Nebius Q3 2026 Earnings Call - NEBIUS GROUP NV

Welcome to Nebious Group's Q3 2026 Earnings Conference Call. The presentation will be followed by a Q&A session. If you'd like to ask a question, you can click the Ask A Question tab in the top right of the live stream player. Then just type in your question and click Submit. You can submit questions at any time during the presentation, and the Nebvious management team will try and answer them during the Q&a portion of the call. I will now hand it over to Geli Naftanovic, Head of Investor Relations, to start the call Hi, everyone, and welcome to Nebius' third quarter 2026 earnings conference call. Joining us on the call today, we have our CEO, Arkady, our CFO, Dado, and the broader Nebious management team. Before we get started, I'll quickly cover the safe harbor. Some of the statements that we make today regarding our business operations and financial performance may be considered forward-looking. Such statements are based on current expectations and assumptions that are subject to a number of risks and uncertainties. actual results could differ materially please refer to our form 20f for a list of our risk factors we undertake no obligation to update any forward-looking statements during this call we will present both gap and non-gap financial measures a reconciliation of non-gaap to gap measures is included in today's earnings press release all earnings related documents are distributed and available to the public through our investor relations website which can be found at nebius.com. And now, I'd like to turn the call over to Arkady. Thanks, Gili, and welcome everyone to our call today. Last quarter, I gave you a better understanding of our business model. This quarter, I want to show you how it's working. First, just to say that Q3 was a record quarter. In a market growing like this, it should be. Capital markets have been unsettled lately, two questions are being asked our whole industry. How fast can AI build out happen? And who will pay for it? These are important questions. The way I think about it is simple. The demand for AI is real and substantial. Everything else, like building the capacity and financing it, is just a task. Tasks can be hard, but they all can be solved. Demand is strong. Our customers are committing to us for longer, at higher prices, and they are paying more upfront. Prices kept rising. Q3 agreements closed above $25 million per megawatt, another step up from the $20-25 million per MW we achieved in Q2. Our customer agreements are getting larger in size. Three months ago, we reported our first billion-dollar-plus contracts. In Q4, we were already signing multi-billion-dollar agreements for our AI cloud. The base of that demand is broadening, too. AI natives are scaling with us. Enterprise AI leaders like Databricks, Datadog, and Snowflake signed multi-gay agreements with us for the first time during this quarter. So everyone knows that demand is exceptional right now, but I also want to talk about how we are preparing for the future. As you remember, we sell on three horizons, and we choose the best mix between the three. First is on sport and short-term at a premium price. Another is one to three-year contracts, and this is our core business. And a limited number of five-year agreements that diversify our contract tenures and further help us to finance our build-out. The second and third are covered by prepayments. Two things are important here. How much of our capex they cover and the payback period for our new capacity. Let me explain this in more detail. A customer pays today for capacity that comes online in the next 12 months. Why does they do it? First of all, they want to be sure they reserve their capacity, and they want reserve today's price. The most important change is that the prepayments for new contracts now cover more than 100% of the capital needed to bring this contracted capacity online. Just to remind you, last quarter it was 50 to 60%. As a result, payback in Q3 shortened to one year and seven months from one year, 10 months, a quarter earlier. So our customers are paying more, they pay earlier, and they committing for longer. And we are getting our capital back faster. Now, let me turn to how we achieve this and how it allows us to grow profitable. First, how we sell. We are creating new tools to find the real price of what we're selling. This include reserve capacity auctions, public spot pricing, and short-term capacity. The market tells us what our capacity is worth, and we sell at that price. And the second thing that helps our margins is of course our low cost. We build the full stack, both the compute infrastructure and the software on top of it. We have built Nebulous layer by layer since the start. First for large-scale training, then for inference, and now for post-training and agentic workloads. Customers start where it suits them and then scale with us as their needs evolve. Our managed inference platform, Token Factory, shows this is working. Token factory is on track to reach multi-hundred-million-dollar ARR at beta margins because we use our own GPUs, not rendered capacity. While our prices reflect the premium value to our products, our cost structure is one of the lowest on the market. We build the infrastructure ourselves. We design and build our racks, we design and built our storage, and these costs will also fall further as more of our capacity comes from our own sites. The premium prices for our products and the low cost makes our margins. This is what we have always focused on, to build a healthy and profitable business. And having such margins is fundamental part of that. Our margins are also supported by low cost of funding. On top of prepayments, we have the financing that we can raise on our investment-grade contracts. Together, all this reduces our costs, expands the market we can serve, and lets us go after higher-value customers. That is what takes us to profitability. And we expect to become pre-tax profitable in the fourth quarter of 2027. And this is important. At some point, supply and demand in our industry will be more balanced. When that happens, we will be ready. We invest in three things at once, the capacity, the software platform, and go-to-market that meets customers where they are. All three matter equally. But capacity is the foundation of this business. It defines our scale. Building at this scale is hard and delays are part of our industry right now. We are not immune. For example, some of our co-location sites, including New Jersey, are behind schedule. Customers have been kept informed and none of that capacity is canceled. Some of it has shifted to 2027. This means that a portion of this year's planned revenue moves into the start of next year. But with our own sites, we remain on track and even ahead of schedule. That's important because going forward, Most of the next gigawatt we're bringing online will be on our own sites, where our own team does everything, land, power, shell, hardware, software, and operations. This gives us confidence for next year. We're building the next Gigawatt. This makes us a different scale of a company, and we're well-funded to make it happen. The payments will be over 10 billion in 26 and should increase significantly next year. We will have access to financing on attractive terms against our investment grade contracts. And we also have our strong balance sheet and potential external finance. We have strong confidence in 2027 and are building beyond that. There will be ups and downs in the industry as in any industry. We are building a business and a financial model that can thrive in good markets and be resilient in challenging times. We expect revenue to quadruple next year on a conservative view of the pace of our build-out, and we expect to reach pre-tax profitability in the fourth quarter. So to close, the prospects for our business have never been better. Our confidence in what we're building has not changed, but we'll keep going. With that, let me hand it over to our CFO, Gado. Thank you, Arkady. We delivered a strong third quarter. Revenue was up 571% year-on-year, with the majority driven by capacity we added in the last 12 months. EBITDA margin expanded both quarter-over-quarter and year-over year. We also strengthened our funding position. Prepayments became the standard structure of our agreements, and we expect $10 billion in committed customer prepayments in 2026. Our long-term agreements with Microsoft and Meta can be used for further asset-backed financing. And our balance sheet held $7.4 billion of cash and cash equivalents at the end of the quarter. In addition, cash generated from operation grows with every tranche of capacity that comes online. I will cover our third quarter results, balance sheet and funding needs for CAPEX, then our updated 2026 guidance and our initial outlook for 2027. All comparisons are year over year and less noted otherwise. Let's start with revenue. Group revenue was $980.8 million, up 571% year-over-year and 68% from the second quarter. Nebius AI Cloud revenue was 973.8m, up 643% and accounted for approximately 99% of group revenue. In the third quarter, we recognize approximately $325 million of non-recurrent revenue as part of our asset-light model. This reflects an initial phase of a rollout as we engage partners to deploy Nebius Architecture and the Nebious AI platform on capacity that they fund. Under these partnerships, we earn revenue, both when we enable our architecture and platform on a partner's capacity and when the capacity comes online. As our asset-light footprint grows, we expect revenue from these activities to become a more regular part of our business. Turning to EBITDA. Group-adjusted EBITD was $465.8 million compared with negative $5.2 million a year ago and $236.2 in the second quarter. Group adjusted EBITDA margin was 47.5%, up from 40.6% in the second quarter of 2026. Our Nebius AI Cloud business delivered an adjusted EBIDDA margin of 53.2%, up from 50% in this quarter. The difference between the Group and the AI Cloud adjusted EBITA margin reflects our investments in AVI-RIDE and Triple10. Now, to balance sheet and funding. Prepayments became the standard structure of our agreements in the quarter. More than 90% of the contract value we signed in Q3 carried a prepayment and customers prepaid a larger share of every agreement. The weighted average share of prepayments to total contract value rose by approximately 20 percentage points from the second quarter. which is, as Arkady described, more than 100% of the capex behind our Q3 wins, up from 50% to 60% in the second quarter, and this has continued to rise on agreements signed so far in Q4. These prepayments cover the full capex, which includes costs such as GPU networking. Prepayments now come with agreements on capacity we have already deployed, as well as on new so they fund the build-out as a whole, rather than one project at a time. Because we choose the mix of contracts we sign, by customer, by duration, and by the prepayment attached, we also choose how much external capital we need, and when we go for it. That is what lets us be opportunistic, rather Than dependent. We race where the cost and the timing are right. We weighed every source against cost of capital, delusion, and the health of our balance sheet. And we are not reliant on any single route to fund 2027. In July, we closed a $775 million facility, the first under our asset-backed financing framework. That facility was secured against long-term customer agreements with investor-grade customers at SOFR plus 250 points. These terms and the flexibility we have on when to tap into such facilities represents why we signed such deals. We have over $40 billion in such similar commitment revenue and see this as a repeatable framework. in august we also completed at 5.75 billion dollars convertible senior notes offering and also in the quarter under our at the market program we issued 4.6 million class a shares at a weighted average price of 229.1 dollars per share for net proceeds of approximately 1.0 billion dollars 7.6 million shares remain available the atm remains a flexible tool not a commitment turning next to capex capital expenditures were approximately 7.3 billion dollars in the quarter driven by server and network equipment and by our own data center expansion we expect to leverage the range of financing vehicles available to us now our outlook we are updating our 2026 guidance and introducing our initial view of 2027 on the same basis what we see today and a more prudent view on timing across all of our sites for 2026 as arcadi mentioned we are seeing some third-party capacity shifts into the second quarter of 2027 we now expect revenue of 3 to 3.2 billion dollars compared with our previous range of three to three point four billion dollars annualized run rate revenue reflects the same shifts in timing we now expect arr to exceed 7 billion dollars for the month of february even before new jersey ramps up to full capacity after that update we will no longer guide to arr as our business is scaling into the next phase this metric does not reflect the full scope of our base it is based on one month of the quarter and we don't build our business around any one month as we scale new partnerships this revenue can add shoppiness to arr until such revenue ramps up and we are also shifting to the next phase where our business is based on revenue and profitability as we are growing and getting mature we believe revenues and pre-tax earnings are the most appropriate way of evaluating us we continue to expect a group adjusted evident margin of approximately 40 percent unchanged from our prior guidance capex for 2026 is now expected to be around 27 billion dollars up from 20 to 25 billion dollars previously contracted power remains unchanged We continue to expect 5 GW of contracted power by year-end, up from more than 4 GW today. Demand has never been stronger and the changes in our 2026 guidance are just about timing, not demand. Now, turning to our 2027 outlook. We expect revenue to increase by around 4 times to 12 to 13 billion dollars. We also are excited to have a path to profitability. We now expect to reach break-even on a pre-tax earning basis in the fourth quarter of 2027, on five-year depreciation of our servers and network equipment, as our own sites ramp through the year. We expect capex of 40 to 45 billion dollars, sized for more than a gigawatt of new capacity, a majority of which will become online from own sites that hold a stronger margin profile than co-location capacity. To fund this ramp, I want to highlight that we expect that 75% to 85% of our capex range will be funded by prepayments and asset-backed financing of our current investment-grade contracts. We expect that, in 2027, customer prepayment will account for 17 to 20 billion dollars. This number is not a ceiling. depend on how we allocate capacity among contract types and we set that mix for the best balance of price, duration and prepayment. We also have a very healthy balance sheet giving us the flexibility to be opportunistic with external capital when it is cost-effective to do so. We enter 2027 from a position of strength, a clear path to break-even in the fourth quarter, a funding plan built on our customers our existing contracts and our balance sheet and an outlook we are confident we can deliver we will keep scaling with the same discipline we started with and with that i will turn the call over to gilly for q a to ask a question you can click the ask a question tab in the top right of the live stream player. Then just type in your question and click submit. You can submit questions at any time during the presentation and the NBS management team will try to answer during the Q&A portion. I'll now pass it back to the NMS management team for a Q&a session. Thanks operator. Our first question is from Alex Duvall at Goldman Sachs who asks if you need more cash on top of current cash to what extent could that come from prepayment given conditions in some of the debt markets? Mark. Thank you, Alex. To answer the question directly and simply, yes, we could tap prepayments to shore up any additional cash requirements that we have. But let me give a little bit more of a detailed answer so that you can get a sense of how prepays are playing a role overall in our execution. As you may recall, back last year, we landed a couple of landmark deals, Microsoft and Meta, if you may remember. Both of those came with significant prepay. And we've known that prepayments are a fundamental part of our business ever since. For our AI cloud business, we started to actually secure prepayment back in Q1 of this year. And now they are a standard structure of our agreements with more than 90% of the contract value we signed in q3 carrying a prepayment so how do we get such prepayments there are three components first we have recognized we are recognized as a market leading platform sought by ai builders who are willing to pay a premium for our reliability and service second we said last quarter that we have the demand and could sell all our capacity at current terms but instead We were holding back to secure better terms, and we were able to do so. That's what we're experiencing now as we've raised prices, expanded prepayments simultaneously. Third, our absolute dollar amount of the prepayment translates to higher percentages of CapEx due to our overall approach to managing our cost structure to a lower absolute value. Higher prepayments on lower costs has resulted this quarter in greater than 100% coverage of the full CapEx, including data center costs. By the way, an important factor that may not be obvious is that we are receiving prepayment long before delivery. I should also mention that prepays also apply to capacity we already own, so they help fund our overall buildup. I hope you recognize that our overall prepayment program provides us great flexibility in responsibly financing our business going forward. And as you called out, Alex, it gives us the lever that we may need at times in order to be able to shore up cash requirements. I think Ophir might be able provide some additional insights in the overall financing utilizing prepayments. Thank you, Mark. I think that you covered it quite well, but at the end of the day, when your prepayment on your contracts covers more than 100% of the capex, you're in a great position. and when you are making the allocations between the various type of contracts you have the flexibility to take into account also the market the capital market conditions so in periods where the interest rates for example for corporate level debt will be high we may decide to do to allocate our capacity differently provide more for longer-term contracts receiving a lot of prepayments covering our capex needs if market conditions will change we may be very much opportunistic with a corporate level debt or other instruments and then keep more of the capacity for a shorter period of time so we have a ton of flexibility and we feel we feel that this result this quarter result both in q3 and what we see in q4 about the prepayments give us the ability to finance our business in a very attractive way we have another question from alex duval can you contextualize how nebius works with local governments and communities in places like texas can your practices help mitigate deployment issues tom yep all right thanks gillian thanks alex for the question um so yeah so specifically with regards to texans we don't currently have anything there but i can definitely speak to the half dozen states or so where we have existing operations or where we're building and as of today we don't see in or anticipate any meaningful impact on timelines coming from the shift in the political landscape um but i guess just to give some also some broader context because obviously this is a topic that we pay very close attention to and it's been the subject of a lot of discussion and i think that the questions around ai and how we see it the questions are on ai and towards data centers in particular they haven't just been coming from the democrats actually so your questions have been coming very much from both sides and by the way we think many of the questions are very legitimate and deserve answers and we try to give those answers um so we don't see that the overall trajectory of sentiment has changed um since since the elections questions will continue to be asked and it's on us to ensure we're showing up and we engage very actively with state leaders with communities and so on we try and be very transparent explain what we're doing and to explain the benefits that we can bring to communities so and we think it's something that we do well and i'm sure we'll continue to do so thanks tom next we have one from rob oliver baird what is the financing strategy for 2027 how much additional funding is required to support the current backlog and data center build out data thank you rob um actually you know mark and of fear has already shared quite a lot of details about our financing approach we have worked really really hard on our product and gtm offering to reach prepayments that enable us to cover over 100 percent of the capex we are getting this well in advance of the capacity we have also worked hard to have available tens of billions of dollars of investment grade contracts that will enable us to receive significant capital in asset back financing based on these contracts at very attractive terms at the end of the day these two factors will give us a lot of flexibility you should remember that we can allocate our capacity in the core business between the long-term contracts and the short-term contracts based on our capital needs so if for example the terms of in the capital market will not be attractive we can allocate more capacity to the long-term contracts if on the other hand we will have the ability the availability you know to raise capital at attractive terms we will be very opportunistic about it and we will shift more of those allocations at the end of the day prepayments are covering 100 of the capits and puts us in a very good place with respect to our financing needs look if markets in financing markets are not attractive we can do more core and long-term contracts unless on spot and short-term deliveries if we can raise more we can may and we can make allocate more to the short-time and spot market we have then the flexibility to optimize the mix to be in a position where you can cover 100 of of the capets, including data center, this is a very good place to be. Thank you, Dado. Daniel Wang from BNB Paribas asks us, can you provide more color on the underlying causes of the delivery delays at Vineland, and what other sites are impacted as the shareholder letter cited several delays across your co-location sites? Andre? Yep, thank you, Gide. Thanks, Daniel, for the question. So regarding the Vineland, the main reason for the delays are the power story there. So when we pivoted to the bloom generation in summer, the plan was that we will use for some time the temporary generation provided by the data one, while the bloom generation will be ramping up. In late Q3, DataOne decided to wind down the temporary generation faster than it was expected. So we are expediting the Bloom deployment as much as possible, but we still will have a gap due to this situation. Having said that, I just wanted to mention that we continue to deliver the new tranches to the Microsoft throughout the Q3, and we will continue to do so in November and December together with the power delivery. And the second point is that the Bloom is already providing basically electron degeneration as life and providing electrons on site. So it's just a question of ramping that up as soon as possible. Yeah. I would just probably add, as I said in my part before, this is one of the sites which we build, not ourselves directly, but with the help of third-party constructors. as you can expect many more things may go wrong in such sites in this case again in august we were told that the old plan of diesel generators will not work we came up with this new solution uh with bloom which we now implemented the power is on the site and of course it took a couple of months of delay but we're back on track and uh electricity is there the project is still going all the engineering teams of all the companies of the contractor microsoft hours work together there is a big respect between the teams uh so uh there will be actually we plan to use more bloom uh generation on our other sites and by the way uh this new solution probably will bring some additional power even on this site we'll discuss what to do with it and last but not least even with this delay you should know that we stayed in the range for our revenue guidance thanks andre and arkady next we have one from ryan lancis from morgan stanley how should we think about the level of demand in overall tam for these shorter duration contracts relative to longer-term dedicated capacity deals. Just trying to understand how we should think about where the mix between longer- term deals and short-duration ones are. Mark? Thank you, Ryan. Great question. I think this does tie together a couple of things that we're talking about today, and I'm going to try to zoom out a little bit. I think you get the sense that we are trying to be market-driven. In other words, meeting the customer where they are. We are not making markets. We are the beneficiary of the demand that Arkady shared earlier. As we've shared in the past, we maintain an opportunistic approach, and we have since been developing the means to get a stronger set of pricing and term signals. Between our auctions, spot pricing, and the longer-range discussions taking place with customers and prospects regarding their plans we are able to adjust our terms and offers in the market to optimize our outcomes so ultimately we are looking to drive the most beneficial offer relative to opportunity in the market today we now have systems in place so that we can adjust our execution to optimize for these outcomes and what we're seeking is the ability to to optimize between short-term consumption and long-term reserve. And as Dado tied together earlier between my and Ophir's responses regarding prepays, the same flexibility allows us to switch between the offers in order to optimize short-time revenue versus securing CapEx for future build. In the fullness of time, based on Arcadi's vision, we want to deliver this entire capability on a standard trading platform that allows us to algorithmically adjust our offers for all types of customers, from small, self-service customers, all the way to scale, sales-assisted enterprises. Thanks, Mark. The next question is from Tyler Radke from Citi. What are the key assumptions behind the preliminary 2027 revenue guidance? Dado? Thank you, Tyler. Well, revenue in the guidance for 2027, 12 billion to 13 billion US dollars. We are quite confident regarding this guidance. In order to reach this revenue guidance, we obviously will need two parts. We will need to have the capacity on time, and this capacity should be ready to be sold. On the capacity parts, we took a very, very conservative approach about the timing, which give us a lot of comfort as a matter of fact a significant part of this 2027 capacity will be owned by us and not by third parties which give us control over the delivery we believe that the capacity will come really on time which may even increase the potential rate of the revenues that that we have given as a guidance. And if so, the revenue, we expect that it could be higher. On the demand side, we have no doubt that this capacity will be solved. Clients are looking for capacity already for 2028, and prices for capacity in 27 are going up. So we do not see any risk on this front. So really overall, we are really confident with our guidance. Thanks, Dotto. And we have a follow-up from Tyler. Customers committed more than 12 billion of TCVs since the start of Q3, but RPO only increased 3%. How much of that TCV remains unrecognized in RPO, and what are the primary factors limiting reported backlog growth? Mark, do you want to take that one? Certainly. Tyler, let me start by giving you some broader context in terms of how this quarter unfolded and how that relates to the momentum that we're experiencing. We've been saying for multiple quarters that we can sell all our current capacity at current rates. That includes, by the way, as well, the ability to be able to sell future capacity at currently. What we didn't know was what's the right current terms. As we shared and I answered earlier, we've been conducting programs to get a better understanding of pricing including the auctions i mentioned and more recently our spot pricing programs we've also been talking to customers about their longer range needs and have a strong sense of the terms that are possible at the start of september we increased prices we added higher prepaid terms and contract duration to a new set of capacity that we we were releasing. As a result, since the start of Q3, customers committed more than $12 billion of contract value, including multi-billion dollar five-year agreements. In Q2, we shared that we landed four landmark deals. What followed was expansions by those same kinds of customers on longer terms, higher rates, and with more paid up front. Several of the agreements signed after the quarter end and show up on the next quarter's reported commitments. And importantly, the momentum that we're experiencing has continued into Q4. Thanks, Mark. We now have a question from James Kisner from Water Tower Research. token factory was a day zero launch partner for kimmy k3 in july and open router reported in september that open weight models accounted for 72 of its weekly token volume how do you see the long-term split between open weight and closed models and is a shift toward open weight a net positive for nebius roman yeah thank you james uh just a reminder uh we were day zero launch partner for much more models in Q3 and the beginning of Q4, including Meta, Reflection, NVIDIA, and others. And we absolutely see the adoption of open models accelerated even in the last few months. And that happens to bring AI at scale with the reasonable economics and quality improvements driven by the unique data and business knowledge that the companies have. and we build the future of the services to support our customers in this transaction we were always saying that the bigger diversification on the market uh would be uh the better for us and this diversification comes from open models or other ways to build specialized models for the particular use cases and why again why it's good for nebulous because it extends the universe of customers and partners we can work with and the value we can create more new products are built more enterprises bring ai into the production and we will continue supporting this adoption of the diversified models across the ecosystem Thanks Roman, James Fish from Piper Sandler is asking, you plan to add more than one gigawatt of computing capacity annually while taking a cautious view on commissioning timing. What are the main constraints between contracted power and customer ready compute? What milestones should investors track to assess whether deployment is on schedule? And are you changing how you're thinking about timing and messaging around them? Andre? Yep, I'll take it, thank you. So first of all, I would just say that the power and the timing connected to the power is just the main challenge for the industry and for us specifically. And the big change for 2027 for us is that most of the capacity that will be delivered uh to our cloud will be from our own sites and they believe that was already mentioned in a couple of answers but that gives us much higher confidence uh compared to the uh compared to the collocation projects because we develop the projects from the uh from the very start we have the full control over the pace and pace of the project in general so um and in in 2027 uh in 20 27 we have um alabama missouri um two projects in finland uh already being up and contributing to the revenues in 2027 and Pennsylvania that will be going up and probably contributing to their future revenues as well. And we are very confident in our executions on those sides. The other probably most commonly regarded bottleneck is the supply chain for the chips i mean gpu cpus network and storage we are in a very good position there there was never an issue before with us and i wouldn't expect that this will be an issue in 2027 we started working on that uh in early 26 for 27 basically on the r d and on the securing the supply we expected this to happen if we talk about the new generations and new chips that will come online in 2027 uh vr cpus there are robin's views and grok so we already have all the rnd integration and tests and benchmarks already done so we are very good to go from the technical standpoint And from the supply chain standpoint, we have confirmed all the supply for 27. And we are, again, here, we are also very confident in our execution. Thank you, Andrey. Our next question is from Arsenij Matovic at Wolf Research. Walk us through the $325 million of non-recurring revenue you recognize in Q3. What drives that large amount of revenue recognition to be now recurring in the asset-light model and executing that in the quarter going forward? Pierre? I can take that. Actually, we are very excited about this achievement. We think that it was one of the nicer achievements in this quarter. uh we are all the time exploring and adopting various mechanisms and partnerships to bring more capacity online one of them as we said before is the asset light model by that we are bringing capacity online with a nebulous architecture in this case some revenues are recognized when we lock this capacity the supply chain and the architecture and some of the revenues recognize where the capacity actually comes online and brings on to customers this is actually our first transaction but as the transactions will grow they will be and they will become more regular and part of our business then i assume that we will add that we relate them to our base model now i think that's a an important point to put about our revenue guidance for 2027. as we mentioned before we were very conservative about this guide for example we took a assumption a very significant assumptions about potential delays in the provision of capacity even though most of the capacity will be owned by us and we have much more control over the delivery times so if we will deliver on time then obviously things will look much better The same goes actually also for these partnerships and asset-light model. We were conservative on that. We didn't add any potential revenues from asset- light model and other partnership for 2027. If these opportunities will come alive and will grow, it will obviously have effect on our guidance as well. There are a few questions of things up here. We have a few question about the breakdown of AI natives versus enterprise, including this one from Rob. Rob Baird, looking at your new customer growth, can you walk through a breakdown of those customers, enterprise, AI native, and others? Mark? Certainly. Thank you, Rob. We don't actually break out our results by segment, but I'm happy to give the color that you're looking for. Enterprise momentum is picking up, but it is still well behind the overall potential that we all expect in the market. A great leading indicator that we're seeing in our results is our adoption by the leading data and infrastructure platforms that enterprises build on. As Arkady mentioned earlier, he shared a couple of examples where we have signed multi-year agreements with the likes of databricks datadog snowflake and palantir and with these we are actually experiencing what they are experiencing which is the enterprise adoption that's taking place around ai palantr might be a great example they selected nebius specifically as their preferred ai cloud to go to market with our token factory solution and ai cloud capabilities in in combination with their solution called Foundry that is an enterprise data and operational platform that allows them to combine our solutions with open models in order to serve sovereign AI requirements by major enterprises. I was able to actually join a bootcamp of theirs recently and it was really exciting to see the enterprise interest in the room around supporting the opportunity for enabling AI to automate and transform businesses. My confidence is very high about this type of opportunity and we're looking for the same type of opportunities with the other platform companies that I mentioned earlier. Simultaneously, we're actually seeing direct adoption as well with leading significant enterprise logos as enterprises are starting to bring on the first non-hyperscalar relationships oftentimes for the innovation that they're seeking to implement in their organization. Our confidences in future quarters, we'll be talking a lot more about the buildup in enterprise in our business. Thank you, Mark. Michael Donovan at Compass Point Research is asking, adjusted EBITDA margins stepped up to 47.5% from 41% in Q2. What drove it and how should we think about Q4, given a full-year margin of roughly 40% implies a step back to the mid-30s. Thank you, Michael. Our guidance for 2026 is to be around 40% EBITDA margin. Look, quarter to quarter, the margin moves with timing. New sites carry rent, power, and people before they build. And the third quarter had revenue recognized at a point in time does not recur in the same form. So I would not analyze any single quarter up and down. We do not guide quarterly, actually, but for 2026, as I said, we expect circa 40% EBITDA margin. What I can tell you about Q4 is that it has the full quarter of capacity that we added in Q3, further colocation phases coming online, and the New Year's Eve tranches delivered throughout November. and that it carries the cost of sites arriving ahead of the revenue so for 2027 actually the direction is up capacity on our own sites come online in the second half with no third party rent and the agreement signed in q3 and since a higher prices and larger prepayments turn into revenue so we are quite confident about our guidance for the 40%, around 40% EBITDA margin at the end of 2026 for the year. Thanks, Dado. Nehal Chokstui from Northland is asking, what percent of the 12 billion of the TCV signed in Q3 comes from AI natives and large enterprises? Mark? Certainly. Thank you, Nehal, for the question um the high majority of the 12 billion dollars is coming from ai natives but i want to speak a little bit more granularly about it these are customers that i think we mentioned this but i want to reinforce it these were mostly customers that started somewhere else on our platform either coming from an auction or having already had deployed capacity for other workloads or requirements what's common to them though is that they're all scaling and what's also really interesting is the revenue momentum that they're experiencing so these are customers that are making significant commitments against scaling revenue producing opportunities that we're very privileged to be a part of and excited about their prospects and growth thanks mark we have a question that's coming in um what are the updates to the software stack given that's driving margins and acting as a moat versus competitors roman yeah thank you for the question uh let me talk a little bit about uh token factory Token Factory is a price-per-token and sold as a managed service with different SLAs from GPU hours infrastructure. It provides day-zero support for the new model that we already discussed, advanced routing and caching capabilities, variety of inference optimization techniques like custom kernels, quantization, and more. It also provides post-training capabilities and inference optimizations around it. This is our relatively new service that is growing very fast from the low base now. We are not looking in the margin product by product, but as we run in our own infrastructure, we have much better cost structure than any inference provider renting GPUs. And also, as Arkady told at the beginning, that is not as a later business. Nebios is serving customers with entire platform in the way that customer want. Q3 and the beginning of Q4 were the period of significant acceleration for our Nebio Stocking Factory. We activated our go-to-market organization around both large-scale training and inference workloads. A lot of customers, including Revolut, Hicksfield, Applied Compute, are combining different use cases on Nebulous and benefiting from the flexibility of integrated platform. TokenFactory is a day zero launch partner for leading open models that we've discussed and consistently delivers leading performance at independent benchmarks such as artificial analysis. But what is even more importantly, we see the same in the real customers' workloads. We help customers train and run specialized models at scale across use cases, different use cases including personal AI system, code generation, long-horizon enterprise agents. And Token Factory benefits from running on nebulous infrastructure with direct access to the latest and greatest GPUs. As an example, we'll be the first to support NVIDIA GROG 3 LPX new product. This progress is supported by aggressive investments in the team, including acquisitions we made, EGON and Clarify earlier, which are now fully integrated, and the most recent, InferEyes. SysRise brings leading model loading capabilities, which solves the cold start problem. And it's especially important for improving GPU utilization with spiky on-demand workloads. So this is the vertically integrated platform we are talking about. Everything runs on one platform. can expand from one product to the next and they can choose the optimal way to consume each workload with us. Thank you, Roman. This concludes our call. Thank you all for joining us this quarter. This concludes today's call. Thank you everyone for joining. You may now disconnect.