Nebius revenue grew 454%. Most of the cash came from customers paying in advance

Nebius rents out computing power. It buys Nvidia chips, puts them in data centres, and charges companies to train and run AI models on them. The trade calls this a neocloud.

It is based in Amsterdam, listed on Nasdaq, and was spun out of the Russian internet company Yandex in 2024. On Wednesday it reported second-quarter results, and the shares closed 34% higher.

Revenue reached $582.3m, up 454% on a year earlier. The AI cloud unit, which is most of the business, grew 514% to $575m, Bloomberg reported. Analysts had expected $572.75m in total, according to LSEG data.

Those are the numbers everyone reported. The more interesting ones are further down the statement.

The cash is not profit

Nebius generated $2.2bn of cash from operations in the quarter. It also lost $190.4m. Both figures are correct, and the gap between them is the story.

About $1.2bn of that cash is deferred revenue, meaning money customers have handed over for capacity they have not used yet. Another $1.2bn came from collecting invoices already issued.

Deferred revenue on the balance sheet has gone from roughly $1.6bn at the end of December to almost $6bn. The company expects to take more than $9bn in customer prepayments this year, and says it holds over $40bn in customer commitments.

That is a real advantage. Deposits are cheaper than debt, and they are evidence that buyers are willing to pay years ahead. It is also not the same thing as earning money.

Growing this fast is expensive

Nebius spent about $5.7bn on chips, equipment and data centres in three months. Analysts had expected $4.7bn, according to Visible Alpha. Cash burn rose to $3.4bn from $678m a year earlier, The Information reported.

The operating loss widened to $175.9m from $111.2m, so the company is losing more money on operations than it was when it was a twentieth of the size. Adjusted EBITDA turned positive for the first time, at $236.2m.

Long-term debt has doubled to $8.5bn since December. In July the company raised its first facility secured against its own GPUs, worth $775m, and says it will keep using it. Lambda financed chips the same way with a $917m leveraged loan.

For the full year it guides to revenue of $3bn to $3.4bn and capital spending of $20bn to $25bn. That is roughly seven dollars out for every dollar in.

It just published a price for compute

Buried in the earnings call is a number that matters beyond Nebius. Chief executive Arkady Volozh told analysts what a megawatt of deployed capacity earns.

Medium-term leases bring in $20m to $25m per megawatt per year. Short-term leases, up to six months, bring in $40m to $50m. Renting compute by the month costs roughly double renting it by the year.

Volozh also said Nebius could sell its entire planned 2027 capacity today at current terms, and is choosing not to. That is a company saying the forward price is high enough to hold inventory back.

Wall Street spent the summer building a financing layer for compute, including Nvidia’s $500bn push with six asset managers. What it lacked was a price.

The timing is not coincidental. CME Group starts trading futures on Nvidia GPU rental prices on 5 October, and the case for that market was that compute had no public reference price. A listed operator has now put one on the record.

The demand is concentrated, and that is the risk

Total contract value won in the quarter roughly quadrupled, including four agreements averaging more than $1bn each. Contract values from new customers rose more than ninefold.

Four deals over $1bn is a small number of buyers. Nebius already counts Microsoft and Meta among its customers, and Nvidia is both a supplier and a shareholder.

Emarketer analyst Jacob Bourne put the caveat plainly to Reuters. Demand keeps rising despite more competitors, he said, but the bigger question is how diversified and durable it proves beyond the AI industry itself.

The same week made his point twice. Rival CoreWeave doubled revenue to $2.6bn and gained 19%, CNBC reported. Cerebras reported and fell more than 16%.

The capacity is landing in Wales

A day after the results, Nebius announced where some of it goes. It has agreed to lease high-density capacity from Vantage Data Centers at the CWL1 campus in Newport, south Wales.

The agreement is the first announced commercial capacity commitment in the South Wales AI Growth Zone. Nebius committed about £1.7bn across four UK sites in June, and the buildout uses Nvidia’s DSX reference design.

Two governments turned up for the announcement. UK AI minister Kanishka Narayan called domestic compute “the horsepower that makes AI possible”. Adam Price, the Welsh cabinet minister for enterprise, connectivity and energy, called it a milestone for the region.

South Wales was designated an AI Growth Zone partly because it holds the UK’s largest cluster of semiconductor businesses. Vantage expects to build more than a gigawatt across Newport, Bridgend and Bro Tathan.

Nebius is not the only European operator making this bet. Nscale, which runs data centres in the UK, is preparing a US listing that values it at $51bn on revenue it has contracted but mostly not yet earned.

What would actually settle this

Nebius raised its contracted power target for 2026 to five gigawatts, from more than four. It plans to deploy over a gigawatt of capacity a year from 2027, roughly enough electricity for 750,000 American homes.

Chief product and infrastructure officer Andrey Korolenko was careful about what connected power means. The company expects up to a gigawatt connected by the end of this year, but revenue comes later.

“You have to commission the datacenter, build the network, build the clusters, deploy the platform, then onboard the customers, and then the revenue generation starts,” he told analysts. That takes a few months.

So the test is not this quarter. It is whether the roughly $6bn of deposits converts into delivered capacity on schedule, and whether the price per megawatt holds once everyone building a gigawatt a year has finished building it.

Europe has spent two years being told it missed the AI infrastructure race. An Amsterdam company just posted the fastest revenue growth in the sector and is pouring a billion and a half pounds into Wales. Whether that is a win depends entirely on what compute is worth in 2028.