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What Nebius Group does
Nebius Group N.V. is headquartered in Amsterdam and listed on Nasdaq. Its main operating business, Nebius AI cloud, provides graphics-processing-unit (GPU) compute, storage, networking and software services for training and running artificial-intelligence models. Customers can buy capacity on an on-demand, pay-as-you-go basis or reserve capacity through fixed contracts.
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The listed group is broader than the cloud segment. It also owns Avride, an autonomous-vehicle and delivery-robotics business, and TripleTen, an online technology-education company. Nebius holds equity interests in businesses including ClickHouse and Toloka. Group revenue, operating costs and investment revaluations therefore should not be treated as if they all came from AI-cloud subscriptions.
What the latest results say about growth
The latest figures covered here are Nebius’s unaudited quarter and six months ended June 30, 2026, released August 12, 2026. They show exceptional reported growth, but also the cost of building the infrastructure needed to support it.
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| Measure | Q2 2026 | First half 2026 |
|---|---|---|
| Revenue | $582.3 million, up 454% year over year | $981.3 million, up 529% year over year |
| Adjusted EBITDA | $236.2 million | $365.7 million |
| GAAP net income (loss) from continuing operations | $(190.4) million | $430.8 million |
| Adjusted net income (loss) | $(33.2) million | Company-reported first-half figure is not presented as recurring GAAP cloud profit |
These numbers come from the SEC-filed Q2 2026 earnings release. Adjusted EBITDA is non-GAAP: Nebius excludes depreciation and amortization, share-based compensation, interest, certain transaction costs, investment results, other income or loss and income tax. It can help track operating momentum, but it is not GAAP operating income, net income or cash flow. The first-half GAAP profit also needs context: a large investment remeasurement gain, rather than equivalent recurring cloud earnings, contributed materially to the result.
Why earnings and cash flow tell different stories
Infrastructure spending comes before revenue
AI-cloud operators must purchase GPUs, servers, networking equipment and data-center capacity before all of that equipment can be deployed, sold and fully utilized. Nebius purchased $5.657 billion of property, equipment and intangible assets in Q2 2026 and $8.130 billion in the first half. Those outlays dwarf the reported adjusted EBITDA figures and are the central economic test for the company: each dollar of capacity must eventually produce enough contracted revenue and cash return to cover its cost of capital and operating expenses.
Operating cash flow is not free cash flow
Operating cash flow from continuing operations was positive $2.246 billion in Q2 and $4.504 billion in the first half. The same periods included the capital purchases above. Positive operating cash flow can reflect customer prepayments, working-capital movements or payment timing; it does not mean the company had that amount available after building its infrastructure. Review the cash-flow statement together with prepayments, receivables, payables, financing and capex before treating cash generation as self-funding.
Depreciation is rising with the asset base
Q2 depreciation and amortization was $259.7 million, up 245% from a year earlier. Nebius prospectively changed the estimated useful life of server and network equipment from four years to five years beginning in Q1 2026. The longer life reduced depreciation compared with the previous estimate, but it does not reduce the cash cost of buying replacement equipment or prove that five-year utilization and residual values will be achieved. Rising depreciation is an important check against relying only on adjusted EBITDA.
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Compensation and interest affect per-share economics
Share-based compensation rose to $102.5 million in Q2 from $14.7 million a year earlier and totaled $137.8 million in the first half. The filing attributes much of the increase to acquisition-related compensation and equity awards. Because this expense can dilute shareholders even when excluded from adjusted EBITDA, track diluted shares and award activity alongside operating metrics.
Interest expense was $119.1 million in Q2, compared with $4.8 million a year earlier, and $182.8 million in the first half. Nebius attributes 2026 interest primarily to convertible notes issued in June 2025, September 2025 and March 2026. Higher interest reduces the cash available to expand and increases the importance of refinancing terms and maturity planning.
Investment gains are not cloud revenue
Nebius reported a $780.6 million first-half gain from remeasuring its ClickHouse investment after a financing round. That mark helped reported GAAP results, but it is an investment valuation change, not revenue from GPU capacity. Separate operating performance from gains or losses on equity holdings when assessing recurring earnings.
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Nebius said it had more than $40 billion of additional contracted revenue from investment-grade customers such as Microsoft and Meta. Multi-year commitments can improve visibility, but a contract headline is not the same as recognized revenue or deployed capacity. Investors still need to ask when delivery milestones occur, whether customers prepay, how concentrated the commitments are, and whether Nebius can build and operate the required sites at an acceptable return. The company also remains exposed to customer credit, amendments and cancellations.
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On July 17, 2026, Nebius announced its first senior secured debt facility, approximately $775 million, backed by deployed GPU infrastructure and contracted cash flows from an investment-grade customer. It matures October 31, 2030 and is priced at SOFR plus 2.50%. Nebius said the facility and customer cash flows cover more than 100% of the capex required for the underlying GPU deployment. That is management’s characterization; it is not an independent assessment of risk-adjusted economics. The announcement is available at Nebius’s financing release.
Debt secured by equipment and customer cash flows can reduce the amount of new equity needed for a project, but it adds interest, covenants, collateral and repayment obligations. If utilization or customer payments disappoint, the same leverage can constrain investment elsewhere.
The main long-term risks
Capital intensity and funding risk
Growth requires continuous purchases of GPUs, data-center space, power and networking. The 2025 Form 20-F warns that Nebius may need significant additional financing. Debt can increase fixed obligations and refinancing risk; equity or convertible issuance can dilute existing owners. A long-term thesis must specify how much capital is needed to fulfill contracts and what portion can be funded from operations, customer prepayments or asset-backed borrowing. The filing is available through the 2025 Form 20-F.
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Power, sites and construction
GPU capacity is useless until suitable land, electricity, connectivity, water, permits and construction capacity are secured. Delays, interconnection limits, higher energy prices or construction overruns can push revenue into later periods while financing and depreciation begin earlier. Follow announced sites through actual energization, commissioning and customer delivery rather than counting planned megawatts as productive capacity.
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GPU and supplier concentration
The annual filing identifies reliance on NVIDIA for GPUs and on a limited number of suppliers for other components. Supply delays, allocation decisions, pricing changes or a shift to a more efficient accelerator could affect deployment schedules, margins and competitiveness. Technology becomes obsolete quickly, so a long-lived asset plan must include refresh cycles and resale assumptions.
Customer concentration and contract execution
In 2025, one customer represented 25% of revenue and another 15%, according to the Form 20-F. Concentration can make a quarter, site or financing structure dependent on a small number of counterparties. Monitor the mix of recognized revenue, contracted commitments, cancellations, amendments, credit quality and the percentage of capacity actually used by each major customer.
Demand, pricing and competition
AI infrastructure demand can grow quickly and then change as model architectures, chip efficiency, cloud purchasing preferences or competing prices evolve. A customer may shift from reserved capacity to on-demand usage, delay a project or bring workloads in-house. High growth does not by itself establish durable pricing power or returns on the equipment purchased to support that growth.
Accounting and dilution risk
Depreciation-life assumptions, non-GAAP exclusions, investment revaluations and share-based compensation can make headline results diverge from durable per-share economics. As of June 30, 2026, Nebius reported 271,855,218 shares issued and outstanding, excluding 50,185,726 Class A treasury shares. That point-in-time figure is not a current fully diluted count: convertible notes, options, restricted awards and future issuance can change the denominator. Use diluted shares when estimating any future value per share.
Independent reader supportYour contribution helps us test, update, and keep practical guides available for everyone.A practical dashboard for following NBIS
Use consistent periods and keep group results separate from Nebius AI cloud. The following dashboard links reported growth to the capital and execution questions that determine long-term returns.
| Metric | What to examine | Why it matters |
|---|---|---|
| AI-cloud revenue | Growth, customer mix and recognized revenue versus announced contracts | Tests whether commitments are converting into operating sales |
| Capacity | Commissioned GPU capacity, utilization, delivery dates and capex per unit | Shows whether assets are productive and how much new capital each increment requires |
| Profitability | Adjusted EBITDA and margin alongside GAAP operating income or loss, depreciation, interest and share compensation | Separates operating momentum from exclusions and financing costs |
| Cash conversion | Operating cash flow minus purchases of property, equipment and intangible assets; working-capital and prepayment changes | Indicates whether expansion is funded internally or externally |
| Balance sheet | Cash, gross and net debt, secured collateral, rates, maturities and refinancing needs | Measures financial flexibility through the build-out cycle |
| Share count | Basic and diluted shares, convertible-note effects, awards and new equity issuance | Protects against overstating value per share |
| Execution conditions | Customer concentration, supplier availability, power access and data-center milestones | Reveals operational bottlenecks that financial statements may show only later |
How to judge whether the stock is attractive at a particular price
The available filings do not provide a current October 2026 share price or a valuation range, so they cannot support a price target. Investors can still build a disciplined decision process:
- Start with a fully diluted share count. Include likely conversion of notes and equity awards rather than using only the 271.9 million shares reported at June 30, 2026.
- Separate operating businesses and investments. Forecast AI-cloud revenue, margins and capital needs independently from Avride, TripleTen and the value of stakes such as ClickHouse and Toloka.
- Translate contracts into a deployment schedule. Model when contracted capacity is delivered, the utilization ramp, pricing, power costs, maintenance and replacement capex. Do not book the more than $40 billion commitment as immediate revenue.
- Use cash returns, not only adjusted EBITDA. Deduct sustaining and growth capex, interest, taxes and the economic cost of equity compensation. Test whether cash flow remains positive under slower utilization or lower pricing.
- Stress financing assumptions. Model higher SOFR, delayed sites, additional debt and a discounted equity raise. Compare the resulting dilution and debt service with available cash and contracted customer payments.
- Apply a valuation method that matches the forecast. A revenue multiple, EBITDA multiple or discounted-cash-flow model is only meaningful when its growth, margin, capex and dilution assumptions are explicit and comparable with peers using the same definitions.
A compelling company can still be an unattractive stock when expectations and valuation already assume flawless execution. Conversely, a volatile, capital-intensive company may offer upside if the market price discounts realistic execution risks. Without a verified current price and forecast assumptions, the correct conclusion is to keep the decision conditional.
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What could make the long-term case stronger
- Contracted capacity converts into recognized revenue on schedule, with customer concentration declining over time.
- Utilization rises enough for each GPU deployment to earn an attractive return after power, maintenance, depreciation and financing.
- Operating cash flow increasingly covers both sustaining and expansion capex without repeated dilutive equity issuance.
- Adjusted EBITDA growth is accompanied by improving GAAP operating results, controlled interest expense and stable or falling share-based compensation per dollar of revenue.
- Sites receive power and permits on schedule, supply constraints ease, and the company maintains competitive infrastructure through refresh cycles.
What would weaken it
- Large contracts remain unfulfilled because power, construction or GPU deliveries slip.
- Customer usage falls, contracts are amended, or a concentrated counterparty delays payment.
- Capex per unit rises while pricing or utilization falls, reducing returns on invested capital.
- Debt and interest grow faster than operating cash flow, forcing refinancing on worse terms.
- Frequent equity or convertible issuance offsets business growth through dilution.
- Non-GAAP gains continue to look strong while GAAP earnings and free cash flow remain weak.
Bottom line for a long-term investor
Nebius offers a high-growth AI-cloud opportunity with substantial customer commitments and new financing tools. The Q2 2026 report also shows why it is a high-risk investment: $5.657 billion of quarterly infrastructure purchases, a $190.4 million GAAP loss from continuing operations, rapidly rising depreciation, $119.1 million of quarterly interest and $102.5 million of share-based compensation. The more than $40 billion contract figure and the $775 million secured facility improve visibility and funding options, but they do not remove deployment, utilization, concentration, technology or dilution risk.
Ophir Nave, Nebius’s chief operating officer, said in the July 17 financing announcement: “We are executing across all the areas that matter for growth: securing capacity, raising capital, strengthening our product offering, and developing other capital-efficient models to scale even further and faster.” That is management’s plan, not a guarantee. The company’s own earnings release also warns that actual results may differ materially from forward-looking statements. Treat NBIS as a speculative, execution-dependent position unless your valuation work shows that the expected return compensates for those risks.
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