Nebius Q1 26 Earnings

Investment Analysis Clubs Saul’s Investing Discussions
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Wow - the market certainly likes it with Nebius currently up another 20% today so far! I still have not sold a single share - even though Nebius has grown to be a very large part of my portfolio (currently at 37%).

The numbers coming out of the release today are very strong.

Here are the highlights from the release:

Revenue: 399m which is 684% YoY.

Adj EBITDA: 129.5m from a loss last year of -53.7m.

GAAP Net Income of 621.2m (which includes a gain from revaluation of investments in equity securities - eg Toloka, Clickhouse, AVRide and TripleTen).

Arkady, CEO, said in his letter that “We continue to see unprecedented demand across the market. Compute and cloud needs are vastly exceeding capacity as more industries embrace AI and companies move beyond experimentation to real-world applications. We are seeing this demand first hand, and are capturing it with our full-stack AI-native cloud.”

ARR has been re-affirmed to be on track for 7-9B and the full year revenue guide has been re-affirmed to be 3.2B at the midpoint.

What a great company who are in the right place at the right time with the right partners and team and support. And on top of all this they announced another new DC as well and have upped their contracted guidance to 4GW.

“We have now secured two gigawatt-scale sites in the US.
We broke ground at our Missouri location yesterday; today,
we are announcing a new site in Pennsylvania where we have
secured power for a deployment of up to 1.2 GW.”

Full report here:

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Great report! I kept trimming on the way up otherwise it would have ballooned to 25% of my portfolio. This company is my first 10 bagger. :partying_face:

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Congratulations. It’s a great feeling when that happens. I wrote on this board only a few weeks ago that I could see Nebius at $200 by the end of the Summer. Then just last week I amended that to say it might even get there by the start of Summer, and here we are still in Spring and it is already over $200.

Having said above that I have not sold a single share, I did actually sell a big chunk last night at $207 to trim it from a 37% allocation back to a 20% allocation minutes before the market closed. But then I instantly regretted it, so if it pulls back a bit, which it might after such a big run up, I’ll buy them all back.

Jonathan

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I know it’s popular to try to find the next shiny object, but many times just staying the course is the best option. Glad I did with Nebius. It’s carrying my portfolio this year, and I hope others of you are experiencing the same. :slightly_smiling_face:

I’m very happy and even a little bit surprised that they keep hitting their contracted power targets (now greater than 4.0 GW). I’ve also liked to see the jump in EBIDA from 15M to 129.5 M QoQ, which says to me that growth will likely be very scalable.

I know that trimming is a good way to reduce risk. I think people should do what helps them sleep at night. I hold to the old Wall Street adage: “shoot your dogs, and let your wild horses run.” I am long Nebius 23.3%. It’s my largest holding.

Best,

bulwnkl

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I will just comment that the CEO can matter so much to a company. I listen to Arkady, and the leadership team, and he is a visionary. Not even a bit of doubt amongst the larger statements he makes. From the conference call his first sentence:

“We have had a great start to the year. We’re building an AI-native hyperscaler. And I would say we are developing it across 4 dimensions. The first is capacity and scale; second, product and functionality; third dimension is customers and demand; and finally, capital, our fourth dimension. All our focus is on execution across all 4 of these dimensions.”

Not to pick a fight, but such a distinction compared to the leadership of $IREN in my opinion. It is clear that the bare metal deals are not the focus nor the prize for them. Whether they do it or not is up to them, but I love that in his mind there is no doubt. This one and getting more $CRDO on the dip have carried my portfolio as well.

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Nbis is one of my largest positions, and I have not trimmed, though as with many other companies here it has been a rough ride.

With each quarter I am even more impressed by nebius’ vision – they seem very much to be skating to where the puck will be (to use a hockey phrase), in a way I don’t see with their competition. There’s no question that the execution risk for all these companies is high, but they have consistently done more than they’ve promised. I that regard, they are to me in the same league as APP.

I was hoping for some more in depth comments in their call regarding the community opposition/missing permits/other issues surrounding the DC builds, but they pretty much dismissed them. I took that to mean they do not think they are significant problems, rather are ‘simply’ issues to work through. My view on those types of problems are 2) we will see more of them, and 2) the mass of this freight train called AI is going to steamroller all, for quite some time. I just don’t see how local communities, even individual states, can hold back this tide. I don’t think that is necessarily good but that is a separate issue. GLTA!

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They did speak about this in answer to a question on it. They said that not all DC’s were built in same way, implying that they are doing it better than others and in a more sustainable way. And they said that they were actively engaging with local communities in town hall meetings and the like, as well as supporting them in all sorts of ways. Indeed Andrey had just returned the day before from such a meeting in Missouri. (I also read they had paid the school lunch debt of 270k for the district for that year.) And of course they are creating many jobs for local people and using a build system that transfers heat for reuse.

Jonathan

Copied from Call transcript below

Number one, I think, first of all, not all companies that build data centers build in the same way. We’re not alike. And I think you’ve heard kind of Andrey and team talk about how we build the efficiencies that we’re able to achieve, what we do around create interesting technological ways of heat reuse and so on and so forth. So we built very efficiently and very effectively, and I think that’s an important part of our story and what we talk about when we come into new regions.

But of course, that’s not enough. I think that we also – the second thing is that we take a very transparent approach to what we do and how we talk about ourselves. I think that’s not something that’s necessarily universal in our industry. But it’s – from the very beginning when we’re looking at a site and we’re engaging strategically who we are, we engage very actively in communities and talking about what our plans are, what we do, how we build, how we contribute. You can see us showing up at community town hall meetings or I’m looking actually right now at Andrey Korolenko across the table in Amsterdam it has just blown in from our event in Independence, Missouri yesterday, where we’re engaging with the local government and communities. So we’re trying to just be very clear and transparent about what we do, how we do and what the benefit that we brings – that it brings.

And I think the last thing is that, look, when we come into a new region to build, we don’t just build and then move on to the next city. These are long-term investments. And so therefore, we have to look at these relationships with communities as long-term partnerships and relationships. So we think very much beyond what we do in terms of the building, but where else we can contribute through it, whether it’s through our Nebius Academy, academic offerings, working with local universities, helping to train, reskill, retool and so on.

So we view this very much holistically as a long-term partnership. And so far, we found that this approach resonates well. But there’s no room for complacency here. So we continue to pay attention and make sure that we’re doing the best we can to be a positive contributor to the local ecosystems.

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Yes, I recall that portion of it, but I had submitted (and I am sure many others did too) a very specific question about the Vineland site, where, to judge from the news, they have a number of issues ranging from community opposition to permits. I was interested in how they saw that specific site progressing, and whether there were indeed any substantial delays. I thought their responses on this topic to be pretty anodyne – a lot of PR pablum.

For the record I don’t think the Vineland issues are serious – the community opposition will follow all the DC projects, and permit problems are a fact of life in large projects. I was simply interested in a more upfront discussion of them

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Well, it has fallen today a bit, so I have bought them all back again - and then some - at sub $200. Even with all dealing costs and taxes I have made a nice profit in the past few days. I have been watching for this moment the past few days as I felt so regretful that I had trimmed any at all last week. It is now back to a 36% holding for me. The more I read and research about this management team (who are top notch) and this company, the more I like. I am sure we will see much much higher later this year - though it looks like it is having a healthy consolidation today after such a large run up post earnings.

Jonathan

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It appears that the recent deal with Bloom Energy ($BE) should resolve the air permit issues at Vineland and explains why they requested the Vineland planning board meeting pushed back to June. The next question becomes, how quickly they will be able to turn around the deployment of the fuel cells. Can they meet the contract timelines? This will be a big test for them and the market could react very harshly if timelines are delayed. Great news for $BE holders though.

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But it is the source of at least 90% of their current revenue.

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I think you mean it is 90% of their future projected revenue through the hyperscaler contracts. I think right now many of the smaller data centers are actually used by mid-size companies and AI-native firms. If you listened to the earnings call it all depends on how you interpret some of the answers. For instance, Marc said the following when asked about the $META contract,

“Thank you, Alex. First, I wanna say that we love working with Meta, and we’re excited that they chose to buy more capacity from us. This expanded new agreement is to make sure that we all understand this, a five year contract for a total of $27 billion, and it is structured in two parts. First, there’s a $12 billion commitment to dedicated compute capacity with delivery starting in early 2027. Second, as you pointed out, there’s another $15 billion of additional capacity that we, at our discretion, can either allocate to Meta or sell to our AI Cloud customers as it comes online for the duration of the five year contract. Let me explain this in a bit more detail.”

I read this as, “we are seeing demand for our cloud offering and software offering that has better margins, if for some reason we don’t get the demand or the market changes by the time this is online, we can always take the thinner margins with $META.”

A critic could read it as, “Our software stinks, we need to have meta as a backup if we pay for this buildout”.

Totally up to the listener at some level. My point is that $NBIS isn’t positioning for this 2nd option at all. Just my 2 cents.

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That’s not how I read it. I read it as “we want our software layer to be a differentiator, but since it isn’t today and may not be in the future, we can continue to be primarily a bare metal provider.”

Neither Nebius nor CoreWeave structure their earnings releases in a way that we can identify which are bare-metal deals and which deals involve their software infrastucture. Q4 2025 core AI cloud revenue was $214.2 million, more than 800% year-over-year growth. So, the growth is real. But Nebius’s two largest deals — a $17.4–19.4B Microsoft deal and the $3B Meta contract — don’t involve the software layer.

Even looking at customer count, Iren’s acquisition of Mirantis netted them 1500 software layer using customers. I believe Nebius’ customer count is less than that, in the hundreds.

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