Key Takeaways
- Nebius’s reported EBITDA margin swung from negative 24.33% in Q4 2025 to 21.05% in Q1 2026 and 44.38% in Q2 2026, tracking management’s account of shifting from preselling 2027 capacity to premium short-term and auction pricing, where standard contracts now run $20 million to $25 million per megawatt and short-term deals fetch $40 million to $50 million.
- Despite that swing and a stock up more than 150% year to date, NBIS trades at 9.34x NTM EV/Revenue, just under its own historical average of 9.58x and far below the 31.11x peak it hit in late 2025, meaning the multiple has not re-rated to the margin story.
- Free cash flow fell from negative $214.9 million in Q1 2026 to negative $3.41 billion in Q2 2026 as capex accelerated, flipping Nebius from roughly break-even on cash versus debt to about $2 billion of net debt in a single quarter, before the additional $4.5 billion in convertible notes proposed in August even closes.
- At Citi’s Global TMT Conference, management said Nebius has secured only about 20% of the roughly $250 billion it estimates it needs to fund its 5-gigawatt capacity pipeline, meaning the pricing power story now has to keep working while the company closes a financing gap worth roughly $200 billion.
Nebius Turns Capacity Scarcity Into Pricing Power for NBIS
Nebius Group (NBIS) spent much of 2026 doing something unusual in cloud computing: raising prices while demand kept climbing. On September 17, the company announced its second GPU cloud price hike in three months, lifting pay-as-you-go rates for select Nvidia chips by 17% to 21% and pushing some CPU-only instance prices up 25%. That followed Nebius’s first-ever capacity auction, which management said on the Q2 earnings call cleared 15% above any price the company had charged before for Blackwell-generation chips.
The mechanism behind it, as CFO Dado Alonso and CRO Marc Boroditsky described on the call, is deliberate scarcity. Nebius closed four landmark deals in Q2, averaging more than $1 billion each, at $20 million to $25 million per megawatt for one to three year contracts. Management said it could sell its entire 2027 capacity today on those terms, but is choosing to hold some back for shorter, three to six month deals commanding $40 million to $50 million per megawatt. Nebius also named Palantir as its preferred sovereign AI infrastructure partner on September 8, opening a channel into enterprise customers who want to keep their data off shared commercial models.
The Margin Data Backs Nebius’s Story, But It Is Two Quarters Old
NBIS’ margin history confirms the shift is showing up in the numbers, not just the earnings call script. Nebius’s EBITDA margin was deeply negative through all of 2024 and 2025, bottoming at negative 293.18% in Q4 2024 and still sitting at negative 24.33% as recently as Q4 2025. It turned positive for the first time in Q1 2026 at 21.05%, then more than doubled to 44.38% in Q2 2026. Gross margin followed a steadier climb, from a 40.06% trough in Q4 2024 to 77.06% in Q2 2026, its highest point across the two-year window.
Those figures run close to, though not identical to, the 41% adjusted EBITDA margin management cited for Q2 versus 32% in Q1, a gap likely explained by stock-based compensation and other items excluded from the adjusted number. That the reported and adjusted figures move in the same direction, by a similar magnitude, is a reasonable check that the improvement is real rather than an artifact of how Nebius defines “adjusted.” What it does not yet show is durability. The entire positive-margin period for Nebius covers exactly two quarters.
Financing Nebius’s Buildout Is the Real Swing Factor for NBIS Stock
The same quarter that produced the margin inflection also produced a sharp deterioration in cash generation.
Free cash flow fell from negative $214.9 million in Q1 2026 to negative $3.41 billion in Q2 2026, consistent with the $5.7 billion in capital expenditures and $2.3 billion of operating cash flow management disclosed on the call. Total debt rose to $10.06 billion while cash and short-term investments fell to $8.04 billion, versus $9.59 billion and $9.37 billion respectively in Q1. That flips Nebius from roughly net cash to about $2 billion of net debt in one quarter, and it happened despite a $2.8 billion at-the-market equity raise management said it completed in Q2.
It also happened before Nebius’s proposed $4.5 billion convertible note offering, announced August 19, which will add to that debt load once it closes. At Citi’s Global TMT Conference on September 9, management put a number on what is still needed: roughly $250 billion in total capital to fund the 5-gigawatt pipeline, of which only about 20% is currently secured.
Meanwhile, NBIS’s NTM EV/Revenue multiple sits at 9.34x, just below its own 9.58x historical average and far under the 31.11x peak reached in late 2025, even after the margin inflection and the price hikes. The market, in other words, has not rewarded Nebius’s pricing power story with a richer multiple.
What Would Change the Verdict on Nebius Stock
The evidence supports a genuine, mechanism-backed improvement in Nebius’s unit economics. Capacity discipline and premium pricing are converting into real EBITDA margin, not just a narrative on an earnings call. What it does not yet support is confidence that the improvement can outrun the capital it takes to sustain it. Two quarters of positive EBITDA margin sit alongside a balance sheet that just crossed into net debt and a management team that says publicly it has closed only a fifth of the financing its own growth plan requires. That the multiple has not expanded even as margins improved suggests the market is already weighing that financing risk rather than ignoring it.
The next test is Q3 2026: whether free cash flow stabilizes closer to Q1’s negative $215 million than Q2’s negative $3.4 billion, and whether the $4.5 billion convertible pushes net debt meaningfully higher without a matching jump in prepayment coverage, which stood at 50% to 60% of capex on the four landmark Q2 deals. If Nebius can raise that coverage ratio without diluting shareholders further, the margin story gets easier to trust. If it cannot, the $200 billion financing gap becomes the story that decides where NBIS trades next, regardless of how high the auction prices climb.
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Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any stocks mentioned. Thank you for reading, and happy investing!
