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Nebius (NBIS) is under heavy pressure today following its Q3 results this morning, which are drawing fresh scrutiny to the neocloud's financing requirements and capacity expansion plans. NBIS comfortably exceeded expectations, reporting a GAAP loss of $0.13/share while revenue surged 571.3% yr/yr and 68.4% sequentially to $980.8 mln. However, management now expects FY26 revenue at the low end of its $3.0-3.4 bln range, pushed back its $7 bln ARR target, and issued roughly in-line FY27 revenue guidance of $12-13 bln while raising capex expectations. Adding to the pressure is NVIDIA (NVDA) CEO Jensen Huang's resignation this morning, which is weighing broadly on AI infrastructure stocks.

• Q3 growth was driven by new capacity coming online and approximately $325 mln in non-recurring revenue from its asset-light partnership model. AI demand remained strong, with over $12 bln in new contract value signed since the beginning of Q3, while GPU-hour pricing on new deals increased more than 20% sequentially.
• However, delays at several third-party colocation facilities are pushing planned capacity deployments and associated revenue into 2027. Most notably, Nebius now expects to deliver more than half of the capacity contracted with Microsoft (MSFT) at its New Jersey facility by year-end, with the remaining tranches pushed into Q2'27. As a result, its prior December ARR target of $7-9 bln has shifted by roughly two months, with management now expecting to exceed $7 bln in February 2027. September ARR reached $6.4 bln, more than doubling sequentially.
• Profitability improved, with adjusted EBITDA nearly doubling sequentially to $465.8 mln and the group margin expanding to 47.5% from 40.6% in Q2. Its core AI Cloud business generated $518.2 mln in adjusted EBITDA at a 53.2% margin. However, depreciation and financing costs remain substantial, with Q3 interest expense reaching $112.5 mln and operating cash flow negative $273 mln.
• NBIS raised its FY26 capex outlook to approximately $27 bln from $20-25 bln, while forecasting another $40-45 bln in FY27 spending. Management expects customer prepayments and asset-backed financing to cover 75-85% of FY27 capex, with customer prepayments projected at $17-20 bln. Notably, prepayments on new Q3 agreements covered more than 100% of associated capex, up from 50-60% in Q2.

Briefing.com Analyst Insight

Shares gained sharply in response to peer CoreWeave's (CRWV) results yesterday but have now more than given back those gains. While Q3 comfortably exceeded expectations, Nebius's reduced outlook, capacity delays, and rising capex requirements have renewed concerns surrounding execution and financing, underscoring how sensitive investors remain to the financing demands of the AI infrastructure buildout. NBIS highlighted improving customer prepayments, which covered more than 100% of associated capex on Q3 agreements, up from 50-60% in Q2, with $17-20 bln in committed customer prepayments expected in 2027. This follows similar reassurance from CRWV, which expects approximately $9 bln in customer prepayments and deposits over the next three months. However, while both companies are benefiting from stronger customer commitments, NBIS's capacity delays and higher spending requirements keep attention on the pace of its expansion and the financing needed to support it.