Nebius reported its second quarter results today, 12 August 2026. The release came before the market opened, and the earnings webcast was held at 8:00 a.m. Eastern Time.
Errors or inaccuracies are possible. Spotted something that looks wrong? Write to me and I will correct it.
The Quarter
| $ millions | The quarter | A year ago | Change |
|---|---|---|---|
| Revenue | 582.3 | 105.1 | +454% |
| Adjusted EBITDA | 236.2 | (21.0) | |
| Net loss from continuing operations | (190.4) | 502.5 | |
| Adjusted net loss | (33.2) | (91.5) | -64% |
And for the first half: revenue of $981.3 million against $156.0 million - up 529% - and adjusted EBITDA of $365.7 million against a loss of $74.7 million.
There is no percentage change on the profit lines, because when the base is negative a percentage change is a meaningless number.
The Figure That Governs Everything Else
Revenue in the quarter: $582.3 million.
Purchases of property, equipment and intangible assets in the same quarter: $5,657.4 million.
The company invested 9.7 times what it earned.
And this is not a one-off spike: in the first half revenue was $981.3 million and capital spending was $8,130.3 million. Capital spending rose 1,008% against the comparable quarter a year ago.
Operating cash flow is in fact positive and impressive: $2,246.1 million in the quarter, against negative $167.7 million a year ago.
But 2,246 less 5,657 is minus $3.4 billion. That is the gap which must be closed with financing - in a single quarter.
And Who Is Funding It
The company sets out exactly where the money comes from, and this is the genuinely interesting part.
Per the CEO's letter, 70% of deals include a prepayment, and those prepayments cover 50% to 60% of the associated capital spending. The company expects over $9 billion in customer prepayments in 2026.
In other words: customers are financing roughly half the build, before it is built.
And that also explains the positive $2.25 billion of operating cash flow. A prepayment enters operating cash flow, but it is not recognised revenue - it is an obligation to deliver a service in future. Strong operating cash flow at a company growing like this is not necessarily evidence of profitability; it is evidence of the contract structure.
The Most Substantive Point in the Report
Adjusted EBITDA was $236.2 million. Depreciation and amortisation was $259.7 million.
Meaning depreciation is larger than the entire adjusted EBITDA figure.
And EBITDA, by definition, is profit before depreciation. At a company whose entire asset base is graphics processors - an asset that wears out and becomes obsolete - that is precisely the line you cannot ignore.
Which is why the company reports positive adjusted EBITDA of $236 million and, in the same breath, a net loss of $190 million. Both numbers are correct. The difference between them is, principally, depreciation and share-based compensation.
The AI cloud adjusted EBITDA margin, which the company notes stood at 50% in the quarter, is true in exactly the same way and with exactly the same limitation - it is a margin before the line that describes the wearing out of the equipment producing it.
This does not mean the number is inflated. It means it answers one question - whether current operations are profitable - and not the second question, whether the investment earns itself back.
Operating Leverage, and Here the Data Is Genuinely Good
| Expenses as a share of revenue | The quarter | A year ago |
|---|---|---|
| Cost of revenues | 23% | 29% |
| Product development | 33% | 41% |
| Sales, general and administrative | 30% | 65% |
| Depreciation and amortisation | 45% | 72% |
| Total operating costs | 130% | 206% |
Every expense line fell as a share of revenue. Every one of them.
And that is the definition of operating leverage: expenses grow in absolute terms, but more slowly than revenue.
And the total says it plainly: total operating costs fell from 206% of revenue to 130%.
Still above 100% - meaning the company still loses money at the operating level under the accounting rules - but the direction is very sharp, and the distance closed in a single year is 76 percentage points.
And one line did grow: share-based compensation rose to $102.5 million, which is 14% of total operating costs, against 7% a year ago. That is a non-cash expense, but it dilutes.
What the Company Reports on the Business
Per the letter from CEO Arkady Volozh:
- AI cloud ARR reached $3.0 billion, calculated as the last month of the quarter's revenue times twelve
- Four large deals were signed in the quarter, averaging over $1 billion each
- Average yield exceeds $20 million per megawatt
- Estimated payback period: one year and ten months
- The year-end 2026 contracted power target was raised to 5 gigawatts - from over 4 GW in May, 3 GW in February and 1 GW in August 2025
- The company expects to deploy over one gigawatt per year from 2027
- Cash position at quarter end: approximately $8 billion
- Full-year 2026 guidance reaffirmed
And the geographic footprint includes sites in Finland, Israel, Iceland, the United Kingdom, France, Spain and Estonia, and in the United States - New Jersey, Missouri, Oklahoma, Alabama, Minnesota, Kansas City and Pennsylvania.
And in the other businesses: Avride's autonomous fleet grew nearly threefold year to date, with over a million miles in 2026 and more than 60,000 commercial rides on the Uber platform.
The Market Reaction
The report was published before the market opened, so the market's response will emerge over the course of today's session.
הזווית שלי
דעה אישית של אילן אברמוב - לא ייעוץ ולא המלצה
This is the report that turns what I wrote here yesterday about NVIDIA from a model into a fact.
The idea was that compute is becoming an asset class - an asset financed like infrastructure rather than like equipment. And Nebius is precisely that case: it spent $5.66 billion in a quarter on revenue of $582 million. No business funds a gap like that out of its profits.
And what impresses me is not the 454% growth - it is who is paying for it.
70% of deals include a prepayment covering 50%-60% of the associated capex, and the company expects over $9 billion of such prepayments this year. Meaning the customer funds the construction of the facility that will serve them. That is a financing structure which transfers a substantial part of demand risk from the supplier to the customer, and it is a real commercial achievement - especially in a market where the biggest risk is building capacity nobody rents.
And from that comes my reservation too.
The positive $2.25 billion of operating cash flow looks excellent, and part of it is simply prepayments. A prepayment is cash arriving today against an obligation to deliver a service tomorrow. It improves cash flow and does not improve profitability - and when you read "positive operating cash flow" at a company growing 454%, it is worth remembering what stands behind it.
And the most important point in the report is depreciation.
Adjusted EBITDA was $236 million. Depreciation was $260 million. Meaning depreciation swallowed the entire EBITDA and then some - and that is exactly the question I raised yesterday about NVIDIA, except that here it appears in the numbers.
In a business whose assets are processors, EBITDA is an inherently partial measure. It says current operations work. It does not say the investment earns itself back - and the answer to that sits in the payback period, which the company estimates at one year and ten months. If that figure is right, the economics here are excellent. If payback stretches to four years, the picture is entirely different.
And what I will check in coming quarters is not revenue and not EBITDA - it is the ratio of capital spending to revenue. Today it is 9.7. As long as it stays there, the company depends on capital markets and customer prepayments to keep going. The day it starts falling, we will know the facilities already built are beginning to pay - and that is the moment a growth story becomes a business.
