Nebius' Revenue in the First Quarter Grew by 684% YoY, Stock Price Jumps 13% Before the Market Opens

AI cloud service provider Nebius Group announced its performance for the first quarter on Wednesday, with revenue soaring 684% year on year to $399 million, slightly above analysts' expectations. Adjusted EBITDA reached $129.5 million, compared to a loss in the same period last year, and the company's stock jumped 13% before the market opened following the release of the financial report.

The core of the growth comes from the demand for AI data centers. Nebius leases computing resources to developers of artificial intelligence, with a business model similar to CoreWeave and a batch of emerging cloud computing companies, benefiting from the continuous demand for computing power for AI training and inference.

This is also an extremely capital-intensive business. Nebius's capital expenditure in the first quarter was about $2.5 billion, higher than the $2.4 billion estimated by Visible Alpha analysts, and far above the $544 million a year ago. The funds are mainly used to purchase chips, equipment, and expand data centers, which means that while sales are growing rapidly, the company must also continue to invest in computing power supply in advance.

Competitive pressure is also on the rise. Bloomberg reported that Nebius not only faces emerging cloud service providers like CoreWeave but also competes with large cloud computing operators in Silicon Valley. Nebius is expanding its AI infrastructure capabilities through acquisitions, having acquired AI startup Eigen AI for about $643 million earlier this month to strengthen its inference platform and business in the United States; the company has also signed a long-term agreement with Meta to provide up to $27 billion in computing power over the next five years.