Nebius' Q2 Loss Widens Y/Y, Revenues Rise on AI Demand, Stock Up

Core Insights - Nebius Group N.V. reported a second-quarter 2025 adjusted net loss of $91.5 million, which is 49% wider than the loss of $61.6 million from the previous year [1][8] - The company's revenues increased significantly by 625% year over year, reaching $105.1 million, primarily driven by strong performance in its core AI cloud business and effective execution by the TripleTen team [1][8] Business Overview - Nebius operates an AI cloud platform designed for intensive workloads, supported by in-house developed software and hardware, with R&D hubs located in Europe, North America, and Israel [2] - The company also manages distinct brands, including Avride (focused on autonomous driving technology) and TripleTen (an edtech platform for tech career reskilling) [2] Financial Performance - The adjusted EBITDA loss for the second quarter was $21 million, an improvement from the $58.1 million loss in the same quarter last year [6] - Sales, general, and administrative expenses decreased by 10% year over year to $68.2 million, while total operating costs and expenses rose by 71% to $216.3 million [6] Investment and Equity Interests - Following an investment transaction in Toloka, Nebius no longer holds majority voting power in the company, which is now accounted for as an equity method investment [3] Stock Performance - Following the earnings announcement, Nebius shares increased by 19% in the trading session, and the stock has surged 59.4% over the past six months, outperforming the Zacks Internet - Software and Services industry's growth of 12.4% [5] Outlook and Guidance - Nebius raised its annualized run rate (ARR) revenue guidance to a range of $900 million to $1.1 billion, citing high demand and closed AI compute contracts [8][11] - The company reaffirmed its group revenue guidance of $450 million to $630 million, excluding previously provided revenue guidance for Toloka [12] - Adjusted EBITDA is expected to be slightly positive at the group level by year-end, although a full-year loss is still anticipated [12] Balance Sheet - As of June 30, 2025, Nebius had cash and cash equivalents amounting to $1,679.3 million, an increase from $1,447 million as of March 31, 2025 [10]