Nebius (NASDAQ: NBIS) reported on Wednesday that second-quarter revenue was $582 million, a 454% year-over-year increase, and reaffirmed its 2026 revenue guidance at $3 billion to $3.4 billion.

Nebius AI generated $575 million, or 98% of group revenue, as the segment grew 514% from a year earlier. Group adjusted EBITDA reached $236 million, compared with a $21 million loss last year, while its margin rose to 41% from 32% in the first quarter.

The results exceeded the $569.9 million consensus revenue forecast cited by Investing.com. Nebius shares rose 16.5% in premarket trading to $225.15, compared with Tuesday’s close of $193.23.

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Short-term capacity earns higher prices

Nebius said its annualized run-rate revenue stood at $3 billion at June’s end, 56% higher than the $1.9 billion recorded at the end of March. Management attributed the increase to capacity added in Q1 and improved utilization, as well as contributions from its asset-light model and Token Factory.

The company spent about $5.7 billion during the quarter, primarily on GPUs and data-center expansion. It maintained full-year capex guidance of $20 billion to $25 billion and its target of 800 MW to 1 GW of connected power by year-end.

Nebius closed four AI cloud contracts during the quarter with Reflection, Cohere, a U.S. Neolab and a U.S. quantitative trading firm. The deals averaged more than $1 billion each, with terms of one to three years and revenue yields of $20 million to $25 million per MW.

Customer prepayments under those contracts cover 50% to 60% of associated capex, according to CEO Arkady Volozh. He said Nebius could sell all its planned 2027 capacity at those terms but is reserving some supply for shorter engagements carrying higher prices.

Nebius is negotiating capacity agreements lasting as long as six months, priced at $40 million to $50 million per MW and occasionally higher. The contracts are aimed at customers that need dedicated clusters for training or post-training workloads with time-sensitive requirements.

The company also launched its first capacity auction, which cleared 15% above its previous highest price for Blackwell-based compute and 20% above pricing in its Blackwell sales pipeline. Nebius said the auction and short-term contracts use a small portion of capacity to establish current market pricing.

“We choose when to sell, to whom we sell, and on what terms, and how we finance everything,” Volozh said during the earnings call.

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The company increased its contracted-power goal for year-end to 5 GW, compared with more than 3.5 GW at the end of March. Management expects nearly all of that power to be brought online in the next two to 3.5 years, while planning to deploy more than 1 GW of new capacity in 2027.

Connected power will not immediately translate into billable capacity. Nebius said each facility must be commissioned, networked, equipped with GPU clusters and integrated into its platform before customer onboarding begins, creating a gap of several months between connection and revenue.

Customer funding reduces capex needs

Nebius expects customer prepayments to provide more than $9 billion during 2026, directly reducing its need for debt and equity. About 70% of contracts signed in the second quarter included upfront funding.

Nebius generated $2.3 billion in operating cash flow during the quarter and finished June with $8 billion in cash and cash equivalents. Through its at-the-market program, the company also sold 12.7 million Class A shares for about $2.8 billion, with the shares averaging $224 apiece.

In July, Nebius secured a $775 million senior secured loan supported by GPU infrastructure already deployed and contracted cash flows tied to an investment-grade customer. The facility carries interest at one-month Term SOFR plus 250 bps and comes due in October 2030.

CFO Dado Kim said Nebius could use its more than $40 billion in committed backlog to support further asset-backed financing. To fund the 2027 buildout, the company is also assessing operating cash flow, customer prepayments, corporate debt and equity-linked instruments.

Nebius’s asset-light model offers another source of capacity without requiring the company to finance the underlying facilities. Partners own and operate the data centers, while Nebius supplies its cloud platform and customer demand. Management said the model remains at an early stage.

Vineland remains in the 2026 plan

Nebius said its Vineland, New Jersey, data center remains part of its 2026 connected-power target despite a local hearing ending without a vote. The hearing concerned an amended site plan following a switch to on-site Bloom Energy fuel cells.

According to management, construction of the building finished earlier in the summer, while the engineering fit-out continued to advance. It expects neither the amended approval process nor deployment of the fuel cells to materially alter the schedule.

The update followed DA Davidson’s decision to cut its Nebius price target to $175 from $250, with the firm citing possible Vineland delays. Residents have also raised concerns about emissions, noise, water consumption and property values around the planned 350 MW site.

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Nebius kept its year-end annualized run-rate revenue target at $7 billion to $9 billion and its adjusted EBITDA margin target at about 40%. Formal guidance for 2027 is planned for later this year.