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2:01 Hello and good morning everyone. Welcome back. Today we have some special people here to discuss Nebus. Nebus is crushing it. We have some special guests. Um we have Manuel, we have Nate, and we have Daniel here. All covering various companies. Um I will link all of their profiles in the description in the pin comments. Great followers on X as well. Um, but today we are here to cover a very special company called Nebus that I do feel went under the radar. Might still be under the radar for us. Not because we talk about this on a weekly basis, I guess, but amazing quarter. Uh, amazing quarter. I'll I'll pull up actually the main the main slides. You want me to pull up the
2:48 press release first or the uh or the shareholder letter? >> Maybe the letter is fine. >> Yeah. I mean, it covers because the press release was a bit just with a few uh headlines. >> Yeah. >> All right. So, first up, good morning to the chat. Good morning to the chat. Today, we'll cover >> Good morning. >> Great morning. Yeah, we'll cover the report and the call. So, stay tuned for the call uh which starts I think in half an hour. >> Half an hour or so. Um, so Manuel, you want to >> I mean it was way better than I expected. Yesterday I posted a preview which was kind of trying to be down to
3:34 her and kind of set up low expectations for everybody based on a few things. Uh, mostly the deconolidation of towoka from the the group's numbers. But still even though they didn't include tolla they still crushed estimates and those estimates included tooka. So if they didn't include it it was it would be like a much larger bit. We reached positive adjusted a bit the for the core business in the second quarter which is ahead of plan and absolutely insane. just see the the group adjusted beta loss was just $21 million when analysts were expecting almost $60 million in loss. We raised the for uh the ARR guidance for the end of the year which I thought wouldn't happen because of I
4:22 mean management always uh showed that they're prudent. So I thought it would still be prudent uh in this regard especially after the New Jersey data center uh got delayed by about a month but it's still on track to meet uh the company's own expectations because that month was delayed because of data one and they had two emissions uh expectation let's say uh capex $510 million to be honest it's lower than I expected they're proving that they are really really efficient and to be honest what really excited me the was the the the guidance of megawatts capacity for uh the end of this year and the end of 2026 220 megawws. It's absolutely incredible.
5:07 They in the last earnings call they said they they were expecting about 100 megawatts in the end of this year. They they more than doubled the expectation and as I was saying uh before we go we went live I mean 220 megawatts is more than enough to cover the high end of guidance like $1.1 billion in ARR with 220 megawatts capacity is simply easy to achieve for them. So I wouldn't be surprised if we see another bump in the guidance uh next quarter assuming everything uh goes according to plan when it comes to the expansion of capacity and over one gigawatt in 2026 is just like stunning. I really have no words because one gigawatt is I mean it could bring billions of dollars in
5:54 revenue by as early as next year. And I mean their midterm target is mid single digit uh billion dollars in the midterm. I mean I'm guessing they'll reach that in the short term based on these uh on these expectations. Then it's also great to see the the new enterprise customers. We already knew about Shopify but Cloudflare is another uh very interesting name to join the party and just shows and validates the quality of nibbas. uh then I mean was again I think retraded to to have the autonomous vehicles uh as soon as this year uh as we know click house and Toka are not part of these of these numbers triple 10 uh triple 10 sorry had another great
6:40 quarter so I mean I couldn't really be more happy with this and it was way better than my own expectations. Yeah, I think the guide is what really we all cared about and they spleed out of the water. I mean, they raised their topline guidance or AR guidance at a midpoint of a billion, which we expected to be the top of the error guidance for the rest of the year. And so, we still two more quarters, right? So, like they can crush this. Um, yeah, I'm super impressed. 220 megawatts too by the end of the year is also insane. And then the CEO saying they're trying to secure more than a gigawatt next year, which they originally got it as a gigawatt. So, I mean, execution risk for me is the big is the big risk here. And they're executing like crazy. >> Yeah. And like I was saying before to
7:29 you guys, I I'm impressed by management in terms of how conservative they are. And I think this makes anyone overall more bullish on the company because um I I like a management team that I can trust and I know they are underrating that rather than overrating the business. So yeah, just wanted to add that. >> Yeah. And uh one gawatt if we go back to what Jensen told us he said that one gawatt data center could generate 40 to50 billion that's that's the number although analysts I see that analysts think it's closer to 25 billion but a one gawatt data center AI data center is a is a 40
8:14 $50 billion revenue for Nvidia chips wise. Yeah, >> you can imagine what type of revenue a company like Nebuse can start generating with a 1 gawatt. Okay, this is contracted power. Um, but still for the future where yeah, like B said, we're talking here about billions of dollars for a company that today, okay, today revenue, group revenue is 105 million, but AR R is probably going to come closer to a billion dollars for what we're getting right now. what we'll be getting in the future, you can multiply that by a couple of times. >> Yeah. Yeah. Exactly. >> Yeah. And this guidance not too long ago like you know they issued the first
9:02 guidance in October which was if I'm not mistaken between 500 and 7 uh $750 million by the end of 2025 in ARR. Then in December they raised it. No, it was um between 500 million and1 billion dollars. Then they narrowed the the range in December when they got the investment from Nvidia. Uh it went up to between 750 and $1 billion and now they went they raised it again and I expect as I said that they could raise it again. And as Danielle said, I really love the fact that Nibbius is conservative on the guidance and especially on the overall business and we know that because of for instance the GPU depreciation which uh is just a four-year scattle versus core wave which
9:48 uses a six-year scale and it's quite aggressive in my opinion. So I mean I really have no bad things to say about the management so far. I mean we're holding it for a few months. I mean, I'm holding it since January and I know you as well, Neil. Uh, but so far, I mean, I have no complaints and I expect to continue holding it for at least uh the short to medium term because I really feel that this price is still way way below than what it when it where it should be. I mean, my average cost is like $25, but I am not selling a single share because this is clearly just the beginning, man. It's it's I'm really pumped. I know I know you can see by my
10:34 reactions and and what I'm saying but I really have no words. You know this is a 12 13 maybe now a little bit more billion dollar company. Uh if corewe for example of course the scale at the moment is is a big difference. Corore is already 50 $55 billion company. So we can see the potential here, especially if you see the differences between the businesses Nebus offers. Well, I think when you buy Nebus today, you buy it for, of course, the core cloud business right now, but you get everything else as an extra. Um, I think we've talked about the fact that they own what was it 28% of Click House. Click House valuation wise can be worth already a couple of billion dollars. When they'll start raising money, I think the market will start rerating Nebus based on the percent that they own
11:21 from that company. And so although the price of the stock has of course more than doubled since the $21 uh the $25 that we've seen in in April and even at the start of the year just because it's up so much doesn't mean it cannot go up even higher. Just the market pays more attention to a quality company. And yeah, it's I mean they say it right here. Outside of a handful of big tech companies, only a few newcomers have both the technological expertise and the multi-billion dollar scale to play in this field. Nebus is one of them. This is a management team with plenty of experience. Um and yeah, they under promise overd deliver, which I love. >> Exactly. >> Yeah, 100%. And this is one of those positions, you know, as I start to learn
12:07 more about the company and as I got more and more bullish that I will probably continue to average up in. Um I think I I was one a really early penalty investor. I think that's one of the mistakes I made is not averaging up into strong execution winners. And so if they continue to execute and continue to outpace their guidance, I mean, I'll pro I'll continue to average up for sure. >> Yeah. I mean, crazy quarter. Crazy quarter. >> Yeah. Let's see what we can >> I mean one moment from from the one gigawatt of contract capacity if we infer the same revenue per megawatt from the 2025 guidance they they can be
12:55 making around four billion maybe in a a RR in 2026 late 2026 if we slap that the same multiple multiple that corwe as that's a 40 billion valuation. So of course we don't know how much of the power will be online by late 2026 of the one gigawatt but still I think I think the valuation even today is still way way below it should be especially when you add a ride and and the rest of the business. Yeah, I was looking to know the current ARR, but I don't think they >> I think they they probably tell us during the the call. They provide us
13:41 some more guidance in the call. Uh >> yeah, probably a presentation as well. >> Yeah, because usually Yeah, usually they do tell us like they ended April or they ended March at >> XYZ at least June because it's the end of Q2. So, >> uh, let's see. Did you see anything from the slide that you wanted to you wanted to share? >> Yeah, I'm trying to look to see if there's anything else. >> Honestly, I'm reading the end right now. >> Yes. So, the Blackwell uh ultra GPUs will be deployed in the UK and will be operational already in Q425. So, that's good. Two quarters from now already. Um,
14:26 I mean the expansions are even even with the delay um in New Jersey. I don't think I don't think that's that's an issue overall for the business. >> Yeah. >> Yeah. I don't think we can even consider it a delay because I mean it's a delay from data one but from nebuse I mean their their uh expectations or at least what they told investors was as early as summer and that's still happening because even with this delay it will be uh ready the first phase according to the CEO of data one by August 28th and that's still summer. So yeah, >> I was afraid that they could um not afraid but I was expecting that they would like uh maintain or reaffirm the the previous guidance because of that
15:14 because they still don't have that assurance but I mean it looks like they have much other levers to pull. I mean, we should expect another data center in the US as they already uh said before. I mean, and I'm expecting a few I mean, to reach over one gigawatt by next year, they should be announcing a bunch of new locations like in the in the next few months. I mean, it's it's impossible to get there without more locations. >> Yeah. >> Do you think they'll raise some money? >> Probably. I mean, I was I would like to ask that uh during the earnings call. I'm not sure if they're going to to reply because they they their earnings calls uh for those that never watched are like through Zoom, not like the the
16:00 regular earnings calls. So, you can put like a a question on the chat and they might answer it. Uh in the I'm not sure if it was the first quarter or the fourth quarter, they replied like one or two questions I I made, but I mean I made so many that some of them uh were not answered but I I I mean it wouldn't surprise me to see another raise uh because I mean the demand is there so why not raise if under favorable terms and that's my question would be around that like what's the preferable method of raising more cash like another convertible placements or I mean obviously excluding the using the subsidiaries because we know that's the preferred method because it's non-dilutive but I mean uh will
16:46 they issue like normal depths instead of convert uh of convertible ones or I mean other methods even uh they could even consider an offering if they reach like a huge share price. I mean that I wouldn't love that but it wouldn't surprise me and they are so efficient with using and deploying the cash they have that it would be probably long-term accreative for the business but I I was really wondering how are they uh managing their expectations in this regard and I mean I'm sure they're probably if they're going to raise cash they're probably already in conversations with someone so yeah maybe they can't give us too much caller but they can at least give us one or two ins let's Yeah, that would be my biggest question
17:31 too is, >> you know, what how they're going to raise money, the type of duty practices they're going to take to raise that money um and so on and so forth. I think that's obviously what everyone's curious about, right? Because they're guiding for even maybe over one billion or one gigawatt. I mean, yeah, they're going to need to build a lot more. So, >> yeah. Yeah, I I think they probably raise through a partnership with Uber to invest in a ride because we've seen Uber invest in many of these autonomous vehicles companies. So I think it's the most likely scenario for Q3 or Q4. >> Yeah, I think whether Yuber or uh Yundai because Yundai also invested in another AV company. I think it was motional or I
18:18 think it's motional the name. I think it's a it's a a joint venture that they did with another company. >> Yeah. But I think later on they acquired like Yeah, it's a joint venture with Aptive, but I think um later on they acquired up to 80% of the company. So now it's more uh still involved by the other party, but I think it's it's more like a Yundai venture. But I mean, if they own 80%, maybe they want to focus there instead of going for a ride. I don't know. But I I understand your point because Uber has been investing in so many AV companies that I've ride them would make perfect sense. I mean if they invest in Lucid, why not Fri? >> Yeah. I think yesterday you talked about
19:03 potentially I mean working with financial backers to basically contract fleets, invest in these types of these types of companies to increase their own supply but not have that capital risk on their balance sheet. a bit like a meta did with I think JP Morgan um to build out more data centers and I think they they said it as well co- financing options for the future which makes sense um which makes sense do you have do you have the link for the for the call because I remember last quarter I also tried to join never never did um >> oh let me check >> because if it's the same thing then we'll have the problem this quarter to follow the call um because >> something else to call out is SGNA is also down 10% year-over-year year, which
19:48 is just great. I mean, >> we wouldn't expect it to go up too much, but it's it's down 10% year-over-year, which is awesome. >> That's great. I didn't look at those. >> So, rather than it being 500% of revenue, it's now 65%. >> Yeah. Yeah. >> Which is hilarious. >> 500% of revenue. Like, imagine saying that. >> Yeah. I mean, cost of revenues as a percent is down to 29 >> a lot. >> Um, product development is down. So already 71% gross margins at this scale. So >> we've probably easily reached like 90% at a huge scale. I remember some bears were uh talking like a few weeks ago saying, "Oh, but
20:34 Nibbius has like 40% gross margins. How the hell will they succeed?" And I was like, "Man, they just started the playing capacity. You can't really look at this quarter's numbers. like next quarter they'll be completely different and the same for this one but still here I mean we have at least $100 million in revenue like in the previous quarters we had like 50 30 so it was really nonsense to draw some conclusions from those numbers and now like quarter over quarter the gross margin like almost doubled it was easy to predict but some people just can't get over their biases >> yeah I think people read also you know as I become more bearish and it's or bullish, sorry, bullish. Um I've been getting a lot more bearish comments just
21:19 about like oh they only do 50 million in revenue or it's like guys you're you're missing the forest of the trees here. Like the goal is not you know you're buying this for two years from now, right? Like you're not buying this because of current fundamentals. It's not it's it's not valued at 14 billion because they do 50 million a year revenue, right? It's because they're going to do billions a year in revenue and billions in profit. And so I think people >> Yeah. Yeah, they get a little ahead of themselves and start, you know, not seeing the force of the trees. >> Yeah. I mean, I can't find the link for the earnings call. >> Uh, I put it in the private chat. >> That's where that's what they linked. I don't know. >> Yeah, that's what that's what they link, but it I clicked on another link to bring me to the earnings call page, but that page does not exist. >> Um, cuz Yeah.
22:05 >> Yeah. I mean, that's just the link for the investors investor relations page. Yeah, cuz last quarter I remember I think uh Manuel, you were one of the only ones that had I tried to enter the Zoom but too many people entered the Zoom meeting for the call. >> Oh, really? >> Yeah. And uh we were I was kicked out basically >> because Yeah, cuz during the call they'll give us uh detailed guidance which >> could be >> could be very useful. Uh it's crazy. It's crazy how I mean the fact first of all transcript for this company takes like I think a day or two sometimes three days to actually appear. Uh the fact that the call is also like a mysterious game. We have to find out
22:53 where and how to join it to me to me tells me we're still early with this one. >> Yeah. >> Yeah. Yeah. Yeah. >> Absolutely. Um, but yeah, it would be great if somehow we find a way to enter the the earnings call. >> Yeah, I'm trying to figure out a way, but like you said, it's it's like a maze. >> Um, cuz in the press release, let's see. In the press release, Yeah. they just bring you >> Yeah. >> to nowhere. actually >> pretty much the webcast show. Maybe it'll show once it's 8 a.m. Eastern. >> Uh to register and participate in the
23:39 conference call or listen to the live uh audio, please visit. Okay, I visited the website but the website doesn't uh does not give me much. >> Yeah, maybe maybe it will pop up or not. I mean, >> yeah. Or not. >> That would be that would be an issue. Uh, in the meantime, let's see. I see that I don't know who someone owns Celsius here, but that stock is ripping pre hours up 20%. So, I guess that Alani new acquisition worked out quite well. >> Novo's up a lot too. If anyone here is a Novo investor. I am not but I ah yeah it is a lot for them up
24:24 >> a company like that yeah >> up 9% u probably because let's see what Eli Liy did. Yeah Eli Lilly is down so it's like the counter it's like the counter effect. Um >> wow it's up 14%. >> Link to call here. try to click the link from the email they sent when you registered. Apparently, Brandon has a way. So, if anyone has the email, if they registered, >> please. Yeah. >> Or the link >> or the link, send us the link. Yeah. >> Um >> I just asked the Roman the >> or the co-founder >> and I I mean at least he he has seen the
25:11 message. So >> that's a good start. >> Yeah. >> I thought he posted too if there's any podcast that he could hop on. >> Yeah. And I replied and he sent me a DM so that could set up uh something. So guys be prepared. >> Fun. >> That's Yeah, that would be great. That would be great. I mean to be it's when I first started to look at at Nebus at the start of the year the fact that we could get a Yandex team for what was it back then five6 billion like Yandex was worth over $30 billion and had like decades of experience >> of building gigantic companies. The fact that we could have that that we had a
25:57 chance to buy it for so cheap was was insane. Um >> yeah, and to be honest, it's not just Yandex team, it's the founder of Yandex, which is way more impressive. So you're getting the founder of Yandex at a 12 billion valuation, now a little bit more than that. So yeah. >> Yeah. I wish I wish I found this company earlier on. I didn't find them until late, but I'm still I think we're still overall early to the party. But yeah, I wish my average was 25. Roman just sent me the link. >> I'll send I'll send it there. >> Perfect. See, this is the power of being public on social media.
26:43 Uh, find the registration. Perfect. Okay, much better. Where was this? Where was this on the website? >> I mean, I don't know. He sent me the link, so >> that's hilarious. Just hit him. >> They don't want too many people on the call, otherwise Yeah, >> it goes down. Zoom can't handle it. >> Yeah, it's going to crash. Zoom. But someone was on the chat saying that uh to loca and clicks are somewhat
27:30 somehow like reported in the equity statement. >> Oh, really? >> But like not just a book value, but I'm not really being able to to find it. Maybe it was a mistake. And someone said $430 million in ARR by the end of the period. But I >> I saw that too, but I can't find that either. >> Yeah. >> How much? 410 >> 30, I guess. >> Yeah, but I couldn't find Oh. Oh, wait. >> Oh, okay. Nice. >> But that's for March. We need a >> We need a
28:16 >> 249 was Yeah. Yeah. 249. Okay. ended the quarter with 430 million in Yeah. Which means >> So which means in June the revenue was $35.8 million. I think >> yeah because the ARR for Navius is last month times 12. So if we divide those >> 430 >> by 12 we get 35.8 but I was wondering where they have cllay house and
29:01 >> were you guys able to get into the call? Yeah, but it's music blasting in my ear. >> The music came on and I didn't It was blasting my ears, too. >> You can't even control the the volume. >> It's very loud. >> Um, >> for those who are asking for the link to the call, I mean, we're going to stream it, so >> yeah, stay right here, guys. >> Yeah, don't go anywhere. >> It's actually easier to watch it here. >> We're keeping you trapped. You can't leave. >> We're saving them like hundreds of people on the Zoom call. So maybe this time everyone will be able to to listen. >> We should be like the exclusive provider of Nebus's uh earning school. Zoom might not like it, but uh but then
29:46 again, this company has over 7,000 employees. I don't know what they doing there, but >> yeah, they also have a data center. Like you think they'd make it work, right? You think it wouldn't crash. I mean, the stock is still down 71% over the past five years and has literally done nothing for three years. It's like a dead >> Yeah. >> Every 10 seconds I do blast music into my ears to see if they go live, but it does. >> Check the financial results file. Okay. >> They were listed in October, right? They were released in October. Yeah. >> Yeah. It's not even been a year yet. That's crazy. >> Yeah, that's also one of the like the comments that I get is one the revenue
30:32 aspect. Oh, it's like a $10 billion company. How can it only generate what was it at first $50 million? And then the second part is like, oh, it's still a Russian company. I'm like, but the whole point of them not being listed was the fact that they had to relocate and divest all of their business and now it's it's it's a Dutch it's basically my neighbor's company. It's like up north from me. Um, >> okay. I see. I think they're referring to the 5.1 billion dollars in equity. They said cuz >> where did you see this >> company like in the financial results page um like a file not the shareholders letter >> the press >> the the earnings release
31:18 >> in page eight they have total shareholders equity >> 307 three uh no sorry $3.7 billion and then total equity 5.1 so the difference is derived from Um probably from the subsidiaries. >> Yeah. Go down. Go down. You have total shareholders equity $3.775 billion and then equity below 5.1. And in the shareholders letter they said that they were accounting for click and loca under the equity method. So
32:04 probably those 1.4 4 billion are from uh probably it's like if if Click House went had a valuation around at 6.35 billion 28% is 6.5 is 1.8 billion. So sounds a bit weird. Maybe they have a bit less, but then I mean it doesn't add up. But the equity method is usually just um to set like a a lower case base because it's usually just an accounting measure. Doesn't really reflect the true value of the the businesses. >> Did we did we get
32:52 >> much a number from the tooka race or >> we we have no information about that. That's why I was trying to get like >> if we could like uh look at these numbers and get a sense of it, it would be great. But I'm not sure if we could. >> Yeah, because the number is a bit too low, especially if we go back to that report, especially for click if that was >> Yeah, click house alone is more than that difference. So, it's probably the just a a conservative method >> and I mean purely accounting one. But that's that's another question I'd like to ask like how much uh do they still own of Click House because they participated in the last funding round and I assumed it was to retain that the entire 28% stake or at least to avoid too much dilution.
33:39 So I would really uh like to to know more details >> and call live call is live by the way >> 2025 earnings conference call. Joining me today are Arai Balo, founder and CEO, and our broader management team. Our remarks today will include forward-looking statements, which are based on assumptions. As of today, actual results may differ materially as the results of various factors, including those set forth in today's earnings release and in our annual report on form 20F, are filed with the SEC. We undertake no obligation to update any forward-looking statements. During this call, we will present both GAAP and certain non-GAAP financial measures. A reconciliation of GAP to non-GAAP measures is included in today's
34:25 earnings press release. The earnings press release, shareholder letter, and accompanying investor presentation are available on our website at group.nvs.com/investor-hub. And now I'd like to I'd like to call the I'd like to turn the call over to Arati. >> Thanks, Neil. And thank you to everyone for joining the call today. I am pleased I'm pleased to say that we had an excellent quarter. We more than doubled our revenue for the whole group from Q1 and this quarter we also became IBIDA positive in our core AI infrastructure business ahead of our previous projections. we could grow faster uh but we were
35:11 oversold on all of our supply of previous generation hoppers and we decided to wait for the new generation of GPUs to come and finally uh the new black belts are coming to the market in masses and in parallel we dramatically increasing our data center capacity that's why we expect to significantly increase our sales in the by the end of this year and that's Why we are increasing our AR guidance for the year end from the previous 700 to1 billion to a new guidance which is now 900 to $1.1 billion more uh some more color on capacity
36:00 front and I see this this as uh one of the most important uh updates of this call. We are aggressively ramping up. By the end of this year, we expect to have secured 220 megawatts of connected power that is either active or ready for GPU deployment. And this expansion uh includes our data centers in New Jersey and Finland. In addition, we have nearly closed on two substantial new Greenfield sites in the United States. And overall, we're in the process of securing more than 1 gawatt of power by the end of 2026 to capture industry growth next year. In addition, we made big enhancements to
36:46 our software cloud platform obviously uh to support our expanding capacity and to meet the demand of those large scaling clusters. Also uh we continued to significantly significantly expand uh our customer base. Uh we started to gain real traction on the enterprise side uh adding large global technology customers such as Cloudflare, Pros and Shopify and we still remained a leading new cloud provider for so-called native AI tech starts startups. Uh we have added customers like hygien uh lightning AI photo room and many many others.
37:35 On the financing front as you already know we are fortunate to have uh multiple levers to finance our ambitious growth. We have raised over $4 billion in capital so far. We have a strong balance sheet as you can see and we have access to potentially billions of dollars more thanks to our non-core businesses and other equity stakes such as a right click house tuma in short this is an exciting time for nebios we are in the midst of a once in a generation opportunity that's what we believe in the demand for AI compute is strong and uh we'll just get stronger We are rapidly increasing our capacity
38:21 to pave the way for accelerated growth in 2026 and beyond. Well, and with that, let me introduce our new chief financial financial officer, Dad Alonsa. Dada, welcome again and the floor is yours. >> Thank you, Ankari. I'm really excited to be joining Nebuse. I've long believed that AI will fundamentally transform our world and Nibius is well positioned to make that happen. Of course, I'm also looking forward to getting to know our investors and analysts over the coming months. While the details of our Q2 financial performance can be found in our shareholder letter, I'd like to highlight a few key items and then conclude with guidance.
39:09 We reported $105.1 million in revenue, up 625% year-over-year and up 106% quarter over quarter, driven by a strength in our core business and a solid execution from our triple 10 team. Our AI cloud infrastructure revenue increased more than nine times year-over-year, driven by strong customer demand for our corporate GPUs and near peak utilization of our platform. Even as we achieve hyperrowth, we continue to operate with discipline. This focus allowed us to achieve positive adjusted evida in our core business ahead of our expectations. Below the operating income loss line, we recorded again from revaluation of investment in equity securities related
39:56 to our equity investment. We also reported again from discontinued operations. These two non-b businessiness related items made us for the quarter gap net income profitable. It is important to notice that we view these gains and one-time in nature. Turning to guidance, we see very strong momentum in our business and demand for AI compute remains exceptionally high. Given our plans to further scale our platform this year, we are updating our fullear outlook for annualized run revenue. As our already mentioned, we are raising guidance from 750 million to1 billion to 900 million to 1.1 billion.
40:41 This is based on closed contracts for existing and future capacity as well as sales we anticipate for the rest of the year. For our core business revenue, we are maintaining our guidance of $400 to $600 million. Let me share a few points. We continue to experience strong demand and are building capacity to take advantage of the large opportunity in front of us. Of the 220 megawatts of connected power we expect to have at the end of the year, we will have 100 megawatts of active power. And as we are building out our data center capacity, most of our GPU installations will take place in Q4. So we expect our annualized run rate revenue and revenue to be
41:27 backed and weighted. For group revenue, we are keeping the projections that we already provided that is group revenue of 450 to $630 million. This excludes the 2025 revenue guidance of 50 to 70 million we previously gave for tooka. As we announced effective from Q2, we have the consolidated to loca from the group. Turning to adjusted EIDA as we previously announced, we expect to be a slightly positive by the end of the year at group level, but still we will be negative for the full year. Finally, we are maintaining our cap our capex guidance of around two billion in 2025.
42:13 So in closing, we are experiencing hyper growth with demand to support continued strong results. We are investing in capacity to capture the large and growing opportunity in front of us and are positioning the company to become a leader in AI cloud infrastructure. Look, I truly believe the future of Nebios is incredibly bright. We're not just well positioned. We have the resources, the expertise, and most importantly, the team to lead and win. Now, let me turn the call over to Neil for Q&A. >> Great. Thank you, D. Um, we've started to collect questions from the online platform and we'll give it a minute just to consolidate. Great.
43:01 All right. So, our first question comes from our analyst from Goldman Sachs, Alex Dval. And maybe I'll give this to Mark. Um, you know, Mark, can you maybe talk about the overall demand environment and um, how does demand look like as we're moving into the second half of this year? >> Yes, and thank you, Alex, for the question. The demand environment in the second quarter, as you can tell from our results, was very strong. Um, as we brought on more capacity, we sold through it and by the end of the quarter, we were at peak utilization. There's a nice trend that we're actually starting to witness. As we bring on larger CR clusters, we are able to bring on new large customers who want to purchase uh greater and greater
43:48 capacity. This allows us to expand and diversify our customer base and has been a clear signal there is growing opportunity in the market. This also suggests strong demand to support ramping up our capacity. If we had more capacity in the second quarter, we probably would have sold more as well. At the same time, we were able to improve the maturity of our platform, which has contributed nicely to increasing our competitive win rate. All of which is continuing on into this quarter. >> Great. Thanks, Mark. And that was Mark, our new uh chief revenue officer. Um, a question on on EVA Doto, maybe you can
44:33 take this one. You know, it's good to see positive adjust for the AI cloud business come in ahead of expectations. um how how should we think about adjust for the core business and for the whole group going forwards for the remainder of this year? >> Well, look, we are very pleased to report that our core business rates adjusted every profitability this quarter ahead of our initial guidance and looking ahead we expect the core business to remain positive throughout the rest of the year. At the group level, we anticipate turning adjusted EVA positive by the end of the year. However, for the full year, it will remain negative. That said, we expect group adjusted evidence to be positive starting next year.
45:20 Great. Thank you, Doto. Uh, and do maybe we'll we'll stick with you. Um, analyst Neh Chi from Northland is asking about ARR. So, you know, really as we as we think about uh ARR um for the year, um what what are the what are the dynamics around ARR? and um can you give any update for AR this quarter? >> Sure. Thanks, Nihal. Reality is that we saw strong momentum in Q2 with annualized run rate revenue growing from $249 million in March to $430 million in June. While we are not providing monthly ARR updates, I can say that this positive trajectory has continued into July. Looking ahead to our increased
46:06 analyze run revenue guidance, a significant portion of it is already under contract which gives us a strong visibility. We also see continued strong demand in the market and as we scale up capacity, we are able to sell it quickly. With additional capacity coming online later this year, we are confident we're on track to deliver on the revised ARR guidance. >> Great. Thanks, D. Maybe maybe staying with you um you know from online looks like our prior guidance for ARR was 750 to 1 billion and 400 to 600 million of core business revenue. Um we're now increasing the ARR to 900 million to 1.1 billion but
46:53 there's no change to the to the revenue guidance. Can you explain why this is? >> Yes, of course. The increase in our AR guidance reflects the strong demand we are seeing in the expected delivery of additional GPU capacity later this year. Particularly the Blackwell Ultras because much of this capacity will come online by the end of the year. The impact will show up more in ARR than within the year revenue. That timing dynamic is why we are holding our 2025 revenue guidance steady. That said, this late year ramp will create a strong foundation heading into 2026 and will support meaningful revenue acceleration next year. >> Great. Thanks, Doto. Um, we have a
47:39 question from Alex Platt, analyst from DAD Davidson, you know, and he's really asking about the the one gawatt. So, if we're if we're getting to one gigawatt of contracted power by the end of 26, um, how should we think about revenue for next year? And you know, how should we also think about the uh guidance we gave last quarter for the midterm of getting to mid-s singledigit billions of revenue over the next few years? Um maybe Mark, do you want to take this? >> Uh certainly and thank you Alex for the question. Um it's too early for us to provide 26 guidance and and we'll be returning to that question uh later this year. Uh but for now, we do want to reaffirm our midterm outlook as uh we are making very good progress towards our goals. Um as we said in our Q1
48:26 earnings call, our base case calls for several billion dollars of revenue in the midterm, which means in the next few years. Um our base case also assumes that we grow our capacity to support this type of revenue uh goal from our 25 levels. Um, we also said this guidance does not factor in a large deal from like a frontier AI lab or a hyperscaler. Those transactions would be considered incremental to this guidance. I hope everybody's gathering that our ambition is to grow much larger and much faster and we are laying that foundation with the one gigawatt capacity that we're deploying. >> Great. Thanks Mark. Um the next question
49:17 is around tariffs. The US is now exercising tariffs across most nations. How will this impact your business and margins? Uh Tom, do you want to take this? >> Yeah, sure. I'm happy to. So yeah, listen, I mean I think the question of tariffs, this is obviously something that we're following closely. Um I would say that for now it's a bit early to say anything definitive, including based on the latest comments we saw overnight. we're still looking looking into these. But I I think the key thing is whatever is determined, you know, obviously this is something that affects all players in our market. Um and you know, while it's it's it's possible we could potentially see some short-term fluctuations, we're confident that the market will be able to balance things out going forward, but you know, as we see more, we'll obviously update. >> Thank you, Tom. All right. We we get this question quite
50:04 a bit. um you know what is what is your return on on capex and you know do maybe you can help >> certainly shed some light here >> certainly look when we price our GPUs we aim for healthy margins on a per hour compute basis for the hopper generation we expect to break even in roughly two to three years on a gross profit level that includes both the cost of hardware but also the associated operational expenses this estimate doesn't factor in our higher higher margin software and services revenue. As those scale, we see potential to shorten the return on invested capital. As for blackwells, we expect the price at the at the premium. So, it's still early to comment on
50:50 specifics at this age. >> Great start. All right. Another question from Alex Dval from Goldman and this is around capacity and and timeline. Um, so you know, and maybe I'll give this to Andre. Uh, Andre, can you maybe walk us through the timeline for the infrastructure buildout for this year and um, and how do we get to, you know, the 220 megawatts this year and maybe some incremental color for next year? >> Yeah, sure. U, thanks Alex for the question for everyone. So, we are ramping up our capacity to accelerate uh, our growth for the next year and after. Uh first of all we are growing with a number of the regions uh where we are present. In second half of 2025 we
51:38 are adding UK, Israel, uh new site in New Jersey uh additional capacity in Finland and Finland and New Jersey are our main drivers of the capacity this year. Um in currently New Jersey we have 200 megawatts in ongoing construction phase. A good part of that will be available this year and the rest in uh first half of 2026. In Finland, we expect to have an additional 50 megawatts in operations this year just like we um spoke earlier. Y >> and Andre, you know, kind of another part of Alex's question is also just, you know, any any more details to, you
52:24 know, for for 26 and you know, some of the the green field opportunity we talked about. Um and you know maybe just lumping that in with an online question you know why why Greenfield versus built to suit. >> Yeah sure Neil um well we are in advanced discussions for a couple of new Greenfield sites uh each one able to deliver hundreds of megawatts of power in 2026 and we sure will announce uh hopefully soon uh about that. Uh, regarding the why green fields versus built to suits or cola options, we typically and we spoke about that a lot. We typically favor green fields because we can control every aspect of the data
53:09 center from the design to construction uh to the hardware installations and uh deployment and phasing. we can actually tailor the phase phasing according to our demand and for us it's cheaper uh to build than build to suit and we are not locked into the long-term leases um also by controlling the design of the building starting from the how piper power is piped into uh building and uh design installation of our own racks and servers we can achieve give a lower total cost of ownership uh probably around 20% less than the market average. >> Thanks Andre.
53:54 >> Um maybe we can give this question to our native uh UK person. Uh Tom, can you maybe shed some light on on on our UK and and Israeli facilities? Um you know, what do you see there? What do we see there from an opportunity perspective in those markets? And to what extent will we have local infrastructure presence to unlock that opportunity? >> Yeah. No, absolutely. Um, so I suppose given my accent, I'll start with the UK. Um, I think UK looks great. Uh, we think it's a really exciting opportunity there. I mean, obviously I think everyone knows it's a massive AI market, definitely the third largest, biggest outside of US and China. We've been paying quite close attention to what the government's been doing and they've been taking some quite impressive steps to stimulate growth generally in AI. um
54:41 including confirming I think 14 billion pounds in private sector investment into AI in the region. So I think probably you'll have many of you have noticed a couple about a month ago we announced our intention to launch our first big facility uh GPU cluster uh in the UK. It's just outside of London and we expect that to be coming on stream in roughly early Q early Q4. Um, so actually we think we're going to be the first to deliver B300s to the UK market which we think which we think will be a really interesting opportunity and just generally how we're looking at the commercial opportunity there. You know there's a there's a vibrant market of AI AI native startup scaleups um in London and around um there's a significant enterprise customer presence as well. I mean you also what you've seen actually what we've seen lately is that even some
55:27 a number of the big global tech companies have been setting up regional hubs regional R&D facilities which we think will help to also drive the growth of the ecosystem. So the other thing I would say is that as we're looking at some specific industry opportunities and creating verticals around them. Um and one of the most promising that we see right now among others is the healthcare and life science space. And actually we have a dedicated healthcare and life science team that's led out of the UK. Um and in fact in this particular area this is an area where we're working in partnership with Nvidia and and we'll soon be announcing some initiatives that will be helping sort of life life science startups in the sector. So UK looks great and we're looking forward to being part of that. Uh likewise Israel, we think there's also a big opportunity there to sort of service what we think is really growing demand in the local AI
56:14 sector. Um as in the UK, the government's been doing a reasonable amount um to really develop the ecosystem and stimulate demand. Um and just generally, you know, we see that Israel seems to be emerging as a as a quite a dynamic AI hub uh globally. So we'll again we're there we've we've mentioned this previously but we'll be launching our GPU cluster there with Nvidia and with that coming up on stream also early Q4 um and just generally looking forward to be parting being part of it tapping into the grow and to the growth of the AI ecosystem we think there's there's a big opportunity for us there so great keep you posted thank you Tom um maybe we'll go to do on this question you know how do you plan to finance the capacity expansion for this year and next year seems like you you know you'll
56:59 have to raise a significant amount of capital to achieve your expansion plans. >> Surely Neil what we are seeing is that our business model is working well and as we bring new capacity online we are able to sell it efficiently which reinforces our confidence to continue investing. Given the strength of the market we see a clear opportunity to scale and demand our footprint in infrastructure. We have significant cash on hand and will approach any additional capital raising opportunistically depending of course on timing and market conditions. At the moment our focus is on securing land and power and moving quickly to reach our one gigabyte target. Great.
57:46 Thank you D. Um maybe Andre you can take this question. you know, you've announced some some important updates to the software stack. Um, what's what's most important for your customers? >> Sure, Neil. Um, well, our customers who train or run the AI models and have the AI connected tasks are generally looking for three things. They're looking for speed, reliability, and flexibility slashconvenience. And this quarter we continued to execute on those things and the improvements uh were also driven and geared towards the
58:31 blackwell uh deploy readiness. Uh on speed we doubled the speed of our network and that had a direct impact on our ML perf uh benchmark results. uh we made a great step and um improved reliability by increasing um like resulting number um mean time between failure. Uh this was due to um improvement uh in our core platform and deployment of our auto healing and health check software that could address potential points of failure before before uh nodes actually fail. We also improved flexibility. We made it easy
59:17 for anyone using uh the S3 storage easily migrate their data to do the AI workloads on our uh clusters network and this makes this makes it easier for the customers to come to Nabus. >> Great. Thank you Andre. Um Andre maybe sticking with you Nejo from Northland is asking around some of the the benchmarks that we've talked about this quarter. Can you maybe elaborate a little more on the ML Perf? >> Yeah, with pleasure. Thanks, Nik. Uh, this quarter we submitted uh ML Perf training 50 results uh revealing some quite impressive performance for large scale training of Llama 3.1
1:00:02 the big one 405 billion parameters model. Basically in cloud as we doubled the size of our cluster the speed scales linearly. So the most impressive part about this is that our results are comparable to bare metal benchmarks but we accomplish this in the cloud and for the customers this is important because it's easier faster and more cost effective in in in the end. Yeah, >> great. >> Thanks Andre. >> Uh we have a question about uh about our our inference as a service platform. Maybe I'll I'll ask Roma to elaborate. Roma, can you maybe talk about uh our inference as a service platform and also, you know, it looks like you you've
1:00:48 transitioned to a new role, so maybe you can also elaborate on on your on your new uh role and what you're working on. >> Yeah, thank you Neil. Um first of all, uh I'm always happy to talk about inference. uh about my transition. We now have Mark uh that is focusing on scaling our go to market and uh sales and I'm happy to spend time on new initiatives and of course we see more and more demand shifting to inference uh as all the market and the strength of uh is that we build the full stack. So now we are developing the next layer of our
1:01:36 offering very naturally. Uh we we do it to enable the AIcentric ISVS like product builders and enterprises that apply AI in their critical workflows. Uh and we do it with our fully vertically integrated inference as a service product. Um we are building enterprisegrade platform uh to deploy and scale uh openw weight AI models like lamaquen flux uh just released open AI uh new models and others. Uh and we focus on high performance and reliability on dedicated infrastructure.
1:02:23 Uh our platform runs on top of Nibio's proven scaled infrastructure and we target to solve the biggest pain points in production AI. Uh unpredictable latency, GPU bottlenecks and uh not enough flexible platforms to build on scale. >> Great. Thanks, Roman. Um, next question is around some of the new large customer wins like Shopify. Maybe Mark you can take this. Was were these deals competitive? Um, what what are they using NetBS for? And uh any more color you can provide would be would be super helpful.
1:03:08 >> Yes, thank you Neil. Um probably one of the important uh highlights that we're observing is as we're making our way through the market, we're actually getting interesting adoption like big customers like Shopify and uh I want to add another one to the discussion here like uh Cloudflare. I'm very excited about these customers. They they are leaders in their categories. They are um pushing the frontier of um using AI to build and deliver great solutions. and I've had the privilege of partnering with both of them in the past. Um, Shopify is uh utilizing Nebius's AI infrastructure along with uh TLOCA's
1:03:53 training data in order to optimize every step of the merchants journey. A very exciting opportunity for us. Um, likewise, Cloudflare is using Nebus to power inference at the edge. very important part of their overall offering um as a part of their popular uh workers API. Um both relationships are growing um and both are scaling opportunities for us. Um we're also seeing other similar interests from other major technology companies and leaders in their categories reinforcing the opportunity overall in the market. >> Great. Thanks Mark. Mark, we also seem to have a question just about uh you
1:04:39 know you uh looks like you know since you've joined NVS um for past couple months now what have been some of your observations and what is your strategy to bringing more long-term contracts and move the company up towards the enterprise market. >> Um I couldn't be more excited I have to say um even more so than uh when I uh received the opportunity to join the company. This is a very exciting organization. We've got great technology and that's because we have a world-class leading team. Um it's turned out as uh you're hopefully hearing in today's call that the market is massive and it's growing quickly. Um the opportunity for um Nebias is to get more structured and
1:05:27 methodical um with our go to market and to continue to build out our coverage to be able to proactively pursue the market opportunity. Um to that end, we are building out our go to market leadership team. Um including adding a world-class VP of sales strategy and oper operations who's actually starting this week. Uh we're also adding uh uh general managers to lead our businesses in the Americas, uh Middle East, Asia-Pacific, and Japan, as well as adding leadership to take on the opportunity around strategic customers and major enterprises. In tandem, we will continue to expand our
1:06:14 overall customerf facing capacity and distribution capabilities. In the short term, we are focused on pursuing the regional markets of AI builders and targeted software vendors and select enterprise segments in order to be able to develop a strong understanding of the use cases that are winning and then a deep understanding of the overall customer journey. midterm and longer term. We intend to cover the entire global IT market with distribution and sales capacity. >> Great. Thanks, Mark. Um, you know, we we have a question from Alex, our Goldman, um, around Blackwell demand. You know, and Mark, you know, as
1:06:59 as we're bringing on the black walls, what is what does the demand look like for them? >> Thank you again, Alex. a very very thoughtful set of questions today. Um well, first of all, let me just clarify. We we continue to see really strong demand for the hoppers uh in Q2. As a matter of fact, whenever hopper capacity becomes available, we're selling it very quickly. Um we did bring on the uh the B200s and we are actively selling through them as well. um pricing trends uh remain relatively stable for the hoppers even in the context of black whale um alternatives and which are actually coming through with a healthy premium relatively speaking. We're also seeing interest in
1:07:46 the grace blackwells that are being implemented later this year. >> Great. Thanks Mark. Um looks like we're getting a question on um partnerships. Uh looks like you you've added a number of partners in Q2 and continue to strengthen your relationship with NVIDIA. What partnerships do you think are most meaningful and how should we measure the success of these partnerships? Maybe I'll give this to Daniel. >> Hey, thanks Neil. Uh this quarter we made strong progress expanding our reach across the AI ecosystem uh through several high impact partnerships. We launched integrations with Mistl B 10 and Sky Pilot. All of which extend our ease of use of our AI cloud and dedication to our developers and model builders by supporting them across their
1:08:34 workflows. We also partnered with Lightning AI and any scale extending our presence across both open source tool sets and enterprise users. These collaborations simplify how teams scale and deploy AI workloads using Nebus. And then on the infrastructure side, we expanded our AI cloud portfolio with NVIDIA AI interprise and became a launch NCP partner for NVIDIA DGX cloud leptin, further strengthening our position as a high performance AI platform. Ultimately, we measure our success through the adoption of our partner platforms, revenue contribution, and strategic access to new user segments, all of which we've seen trending positive positively. Great. Thank you, Daniel.
1:09:21 Um, question on utilization. Can you discuss utilization trends in the quarter um or even by by by GPU family? Mark, can you take this one? >> Absolutely. You know, as we discussed already, we are investing in and building out our infrastructure. Um, and as we bring on more capacity, we're selling through it and we are able to bring on bigger customers who want to get greater capacity. um we're adding more capacity this and next quarter and shifting to selling against future requirements. So ideally what we're building is a model where we can close and drive expansion of future capacity and future versions of GPUs.
1:10:07 >> Great. Thank you Mark. Uh here's a question from Andrew Beal uh our analyst from Arite um on getting large contracts. So some of your competitors are signing, you know, large multi-year deals with hyperscalers. Um you know what what do you need to do to to get one of these deals and when when can we see one of these deals? Arati. Oh yeah. Uh as we previously said u of course we we see a lot of this demand coming from uh the top frontier AI labs and we actually believe that this will increase in the future. Millions of new GPUs are coming to the market next year and beyond. uh in C in order to capture this demand
1:10:54 uh actually yeah answering the question what what we need to do we we're doing the main thing we are increasing our capacity significantly uh increasing this capacity and u uh as I said uh in the beginning of the call we are just addressing this issue right now going forward u uh We hope very much to see uh those uh big customers among our class customers uh because finally we have uh capacity of their scale and probably just again to remind that uh all the projections we're making this year in midterm they do not include
1:11:42 these big accounts uh and those big deals. Uh so if uh when they will come uh it will all be incremental and will be a nice surprise I would say. >> Great surprise. >> Thank you Arati. Um a lot of questions on AV ride including uh from Alex Platt and from Andrew Beiel. Um maybe Ara you can take this you know can you provide an update on AV ride and and any update regarding their strategic partnership and then uh really around the potential robo taxi launch in Dallas you know how is that tren trending >> uh well uh it's to say nothing to say that we're very excited about a ride as a company's future taking into
1:12:27 consideration what's going on in this industry this year uh on the future of aite corporate structure as we uh spoke many times before. We see a structure uh something similar to what uh we've done with Taloka. It's a good example of a type of a partnership we are looking for when uh a strong partner comes uh to who develop this business and who actually give up control. Uh in the meantime the business is performing extremely extremely well. Uh they continue to scale. Uh as you know they have two business lines delivery and autonomous vehicles and uh both on
1:13:16 the on the first line robot side uide is expanding the coverage uh with the existing partners. uh they uh they add uh new new cities, new service areas, the restaurants with uh they're launching new uh university campuses uh in their project with GrabHub uh and uh they're also entering the the new verticals. Just recently they u uh signed with a grocery delivery for uh the retailer HB in Texas and also uh indoor robot operations in Japan. Uh that came through a partnership with
1:14:02 Mitsu for the sun. On the autonomous vehicle side is growing its fleet. Uh as you know they're partners with Hyundai um and uh they're expanding their road tests in Dallas uh and uh they're looking forward to launch their robot taxi service with uh Uber later this year because they have they signed this partnership early. So we believe it's a great business uh and we believe that this is a source of significant significant value for for our company for the group. >> Great. Thank you Arai. Um a few a few questions around our sources of funding. You know last quarter we talked about potentially tapping into our non-core
1:14:48 businesses and equity investments to fund growth of the core business. Any updates that we can share? Uh Tom, would you like to take this? Um yeah I'm happy to kind of catch up on this. I mean I think that you know as we talked about first of all I would maybe just touch briefly on sort of two significant equity stakes. So Toka which you saw this quarter actually we were very pleased that they were able to raise growth capital in a transaction that was led by Bezos uh Bezos expeditions and others. Um they're doing great things doing a lot of stuff in the kind of complex AI data task world and and actually their customers are a number of the major AI labs and others. Um you may have seen in this industry, this industry generally is is a hot one. Um scale AI which is a which is a a comp for them recently sold about half the
1:15:35 company at a $30 billion valuation. So we think that there is very significant upside to took business prospects and valuation and what was important for us in that deal was that we we retained a significant majority economic interest. So we feel like we have a lot of exposure to the upside as and when we feel it's the right time to try and tap into that. Um with regards to click house is also you you'll have seen click house in the news in the last quarter. Um we um retain a minority economic interest in in this business the previous valuation it had that two two billion in a transaction in 22 but in the latest capital raise that was a reported valuation of around six billion. And the way that we're thinking about that stake is that I think that right now we still think there's a lot of value to be created in the business.
1:16:21 Um, but if there were to be a liquidity event in the coming years at a significantly higher valuation, then that's something that we would consider and we think potentially that could be the source of really several billion dollars. Um, but we'll obviously see see how the business goes. Um, and
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