Hashrate is as valuable as gold! Single contract exceeds $1 billions; AI rising star Nebius (NBIS.US) cloud business revenue surges by 500%, soaring in pre-market trading

According to Golden Ten Data APP, Nebius (NBIS.US) saw its cloud business sales soar 514% year-on-year in the second quarter, driven by strong demand for artificial intelligence computing power. Financial reports show that AI cloud business revenue, which makes up the vast majority of its operations, reached $575 million for the quarter. Total revenue for the quarter surpassed $582 million, a year-on-year increase of 454%, above analysts’ expectations of $557 million. The loss per share was $0.68, exceeding expectations by $0.18.

In pre-market trading on Wednesday, the company's stock price rose by about 16%.

The company also reiterated its full-year outlook for 2026, noting that accelerating demand for AI computing power helps it secure larger and more profitable customer contracts.

In its first quarter earnings report published in May, Nebius reaffirmed its full-year guidance for 2026, forecasting annualized revenue of $7-9 billion, group revenue of $3-3.4 billion, and a group adjusted EBITDA margin of approximately 40%. Market consensus expects revenue to reach $3.38 billion.

Chief Executive Officer Arkady Volozh said, “Everything we set out to do this quarter, we accomplished,” adding, “in most cases, we did even more.”

The statement noted that the value of contracts signed in the quarter was four times higher than the previous quarter, including four agreements each averaging over $1 billion.

The company stated that pricing improved this quarter, benefiting from demand for next-generation AI chips and higher rates on older GPUs. Among contracts signed during this period, about 70% included customer prepayments, covering 50-60% of related capital expenditures.

Nebius said it finalized four milestone AI cloud transactions this quarter, each with average total contract values exceeding $1 billion, and overall contract value almost quadrupled compared to last quarter.

Volozh highlighted that new pricing initiatives launched at the start of the third quarter—such as first-time auctions and short-term computing power deals—show promising prospects. He added the company sees pricing opportunities in the $40 million to $50 million per megawatt range, and signed the first such contract this week.

Competitor CoreWeave Inc., driven by the ongoing AI spending frenzy, predicted on Tuesday its third quarter sales will exceed expectations.

Shorter Capital Expenditure Payback Cycles

Nebius is one of several so-called “new cloud” companies renting out computing power in data centers, riding the global wave of demand for infrastructure capable of processing AI workloads. The company was spun out of Russian internet giant Yandex in 2024, and has collaborated with NVIDIA, as well as large data center operators like Microsoft and Meta Platforms Inc.

Building infrastructure for AI workloads is a costly business. Nebius reported in a statement that in July, it secured $775 million in financing, backed by assets including GPUs. In the second quarter, the company spent about $5.7 billion on purchasing chips, equipment, and expanding data centers.

Volozh said that, overall, the expected payback period for capital expenditures and related operating costs tied to second quarter transactions is 1 year and 10 months, shorter than the previous estimate of 2-3 years.

Nebius noted that it will continue to ramp up capital spending this year and plans to adopt diversified financing channels.