Nebius (NBIS) Q2 2026 Earnings: $236M Of EBITDA, $260M Of Depreciation

Nebius Group (NBIS) Q2 2026 — Revenue $582.3M vs a $569.9M bar - a BEAT, up 454% y/y and 46% q/q. Adjusted EBITDA swung to +$236.2M from -$21.0M. ARR hit $3.0B, up 56% in one quarter. The 6-K was accepted 9:15am ET, so August 12 IS the reaction session: $193.23 to $238.19, up 23.27% intraday. Nebius reported +$236.2M of adjusted EBITDA and the stock rose 23%. On the line directly above it, depreciation was $259.7M - the cost adjusted EBITDA is defined to exclude is bigger than the adjusted EBITDA itself. For the half, $471.7M against $365.7M. And in one sentence of the shareholder letter, Nebius disclosed it now uses a five-year useful life for server and network equipment, up from four years prior to 2026. THE CALL: HOLD (3/5, GREAT QUARTER, PRICE ALREADY PAID FOR IT) — base-case value ~$220.0 vs ~$238.19 today. KEY METRICS: - CALL: HOLD 3/5, fair value $220.00 vs $238.19 - about 7.6% BELOW the price, but 1.3% ABOVE the Street's $217.13 average target and 10.3% ABOVE its $199.50 median. Bear $98, base $208, bull $366, weighted 50/25/25 on year-end ARR of $6.5B / $8.0B / $9.0B at 4x / 7x / 11x. - THE ANGLE: adjusted EBITDA was +$236.2M and depreciation the same quarter was $259.7M - the excluded cost is larger than the measure it was excluded from. For the half, $471.7M vs $365.7M, a ratio of 1.29x. Add $119.1M of interest and $102.5M of share comp and it is a $175.9M GAAP operating loss. - THE DISCLOSURE NOBODY QUOTED: the shareholder letter says Nebius now uses a five-year useful life for server and network equipment, up from four years prior to 2026. That cuts the annual depreciation rate on that equipment by 20%. On the old life the same charge is 25% higher - roughly $63M more per quarter. - THE EPS BASIS: GAAP diluted loss from continuing operations was $0.68 on 280,381,615 shares. The $0.12 the feeds carry is adjusted net loss of $33.2M over the same count - derived, never printed by Nebius. Proof: Q2 2025 adjusted loss $91.5M over 238,520,244 shares gives the $0.38 the same feed carries. - WHO FUNDS THE BUILDOUT: operating cash flow was $2,246.1M, but receivables gave $1,186.8M and deferred revenue $1,197.0M - $2,383.8M of working capital. Strip those and it is MINUS $137.7M, against $5,657.4M of capex. Deferred revenue went $1,577.5M to $5,975.2M in six months. - THE DEMAND IS REAL: AI cloud revenue $574.9M, up 514%. ARR $3.0B at 30 June, up 598% y/y and 56% from $1.9B in March. AI cloud adjusted EBITDA margin 49.7%. Four deals over $1B of TCV each, ACV above $20M per megawatt, payback cut to 1 year 10 months, over $40B of commitments. - THE FUNDING CALENDAR: H1 financing was $9,160.4M - $4,337.5M of converts, $2,000.0M of pre-funded warrants, $2,846.7M of treasury shares - plus $775M of asset-backed debt in July at SOFR plus 250. The ATM sold 12.7M shares at $223.60 with 12.3M left. 2026 capex target $20-25B; $8.13B spent. - THE BREAK-EVEN TEST: at the 49.7% AI cloud margin, $8.0B of year-end ARR gives about $3.98B of adjusted EBITDA. Gross PP&E exits 2026 near $25-30B, which on a five-year life is $5.0-6.0B of depreciation a year. EBITDA only covers depreciation near $10-12B of ARR. Guidance exits 2026 at $7-9B. What to watch: UP: revenue $582.3M beat and grew 454%, ARR $3.0B up 56% in one quarter, AI cloud adjusted EBITDA margin 49.7%, four deals averaging over $1B of TCV, more than $40B of customer commitments, and 70% of Q2 deals prepaid, covering 50-60% of the associated capex. DOWN: $259.7M of depreciation exceeds $236.2M of adjusted EBITDA, the useful life went from four years to five, the $2.25B of operating cash flow is $2.38B of working capital, and $12-17B of 2026 capex is unfunded. Also on YouTube: @ChargedAlpha DISCLAIMER: For informational and educational purposes only. Not financial advice. Do your own research before any investment decision. Learn investing free in the Charged Alpha app: https://chargedalpha.com/app?source=youtube&ref=video Educational only. Not financial advice.