Nebius Group N.V. (NBIS) Q3 2026 Earnings Call

Welcome to Nebius Group's Q3 2026 earnings conference call.

The presentation will be followed by a Q&A session.

If you'd like to ask a question, you can click the Ask a Question tab in the top right

of the live stream player.

Then just type in your question and click Submit.

You can submit questions at any time during the presentation, and the Nebius management team will try and answer them during the Q&A portion of the call.

I will now hand it over to Gaili Naftonovich, Head of Investor Relations, to start the call.

Hi, everyone, and welcome to Nebius' third quarter 2026 earnings conference call.

Joining us on the call today, we have our CEO, Arkadi, our CFO, Dotto, and the broader Nebius management team.

Before we get started, 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 for 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.

All earnings-related documents are distributed and available to the public through our investor relations website, which can be found at nebias.com. And now, I'd like to turn the call over to Arkady.

Thanks, Gili, and welcome, everyone, to our call today. Last quarter, I gave you a better understanding of our business model. This quarter, I want to show you how it's working. First, just to say that Q3 was a record quarter. In a market growing like this, it should be. Capital markets have been unsettled lately. Two questions are being asked our whole industry.

How fast can AI build-out happen, and who will pay for it? These are important questions.

The way I think about it is simple. The demand for AI is real and substantial. Everything

else, like building the capacity and financing it, is just a task. Tasks can be hard, but they

all can be solved. Demand is strong. Our customers are committing to us for longer at higher prices,

and they are paying more upfront. Prices kept rising. Q3 agreements closed above 25 million

Another step up from the 20 to 25 million per megawatt we achieved in Q2. Our customer

agreements are getting larger in size. Three months ago, we reported our first billion

dollar plus contracts. In Q4, we were already signing multi-billion dollar agreements for

our AI cloud. The base of that demand is broadening too. AI natives are scaling with us. Enterprise

These AI leaders like Databricks, Datadog, and Snowflake signed multi-year agreements with

us for the first time during this quarter.

So everyone knows that demand is exceptional right now, but I also want to talk about how

we are preparing for the future.

As you remember, we sell on three horizons, and we choose the best mix between the three.

First is on sport and short-term at a premium price. Another is one to three-year contracts, and this is our core business, and a limited number of five-year agreements that diversify our contract tenures and further help us to finance our build-out.

The second and third are covered by prepayments. Two things are important here. How much of

our CAPEX they cover and the payback period for our new capacity. Let me explain

this in more detail. A customer pays today for capacity that comes online in the next

12 months. Why do they do it? First of all, they want to be sure they reserve their capacity

and they want to reserve today's price. The most important change is that the prepayments

on new contracts now cover more than 100% of the capital needed to bring this contracted

capacity online. Just to remind you, last quarter it was 50 to 60%. As a result, payback in Q3

shortened to one year and seven months from one year, 10 months, a quarter earlier. So our customers are paying more, they pay earlier, and they're committing for longer. And we are getting our capital back faster.

Now, let me turn to how we achieve this and how it allows us to grow profitable.

First, how we sell. We are creating new tools to find the real price of what we are selling.