that customers are willing to pay prices that generate healthy contribution margins. In a market where some AI infrastructure providers have struggled to translate revenue growth into profitability, Nebius's margin trajectory suggests pricing power.

The Full-Stack Strategy

At the Morgan Stanley Technology, Media & Telecom Conference in March 2026, management articulated a strategy focused on becoming a full-stack AI cloud provider. The company is scaling toward 3 gigawatts of capacity, a figure that would place it among the largest AI infrastructure operators globally.

The full-stack approach means Nebius is not merely renting GPUs but providing the orchestration layer, storage, networking, and tooling that enterprises need to train and deploy AI models. This strategy matters for earnings sustainability.

Pure GPU rental is a commodity business vulnerable to pricing compression as more capacity comes online globally. A full-stack offering with differentiated software and services creates switching costs and supports premium pricing.

The margin data suggests this approach is working.

The Cost of Growth CapEx, EPS, and the Bear Case

No analysis of Nebius's earnings would be honest without addressing the costs of this growth trajectory. The company has consistently reported negative GAAP earnings per share, and the capital expenditure program is staggering in absolute terms.

Understanding the EPS Picture

Recent EPS history shows a pattern of losses that are nonetheless beating expectations:

Q2 2025: EPS of -$0.38 versus estimates of -$0.42
Q3 2025: EPS of -$0.40 versus estimates of -$0.44
Q4 2025: EPS of -$0.68 versus estimates of -$0.54 (a rare miss)
Q1 2026: EPS of -$0.33 versus estimates of -$0.73

The magnitude of these losses is relatively small compared to the revenue base, reflecting the impact of massive depreciation charges from the growing asset base. As capacity comes online, depreciation accelerates, which pressures GAAP earnings even as cash flows from operations improve.

The Depreciation Wall

The Q2 2025 financials illustrate this dynamic. Depreciation and amortization reached $75.2 million for the quarter, up from $11.4 million in the prior-year period—a more than six-fold increase.

As a percentage of revenues, depreciation stood at 72%, down from 79% in the prior-year quarter. The percentage declined because revenue grew faster than depreciation, but the absolute dollar figure will continue to climb as the $20–25 billion CapEx program comes online.

This creates a tension in the earnings narrative. Adjusted EBITDA margins of 45% tell one story about underlying business quality.

GAAP net losses tell another story about reported profitability. Investors need to understand which metric matters for their investment thesis.

The Financing Question

A $20–25 billion annual capital expenditure program requires substantial external financing. The company entered this growth phase with approximately $2.3 billion in cash as of Q3 2024.

Since then, it has relied on a combination of debt, equity raises, and operating cash flow to fund expansion. The Q2 2025 results showed net income of $584.4 million, including $81.9 million from discontinued operations and $502.5 million from continuing operations.

These figures were heavily influenced by non-cash items, including gains related to the deconsolidation of Toloka. The underlying operating cash flow position is less clear from the reported data.

Investors should watch the company's debt levels, equity dilution, and cash balance in upcoming reports. The ability to fund $20–25 billion in annual CapEx without excessive dilution will be a key determinant of per-share value creation.

The Competitive Risk

Nebius is not the only company building AI infrastructure at scale. Major cloud providers, hyperscalers, and well-funded startups are all deploying GPUs and data centers.

The risk is that by 2027 or 2028, the supply-demand imbalance that currently favors Nebius will shift, compressing pricing and margins. The company's response to this risk is embedded in its 45% adjusted EBITDA margin.

If margins were thin, a modest pricing decline could eliminate profitability. At 45%, there is room for pricing pressure before the business becomes unprofitable.

The full-stack strategy is also a hedge, as software and services components are less susceptible to commodity pricing pressure than raw GPU capacity.

What the Stock Price Says and What It Doesn't

The market has clearly endorsed Nebius's growth trajectory. The stock is up 194.27% year-to-date and 226.98% over the past year.

Over three years, the return is a remarkable 1,623.69%, compared to 73.52% for the S&P 500 over the same period.

Reading the Price Action

This performance reflects the market's willingness to value high-growth AI infrastructure companies on forward revenue and capacity metrics rather than trailing earnings. The consistent beat-and-raise pattern—revenue exceeding guidance, guidance being raised, and EPS beating estimates—has rewarded shareholders.

The stock price also embeds expectations. A company trading at these levels after this run-up is priced for continued hyper-growth.

If revenue growth decelerates more sharply than expected, or if the company misses on any of its ambitious targets, the downside could be significant.

What Earnings Reports Reveal Beyond the Headlines

The earnings reports provide several signals beyond the headline revenue and EPS figures:

Guidance credibility matters. The company has a pattern of setting targets and exceeding them. The Q4 2024 guidance of $750 million–$1 billion ARR for 2025 was met, and the 2026 target of $7–9 billion represents a continuation of this pattern.

Each successful guidance beat builds credibility that supports the stock's valuation. Utilization rates indicate demand quality. Near-peak platform utilization suggests that the company's capacity is genuinely in demand, not sitting idle.

This is critical because AI infrastructure with low utilization generates losses rapidly. The pace of capacity deployment is accelerating. The increase in 2026 CapEx to $20–25 billion, with revenue contributions expected in the first half of 2027, indicates that management sees demand visibility extending well beyond the current year.

This forward look is more informative than trailing revenue figures.

The Investor's Checklist

For investors evaluating whether Nebius's earnings reports justify the stock's valuation, several questions are worth tracking:

Is the revenue trajectory matching the ARR guidance? The company has provided increasingly ambitious ARR targets. Quarterly revenue figures should show a path toward these targets.

A significant gap between run-rate revenue and ARR guidance would be a warning sign. Are margins stable or improving? The expansion from 24% to 45% adjusted EBITDA margin was a major positive.

Continued margin expansion would support the thesis that Nebius has pricing power. Margin compression would suggest competitive pressure.

Is the CapEx program on track? The company has raised CapEx guidance twice. Delays in data center construction, GPU availability, or power procurement could push revenue contributions further out, creating a gap between expectations and results.

How is the balance sheet evolving? The $20–25 billion CapEx program requires financing. Tracking debt levels, equity raises, and cash balances will indicate whether growth is being funded in a sustainable way.

What is the customer concentration? If a handful of customers account for a large share of contracted capacity, the business is exposed to customer-specific risks. Diversification across customers and use cases reduces this risk.

Frequently Asked Questions

Why does Nebius report revenue growth of over 500% but still have negative EPS?

Nebius is building AI infrastructure at massive scale, which requires enormous upfront capital expenditures. These investments generate depreciation expenses that reduce GAAP earnings even when the underlying business is growing rapidly.

The company's adjusted EBITDA margin of 45% shows the business is profitable on a cash operating basis, but heavy depreciation and financing costs keep reported EPS negative.

What is the difference between ARR and reported revenue?

ARR (annualized run-rate revenue) is calculated by taking the current period's revenue and extrapolating it forward. Nebius has provided ARR guidance as a forward-looking metric.

For example, the $7–9 billion ARR target for 2026 means management expects the business to be generating revenue at an annualized rate of $7–9 billion by that point. Reported revenue is the actual revenue recognized during a specific quarter.

How does Nebius's capital expenditure program affect future earnings?

The company plans to invest $20–25 billion in 2026, up from a prior range of $16 billion. This investment will create future revenue as capacity comes online, but it also means higher depreciation and potential financing costs in the near term.

Management has stated that capacity built with this capital will contribute to revenue in the first half of 2027, indicating a relatively short timeline between investment and return.

What risks should investors consider with NBIS stock?

The primary risks include a slowdown in AI infrastructure demand, pricing pressure as more capacity comes online globally, execution risk on the massive capital expenditure program, potential equity dilution to fund growth, and the possibility that the current stock price already reflects optimistic expectations. The stock has gained over 1,600% in three years, and such moves can reverse quickly if fundamentals disappoint.

When is Nebius's next earnings report?

Nebius's next earnings report is scheduled for Q2 2026 on August 12, 2026. Analysts project an EPS of -$0.70 for this quarter.

The company has beaten EPS estimates in three of the last four reported quarters.

Reference Notes

Information in this article is based on publicly available sources. Some details may change over time.

Verify with official sources before acting.

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