Borrowing costs strongly affect the economics of AI infrastructure buildouts. A startup with public market status can still face high financing rates because banks view the AI-related economy as risky. Differences between single-digit annual interest rates can translate into large margin impacts over multi-year contracts. Nebius reported rapid revenue growth in Q1 FY2026, with strong growth in its AI Cloud segment and improved adjusted EBITDA margin. Results were influenced by a large non-cash gain from revaluing a ClickHouse stake, while adjusted losses widened when excluding that item. The company showed high capital intensity, with significant capex funded partly through operating cash flow driven by customer prepayments and additional financing through convertible notes. Plans include expanding contracted power capacity by year-end 2026.
"For a startup like us with all of our public NASDAQ status and size, we're still a young startup for the banks working in a very risky new part of the economy. If you want to get your financing for, I don't know, 10, 12%, you can get it. It depends on the size, but it kills all of the economy. People maybe don't understand the difference between 6% annual interest and 9% annual interest, 10% annual interest. They see it as a 4%, but on a 5-year contract, it's like 20% of extra margins. It's a huge difference. So we're looking for affordable financing in pretty big volumes, tens of billions, probably hundreds of billions of dollars."
"Nebius reported Q1 FY2026 revenue of $399.00 million, up 279.6% YoY, but missing the consensus $593.19 million estimate by 32.74%. The core Nebius AI Cloud segment grew 841% YoY to $389.70 million, with adjusted EBITDA margin nearly doubling QoQ to 45%. Headline EPS of $2.11 versus -$0.79 consensus was inflated by a $780.60 million non-cash gain from revaluing the company's ClickHouse stake. Excluding that, the adjusted net loss widened to $100.30 million."
"In Q1, capex ran $2.47 billion against $2.26 billion of operating cash flow, itself driven by $3.198 billion of customer prepayments. Cash from financing reached $6.30 billion. In March, Nebius priced $4.3375 billion in convertible notes (1.250% due 2031 and 2.625% due 2033). Volozh plans to fund contracted power exceeding 4 GW by year-end 2026, plus"
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