# How Nebius makes money

CXProWealth Business Lens · Nebius (NBIS) · FY2025

Read from the 20-F for the period 2025-01-01 to 2025-12-31, filed 2026-04-30 with the SEC (accession 0001104659-26-052948): https://www.sec.gov/Archives/edgar/data/1513845/000110465926052948/

Business Lens explains how a company earns, spends and keeps its money, from its own filings. It is insight and context, never a view on the shares, a target, or advice. Figures are raw units as filed; percentages are percentage points.

## Headline figures

- Revenue: $529.8M (+479.0% on the year)
- Operating income: -$611.7M (operating margin -115.5%)
- Net income: $82.5M (net margin 15.6%)
- Gross margin: 68.6%
- Free cash flow: -$3.7B (-694.8% of revenue)
- Cash conversion (operating cash flow / net income): 4.66x
- Capital expenditure: 767.5% of revenue

## Where the money goes (FY2025)

- Revenues → Total operating costs and expenses: $529.8M
- Total operating costs and expenses → Depreciation and amortization: $417.9M
- Total operating costs and expenses → Sales, general and administrative: $380.1M
- Total operating costs and expenses → Product development: $177.3M
- Total operating costs and expenses → Cost of revenues: $166.2M
- Gain from revaluation of investments in equity securities → Interest expense: $61.5M
- Gain from revaluation of investments in equity securities → Income / (loss) from equity method investments: $24.3M
- Gain from revaluation of investments in equity securities → Total operating costs and expenses: $513.1M
- Other income / (loss), net → Total operating costs and expenses: $80.6M
- Interest income → Total operating costs and expenses: $18.0M
- Interest income → Net income / (loss) before income taxes: $13.8M
- Net income / (loss) before income taxes → Income tax expense / (benefit): $4.0M
- Net income / (loss) before income taxes → Net income / (loss) from continuing operations: $9.8M
- Net income / (loss) from continuing operations → Net income / (loss): $9.8M
- Net income / (loss) from discontinued operations → Net income / (loss): $72.7M
- Net income / (loss) → Net income / (loss) attributable to Nebius Group N.V.: $82.5M

## Where the revenue comes from

### Segments (INFORMATION ABOUT SEGMENTS & GEOGRAPHIC AREAS - Segment's Revenue, Adjusted EBITDA, Expense (Details))

| Member | Value | Share |
|---|---:|---:|
| Nebius | $480.3M | 90.7% |
| TripleTen | $54.1M | 10.2% |
| Avride | $1.3M | 0.2% |

The members do not sum to total revenue.

### ConsolidationItems (INFORMATION ABOUT SEGMENTS & GEOGRAPHIC AREAS - Segment's Revenue, Adjusted EBITDA, Expense (Details))

| Member | Value | Share |
|---|---:|---:|
| Operating Segments | $535.7M | 101.1% |
| Eliminations | -$5.9M | -1.1% |

The members sum to total revenue.

## Income statement, as filed

| Line | FY2025 | Of revenue |
|---|---:|---:|
| Revenues | $529.8M | 100% |
| Cost of revenues | $166.2M | 31.4% |
| Product development | $177.3M | 33.5% |
| Sales, general and administrative | $380.1M | 71.7% |
| Depreciation and amortization | $417.9M | 78.9% |
| **Total operating costs and expenses** | $1.1B | 215.5% |
| **Loss from operations** | -$611.7M | 115.5% |
| Interest income | $31.8M | 6.0% |
| Interest expense | ($61.5M) | 11.6% |
| Gain from revaluation of investments in equity securities | $598.9M | 113.0% |
| Income / (loss) from equity method investments | -$24.3M | 4.6% |
| Other income / (loss), net | $80.6M | 15.2% |
| **Net income / (loss) before income taxes** | $13.8M | 2.6% |
| Income tax expense / (benefit) | $4.0M | 0.8% |
| **Net income / (loss) from continuing operations** | $9.8M | 1.8% |
| Net income / (loss) from discontinued operations | $72.7M | 13.7% |
| **Net income / (loss)** | $82.5M | 15.6% |
| **Net income / (loss) attributable to Nebius Group N.V.** | $82.5M | 15.6% |
| Basic (in dollars per share) | $0 | 0.0% |
| Diluted (in dollars per share) | $0 | 0.0% |
| Basic (in dollars per share) | $0 | 0.0% |
| Diluted (in dollars per share) | $0 | 0.0% |
| Basic (in dollars per share) | $0 | 0.0% |
| Diluted (in dollars per share) | $0 | 0.0% |
| Basic (in shares) | 242,531,291 |  |
| Diluted (in shares) | 247,679,946 |  |

## History

| Period | Revenue | Operating income | Net income | Operating cash flow | Capital expenditure | Free cash flow |
|---|---:|---:|---:|---:|---:|---:|
| FY2011 | $622.2M | $218.5M | $179.3M | $242.1M | $172.9M | $69.2M |
| FY2012 | $947.1M | $311.2M | $270.7M | $379.6M | $131.2M | $248.4M |
| FY2013 | $1.2B | $392.2M | $411.7M | $449.3M | $150.8M | $298.5M |
| FY2014 | $902.4M | $272.4M | $302.5M | $276.3M | $172.0M | $104.3M |
| FY2015 | $820.4M | $131.6M | $132.8M | $268.6M | $179.0M | $89.6M |
| FY2016 | $1.3B | $211.8M | $111.8M | $419.6M | $158.7M | $260.9M |
| FY2017 | $1.6B | $226.3M | $150.3M | $412.7M | $215.1M | $197.6M |
| FY2018 | $1.8B | $300.3M | $660.1M | $406.1M | $407.7M | -$1.6M |
| FY2019 | $2.2B | $313.3M | $142.0M | $562.8M | $260.5M | $302.3M |
| FY2020 | $3.0B | $220.0M | $326.9M | $441.3M | $332.3M | $109.0M |
| FY2021 | $4.8B | -$178.7M | -$197.2M | $125.1M | $600.6M | -$475.5M |
| FY2022 | $13.5M | -$158.0M | $745.6M | $697.0M | $14.6M | $682.4M |
| FY2023 | $9.8M | -$285.7M | $241.3M | $829.8M | $82.9M | $746.9M |
| FY2024 | $91.5M | -$399.6M | -$641.4M | $245.6M | $807.5M | -$561.9M |
| FY2025 | $529.8M | -$611.7M | $82.5M | $384.8M | $4.1B | -$3.7B |

Latest trend (the newest full year against the year before; a reading, not a forecast):

- Revenue: +479.0% (year before +833.7%): slowing
- Operating income: — (year before —): too short a history to read
- Net income: +87.1% (year before -365.8%): accelerating
- Free cash flow: — (year before -175.2%): too short a history to read

## Key insights

### Depreciation alone outweighs the 68.6% gross margin

Depreciation ran at 78.9% of revenue against a 68.6% gross margin: the fleet's wear costs more than renting it earns after running costs.

Cost of revenues was $166.2M, 31.4% of revenue, down from 47.8% the year before, which leaves a 68.6% gross margin. That line excludes the equipment itself. Depreciation and amortization, reported separately, was $417.9M, 78.9% of revenue, against 84.3% a year earlier. The filing ties the increase to server and network equipment and infrastructure systems. _(from the filing)_
Revenue grew 479.0% and depreciation 442.0%, nearly in step, because the asset base grew with sales. A new fleet still filling with customers depreciates in full from installation, so depreciation running above the gross margin is expected early. The test is whether revenue on installed GPUs pulls ahead of the next waves of equipment. _(analysis)_
Depreciation rests on the useful lives the company assigns to its infrastructure, an estimate the filing names as a risk. A shorter assumed life would raise this line and a longer one would lower it, without changing the cash already spent. _(analysis)_

### Operating cash funded 9.5% of equipment spending

Capital expenditure of $4,066.0M was 767.5% of revenue, and operating cash flow of $384.8M covered 9.5% of it, so outside money funds the build.

Capital expenditure was $4,066.0M, against $807.5M in FY2024, and free cash flow was -$3,681.2M, a free cash flow margin of -694.8%. Operating cash flow was $384.8M, positive despite the $611.7M loss from operations; the filing credits advances from strategic customers. _(from the filing)_
Debt has started to carry the build. Interest expense was $61.5M against none the year before, 11.6% of revenue, while interest income fell to $31.8M from $63.6M as cash went into equipment. The company says it must keep raising equity and debt and expects to pursue secured financing such as asset-backed structures. _(from the filing)_
At this scale the business is a financing exercise as much as an operating one: what the equipment earns over its life has to cover both its cost and the interest on the money that bought it. _(analysis)_

### Net profit came from the ClickHouse stake, not GPUs

A $598.9M revaluation gain, mostly ClickHouse, offset 97.9% of the $611.7M operating loss and turned the group to $82.5M of net income.

The gain from revaluation of investments in equity securities was $598.9M, which the filing ties almost entirely to ClickHouse and to prices set by third-party investment in it. Other income added $80.6M. Pre-tax income was $13.8M and net income from continuing operations $9.8M. _(from the filing)_
Discontinued operations added $72.7M, against a loss of $289.4M the year before, mainly a gain on deconsolidating Toloka. That is 88.1% of the $82.5M net income. Diluted earnings per share were $0.33, against -$2.28. _(from the filing)_
Neither the revaluation nor the deconsolidation gain comes from renting compute, and neither recurs on a schedule. The loss from operations, which widened to $611.7M from $399.6M, is the better guide to the core business. _(analysis)_

### The cost base shifted from people to machines

Depreciation rose to 36.6% of operating costs from 15.7%, while sales and administrative costs grew 48.8% against revenue growth of 479.0%.

Total operating costs and expenses were $1,141.5M, up 132.4%. Within them, depreciation and amortization was $417.9M, 36.6% of the total, against $77.1M and 15.7% in FY2024. Sales, general and administrative costs rose 48.8% to $380.1M and product development 54.4% to $177.3M. _(from the filing)_
Those overheads fell sharply as a share of revenue: sales, general and administrative to 71.7%, down 207.5 points, and product development to 33.5%, down 92.0 points. The loss from operations still widened to $611.7M from $399.6M, an operating margin of -115.5%. _(from the filing)_
Staff-driven costs are spreading over a larger revenue base, the leverage a cloud model promises. Equipment costs are not yet doing so: they scale with capacity installed, so the path to an operating profit runs through filling the fleet rather than further overhead savings. _(analysis)_

### Competitive edge

- **Hyperscaler contracts turn a speculative build into a contracted one** Multi-year agreements with Microsoft and Meta, which the filing calls multi-billion dollar, give the build-out visible revenue to finance against and customer advances to fund it.
- **Retained stakes in spun-off businesses act as a funding reserve** Stakes kept in ClickHouse and Toloka produced a $598.9M revaluation gain and $72.7M from discontinued operations, assets that could help fund the core cloud.

### What to watch

- **The build-out depends on raising more capital** With free cash flow at -$3,681.2M and interest expense new at $61.5M, the company says it must keep raising equity and debt, which can dilute shareholders.
- **Older GPUs may lose price before they are paid off** With depreciation at 78.9% of revenue, the filing's warnings on pricing pressure for older chips and on estimating useful lives bear directly on profit.
- **Delivering contracts larger than any it has run before** The filing calls capacity for hyperscaler customers critical, ties it to sites, power and NVIDIA supply, and cites limited experience with long-term contracts this large.

## Investor view

**Nebius spent $4.07B building GPU capacity this year, ahead of the revenue that capacity is meant to earn**

### How it makes money

Nebius rents computing power for AI as a cloud. Customers either pay on demand, pay-as-you-go, or sign reserved-capacity contracts for a fixed block of GPU time. A newer managed inference service charges per token processed rather than per GPU hour. This AI cloud, the Nebius segment, brought in $480.3M, 90.7% of the group's $529.8M of revenue. _(from the filing)_
The customer base runs from individual developers, startups and AI labs to large enterprises and software vendors. Late in the year the company added long-term committed contracts with two hyperscalers, Microsoft and Meta, which the filing describes as multi-year, multi-billion dollar agreements with attractive economics and financing terms. Most earlier customer engagements, it notes, were relatively short-term. _(from the filing)_
The rest of revenue is small. TripleTen, an online tech-skills education business, earned $54.1M, 10.2% of revenue. Avride, which builds delivery robots and robotaxis, earned $1.3M. The group also holds a significant minority stake in ClickHouse, the database company it spun off, which moves net income rather than revenue. _(from the filing)_
The cost of running the cloud sits in two places. Cost of revenues was $166.2M, 31.4% of revenue, which leaves a 68.6% gross margin. That line excludes the main cost of owning GPUs and data centers: depreciation and amortization of $417.9M, 78.9% of revenue, is reported separately below it. _(from the filing)_

### What shifted

Revenue rose 479.0% to $529.8M from $91.5M. The company attributes the growth mainly to scaling its global infrastructure footprint and deploying next-generation GPUs: new data center locations added capacity and supported new customer onboarding, including, later in the year, the long-term hyperscaler agreements. _(from the filing)_
Depreciation and amortization rose 442.0% to $417.9M from $77.1M, which the filing ties to server and network equipment and infrastructure systems. Because the asset base grew almost as fast as sales, depreciation fell only modestly as a share of revenue: 78.9%, against 84.3% the year before. _(from the filing)_
Overheads grew far more slowly than revenue. Sales, general and administrative costs rose 48.8% to $380.1M and product development rose 54.4% to $177.3M, so their shares of revenue fell by 207.5 and 92.0 points, to 71.7% and 33.5%. Even so, the loss from operations widened to $611.7M from $399.6M, an operating margin of -115.5%. _(from the filing)_
Net income turned to $82.5M from a loss of $641.4M, and the swing came from outside operations. A $598.9M gain from revaluing equity securities, which the filing ties almost entirely to ClickHouse and to prices set by third-party investment in it, nearly offset the $611.7M operating loss. Discontinued operations added $72.7M, mainly a gain on deconsolidating Toloka, the data business spun off from the group. _(from the filing)_
Cash tells the build-out story. Capital expenditure was $4,066.0M against $807.5M a year earlier, 767.5% of revenue, and free cash flow was -$3,681.2M. Operating cash flow of $384.8M stayed positive despite the operating loss, helped by advances from strategic customers. Interest expense of $61.5M appeared against none the year before, while interest income fell to $31.8M from $63.6M as cash went into equipment. _(from the filing)_

### Risks in the filing

Capital. The company says its core business is capital-intensive and not yet profitable, so it must keep raising equity and debt, and it expects to pursue secured financing such as asset-backed structures. Future share sales and the conversion of its convertible notes could dilute existing shareholders. _(from the filing)_
Supply and capacity. Nebius relies on NVIDIA for its GPU chips and on a small number of suppliers for key hardware, and on third parties for power and network connectivity. Its growth depends on continuing to expand its data center footprint, finding sites and reliable power on acceptable terms. _(from the filing)_
Demand and competition. A slowdown or deferral of AI spending, or excess capacity across the industry, could leave built capacity underused. More efficient AI models could reduce demand. Larger, better-funded rivals compete for the same customers: specialist AI clouds such as CoreWeave, Crusoe and Lambda, and the hyperscalers AWS, Google Cloud, Azure and Oracle. The company also has limited experience delivering long-term contracts of the size it signed this year. _(from the filing)_
Legacy, control and reporting. The group divested its Russian businesses, and that history could slow onboarding with counterparties and banks. Class B shares carry ten votes each against one for Class A, and a trust whose beneficiaries include the founder's family holds a majority of the voting power, making Nebius a controlled company. The company has also identified two material weaknesses in internal control, over fixed assets and TripleTen revenue. _(from the filing)_
Two of these risks are already visible in the numbers rather than hypothetical: the dependence on outside capital, since spending on equipment ran several times revenue and free cash flow was deeply negative, and the weight of asset lives, since depreciation is already close to the size of revenue. The demand and competition risks have not yet shown up, with revenue growing far faster than costs other than depreciation. _(analysis)_

## Founder view: mechanisms

### Build capacity ahead of revenue

Nebius buys GPUs, servers and data center space before the revenue that will use them exists, betting that demand for AI compute will absorb whatever it can stand up. In a market where capacity is scarce, the provider that has racks powered and ready wins the customer. The cost is that every dollar of equipment starts depreciating on installation, whether or not it is rented. _(analysis)_

### Gross margin that excludes the fleet

In a rental business built on owned equipment, the main cost is the equipment wearing out, not the electricity and staff to run it. Nebius reports depreciation on its own line, outside cost of revenues, so the gross margin describes running costs only. The real unit economics are revenue per GPU against the running cost plus that GPU's depreciation. _(analysis)_

### Anchor contracts fund the build

A few large, long-term committed contracts turn a speculative build into a contracted one. They give lenders and investors visible revenue to finance against, and the filing describes the hyperscaler agreements as carrying attractive financing terms. Advance payments from such customers can fund equipment before the revenue is recognized. _(analysis)_

### Spun-off stakes as a treasury

Nebius kept minority stakes in businesses it separated from the group, ClickHouse and Toloka, instead of selling them outright. When outside investors put money into those companies at higher prices, the stakes are revalued, and they can be sold or borrowed against to fund the core business without issuing as many new shares. _(analysis)_

## Member research

Signed-in members read, on the page: what Nebius's numbers depend on from here, and the playbook behind each mechanism (what needs scale, what transfers, how to test it, the metric that would show it).

## Sources

- Nebius 20-F for the period to 2025-12-31: https://www.sec.gov/Archives/edgar/data/1513845/000110465926052948/ (2026-04-30)
- Nebius newsroom: https://nebius.com/newsroom

Methodology business-lens-1.0 · schema 1.2.0 · run business-lens-2026-11-02 · as of 2026-11-02