Nebius Earnings Beat Fails to Stop 16% Slide as Capex Soars

Nebius earnings for Q3 2026 came in well ahead of expectations: the Amsterdam-based AI cloud company reported unaudited revenue of $980.8 million on Nov. 12, 2026, according to its press release. Even with revenue above LSEG consensus and adjusted EPS of 31 cents versus an expected loss of 69 cents, CNBC reported that Nebius Group N.V. shares fell about 16% on Thursday as investors focused on a 2026 guidance cut, a Microsoft capacity delay and a higher $27 billion capex plan.

Nebius is a neocloud, a cloud provider that rents out GPU computing for AI, as opposed to general-purpose clouds like AWS. The company also published CEO Arkady Volozh's shareholder letter, filed with the SEC, and held its earnings webcast at 8:00 a.m. ET.

What did Nebius earnings show for Q3 2026?

Q3 2026 revenue rose 571% from $146.1 million a year earlier and increased 68% from the prior quarter, DCD reported on Nov. 12. Nebius AI Cloud generated $973.8 million, or about 99% of group revenue, underscoring how concentrated the business has become around AI infrastructure.

Adjusted EBITDA, a profitability measure that excludes interest, taxes, depreciation, amortization and selected adjustments, was $465.8 million versus a loss of $5.2 million a year earlier. Net loss from continuing operations narrowed to $37.5 million, or 13 cents per share, from $119.6 million, or 50 cents per share, a year earlier. Adjusted net income was $90.9 million versus an adjusted loss of $100.4 million.

Why did Nebius stock fall 16%?

The selloff was not about the Nebius earnings headline alone. CNBC reported that revenue of $980.8 million topped the $907.5 million LSEG estimate, while adjusted EPS beat by a wide margin. The pressure came from what management said about timing, spending and the path into 2027.

Nebius now expects 2026 revenue at the low end of its prior $3.0 billion to $3.4 billion range. CFO Maria del Dado Alonso Sanchez said on the call that the new range is $3.0 billion to $3.2 billion, below the $3.37 billion LSEG consensus. Management said some revenue is moving into early 2027 because of third-party capacity delays, calling it a timing issue rather than a demand issue.

Capital expenditures, or capex, meaning spending on property, equipment and intangible assets, also moved higher. Nebius now expects 2026 capex of $27 billion, above the previous $20 billion to $25 billion guidance and the $23.85 billion FactSet expectation. Q3 purchases of property and equipment and intangibles were $7.3 billion, taking the nine-month total to $15.43 billion.

What is behind the Microsoft data center delay?

TechCrunch reported that the Microsoft contract at the Vineland, New Jersey site is worth up to $19.4 billion. Andrey Korolenko, Nebius chief product and infrastructure officer, said operator DataOne wound down temporary power generation faster than expected in late Q3 while Bloom Energy fuel cells ramp up.

Just over half of the Microsoft capacity is now expected by year-end, with the rest due in Q2 2027. Nebius said its own sites are on time or ahead of schedule, while delays are occurring where it relies on third parties. That distinction matters because power availability, not GPU demand, is becoming a central constraint for neocloud expansion. Large AI sites need hundreds of megawatts, a challenge we explain in what is a data center.

What does Nebius expect for 2027?

Annual recurring revenue, or ARR, the yearly run-rate of recurring contracts, is now expected to exceed $7 billion in February 2027 instead of December 2026. Nebius said it will stop guiding to ARR after that and will guide revenue and pre-tax earnings from 2027 onward.

The initial 2027 outlook calls for $12 billion to $13 billion in revenue, roughly four times the 2026 level and above the $11.98 billion LSEG consensus. It also calls for $40 billion to $45 billion in capex, far above the $28.77 billion FactSet expectation, more than 1 GW of new capacity per year and pre-tax breakeven in Q4 2027, assuming five-year depreciation of servers and network equipment. DCD reported that contracted power is expected to reach 5 GW by year-end.

Customer prepayments, upfront cash paid by customers before service delivery, are central to that plan. Nebius expects prepayments and financing against existing investment-grade contracts to cover 75% to 85% of 2027 capex, with 2027 customer prepayments expected at $17 billion to $20 billion. TechCrunch reported that the CFO named Microsoft and Meta as contracts that can be financed this way.

The timing of the Nebius earnings release did not help. Nvidia shares were already swinging after Jensen Huang's resignation, a move that briefly sent Nvidia stock down 14%.

Our take: The quarter beat estimates, but the stock reaction reflects guidance, the Microsoft delay and a much larger capex profile. The real question is execution and financing at $40 billion to $45 billion a year with roughly $12 billion to $13 billion of 2027 revenue. The prepayment model shifts part of the risk to major customers such as Microsoft and Meta, but reliance on third-party power remains the weak point, as the New Jersey case shows. Compare that with Cerebras, whose earnings beat the same evening also came with a new Microsoft deal but a far smaller spending plan.

What should investors watch next?

Volozh said on the call, "The demand for AI is real and substantial. Everything else, like building the capacity and financing it, is just a task. Tasks can be hard, but they all can be solved." After these Nebius earnings, investors will test that statement against delivery milestones, financing terms and power constraints.

• Whether Microsoft capacity arrives on the revised year-end and Q2 2027 schedule.
• Whether 2027 customer prepayments reach the expected $17 billion to $20 billion range.
• Whether 2027 capex stays within the $40 billion to $45 billion outlook.
• Whether third-party power providers create further timing risk.
• Whether Nvidia-linked neocloud stocks stay volatile; Nvidia held about $329 million in Nebius shares at the end of June, CNBC reported.