Nebius Revenue Up 571% to $981M, But Colocation Delays Hit 2026

Nebius Group booked $980.8 million in third-quarter revenue, up 571% from $146.1 million a year earlier, but delays at third-party data centers will pin its 2026 sales at the low end of a $3.0-3.4 billion forecast. The Amsterdam-based AI cloud operator also pushed back its run-rate milestone: it had guided to $7-9 billion in annualized run-rate revenue (ARR) by December, and now expects ARR above $7 billion only by February.

About $325 million of the quarter's revenue was non-recurring, recognized from the first phase of an "asset-light" model in which partners fund capacity running Nebius's architecture and cloud platform. Strip that out, and revenue lands near $656 million — still 13% above Q2's $582.3 million. Nebius said it expects partnership revenue to become a regular part of the business.

Where the money came from — and where it went

Adjusted EBITDA rose to $465.8 million, a 47% margin, from a $5.2 million loss a year earlier. The AI cloud unit alone earned $518.2 million of adjusted EBITDA on $973.8 million of revenue. Under GAAP, operating income was $50.4 million, but interest expense of $112.5 million and a $49.5 million induced conversion charge on convertible notes left a net loss from continuing operations of $37.5 million, or 13 cents a share.

Spending accelerated. Quarterly capex reached $7.3 billion, mostly GPUs and data center expansion, lifting nine-month capex to $15.4 billion. Full-year 2026 capex now runs about $27 billion, above the earlier $20-25 billion range. Nebius ended September with $7.4 billion of cash against roughly $14.2 billion of debt, plus $9.4 billion in deferred revenue. Financing in the period included $5.75 billion of convertible notes raised in August, about $1.0 billion of net proceeds from an at-the-market share program in Q3, and a $3.5 billion secured facility from Citi in October.

What happened to Microsoft's New Jersey capacity?

The guidance cut traces to colocation sites run by third parties, where delivery dates at several sites slid into the first half of 2027. At the New Jersey campus built for Microsoft, Nebius expects to deliver more than half the contracted capacity by year-end, with the rest scheduled for Q2 2027. The site operator, DataOne, began retiring temporary generation in late Q3 ahead of a switch to permanent power; Nebius is moving the main power source to Bloom Energy fuel cells and said Microsoft "has been part of the planning process." The delayed contracts remain in place.

The timing question matters. Bloomberg and the Financial Times reported last week that Microsoft passed on an option to expand Nscale's Texas contract and tightened oversight of neocloud projects, including Nebius's. Nebius's shareholder letter says its Microsoft and Meta agreements can be financed through asset-backed facilities, and that it holds more than $40 billion of similar committed revenue.

Its own sites are on time or ahead of schedule and will supply most new capacity from 2027: new owned campuses in Missouri, Lappeenranta, a second Mäntsälä site in Finland, and Alabama, together representing more than 3 GW at full scale over three to three and a half years. Contracted power stands above 4 GW, and the company still expects 5 GW by year-end.

Can customers fund the build-out?

Customers committed more than $12 billion of contract value since the start of Q3, and prepayments on Q3 deals covered more than 100% of the associated capex, up from 50-60% in Q2. Annual contract value per megawatt topped $25 million, and prices rose more than 20% per GPU-hour from the second quarter. New customers include Databricks, Datadog and Snowflake, and Palantir named Nebius a preferred AI cloud partner. Remaining performance obligations climbed 3% from June to $38.7 billion.

For 2027, Nebius guided to revenue of $12-13 billion, capex of $40-45 billion, and pre-tax breakeven by year-end. It expects $10 billion of customer prepayments in 2026 and $17-20 billion in 2027, with prepayments plus asset-backed financing covering 75-85% of next year's capex. It will stop reporting ARR, which reflects only one month per quarter, and will guide on revenue and pre-tax earnings from 2027.

"In recent weeks our industry has been asked questions about how the AI build-out will be financed," founder and CEO Arkady Volozh wrote in the letter.

The release lands days after CoreWeave posted Q3 revenue of $3.66 billion, up 168%, raised its 2026 outlook and lifted its backlog to $132.5 billion. With prepayments now covering full capex on new deals, Nebius's bet is that customers, not lenders, keep financing the GPUs through 2027.