AI cloud firm Nebius reports near eightfold revenue surge, shares jump
Nebius Group's Financial Performance and Expansion Strategies
Quarterly Revenue Growth and Market Impact
May 13 (Reuters) - Nebius Group reported a nearly eightfold rise in quarterly revenue on Wednesday, benefiting from increasing demand for artificial intelligence infrastructure and cloud services, sending its shares up 14% in early trading.
Capital Expenditure and Capacity Expansion
Increased Capex Forecast
The Amsterdam-based neocloud company is racing to secure capacity and power, boosting its annual capital expenditure forecast to between $20 billion and $25 billion, from a prior projection of $16 billion to $20 billion.
AI and Cloud Infrastructure Market Position
With customers including Meta and Microsoft , it has grabbed a slice of the lucrative AI and cloud infrastructure market by providing Nvidia GPUs and computing platforms to developers.
Funding and Demand Management
Financing Rapid Expansion
Nebius said demand continues to exceed available capacity and it plans to fund its rapid expansion through asset-backed financing and corporate debt, while keeping costs tight.
Margin Pressure and Spending Insights
Analysts flagged margin pressure despite strong revenue growth due to the firm's heavy capital expenditure.
"We typically see several customers competing for every GPU we bring online," CEO Arkady Volozh said, adding that higher spending reflected visibility into 2027 demand, not cost pressures.
Investments and Strategic Deals
Capex Drivers and Hardware Investments
Investments in procuring graphics processing units and data center hardware also drove first-quarter capex to about $2.5 billion, compared with $544 million a year earlier.
Acquisitions and Long-term Contracts
Nebius has been expanding its AI infrastructure business through acquisitions and large computing contracts, agreeing to buy startup Eigen AI for about $643 million, while also signing a long-term deal with Meta to provide up to $27 billion worth of computing capacity over five years.
New Site Announcement
The company announced a new site in Pennsylvania on Wednesday to support 1.2 GW of power once fully live.
Financial Results and Future Outlook
Quarterly Revenue Figures
Revenue for the three months ended March jumped to $399 million from $50.9 million a year ago, beating an estimate of $371.4 million, according to data compiled by LSEG.
Contracted Power Forecast
Nebius now expects to have more than 4 GW of contracted power by the year-end, up from its prior forecast of more than 3 GW.
(Reporting by Harshita Mary Varghese in Bengaluru; Editing by Pooja Desai)
