Financial Data and Key Metrics Changes - Revenue grew nearly 400% year over year, with an annualized run rate revenue increase of nearly 700% [5] - The company ended the quarter with a solid cash balance of $1,400,000,000 [5] - April's annualized run rate revenue was $310,000,000, indicating strong demand continuing into May [17][41] Business Line Data and Key Metrics Changes - Significant improvements in AI cloud offerings, including SLURM based cluster upgrades that reduced downtime by around 5% [8] - New platform services moved from beta to general availability, enhancing overall service reliability and performance [9][10] - Expanded integrations with external AI platforms, allowing customers to bring existing tools into the ecosystem with minimal friction [11] Market Data and Key Metrics Changes - The company is well-positioned in the US, Europe, and the Middle East, with plans to expand capacity in these regions [5][6] - The demand environment for AI compute remains robust, with strong sales momentum continuing into Q2 [17][41] Company Strategy and Development Direction - The company is focused on building out its AI cloud infrastructure to serve a diverse customer base, including tech, media, entertainment, and life sciences [15][16] - Plans to achieve mid-single-digit billions in revenue in the midterm, with a focus on expanding capacity to support this growth [22][24] - The strategy includes building national AI factories in various geographies to tap into emerging markets [56][58] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving adjusted EBITDA profitability in the second half of 2025, with a focus on positive adjusted EBITDA in the core infrastructure business by Q3 [44][45] - The company anticipates medium-term EBIT margins to range between 20% to 30%, supported by the scaling of its AI cloud business [24][26] - Management highlighted the importance of technology quality and capital access as key differentiators in the competitive landscape [26][30] Other Important Information - The company announced new partnerships with NVIDIA and other industry leaders to enhance its technology stack and service offerings [6][13] - The deconsolidation of Teloka will impact financials and guidance, but the company retains a significant economic stake [62] Q&A Session Summary Question: What do you mean by midterm, and what are the building blocks to get there? - The base case plan calls for several billion dollars of revenue in the midterm, with a focus on scaling capacity to support this goal [35] Question: What drove the strength in Q1 ARR, and how do you feel about the full year? - Strong demand for GPUs and improved sales processes contributed to the strength in Q1 ARR, with continued robust demand expected [38][41] Question: When do you expect to achieve positive adjusted EBITDA? - Positive adjusted EBITDA is expected in the second half of the year, with the core infrastructure business likely reaching it by Q3 [44][45] Question: Can you provide an update on the reasons for raised CapEx guidance? - Increased CapEx guidance is due to earlier-than-expected spending and the need to ramp up capacity in response to demand [46][47] Question: Where do you see future growth in this business? - Future growth is expected from AI-native companies, enterprise clients, and national AI projects, with a focus on expanding data center capacity [54][56][58]
Nebius Group N.V.(NBIS) - 2025 Q1 - Earnings Call Transcript