Strategic Execution and Market Positioning

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• Performance was driven by a multi-tenant cloud model that builds capacity ahead of contracts, allowing management to selectively sell on premium terms.

• The company closed four landmark deals in Q2 averaging over $1 billion each, achieving yields of $20 million to $25 million per megawatt.

• Strategic flexibility is maintained by withholding some 2027 capacity to serve high-value, short-term needs that command significant pricing premiums.

• The new asset-light partnership model addresses capital and capacity constraints by having partners finance and operate facilities while Nebius provides the software stack.

• Operational efficiency and higher utilization were achieved through underlying infrastructure improvements, resulting in triple-digit revenue and ARR growth.

• Management attributes competitive wins to their scale, reliability, and 'white glove' support compared to traditional hyperscalers.

Capacity Expansion and 2027 Outlook

• The year-end contracted power target was raised to 5 gigawatts, with plans to build more than 1 gigawatt of new capacity annually starting in 2027.

• Full-year 2026 guidance is reaffirmed, with annualized run rate revenue expected between $7 billion and $9 billion.

• Revenue from landmark Q2 deals is expected to begin contributing in late 2026 and significantly impact 2027 and beyond.

• The company expects to start deploying next-generation Vera Rubin chips late this year or early next year, noting a smoother technical transition than previous generations.

• Future margins are expected to improve in the second half of next year as capacity from owned data centers comes online.

Funding and Operational Milestones

• Customer prepayments reached an all-time high, covering 50% to 60% of associated CapEx and providing over $9 billion in upfront funding for 2026.

• A first-of-its-kind capacity auction cleared at prices 15% higher than previous peaks, serving as a real-time price discovery mechanism for Blackwell chips.

• The company secured a $775 million asset-backed debt facility in July, leveraging its $40 billion contracted backlog for efficient financing.

• Management flagged the ongoing public hearing process for the Vineland, New Jersey site but remains confident in the timeline following a pivot to Bloom fuel cells.

Q&A Session Insights

Impact of Vineland data center hearing delays on capacity ramp