Nebius Group N.V. Q1 FY2026 Earnings Call

Welcome to Nebius Group's Q1 2026 Earnings Conference Call. I will now hand over to Gili Naftalovich, Head of Investor Relations, to start the call.

Hi, everyone, and welcome to Nebius's first quarter 2026 earnings conference call. Joining us on the call today are Co-Founder and CEO, Arkady; and our CFO, Dado, along with the broader Nebius executive management team. Now I'll quickly cover the safe harbor. Some of the statements that we make today regarding our business operations and financial performance may be considered forward-looking. Such statements are based on current expectations and assumptions that are subject to a number of risks and uncertainties. Actual results could differ materially. Please refer to our Form 20-F, which is a list of our risk factors. We undertake no obligation to update any forward-looking statements. During this call, we will present both GAAP and non-GAAP financial measures. A reconciliation of non-GAAP to GAAP measures is included in today's earnings press release, which is distributed and available to the public through our Investor Relations website located at nebius.com. And now I'd like to turn the call over to Arkady.

Thanks, Gili, and welcome, everyone, to our call. We have had a great start to the year. We're building an AI-native hyperscaler. And I would say we are developing it across four dimensions. The first is capacity and scale; second, product and functionality; third is customers and demand; and finally, capital, our fourth dimension. All our focus is on execution across all four of these dimensions. Let me put our results of the quarter in this context. First, on capacity. As you see, we are building big. Last quarter, we told you that we already contracted more than 2 gigawatts of power while targeting more than 3 gigawatts by the end of the year. Three months later today, we have already contracted more than 3.5 gigawatts, and we are now targeting at least 4 gigawatts of contracted power this year. Today, we announced a new site in Pennsylvania to support 1.2 gigawatts of power once fully live. This is our second owned gigawatt-scale site in the United States. Our platform is most efficient when we own the full stack, and we are building towards that. Our owned contracted capacity now accounts for more than 75% of our total power. But more importantly, we continue to build our full stack platform, and this is our second dimension. What does it mean? It means we don't just offer compute. We offer cloud services, services that span across the AI lifecycle from bare-metal to multi-tenancy to inference to agentic and more. And we have made significant progress on that front. And it's not just developing our platform and launching Aether version 3.5 this quarter. Our three acquisitions this year, Tavily, Eigen and Clarifai demonstrate the uniqueness of what we're building. All three companies bring industry-leading engineers and researchers to Nebius. Eigen AI and Clarifai strengthened our inference optimization solutions. Eigen was recognized as the number one speed inference provider by NVIDIA. While Eigen optimizes at the model level, Clarifai optimizes at the system level, and they both strengthen our in-house Token Factory offering. We also acquired Tavily earlier this year, extending our platform reach to agentic search, an increasingly significant part of the market. This acquisition brought us rarer capabilities of what this new class of developers need. We also expanded our technology partnership with NVIDIA. We again achieved NVIDIA Exemplar Cloud status this time on our GB300 for training workloads. We are among a small group of providers to achieve this status across multiple GPU generations. At our core, we're a technology company. We have top AI engineers and deep proprietary expertise across every layer of the stack, both hardware and software. We're quickly becoming a magnet for top talent. We're happy with our ability to enlarge our offering through strategic acquisitions. Our clients appreciate the full extent of our offering. This is not common in our market. These are our strengths, and this is our uniqueness. And we believe this is what will enable us to win. Demand is our third dimension, and it continues to be increasingly strong, but more importantly, our full stack platform allows us to capture and service a large and diverse range of hundreds of customers, not just several big bare-metal offtakers. Our pipeline generation in the first quarter grew 3.5x over the fourth quarter, and this is a record for us. And the demand is broadening across industries. Today, we typically see several customers competing for every GPU we bring online. We're building to support this demand with scale and discipline. New customers across a number of use cases are using our full range of offerings to solve their most challenging problems. For example, European fintech leader, Revolut, recently began using our Token Factory. In physical AI, 1X Technologies is using our cloud platform to build general purpose robots. In life sciences, our cloud platform is enabling start-ups to build more powerful models that accelerate drug discovery and advance the fight against diseases in ways that were previously impossible. And beyond technology sectors, larger companies in industries such as manufacturing, energy, heavy equipment and pharmaceuticals are increasingly engaging with us. Demand is high. Everything we build is sold. That is what is driving us to build more and to raise our 2026 CapEx guidance to between $20 billion and $25 billion, which is up from our prior range of $16 billion to $20 billion. This increase reflects investments in our 2027 capacity that will come online early next year. We expect these investments to contribute positively to revenue in the first half of 2027, where we already have customer commitments in place. Meta is one such customer. We need to invest to fully realize this. This requires capital, which is our fourth dimension. We're doing a very good job in tapping the market at scale. We raised significant capital this year, more than $6 billion. More than $4 billion of that came from converts and $2 billion from NVIDIA equity investment. This leaves us with a strong cash position of more than $9 billion. More importantly, we have laid the foundation to raise substantial further capital this year. There are a variety of ways for us to do this. There is our recent Meta contract. First, let me just say that we are very proud of our relationship with Meta, and there is tremendous respect between our tech teams. Formally, this is a $27 billion contract with Meta. But in fact, it's worth a lot more for us. This contract alone can unlock billions of dollars of capital for our own multi-tenant cloud at attractive rates that may not otherwise be available to us. On top of this, we also have our first contract with Meta and our Microsoft agreement that will provide additional financing opportunities. Obviously, there are many other untapped options for us to finance our public cloud build-out from the significant prepayments we get from customers to asset-backed financing of our payment contracts to corporate debt and so on. So to close, it has been a great quarter. We are even more focused on what is ahead. We will continue to execute, expanding capacity, building our cloud platform, expanding our customer reach and financing growth diligently. Everything we build, we sell, and we are still in the very early days. I want to thank our team for the incredible work day after day and night after night and to thank our shareholders for your continued support. And with that, let me hand it over to Dado.

Thank you, Arkady. Indeed, we are off to a strong start to the year with a number of important achievements. First, we accelerated revenue growth during the quarter. We also significantly expanded our margins, and we strengthened our balance sheet. I will touch on each of these, share some color on our results and conclude with guidance. Please note that all comparisons are year-over-year unless noted otherwise. So let's start with the revenue and ARR. In Q1, we grew the group revenue by 684% year-on-year to $399 million, up 75% from Q4. Once again, we sold out our capacity as demand continued to exceed available supply. Our Nebius AI business, which excludes our consolidated investments in TripleTen and Avride, delivered even stronger results. Revenue grew 841% from last year to $390 million, representing an 82% quarter-over-quarter increase and 98% of group revenue. Growth was driven by capacity scaling and was further supported by strong utilization of pricing. Annualized run rate revenue for our Nebius AI business reached $1.9 billion at the end of March, up over 50% from $1.25 billion in the previous quarter. As we delivered strong top line growth, we also remain focused on profitability. Group adjusted EBITDA was $130 million compared to $15 million last quarter and compared to a loss of $54 million a year ago. Group adjusted EBITDA margin was 32%, continuing the inflection in Q4 and reflecting operating leverage in our model. Nebius AI business adjusted EBITDA margin expanded to 45%, up from 24% in Q4. This improvement was driven by strong revenue growth. The gap between group and Nebius margin essentially reflects our investments in Avride and TripleTen. Both are still early-stage companies and require substantial operating investments as they scale. We expect Nebius to represent the significant majority of group adjusted EBITDA for the foreseeable future. As mentioned in the past, our intention is to find strategic and financial partners for these businesses and deconsolidate them in the future. Net income of $621 million benefited from a valuation adjustment on the back of ClickHouse's recent funding round. This is a noncash item that captures the growth in the underlying value of the asset. And now turning to our balance sheet. Since our last call, we have continued to strengthen our financial position. In March, we closed a private offering of convertible senior notes, raising $4.3 billion in gross proceeds at attractive premiums and coupons of 1.25% and 2.60%. In the same month, we announced a $2 billion equity investment from NVIDIA, reinforcing our alignment with one of our key strategic partners. Prepayments from our customers also reached a new quarterly record. Operating cash flow of $2.3 billion was up from an operating cash outflow of $198 million in Q1 last year. The sharp increase was primarily driven by upfront payments from our customers. Together, these sources of capital increased cash and cash equivalents to $9.3 billion at quarter end. Now let's speak about our CapEx. As Arkady mentioned, today, we are raising our CapEx expectations to $20 billion to $25 billion for the year. The expansion of our infrastructure footprint remains one of our highest priorities given the strength of market demand and customer activity. We are building for 2027 demand where we have customer commitments already in place. And so we have near-term visibility into future revenue associated with this investment. As always, we will invest in capacity with discipline and rigor, including the capacity we are bringing online in 2026. In terms of how we will fund the capacity in the year ahead, we will continue to leverage a diversified range of funding sources. On the debt side, during the past year, we built our ability to take on debt capacity. For example, with our Microsoft contract and our two Meta contracts, we expect to unlock the ability to raise significant capital through asset-backed financing. We expect this to be at attractive terms based on Microsoft and Meta credit ratings, and we will inject this capital into building our cloud business. In addition, we expect to raise corporate level debt. We plan to start tapping into these financing options in the near term. And on top of that, our financing options include our at-the-market program. We have not utilized this program to date, but we are evaluating changes to it. Obviously, we are very focused on generating prepayments from our current and future customers in order to reduce the capital needed from equity and debt financing. We may also evaluate other financing options, but we'll ultimately pursue whichever vehicles have the best long-term interest of the business to support our expected capital spending in 2026. The bottom line is that as of now, given our strong balance sheet and the work we have done putting in place the various long-term contracts, we have laid the foundation to enable us to access a wide range of potential funding sources. And now turning to our outlook for the year. While it remains early in the year, our strong Q1 performance reinforces our confidence in our annual targets. As such, we are reiterating our full year 2026 guidance for annualized run rate revenue of $7 billion to $9 billion, group revenue of between $3 billion and $3.4 billion and group adjusted EBITDA margin of around 40%. Three key parameters will determine our growth profile and margin progression throughout the year: utilization, pricing and capacity. At present, neither of the first two parameters is limiting our growth. The third, capacity, will play an important role in unlocking our growth potential and driving margin flow-through. On utilization, we continue to sell out our capacity, and we expect this to be the case for the foreseeable future due to strong market demand and our healthy pipeline. On pricing, strong market demand is translating into pricing gains in our latest sales. On capacity, the timeline of deploying the new capacity impacts both top and bottom line results from quarter-to-quarter. We anticipate a nonlinear quarterly adjusted EBITDA margin progression during 2026. We will see this in Q2 given the back-end weighted nature of the capacity we bring online. These investments unlock growth by increasing capacity substantially from Q2 to Q3, leading us to be confident in our adjusted EBITDA margin returning to Q1 levels in Q3 before moving even higher in Q4. Overall, we are confident in our full year targets. In closing, Q1 was another quarter of rigorous execution across the business. We delivered a strong revenue growth, margin expansion, new business wins and continued capital discipline. As we look ahead, we will continue to scale rapidly to capture the tremendous market opportunity ahead, while remaining balanced, disciplined and focused on delivering long-term value for our shareholders. With that, I'll turn the call back over to Gili for Q&A.

I will now open the call for questions.

The first question from our investors on the portal is from Alex Duval at Goldman Sachs. To what extent have you started to see the impact of stronger GPU pricing reflecting in your core AI business? Additionally, is there a way for us to think about the share of older shorter-term contracts that could benefit from this pricing dynamic? Marc, would you be able to answer this one for us?

Thank you, Alex. We continue to see strong pricing across both old and new GPU generations as demand continues to exceed our available capacity. We just raised prices again in the latest quarter, and we are still selling out across all chip types at the higher prices. We're in a very dynamic market, and we have built a resilient set of processes that allow us to adapt and respond accordingly in any market environment for both new and existing customers. The strength is showing up in a number of ways beyond just price. Contract durations are extending with the average duration of contracts growing meaningfully over the past few quarters. Also, average contract values continue to increase across new logos and existing accounts where we are seeing strong expansion as well. And finally, prepayments are becoming more significant. Customers of all types are prepaying in order to lock in future capacity, including the hyperscalers. This improves our working capital position and gives us flexibility around external financing needs. Our go-to-market model is being built to be agile and adapt to the market and yield outcomes that can best help us continue to scale our business.

Thanks, Marc. We have a few questions coming in on the CapEx guide and cost inflation. Andrey, can you please discuss how much our raise in CapEx is driven by higher capacity growth versus component cost inflation?

Sure. Thanks, Gili. Well, the increase in this spending is driven by visibility into 2027 and our need to invest ahead of capacity that we expect to bring online. We will add much more capacity in the first half of '27 than this year. And that requires more CapEx spend starting from now in the later part of this year. We have been able to secure sites and power and customer commitments for 2027. And so we are ramping up construction activities accordingly. In short, the high number reflects confidence in our contracted demand pipeline and our ability to secure the infrastructure that we need against it. It's not cost pressure. The impact of component inflation in our 2026 program was quite small, around low single digits as a percentage of total spend, also because we secured a lot of 2026 components back in 2025 at the previous price levels.

Thank you, Andrey. Next question we have is from James Kisner at Water Tower Research. Nebius said AI cloud adjusted EBITDA margin nearly doubled quarter-over-quarter to 45% in Q1, while you're targeting around 40% for the full year. What's driving the implied step down? Can you walk us through the adjusted EBITDA margin progression for the year? Dado, please.

Thanks, James. Indeed. As you saw in the quarter, our Q1 margins were really strong. Nebius AI adjusted EBITDA margin reached 45%, nearly doubling from Q4. And that really reflects the underlying strength of the business. On the one hand, the demand we are seeing in the market; on the other hand, the terms that we are also able to negotiate with our contracts and the unit economics of the platform itself. So as I mentioned earlier, as we move throughout the year, you will see some quarter-to-quarter variability. And I think this is worth taking a moment to explain the dynamic. We have made a number of important investments in the first half of the year, hiring across go-to-market and engineering, our recent acquisitions and continued development of new product capabilities. And those investments are already in the cost base today. And we expect them to actually benefit the business going forward. On the capacity side, our delivery this year is back-end weighted, and we have a meaningful step-up coming in Q3. We have very clear visibility into both the investments that we have made and also the capacity that we are bringing online. So really, what you are seeing across the quarters is a timing dynamic, not a structural one. The investments land first and the capacity and the revenue it supports come online shortly after. So given the timing of our investments in Q2 and the timing of the deployment towards the end of the quarter, we actually expect those margins in Q2 to go a little bit lower, returning to Q1 levels in Q3 and stepping even higher in Q4. So for the full year, group, we expect a margin around 40% as we have guided. And on the longer term, those dynamics will smooth over time as our capacity footprint continues to scale and higher-value software solutions become a larger part of the mix.

Thank you, Dado. The next question is around capacity from Andrew Beale at Arete. Andrey, maybe I can come to you here. Can you talk about the timing of capacity additions beginning in Q2 and when you expect key sites such as Pennsylvania to reach full capacity?

Thanks, Gili. So Andrew, first, about the Pennsylvania site. Pennsylvania is going to have lights up by the end of 2027 with the first around 250 to 300 megawatts probably. And then the schedule looks like adding 300 megawatts each year up to 1.2 gigawatts in total, and 1.2 gigawatts according to our power contract we have in our concession by mid-2030 or the beginning of 2030 to be more precise. But overall, our capacity schedule is just ramping up. This year is heavily towards the second half of the year. Q3 is a very significant improvement for us in terms of capacity going online. Q4 is also very significant and then Q1 next year is where our bigger projects like Alabama and probably the first Missouri will kick in as well.

Great. Thank you. We'll probably stick with you, Andrey. We have a question from Josh Baer, Morgan Stanley. Can you address the media reports indicating delays at the Vineland, New Jersey site? Understanding you delivered commitments so far, are there any delays to note for the remainder of the Microsoft contract?

So we delivered all our capacity commitments across our Microsoft and Meta customers. The first Meta contract, as we already spoke, I believe the first Meta contract was fully delivered in Q1 this year. The Microsoft contract is more stretched, and we have the delivery schedule up to the end of this year. We delivered the first tranche in November last year. We continue to be in the contract schedule. Again, it ramps up starting from midyear and most of the volumes will be coming in Q3 and Q4.

Great. Thank you. So we have a number of questions around the Meta contract. A question from Alex Platt is, can you provide more details on the recently announced Meta deal? Can you explain how the $15 billion capacity option works? Should we view this as Meta backstopping $15 billion with a set attractive margin? And if you can get a customer with better unit economics on that capacity, would you take that instead? Marc, let me come to you here to walk us through this.

Thank you, Alex. First, I want to say that we love working with Meta, and we're excited that they chose to buy more capacity from us. This expanded new agreement is, to make sure that we all understand, a five-year contract for a total of $27 billion, and it is structured in two parts. First, there's a $12 billion commitment to dedicated compute capacity with delivery starting in early '27. And then second, as you pointed out, there's another $15 billion of additional capacity that we, at our discretion, can either allocate to Meta or sell to our AI cloud customers as it comes online for the duration of the five-year contract. Let me explain this in a bit more detail. Meta is committed to buy up to $15 billion of any capacity in these clusters at our option during the entire five-year contract. This commitment will likely allow us to finance the clusters with asset-backed financing at attractive terms, while selling them to our AI cloud customers at potentially higher market prices. The unique combination of being able to sell at a premium, along with the commitment by Meta to purchase any capacity during the contract should provide us with higher margins, less risk and more visibility in our revenue. If the market remains strong, we should generate more than $27 billion in revenue from this agreement.

Thank you, Marc. We have a question from Alex Duval of Goldman Sachs about M&A. Could you explain the rationale behind your move to acquire Eigen AI and Clarifai? How does this move improve your AI cloud platform capabilities? To what extent does this move mean that you could improve customer stickiness? Roman, I think we'll go to you.

Yes. Thank you, Gili. Thank you, Alex, for the question. First of all, I want to say that we are super excited that these two incredible teams of talented people from Eigen and Clarifai will join us. To deep dive in rationale, let's start from the foundations. Our view is that we should own the compute stack. That is where our vertical integration, our supply chain depth and our hardware engineering generate advantage and it's also the layer that drives the bulk of our economics. But above the compute stack, we build the full cloud solution and software plays the role of enabler. By the way, we partner where partnership is the right path. And as you see now, we use M&A selectively where it accelerates our roadmap, brings in proven developer adoption or capabilities complementary to what we are building. Acceleration is the key lens we apply to every potential transaction where we can find rare talent or proven adoption. This is, by the way, the example of Tavily that has incredible developer adoption that would, in general, take us meaningfully longer to build organically; acquisition is the fastest path. We evaluate every potential deal against clear criteria: does it deepen customer engagement, increase lifetime value, unlock new categories of customers or use cases we can address, and in general strengthen our position as a full stack AI cloud.

Thanks, Roman. We are getting more questions on M&A, so we'll likely stay with you here. Several participants are asking whether Token Factory and software more broadly are distinctly different from the infrastructure layer and training. I would love to get your insights around agentic monetization and the opportunity there.

Yes. Thank you for the question. As I said, we look at software as an enabler. So it's not that we build the software to generate a separate revenue stream. The software first of all plays the role of unlocking new capabilities for us, unlocking new opportunities in the types of workloads that are growing on the market and the types of customers that we can address. Software changes the shape of the customer relationship. Every layer of the software unlocks another group of users and customers. We want to meet customers where they need us and let them consume our vertically integrated solution in the way that they need, and it might be a different way for different types of customers. Customers come to our platform for different needs. In essence, they all need to run AI at scale, which means that they need compute. But for example, people who use our multi-tenant cloud to a large extent come for large training jobs. These are research-driven, data scientist-driven workloads. People who come to Token Factory build vertically integrated AI products or apply AI in their enterprises, and they come for tokens. Moving forward, we'll see new ways to consume infrastructure at scale that will be agentic, end-to-end workloads.

Thanks, Roman. We have a question from Tal Liani at Bank of America. How do you plan to finance this additional CapEx? And are you considering disposing some of your noncore holdings? Dado, over to you.

Happy to take this question, Tal. Well, look, our balance sheet is strong. At the end of the quarter, we had $9.3 billion of cash and cash equivalents, and this was supported by $2.3 billion of operating cash flow, which was generated in the quarter, mainly coming from upfront payments from our customers. So currently, more than 90% of the CapEx range that we projected in February is already secured by cash and contractual commitments. The incremental capacity reflected in our raised $20 billion to $25 billion guidance will be funded through additional financing. And as I have mentioned in previous calls, we have a wide range of sources available to us. On the debt side, we expect to use asset-backed financing against our contracts with Microsoft and Meta. And we may also raise corporate level debt. On the equity side, we have established an at-the-market program for up to 25 million Class A shares. We have not utilized this program to date, but we are evaluating the program regularly. In any case, as we have done today, we will apply consistent guardrails on cost of capital and shareholder dilution, while maintaining a disciplined capital structure.

Thanks, Dado. We have gotten a few questions on pipeline. One from Nehal Chokshi at Northland Capital. Your pipeline is up 3.5x quarter-over-quarter in 1Q '26. Does this pipeline include hyperscalers like Meta? Can you also provide more details on what this number represents? And how likely are you to convert pipeline to revenue? Marc?

Thank you, Gili, and thank you, Nehal. The referenced pipeline growth of 3.5x quarter-over-quarter, which we're very proud of, is for our AI cloud business, and it does not include any strategic hyperscaler deals like the Meta deal. It does include qualified opportunities across our core AI cloud and Token Factory products as well as across all of our key customer segments, including AI natives, software vendors and enterprises. What we can share about conversion is that we have maintained our solid win rates at the same time as we've accelerated our sales cycles and increased our average selling prices. And you can see this with some of the strong wins that we have, such as Sword Health in healthcare, life sciences and Rhoda and 1X in physical AI and core automation in one of our AI-native model builders as well as Revolut and monday.com, new customer wins for Token Factory. What we are doing is enabling our go-to-market teams to have a consultative conversation with our customers about their plans and for current and future workloads, including, as an example, what they're thinking about with regard to Vera Rubin deployments. We're also focusing on scaling our go-to-market and success teams to help customers realize their plans, which turns into durable revenue for us. Speaking about scaling, by the way, we have a number of recent appointments, including key leaders for the Americas, Dan Lawrence, who is our SVP and GM for the Americas; John Haarer, who has joined as GM for Asia Pacific and Japan; and Raja Agrawal, our VP for the Middle East.

Thanks, Marc. Another question that we have from the portal is saying that you emphasize the momentum in your software stack. Where are you seeing the most momentum across the stack today? Why are customers choosing Nebius? Roman, over to you.

Thank you, Gili. As many have said, now is the time of inference, and we see the same. Inference is the fastest-growing segment in our stack. And we see a very lucrative place where Nebius is positioned. We have the winning combination with capacity that customers need at scale. We have a strong software stack, and we invest in-house and with the new announced acquisitions to be on top of performance in supporting the most popular open source models and specialized models. We can provide the best total cost of ownership and cost of tokens for our customers through full stack optimization. And of course, we care a lot about the developer experience. So we combine the best from different worlds: specialized inference platforms, the scale of hyperscalers and the specialization of AI-focused cloud providers. Token Factory is our primary inference product now, and we are seeing good product-market fit. If we look at the next layer, agentic, it's still to be defined what the final shape of the product will be and who the winners are. We expect that Nebius will play the same role of foundation for people to build at scale and will provide the set of tools and platforms to optimize workloads in the agentic world.

Thanks, Roman. We have a question on customer concentration. Marc, how do you think about concentration risk given how large your contracts are with Meta and Microsoft? What does the rest of your revenue base look like in terms of customer diversification?

Thank you, Gili. As a reminder, our priority is our AI cloud business. As such, we are very intentional about how we are pairing these key strategic relationships with the likes of Meta and Microsoft with a diversified core of our AI cloud customer base. We do not take these big strategic deals lightly and only take them when we see terms favorable for our core mission, again, serving our AI cloud business. We also diligently capacity plan, and we're always looking to add capacity to best serve our core AI cloud customers from developers all the way through to enterprises. Our AI cloud business is experiencing strong traction across all of the products that we're offering as well as customer segments and the verticals that we're chasing. The diversified AI cloud book of business gives us both customer and use case visibility that helps to fuel our go-to-market and drives our pipeline and revenue diversification overall.

Thanks, Marc. We have a question from James Kisner at Water Tower Research on the $2 billion investment from NVIDIA and extended collaboration on inference and agentic software around Token Factory. What concrete deliverables should we expect over the next few quarters? And does the partnership affect the timing or scale of your Vera Rubin deployments in the second half of 2026? Andrey?

Okay, Gili. Thanks, James, for the question. So first of all, the NVIDIA strategic investment is meaningful across several dimensions beyond the $2 billion of equity and the line of sight to 5 gigawatts of capacity commitment by the end of 2030 that we've done. It really gives us a multiyear partnership with our most important hardware supplier at the moment when access to GPU supplies is a competitive advantage. We gain differentiated supply chain certainty on the future Rubin, Vera CPUs and the networking. We also have a close collaboration with NVIDIA for the design and early support of the future SKUs. As of today, this is Rubin and Vera CPU platforms, and we are able to have an early deployment that supports them on our cloud platform as soon as they are publicly available. Again, it reinforces our position as a preferred builder of AI infrastructure and aligns our roadmap with the NVIDIA product cycle, which is very critical for price, performance, utilization and leadership overall. We are also expanding our software integration. Our announcement around physical AI is one example, and we are very excited about our partnership driving vertical-specific advancements. We are also partnering with them to build software for inference and agentic parts and just recently achieved NVIDIA Exemplar Cloud status on GB300 for training. We are one of the first cloud providers globally to receive this status across the NVIDIA generations where the status is available.

Thanks, Andrey. Marc, maybe this one for you from the portal. Some of your competitors have mentioned they are sold out for most of 2026 and even into 2027. If you are future selling, how much of your future capacity is sold out for this year and next?

Thank you, Gili. First of all, we are sold out again in Q1 as we have been for several quarters as demand continues to significantly exceed available capacity. The vast majority of capacity coming online over the next several quarters to 12 months is already under contract or earmarked for our AI cloud customers. We do retain a portion of capacity for self-service to serve those AI builders that Roman mentioned earlier. We proactively manage those allocations to keep that segment supplied as demand evolves. Separately, we are typically seeing four or more customers competing for every GPU we bring online. We have significant expansion planned for 2027, including Vera Rubin deployments, and we'll start selling that capacity as we move into the second half of this year.

Thank you, Marc. We also have a question on U.S. data center opposition. Tom, can you touch on some of the political opposition here in the U.S. related to data center construction?

Yes. For sure, Gili. This is a big topic. It's something that we pay a lot of attention to. Overall, the approach that we've taken so far, we found to be quite effective. There are a few components of that approach. Number one, not all companies that build data centers build in the same way. We're not alike. I think you've heard Andrey and the team talk about how we build the efficiencies that we're able to achieve, what we do around creating interesting technological ways of heat reuse and so on. We build very efficiently and effectively, and I think that's an important part of our story and what we talk about when we come into new regions. But of course, that's not enough. The second thing is that we take a very transparent approach to what we do and how we talk about ourselves. From the very beginning when we're looking at a site and engaging, we engage very actively with communities and explain what our plans are, what we do, how we build and how we contribute. You can see us showing up at community town hall meetings; I'm looking actually right now at Andrey across the table in Amsterdam, who just flew in from our event in Independence, Missouri yesterday, where we're engaging with local government and communities. So we try to be very clear and transparent about what we do, how we do it and what the benefit is. And the last thing is that when we come into a new region to build, we don't just build and then move on to the next city. These are long-term investments. Therefore, we look at these relationships with communities as long-term partnerships and relationships. So we think very much beyond what we do in terms of the building about where else we can contribute, whether it's through our Nebius Academy, academic offerings, working with local universities, helping to train, reskill and retool. We view this holistically as a long-term partnership. So far, we found that this approach resonates well. But there's no room for complacency here, so we continue to pay attention and make sure that we're doing the best we can to be a positive contributor to local ecosystems.

This concludes today's call. Thank you, everyone, for joining. You may now disconnect.