Nebius Says New Deals Now Come With Prepayments That Cover Their Build-Out Costs

Nebius has found a way to make its customers bankroll a growing share of its AI build-out. Deals the Amsterdam-based AI cloud company signed in the third quarter came with prepayments that covered more than 100% of the related capital spending, including data center construction and networking. On second-quarter deals, the figure was 50% to 60%.

That number is Nebius’s answer to the question hanging over every neocloud. “In recent weeks our industry has been asked questions about how the AI build-out will be financed,” founder and CEO Arkady Volozh wrote Thursday in his quarterly letter to shareholders. The bill is large. Nebius now expects capital expenditures of about $27 billion this year, above its earlier $20 billion to $25 billion range, and $40 billion to $45 billion in 2027. It expects prepayments and asset-backed financing tied to contracts with investment-grade customers to fund 75% to 85% of next year’s spending.

The quarter itself beat expectations. Revenue rose 571% from a year earlier to $980.8 million, ahead of the $907.5 million LSEG consensus cited by CNBC. Adjusted EBITDA reached $465.8 million, and the net loss from continuing operations narrowed to $37.5 million from $119.6 million. About $325 million of the revenue was non-recurring, booked from the initial phase of an asset-light arrangement in which partners deploy Nebius’s architecture and cloud platform on capacity they fund themselves.

The outlook was softer. Some third-party capacity Nebius expected to switch on this year has slipped into the first half of 2027, so the company now sees 2026 revenue at the low end of its $3.0 billion to $3.4 billion range. Its target of $7 billion to $9 billion in annualized run-rate revenue by December moves to February, when Nebius expects to top $7 billion. The shares fell about 10% Thursday morning, CNBC reported.

For 2027, Nebius guided to revenue of $12 billion to $13 billion, about four times this year’s, and to pre-tax breakeven in the fourth quarter, measured after financing costs. It expects committed customer prepayments to climb from $10 billion this year to $17 billion to $20 billion.

The delays include a colocation site in New Jersey where Nebius has contracted capacity to Microsoft. Nebius now expects to deliver more than half of the capacity contracted with Microsoft there by year-end, with the remaining tranches scheduled for the second quarter of 2027. The schedule reset after DataOne began retiring some of the site’s temporary generation ahead of a move to permanent power, which is shifting to Bloom Energy fuel cells. Nebius said the sites it owns are on time or ahead of schedule. Four of them, in Missouri, Alabama, Lappeenranta and a second location in Mäntsälä, are set to start deploying capacity in 2027 and add more than 3 gigawatts at full scale.

Pricing is moving in Nebius’s favor. “Our customers committed to longer deals, at higher prices, with more up front,” Volozh wrote. Annual contract value per megawatt topped $25 million on third-quarter deals, up from more than $20 million in the second quarter, and prices per GPU-hour rose more than 20% on average. Customers have committed more than $12 billion in contract value since the start of the third quarter, and Databricks, Datadog and Snowflake signed multi-year agreements with the company for the first time.

The financing pitch arrives two days after rival CoreWeave ruled out new unsecured debt at today’s yields. Nebius has still tapped outside markets this year, raising $5.75 billion in convertible notes in August, about $1.0 billion in net proceeds from at-the-market share sales in the third quarter and lining up a $3.5 billion senior secured facility with Citi in October. It ended September with $7.4 billion in cash and equivalents.

Starting next year, Nebius will stop guiding on run-rate revenue and give forecasts for revenue, pre-tax earnings and capacity instead. Its breakeven target assumes compute is depreciated over five years, the useful life the company adopted for its servers and network gear this year in place of four.