TLDRs;
- Nebius shares surged 34% after the AI cloud provider delivered stronger-than-expected second-quarter results.
- Customer prepayments are expected to exceed $9 billion in 2026, helping support Nebius’ aggressive expansion plans.
- Revenue jumped 454% year over year, while adjusted EBITDA significantly exceeded Wall Street expectations.
- Despite improving operating performance, Nebius still reported a $190 million GAAP loss during the quarter.
Nebius Group (NASDAQ: NBIS) shares surged 34% on Wednesday after the AI cloud company reported stronger-than-expected second-quarter results and highlighted a growing source of funding for its expansion. Investors responded positively to the combination of rapid revenue growth, rising demand for AI computing capacity and billions of dollars in customer prepayments.
The sharp rally also reflected growing confidence that Nebius can finance part of its infrastructure buildout through customer commitments rather than relying entirely on external financing. The company expects customer prepayments to exceed $9 billion this year, providing substantial cash support as it invests heavily in new AI capacity.
Revenue Growth Beats Expectations
Nebius generated $582.3 million in second-quarter revenue, compared with $105.1 million during the same period last year. That represents growth of roughly 454% year over year and puts the company well ahead of its recent revenue base.
The figure also exceeded the approximately $572.75 million analysts had expected. Adjusted EBITDA came in at $236 million, substantially above the $169 million consensus estimate. The result translated into an adjusted EBITDA margin of about 40.5%, highlighting the operating leverage emerging from the company’s rapidly expanding AI cloud business.
However, the strong adjusted figures did not translate into bottom-line profitability. Nebius reported a GAAP net loss of $190 million for the quarter. Depreciation, financing costs and continued investment in expansion remain significant expenses as the company builds the infrastructure required to serve its growing customer base.
$9 Billion Helps Fund Expansion
The biggest investor focus may be the scale of customer prepayments. Nebius expects more than $9 billion in such payments during 2026, while its second-quarter capital expenditure stood at $5.7 billion.
That comparison suggests customer funding could provide an important source of liquidity for the company’s expansion. Advance payments can reduce the immediate need to raise additional debt or sell shares, although they are not equivalent to unrestricted profits or free cash flow.
The payments also come with obligations. Nebius must deploy the promised computing capacity and deliver services to customers, meaning delays in construction, equipment availability or infrastructure deployment could create pressure later.
Around 70% of Nebius’ second-quarter deals reportedly included prepayments. The company also signed four major AI cloud agreements during the period, each averaging more than $1 billion in value.
AI Demand Drives Capacity Push
The results underline the strength of demand for AI computing infrastructure. Nebius increased its contracted-power target to 5 gigawatts and expects to add more than 1 gigawatt of annual deployment capacity beginning in 2027.
Chief Executive Arkady Volozh has indicated that demand remains strong enough for the company to potentially sell all of its 2027 capacity. That outlook gives investors greater visibility into future revenue but also raises the stakes for execution.
Nebius’ customer commitments have now surpassed $40 billion, creating a sizable pipeline for future business. The company also has a major agreement with Meta Platforms, involving $12 billion in committed capacity and options that could add another $15 billion.
The company relies heavily on NVIDIA accelerators for its AI cloud operations, making the availability and pricing of advanced GPUs an important factor in its ability to expand.
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