To The Moon

Nebius Q4 Review: 2026 ARR Unchanged, Execution Still Key; Not the Best Time for NeoClouds Yet?

$NEBIUS(NBIS)$   The Q4 earnings report is very “cloud-provider” in its core message: demand is strong → capacity is the real ceiling → first secure power and data-center space, then turn revenue into a run-rate (ARR), while in the short term the income statement may actually look weaker as depreciation and expansion investments weigh on it.

Financial Snapshot

Q4 2025

– Revenue: 227.7 million (slightly below expectations).

– Adjusted EBITDA: +15 million (first time turning positive at the consolidated/group level but below the expected $33 million). 

– Net loss from continuing operations: -$249.6 million.

Why is “Adjusted EBITDA positive” while GAAP is still a massive loss? 

The key is depreciation & amortization and expansion-related costs: in Q4, D&A was $180.7 million (about 79% of revenue), plus SG&A of $159.9 million. This looks more like the financial profile of a capital-intensive compute platform in a ramp-up phase than the profit structure of a mature cloud software business.

Three Things to Watch

ARR remains the market's “north star” for valuation, and the company did not raise its 2026 guidance

Near-term P&L is not that important—what matters is the chain of power/data-center delivery → GPU deployment → utilization/pricing → ARR realization.

YE25 ARR = $1.25bn (well above the prior $0.9–1.1bn guidance); YE26 ARR guidance = $7–9bn (consistent with last quarter's guidance—no upward revision).

Now line that up with the physical build. Active power ended 2025 at about 170MW, while connected power is guided to 800MW to 1GW by end 2026. That is roughly 4.7x to 5.9x more connected capacity than today's active base, which is broadly the same order of magnitude as the ARR ramp.

Balance sheet and funding reality check

Cash and cash equivalents plus restricted cash ended 2025 at $3.7216B. Purchases of property and equipment were $2.056B in Q4 and $4.066B for full year 2025. 

Debt is also meaningful. The balance sheet shows $24.5M of current debt and $4.10B of non current debt at year end 2025, so total debt is about $4.1277B. Against $3.7216B of cash plus restricted cash, that is roughly $0.406B of net debt, so the company is not obviously liquidity stressed today, but it is operating in a mode where continued build will keep capital markets relevant. 

In addition, several of the company's subsidiaries and investee companies are making good progress, and the company may be able to realize some liquidity in the future through equity exits. Overall, a strong balance sheet has consistently been a major advantage for Nebius relative to CoreWeave.

NeoClouds still needs to prove itself first by delivering through strong execution

The market is currently rewarding the shovel sellers, semis and hardware, because the earnings model is cleaner and the cycle feels more linear.

Meanwhile, Nebius and other neoclouds are not being valued on a clean gross margin expansion story today, because fixed costs from the build dominate the income statement.

That is the core reason the market can prefer semis even in a strong demand tape. Chips monetize quickly when units ship, a neocloud monetizes when sites are commissioned, power is connected, hardware is deployed, and utilization ramps. That is closer to an infrastructure project risk profile than a pure product cycle.

On the catalyst front, after broad hardware price increases, the ongoing rapid iteration of leading models and the fast evolution of agent capabilities could make compute scarcity stand out again. If that happens, potential price hikes or new contract signings by NeoClouds would be a positive catalyst.

Bottom line

Nebius a high beta way to express the view that AI compute scarcity persists, and that the best converters of power into sellable capacity will be rewarded. It is not a substitute for chips, it is a different leg of the chain with different failure modes.

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