Nebius 3Q26 First Take: Headline numbers were solid, with both growth and profitability beating estimates. GAAP OP turne…

Nebius 3Q26 First Take: Headline numbers were solid, with both growth and profitability beating estimates. GAAP OP turned positive for the first time.

That said, after CRWV’s strong print yesterday, NBIS had already rallied ~15%, front-running a decent quarter. A closer look shows several issues: delayed capacity go-lives dragged the 4Q revenue guide well below consensus; RPO was flat QoQ; and the 2027 outlook was not particularly exciting.

1) Revenue: +68% QoQ, but ~$330 mn was one-off

Revenue came in at ~$980 mn, ~6% above consensus. However, roughly $330 mn was one-off ‘asset-light’ revenue (partners build compute, Nebius provides DC architecture and platform deployment), calling into question the quality of the beat.

2) Capacity go-live: slower; third-party hosted sites pushed to next year

The company said multiple third-party hosted sites are delayed to 1H27. The New Jersey Microsoft project will deliver more than half by year-end, with the remainder pushed to 2Q27; self-built sites are on track and contracts tied to delayed capacity remain intact.

As a result, the 2026 revenue guide was moved to the low end of the $3.0–3.4 bn range, implying 4Q revenue of ~$1.0 bn, ~30% below consensus.

3) Profit: ahead of estimates, but with ‘misleading’ factors

Adj. EBITDA beat by ~29%, with margin at ~47%. GAAP OP was ~$50 mn, turning positive for the first time, but two ‘misleading’ factors were at play.

First, the quarter included sizable one-off asset-light revenue, which likely carries higher margin. Also, D&A ran ~40% below consensus, likely because slower capacity ramps left a large portion of assets not yet in service.

4) Orders and pricing: pricing still rising, but RPO barely grew

New contracts signed this quarter exceeded $25 mn per MW per year (vs. >$20 mn last quarter). However, this was widely anticipated by the market.

Quarter-end RPO was ~$38.7 bn, up just 3% QoQ (~$1.2 bn), indicating few new wins in 3Q. Management noted contracts signed since 3Q total over $12 bn, likely concentrated in 4Q.

5) Cash flow: operating cash flow turned negative; moved to net debt

Capex was ~$7.3 bn, in line with expectations but up nearly 30% QoQ. FCF was about -$7.6 bn, well below consensus.

With cash down slightly and debt up by nearly $5.7 bn, NBIS moved from net cash to net debt of roughly $5.5 bn. The balance sheet deteriorated.

Full-year 2026 capex was raised to ~$27 bn, implying 4Q capex of ~$11.6 bn and a continued step-up. This points to mounting investment and funding pressure.

6) 2027 outlook: revenue in line, capex far above, profitability better

Revenue guidance of $12–13 bn is about 1% below consensus at the midpoint, with conservative build assumptions. Capex of $40–45 bn is ~34% above consensus at the midpoint, and the mix of higher capex vs. average revenue will raise execution-efficiency concerns.

Management said 75–85% of next year’s capex will be covered by customer prepayments and contract-backed financing. Prepayments are estimated at $17–20 bn.

Profitability guidance was also constructive, targeting PBT breakeven in 4Q27 (incl. interest; GAAP not specified), ahead of consensus. $Nebius(NBIS.US)