Nebius (NBIS) Q3 2026 earnings review
One-time deal lifts Nebius revenue, but data centers arrive late
Nebius rents out computing power for AI, and a one-time partner deal supplied much of its record sales. Revenue rose 68% from last quarter to $981 million. Without that deal, growth was about 13% by our math. Chief executive Arkady Volozh wrote that prepayments on new contracts now exceed the cost of the capacity behind them.
| Revenue excluding a one-time partner deal | $656M +13% from last quarter by our math; reported: $981M, +68% |
|---|---|
| Profit before interest, tax, depreciation and share-based pay | $465.8M 47% of revenue; 41% last quarter |
| 2026 revenue outlook | Cut to the low end about $3.0B; the range was $3.0–3.4B |
| 2027 revenue outlook | $12–13B about four times 2026 |
⚖️ Verdict: 🔴 Bearish
The story got worse because Nebius delayed this year's targets and part of its growth came from revenue it calls "non-recurring". Rented data centers will open late, so sales should land at the bottom of the range. The good news: prices climbed more than 20%, and the first 2027 outlook is about four times this year's revenue.
The question now is whether the rental business can reach the plan without one-time revenue. Either the late sites open and recurring sales jump, or Nebius needs further partner deals. Fourth-quarter revenue will tell: by our math, the outlook requires about $1.04 billion.
🐂 Bull Case
Prices Rose 20% and Contracts Got Longer
Nebius rents out computing power for artificial intelligence, mostly as graphics chips (GPUs) in its data centers. Chief executive Arkady Volozh wrote that customers "committed to longer deals, at higher prices, with more up front". The cloud group said the price of one GPU-hour climbed more than 20% from last quarter.
- Yearly contract value per megawatt of capacity: above $25 million, against more than $20 million on last quarter's deals
- Time for a new one-to-three-year deal to repay its costs: 1 year 7 months, down from 1 year 10 months
- Capacity auctions: winning bids more than 15% above the reserve price
- Contract length: the first five-year deals with AI cloud customers
This matters because the standing worry is that rental prices will drop once more GPU supply arrives. The latest quarter argued against that worry, but one quarter does not settle it. Nebius also supplies the payback figure itself, and that estimate assumes chips last five years.
What to watch: the price change per GPU-hour that Nebius reports next quarter. A second rise would show that demand still exceeds supply as new data centers open across the industry.
New Contracts Promise More Cash Before Delivery
A prepayment is money a customer pays before Nebius delivers computing capacity. The AI cloud provider spends it on chips and data centers. More than 90% of the contract value signed this quarter carried one, Nebius said.
- Deferred revenue (prepaid sums not yet earned): $9.4 billion, from $6.0 billion in June
- Prepayment share of contract value: up about 20 percentage points
- Prepayments expected for 2026: $10 billion, against over $9 billion before
Every prepaid dollar is a dollar the firm does not have to borrow. One caution: a contract promise is not yet cash, and customers had not paid much of the new sum by September.
What to watch: cash from operations next quarter. A large positive figure would show that customers paid the sums they committed in these contracts.
Token Factory Contracts Grew 17-Fold in a Quarter
Token Factory is the Nebius managed service that runs AI models in production for customers. Chief executive Arkady Volozh wrote that it is nearing a yearly revenue pace of several hundred million dollars, with "contract value growing 17x quarter-on-quarter".
Nebius also said it finished integrating Eigen AI and Clarifai, two inference-software deals from earlier this year. This software sells on machines the firm already runs, so each megawatt can earn more. But the letter gave no dollar figure, and a 17-fold rise from a small base says little about size.
What to watch: the first revenue number for Token Factory. A figure near the pace Volozh described would confirm that software now adds to rental income.
🐻 Bear Case
One-Time Partner Deal Supplied a Third of Revenue
Nebius reported revenue of $981 million and credited new capacity and its asset-light partnerships. In such a partnership, an outside partner pays for the data-center capacity, and Nebius supplies its design and cloud software "on their funded capacity".
The first such deal produced about $325 million this quarter, and the company called that revenue "non-recurring". That is a third of sales.
- Revenue growth from last quarter: 68% as reported, about 13% without the partner deal, by our math
- Monthly cloud revenue without the deal: about $216 million on average, against $250 million in June, by our math
- Operating profit: $50 million, less than a sixth of the partner revenue
So the rental business earned less in an average month than it did in June. Yet Nebius reported its "biggest quarter-over-quarter increase" in working capacity, and the letter does not explain the gap. The operating profit followed at least eight quarterly losses, and it probably depended on the partner deal.
What to watch: fourth-quarter revenue, which the full-year outlook puts near $1.04 billion by our math. Without another one-time deal, the rental business must grow almost 60% in three months.
Late Data Centers Delay Two 2026 Targets
Nebius can bill only for capacity that is running, so sales depend on data centers opening on schedule. The bull case is that it keeps securing power: the company still expects 5 gigawatts under contract by December.
"Where we rely on third parties, there have been delays," chief executive Arkady Volozh wrote. Several rented sites, including the New Jersey center serving Microsoft, will now deliver capacity in the first half of 2027.
- 2026 revenue: about $3.0 billion, the bottom of the earlier $3.0–3.4 billion range
- Run-rate revenue target: above $7 billion in February 2027, not December 2026
- New Jersey: over half of Microsoft's capacity by year-end, the rest in the second quarter of 2027
Annualized run-rate revenue (ARR) is one month of cloud revenue multiplied by 12. September's ARR was $6.4 billion, so the February target needs growth of only 9%, by our math. That small gap suggests September included much of the one-time partner revenue, which Nebius said "can add choppiness to" ARR.
What to watch: the capacity Nebius delivers in New Jersey by December. More than half of the Microsoft order would show that the new schedule holds.
Debt and New Shares Funded the Data Centers
"Prepayments on Q3 agreements covered more than 100% of the associated capex," chief executive Arkady Volozh wrote. Capex means spending on chips and buildings, and the cash-flow statement does not show that money yet. Operations used $273 million of cash in the quarter.
- Spending on chips and data centers: $7.3 billion
- Net cash from lenders and share buyers: $7.5 billion
- Unpaid customer invoices: $4.0 billion, up from $0.3 billion in June
- Debt: $14.2 billion, up from $8.5 billion in June
Outside money, not customers, paid for this quarter's building. Nebius presents its range of funding sources as a strength that lets it be "opportunistic rather than dependent". But the 2027 plan is larger: by our math, it leaves $6–11 billion of spending that neither prepayments nor contract-backed loans cover.
What to watch: the size of the next loan secured on customer contracts. The first was $775 million, and the 2027 plan needs many times that amount.
Risks this quarter didn't answer
Four standing risks got no reading from the release and the shareholder letter, and a fifth item, working capacity, still has no published figure.
- GPU rental prices: they rose this quarter; the test comes when rivals' new capacity opens.
- Reliance on Microsoft and Meta: Nebius named new customers such as Databricks but gave no customer split; a revenue share for the two would show it.
- Profit quality: the 2027 breakeven target "assumes a five-year depreciation life for compute", against four years before 2026.
- Local opposition to US data centers: Nebius expects no election effects on its sites; a permit delay at an owned site would change that.
- Working capacity: no megawatt figure for capacity in use, so revenue per megawatt stays unknown.
👓 Other Themes
Nebius Answers Doubts About AI Financing and Elections
Chief executive Arkady Volozh wrote that the industry has faced questions in recent weeks about how companies will pay for AI data centers. His answer is customer prepayments and what he called a healthy balance sheet. On politics, Nebius wrote that "The US political environment may have shifted" and that it does "not anticipate election impacts" on its sites, including Pennsylvania.
Nebius Will Stop Giving a Run-Rate Target
From 2027 Nebius will give targets for revenue, pre-tax earnings and capacity, and none for annualized run-rate revenue (ARR). ARR is one month of cloud revenue multiplied by 12. The company wrote that it no longer sees ARR as "the right measure of our business". That change arrives in the same quarter that the December ARR target moved to February.
💲 Other KPIs
The backlog grew 3% from June, after 12% the quarter before. Backlog here means remaining performance obligations: revenue that customers have contracted and Nebius has not yet delivered. Customers signed $12 billion of contracts since July, the company said. By our math, at most $2.2 billion of that reached the backlog by September.
The cloud unit's margin widened for a third straight quarter, from 50% in June and 24% last December. The measure is profit before interest, tax, depreciation and share-based pay, as a share of revenue. It includes the one-time partner revenue, and Nebius did not say what that revenue cost to deliver.
Depreciation took 36% of revenue, down from 68% a year ago. It is the yearly cost of chips and buildings already bought. The share fell partly because one-time partner revenue enlarged the sales figure. Since January Nebius also spreads server costs over five years, not four.
The share count rose 8% in three months and 16% from a year ago. Nebius sold about $1.0 billion of stock in the quarter and converted some of its convertible notes, debt that holders can swap for shares. Each new share leaves existing holders with a smaller part of the firm.
🔮 Guidance
Cut. Nebius now expects the bottom of its range because rented sites will open late. By our math, that leaves about $1.04 billion for the fourth quarter, 6% above the third. Three months at September's run-rate would produce $1.6 billion, so the plan assumes a much slower pace. In 2025 revenue also ended below the middle of the first range.
Unchanged. The plan still has this profit measure at about 40% of revenue for the year. Nine months came in at 42%, so by our math the fourth quarter needs only about 35.5%. That is well below the third quarter's 47.5%, which included the one-time partner revenue.
Raised. Nebius will spend about $27 billion this year, above the top of its earlier range, to prepare capacity for 2027. By our math, that leaves $11.6 billion for the fourth quarter, after $7.3 billion in the third. It is the second increase this year. The range started at $16–20 billion.
Cut. Nebius moved the target by about two months and no longer mentions the $9 billion upper end. ARR is one month of cloud revenue multiplied by 12. The new date applies even before New Jersey reaches full capacity, the company said. From 2027 it will stop giving ARR targets.
Unchanged. Nebius still expects 5 gigawatts of power under contract by December and has more than 4 today. Contracted power is electricity supply secured for future data centers, not capacity in use. This is the first quarter without an increase after four straight raises, from 2.5 gigawatts a year ago.
Raised. Nebius now expects $10 billion of committed customer prepayments this year. Deferred revenue, the prepaid sums it has booked, grew $7.8 billion in nine months. But customers still owed $4.0 billion on invoices at the end of September, so part of that sum is not cash yet.
New. Nebius expects about four times this year's revenue and calls that "a conservative approach". The February run-rate target of $7 billion is the starting point. By our math, the average run-rate across 2027 must then sit about 79% above February's. The backlog covers part of that, and new sales and on-time data centers must supply the rest.
New. Nebius expects profit before tax to reach zero in the last quarter of 2027, after financing costs. The target assumes servers last five years. This quarter the pre-tax loss was $63 million, with the one-time partner revenue included and a $50 million charge for converting notes into shares. From 2027 the company will give targets for revenue and pre-tax earnings.
New. Spending would climb about 57% from this year's level, by our math, to 3.4 times the revenue planned for 2027. Nebius expects prepayments and contract-backed loans to cover 75–85% of it. At the middle of the ranges, that implies about $15.5 billion of such loans by our math. The first one was $775 million.
New. Nebius expects customer prepayments to rise from $10 billion this year, and said "The 2027 range is not a ceiling". At the middle of the ranges, by our math, prepayments would pay for about 44% of 2027 spending. The amount depends on which contracts the firm chooses to sign.
Unchanged. Nebius still plans to switch on more than 1 gigawatt of new capacity each year. It said its outlook "takes a prudent approach" to timing. Owned sites in Missouri, Finland and Alabama should supply most of the 2027 additions. The company said it has secured all the power and components for them.
❓ Key Questions
How much of September's $6.4 billion run-rate was one-time revenue?
Nebius booked $325 million of non-recurring partner revenue but did not say in which month. If all of it fell in September, the recurring run-rate would be about $2.5 billion by our math, below June's $3.0 billion.
What did the one-time partner revenue cost to deliver?
The quarter's 47.5% margin before interest, tax and depreciation includes it. If that revenue carried no cost, the rest of the business earned about 21% by our math, roughly half of last quarter's 41%.
Who received the $349 million Nebius lent this quarter?
The cash-flow statement shows $348.6 million of advances under notes receivable, a new line. The release does not name the borrower or say whether the loan relates to the partner deals.
How many megawatts earned revenue at the end of September?
Nebius reported its largest addition of working capacity but gave no figure. The letter also does not repeat the earlier target of 800 megawatts to 1 gigawatt of connected power by December.
When will customers pay the $4.0 billion they owe?
Receivables rose from $0.3 billion to $4.0 billion in three months while operations used cash. The collection schedule decides how much of the fourth-quarter spending Nebius must fund with debt or new shares.