Nebius (NBIS), the AI infrastructure provider backed by Nvidia, reported fiscal 2026 second-quarter results on Aug. 12, with revenue up more than fourfold from a year earlier and its AI Cloud business up more than fivefold. The stock rose 34.1% on the day of the release.
Quarterly results beat expectations
Nebius said key metrics for the quarter came in above market expectations, and it raised its capacity target at the same time.
- Total revenue was $582 million, up 454% year over year and 46% quarter over quarter, above the market expectation of $573 million.
- Earnings per share were -$0.12, with a 68% year-over-year increase.
- AI Cloud revenue reached $575 million, up 514% from a year earlier and representing nearly 100% of total revenue.
- Annual recurring revenue, or ARR, was $3 billion, up 58% from the previous quarter.
- Capital expenditures came in nearly $1 billion above expectations.
The company said the higher capital spending reflected continued Nvidia GPU purchases and data center expansion at a pace that exceeded market expectations. Full-year guidance was left unchanged at $3 billion to $3.4 billion in fiscal 2026 revenue, $7 billion to $9 billion in ARR, and an adjusted EBITDA margin of about 40%.
Contract volume and pricing moved sharply higher
The company said it signed four major customer agreements in the quarter, each with total contract value above $1 billion. Total contract volume for the quarter increased fourfold from the previous quarter, while contract value from new customers rose more than ninefold from a year earlier.
Nebius also outlined a tiered pricing structure. Mid-term contracts running one to three years were priced at $20 million to $25 million per megawatt, with prepayments covering 50% to 60% of related capital expenditures. Short-term contracts of less than six months were priced at $40 million to $50 million per megawatt, with some cases above that range.
The company added that its first capacity auction this quarter cleared at a final price 15% above the previous record quote for Blackwell GPUs.
CEO Arkady Volozh said all of the company’s planned 2027 capacity could already be sold out today under current terms, but Nebius has chosen to keep some capacity available to serve flexible near-term customer demand.
Nebius CFO also identified inference-as-a-service product Token Factory for the first time as a specific contributor to Q2 revenue growth and gross margin expansion. The disclosure points to an extension into the software services layer rather than a business model limited to leasing GPU compute.
2026 contracted capacity target raised to 5 GW
On the supply side, Nebius raised its 2026 contracted capacity target to 5 GW from 4 GW. The company also said it plans to deploy more than 1 GW of additional compute capacity each year starting in 2027.
It expects customer prepayments for full-year 2026 to exceed $9 billion, while total customer commitments already secured are above $40 billion.
AI research startup Funda AI said investor focus should shift from the exact fiscal 2026 landing point toward higher revenue per megawatt and stronger gross profit growth potential in 2027. According to Funda AI, AI Cloud agreements signed this quarter with annualized contract value above $20 million per megawatt are expected to begin coming online by late in the fourth quarter. It also said delays tied to the Vineland 2 data center project mean some monetization from connected capacity will not be realized until the first half of 2027.
Funda AI said it still sees a reasonable chance that fiscal 2026 revenue lands below the midpoint of Nebius’s $3.2 billion guidance range.
Demand still running ahead of supply
A day before Nebius released its results, larger rival CoreWeave also raised its full-year forecast, and AI infrastructure names centered on Neoclouds moved higher as well. According to ABMedia, the strong results from both companies reinforced confidence that demand for AI compute remains above available supply in the near term.
Asked about potential competition from new entrants such as xAI, Volozh said: 「Demand far exceeds supply, and at this stage it is not a threat.」
Emarketer analyst Jacob Bourne agreed with that assessment, while pointing to what he described as the key unresolved question: 「Whether this wave of AI compute demand has enough diversity and staying power beyond the AI industry itself.」
That question stands as a central variable for the long-term valuation of Nebius and the broader AI infrastructure sector.