Shares of Nebius Group surged more than 21% on August 12 after the AI cloud company delivered second-quarter results that cleared Wall Street's already elevated bar. Revenue rose 454% year over year to $582.3 million, while adjusted EBITDA swung to a $236.2 million profit from a $21 million loss a year earlier. The beat matters because it signals the company's massive data-center spending is finally converting into cash-generating contracts — but the gap between adjusted and real-world profitability remains wide.
The Top Line Beat Expectations, and the Backlog Keeps Growing
AI cloud revenue alone grew 514% to $575 million, and annual recurring revenue — the company's monthly revenue multiplied by 12 — hit $3 billion, up from $1.9 billion in March. That trajectory is being fueled by headline contracts: Nebius has a five-year deal with Meta worth up to $27 billion and an earlier one with Microsoft worth up to $19.4 billion.
A $1 billion-plus agreement with AI startup Reflection AI, running through 2029, added another marquee customer. Demand is not the concern; fulfilling it is.
Adjusted Profit Arrived, but the GAAP Picture Tells a Different Story
GAAP net loss was $190.4 million , weighed down by depreciation, share-based compensation, and interest expense, all of which increased substantially. In plain English: the company is profitable before you count the cost of the equipment it's buying and the stock it's handing to employees. Wall Street had expected an adjusted loss of $0.82 per share , so the reported adjusted loss of $0.68 was a clear beat — but investors should note that real earnings remain negative.
The Capex Bill Is Staggering — and Growing
Q2 capital expenditure was roughly $5.7 billion, mainly for GPUs and data centers, though the payback period on recent deals has shortened to about one year and 10 months.
Full-year capex guidance of $20–$25 billion sits against revenue guidance of $3.0–$3.4 billion — a ratio of about 7-to-1.
Nebius raised its year-end capacity target to 5 gigawatts , signaling it intends to keep spending aggressively.
Short Sellers and Skeptics Aren't Going Away
Short positions represented roughly 24% of the free float, magnifying today's rally as bearish bets were unwound.
Michael Burry, famous for predicting the 2008 housing collapse, has disclosed a short position , arguing the valuation already prices in years of flawless execution. The stock's next test: proving that $5.7 billion quarters of spending can keep converting into revenue faster than depreciation erodes the bottom line.