The AI cloud company secures new factory site and sees soaring revenues and profits
Category: Business
AMSTERDAM--(BUSINESS WIRE)--Nebius Group N.V. (NASDAQ: NBIS) has reported remarkable financial results for the first quarter of 2026, ending March 31, with revenues soaring to $399 million, marking a staggering 684% increase from $50.9 million in the same quarter last year. The company’s stock surged nearly 15% in pre-market trading following the announcement, as investors reacted positively to the strong performance and an optimistic outlook.
The impressive results exceeded analyst expectations and highlighted the company's accelerating growth in the AI cloud sector. Nebius’s adjusted earnings per share (EPS) for the quarter was $2.11, significantly surpassing the consensus estimate of a loss of $0.78, indicating a shift toward profitability and operational efficiency.
CEO Arkady Volozh noted in the quarterly shareholder letter that Nebius has secured up to 1.2 gigawatts (GW) of power and land for a new AI factory in Pennsylvania, which is expected to bolster the company’s infrastructure capabilities. This expansion is part of Nebius’s broader strategy to scale its operations and meet the growing demand for AI solutions.
For the first quarter of 2026, Nebius reported a net income from continuing operations of $621.2 million, a dramatic turnaround from a loss of $104.3 million in Q1 2025. This surge in profitability was primarily driven by a $780.6 million gain from the revaluation of investments in equity securities. Adjusted EBITDA also saw a remarkable shift, moving from a loss of $53.7 million last year to a profit of $129.5 million this quarter.
Operating cash flow from continuing operations reached $2.26 billion, a massive improvement from negative $184.1 million in the prior year. This positive cash flow reflects the company’s enhanced operational efficiency and effective cost management strategies. Notably, total operating costs as a percentage of revenues dropped from 336% to 132%, demonstrating Nebius's ability to scale effectively.
In terms of expenditures, Nebius invested $2.47 billion in property, equipment, and intangible assets during the quarter, an increase of 355% year-over-year. This investment is indicative of the company’s aggressive capacity expansion plans as it seeks to position itself as a leader in the AI infrastructure market.
As of March 31, 2026, Nebius had a total of 253,898,194 shares outstanding, including 220,406,311 Class A shares and 33,491,883 Class B shares. The company’s strong financial performance has led to a substantial increase in its market capitalization, with shares hitting an all-time high of $213 shortly after the earnings report.
Analysts and investors reacted favorably to Nebius’s earnings report. The stock price rose by 14.70% in pre-market trading, underscoring investor confidence in the company’s growth potential. The substantial revenue growth indicates a strong demand for Nebius’s AI cloud platform, which provides the necessary infrastructure for companies developing AI applications.
Analysts have pointed out that the company's contracted revenue backlog is approaching $50 billion, bolstered by landmark deals with major players such as Meta Platforms and Microsoft. These agreements provide revenue stability and position Nebius as a key player in the AI infrastructure market.
In a broader market perspective, the AI sector is witnessing a surge in investment as companies ramp up their AI capabilities. Nebius, founded by the team behind Yandex and rebranded in 2024, is strategically positioned to benefit from this trend, providing the backend infrastructure required for AI development.
Though the results are promising, challenges remain. The company has guided for revenues between $3 billion and $3.4 billion for the full year of 2026, up from $530 million in 2025. Achieving this ambitious target will depend on the successful execution of its growth strategy, including timely completion of data centers and smooth integration of recent acquisitions.
Investors are also cautious about the company’s high capital expenditures, projected between $16 billion and $20 billion for the year, which significantly exceed its current revenue base. The market is pricing in high expectations for Nebius, requiring flawless execution to maintain investor confidence.
As the company continues to expand its operations and infrastructure, it must also navigate the competitive dynamics of the AI market. The ability to manage supply chain risks, secure necessary equipment, and maintain effective internal controls will be key to sustaining growth.
Looking ahead, Nebius plans to host an earnings webcast on May 13, 2026, at 8:00 a.m. Eastern Time to discuss these financial results in greater detail. Investors and analysts will follow closely closely as the company outlines its strategy for the upcoming quarters and addresses potential challenges.
In a rapidly changing technological environment, Nebius’s ability to adapt and innovate will be instrumental in determining its future success. With a strong financial foundation and ambitious expansion plans, the company is well-positioned to capitalize on the growing demand for AI infrastructure.