Nebius Posts 454% Revenue Growth, FY Guidance Reflects Controversial Vineland Project
Shares of Nebius Group NV (NASDAQ:NBIS) tanked in early trading on Thursday, even as the company reported strong second-quarter revenue growth by capitalizing on high prices on the spot market, according to DA Davidson.analyst Gil Luria.
The Nebius Group Analyst: Luria reiterated a Neutral rating and price target of $175.
The Nebius Group Thesis: While the board hearings on the DataOne-Nebius 300 MW (megawatt) AI data center expansion project in Vineland, New Jersey, is due on Monday, the company’s full-year guidance includes that capacity, Luria said in the note.
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Nebius Group’s Q2 results:
- Total revenue grew 454% year-on-year to $582 million
- Annualized run-rate revenue at the end of June reached $3.0 billion for the core business, versus $1.9 billion in the first quarter.
- Adjusted EBITDA margins expanded to 41%, from 32% in the previous quarter.
- AI business posted an adjusted EBITDA margin of 50%.
- Nebius announced four deals, each exceeding $1 billion and representing $20-25 million per MW.
- The new deals have a lower payback period of a year and 10 months, much shorter than the historical two to three years.
- Management discussed a new pricing model for shorter-duration deals of around six months, with pricing typically at $40-$50 million per MW.
While management expects Vineland to be operational by year-end, revenue recognition is unlikely to begin until 2027, the analyst wrote.
Nebius further indicated it is on track to achieve the initial 2026 guidance range of $3-$3.4 billion in revenue and $7-$9 billion in ARR (annual recurring revenue) by year-end, he added.
NBIS Price Action: Shares of Nebius Group had declined by 2.58% to $252.52 at the time of publication on Thursday.