Nebius, the AI cloud company, reported third-quarter (July–September) results on November 12, 2026, with revenue of $980.8 million, about 6.7 times the same period a year earlier. The company also gave an initial 2027 capital expenditure outlook of $40 billion to $45 billion, laying out a plan to pour enormous sums into expanding its AI infrastructure. Nebius expects to fund 75% to 85% of that spending through customer prepayments, asset-backed financing and similar sources, but the remaining 15% to 25% comes to $6 billion to $11.25 billion. That is comparable to its September-end cash balance of $742.56 million...
Correction: the cash balance was $7.4256 billion, and the text below uses that figure.
Nebius reported third-quarter (July–September) 2026 results on November 12, with revenue of $980.8 million, about 6.7 times the year-earlier level. The company also gave an initial 2027 capital expenditure outlook of $40 billion to $45 billion, signaling a huge outlay to expand its AI infrastructure. It expects to fund 75% to 85% of that spending through customer prepayments, asset-backed financing and similar sources, but the remaining 15% to 25% amounts to $6 billion to $11.25 billion. That is comparable to its September-end cash balance of $7.4256 billion, so whether Nebius can secure the funding as planned will be a key condition for its growth.
Revenue up 6.7x, quarterly capex rises to $7.3 billion
Nebius's third-quarter 2026 revenue was $980.8 million, up 571% from $146.1 million a year earlier. Adjusted EBITDA was $465.8 million, and adjusted net income was $90.9 million. However, net loss from continuing operations under U.S. GAAP was $37.5 million, so the company has not yet reached profitability on an accounting basis.
The sharp rise in capital spending stands out in these results. Capex for July–September reached $7.3004 billion, up sharply from $955.5 million a year earlier. For January–September 2026, cumulative capex was $15.4307 billion. The company also raised its full-year 2026 capex outlook from the previous $20 billion–$25 billion to about $27 billion. Subtracting the nine-month actual from the full-year outlook implies roughly $11.6 billion of spending in October–December alone.
Meanwhile, revenue growth is expected to come in slower than originally planned. Full-year 2026 revenue is now expected near the low end of the earlier $3 billion–$3.4 billion forecast. The target of $7 billion–$9 billion in annualized run-rate revenue (ARR) by December has also been pushed back about two months, to exceeding $7 billion in February 2027. The reason is that some capacity at third-party-owned data centers, which had been due to go live in 2026, has slipped into the first half of 2027. For the New Jersey facility serving Microsoft, the company plans to deliver more than half of the contracted capacity in 2026 and the rest in April–June 2027.
Nebius's structure is therefore one in which investment in GPUs and data centers comes first and revenue recognition follows. A key source of funds to bridge that gap is customer prepayments. Money received in advance is generally recorded as deferred revenue until the service is delivered. Nebius's deferred revenue at the end of September was $9.0920 billion...
Correction: the figure was $9.409 billion, as given below.
Nebius's deferred revenue at the end of September stood at $9.409 billion...
To be exact with the source figures: deferred revenue was 94億920万ドル, i.e. $9.4092 billion, up about sixfold from $1.5775 billion at the end of December 2025. Over the same period, interest-bearing debt rose from $4.1277 billion to $14.1908 billion, showing that the company is using both customer funds and borrowing to expand.
Up to $45 billion in 2027 capex, with up to $11.25 billion left to fund
In its initial 2027 outlook, Nebius plans revenue of $12 billion to $13 billion, about four times the 2026 level. It also expects to reach pre-tax breakeven in October–December 2027. To support that growth, it plans to invest $40 billion to $45 billion to build new data center capacity of more than 1 GW. The company expects to fund 75% to 85% of this capex through customer prepayments, asset-backed financing backed by contracts with investment-grade customers, and its own balance sheet.
Converted into amounts, the portion left after the planned 75% to 85% coverage is $6 billion to $11.25 billion. The low end is 15% of $40 billion, or $6 billion; the high end is 25% of $45 billion, or $11.25 billion. This is our calculation from the company's stated investment amount and funding ratio, not a funding gap the company has formally announced. The company has also not disclosed how it would cover the remaining 15% to 25%.
A useful reference point for the scale of the remainder is cash and cash equivalents of $7.4256 billion at the end of September, which falls within the $6 billion to $11.25 billion range. In other words, even if Nebius secures 75% to 85% as planned, the rest is on a par with its current cash on hand. That said, 2027 capex will not all occur at once, and future operating cash flow and additional financing must also be considered.
Another comparison is the financing Nebius carried out in 2026. In August it issued $5.75 billion in convertible notes, and in July–September it raised roughly $1 billion in net proceeds through an at-the-market (ATM) equity program. In October it also signed a $3.5 billion senior secured credit facility with Citi. Simply adding these gives about $10.25 billion, similar in scale to the $6 billion–$11.25 billion remainder in the 2027 plan. However, setting up a facility does not mean the full amount is drawn, and these funds will not necessarily be applied directly to the 2027 remainder.
What matters is that, because capex is so large, even a small change in the funding ratio moves the required amount considerably. One percentage point is $400 million on $40 billion of capex and $450 million on $45 billion. If the funding ratio improved by 10 points from 75% to 85%, the amount still to be secured would fall by $4 billion to $4.5 billion. In Nebius's 2027 plan, what matters is not only revenue growth but also how much of the enormous capex it can cover with customer funds and secured financing.
Customer prepayments exceeded 100% of capex, but comparisons need care
There is also evidence that Nebius could secure more than planned. According to the company's shareholder letter, for contracts signed in July–September 2026 with terms of one year or longer, customer prepayments exceeded 100% of the related capex. That is a sharp improvement from 50% to 60% in April–June. In addition, prepayments were set on more than 90% of new contract value, and the prepayment ratio rose about 20 points from the previous quarter.
Higher contract pricing is also a tailwind. According to Nebius, annual contract value per MW exceeded $25 million, and the price per GPU-hour rose more than 20% on average from the previous quarter. If customers keep accepting higher prices and large prepayments, it will be easier for the company to secure the funds capex requires. If those contract terms hold for new 2027 deals, the amount needing additional funding could be held near the low end of the initial estimate.
However, the July–September result of prepayments exceeding 100% of capex cannot be compared directly with the 75% to 85% in the 2027 plan. The former is the ratio of prepayments on contracts signed that quarter to the investment in data center construction, networking equipment and so on tied to those same contracts. The latter covers total 2027 capex and includes asset-backed financing as well as customer prepayments. The company's outlook also includes use of its own balance sheet, but its funding explanation centers on prepayments and asset-backed financing, so the scope is not entirely clear. The company has also not disclosed what percentage of total 2027 capex it plans to cover with prepayments alone.
What matters now, therefore, is whether the 2027 funding ratio reaches the company's planned 75% to 85%. Below 75%, the remainder exceeds 25% of total capex. Above 85%, it falls below 15%, and the additional funds needed shrink. The rise in prepayments is encouraging, but it alone does not fully substantiate the 2027 funding plan.
The capex figure itself is also well above market expectations. According to FactSet data reported by CNBC, analysts' 2027 capex estimate was $28.77 billion. Nebius's plan of $40 billion to $45 billion is roughly 39% to 56% higher. The company's shares fell 16% on the day of the announcement, but the company's disclosures alone do not show how much of the move reflected concerns about the capex plan versus funding.
The conditions to watch in assessing the outlook are clear. If, by the next earnings report, Nebius shows it has raised the funding ratio for 2027 capex above 85%, keeping the remainder below 15%, concerns about the funding burden would ease. If the capex plan is revised below $40 billion, the required funds would also fall. Conversely, if the funding ratio drops below 75%, the remainder grows and reliance on financing deepens. If the rest of the New Jersey capacity for Microsoft is not delivered in April–June 2027 and revenue recognition slips further, the gap between investment and revenue would widen.
These developments are not unrelated to Japan's AI infrastructure market. In Asia-Pacific (APAC), Nebius has signed multiple contracts with customers in Japan, South Korea, India, Australia and Singapore, and has placed country managers in Japan and South Korea. If higher GPU-hour prices and larger prepayments continue, companies using Nebius's GPU cloud in Japan could see changes in pricing and contract terms. However, the value and specific terms of contracts signed in Japan have not been disclosed, so the impact on domestic customers cannot be assessed quantitatively at this point.
In exchange for rapid revenue growth, Nebius is planning enormous capex of up to $45 billion in 2027. Rising customer prepayments and higher contract prices help on the funding side, but it is not yet clear how far those conditions will apply to total investment. At the next earnings report, investors will need to check not only improvement in the funding ratio but also any revisions to capex and the timing of data center start-ups. The biggest test of the company's growth strategy is whether it can turn growing demand for AI infrastructure into actual revenue while funding this massive investment without strain.