Nebius posted revenue growth of 355 percent in the third quarter. The former Yandex subsidiary, officially based in the Netherlands, also announced a five-year contract with Meta worth approximately $3 billion.
Nebius reported revenue of $146 million in the third quarter, an increase of 355 percent compared to last year. However, this remains just below analysts’ expectations, which were $157 million according to Bloomberg data. The company predicts it will achieve annual recurring revenue of between $7 billion and $9 billion by the end of 2026.
CEO and co-founder Arkady Volozh announced the Meta deal on Tuesday. It is the second major AI infrastructure agreement for the company. In September , Nebius signed a contract with Microsoft for AI computing capacity worth at least 17 billion euros. Nebius’ shares have risen by about 300 percent this year.
Ambitious growth plans
Chief Revenue Officer Marc Boroditsky calls the outlook “robust but not a foregone conclusion.” According to him, the forecast is based on the influx of future deals and the expected growth of the company’s own AI cloud. “It will take real work,” Boroditsky said in an interview.
For next year’s expansion, Nebius is targeting corporate debt, external financing, and equity. Volozh writes in a letter to shareholders that the company believes it will be able to obtain loans on attractive terms. “This is supported by the creditworthiness of our largest customers,” he says. “We will maintain a disciplined capital structure.”
Completely sold out
Nebius sold all available cloud capacity in the third quarter. According to Boroditsky, the current quarter is almost sold out. “Not only is demand strong, it seems to be accelerating.” Such long-term order books will sound familiar to cloud players and chipmakers. To have computing power for AI at a later date, you have to place your order now.
Nebius is considered one of the largest so-called neoclouds. CoreWeave, which disappointed stock market analysts somewhat today despite its revenue growth, is another. Despite the fact that they have mountains of GPUs for AI computing power, competitors question whether they will remain in the air for too long. Oracle recently concluded to Techzine that neoclouds have “a difficult business case” in the long term.
From Yandex to Nebius
For those wondering how Nebius suddenly emerged as a Dutch neocloud: it is a spin-off of the Russian company Yandex. Due to the invasion of Ukraine, that company had to spin off its Russian branch, which still operates under the same name. CEO Arkady Volozh had to resign from his position at Yandex at the time due to EU sanctions. These were later lifted after he condemned the invasion as “barbaric.”