Nebius Q2 Revenue Surges 454% on AI Cloud Demand
Nebius Group (NASDAQ: NBIS) reported second-quarter 2026 revenue of $582.3 million, up 454% year-over-year, as the AI cloud company scaled its infrastructure to meet explosive demand. Adjusted EBITDA swung to $236.2 million from a loss of $21.0 million a year earlier, marking a key profitability milestone.
The company, headquartered in Amsterdam, said growth was driven by expanding GPU cloud capacity and enterprise adoption. CEO Arkady Volozh’s quarterly letter highlighted the company’s focus on full-stack AI solutions, from model training to production deployment.
AI Cloud Buildout Drives 10-Fold Capex Increase
Nebius spent $5.66 billion on property and equipment in Q2, a 1,008% jump from $510.6 million in the year-ago quarter. This aggressive buildout reflects its strategy to secure data center capacity and GPUs ahead of competitors. The company’s total assets ballooned to $27.96 billion as of June 30, 2026, up from $12.43 billion at year-end 2025.
Cash and equivalents soared to $8.04 billion, providing substantial runway for further expansion. However, debt also increased, with non-current debt reaching $8.50 billion, up from $4.10 billion, as Nebius leveraged its balance sheet to fund growth.
Operating Loss Narrows Despite 758% Cost Increase
Total operating costs surged to $758.2 million in Q2, up 251% year-over-year, driven by higher cost of revenues, product development, and depreciation. Yet the operating loss narrowed to $175.9 million from $111.2 million, as revenue growth outpaced expense growth. Cost of revenues as a percentage of revenue dropped to 23% from 29%, indicating improving operational leverage.
Share-based compensation expense jumped to $102.5 million in Q2, up 597% from $14.7 million, reflecting heavy equity incentives for talent. This non-cash expense contributed to a net loss from continuing operations of $190.4 million, compared to a gain of $502.5 million in Q2 2025, which included a $597.4 million revaluation gain.
Cash Flow Turns Positive As Operating Activities Generate $2.25 Billion
Net cash provided by operating activities reached $2.25 billion in Q2, a dramatic swing from $167.7 million used in the prior year. This improvement was driven by strong collections and a $4.5 billion increase in deferred revenue, signaling robust prepayments from customers. For the first half, operating cash flow totaled $4.50 billion.
The positive cash flow is crucial as Nebius funds its massive capex program. With $8.04 billion in cash and a growing cash generation engine, the company appears well-positioned to continue its infrastructure investments without immediate financing pressure.
What To Watch: Can Revenue Growth Outpace Capex?
Investors should monitor Nebius’s quarterly revenue trajectory and capex efficiency. The company’s ability to convert its $5.66 billion quarterly capex into sustained revenue growth will be key. Watch for management commentary on utilization rates and customer commitments in the upcoming earnings call.
The next critical update comes with Q3 results, expected in November, where analysts will look for revenue acceleration and any signs of margin expansion. A slowdown in new customer wins or a decline in deferred revenue growth would signal softening demand.
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