Nebius Lays Out 2027 Capex Plan as Prepayments Take Center Stage in Funding Strategy

Nebius Group used its third-quarter report to detail how it intends to pay for an expanding build-out of AI infrastructure heading into 2027, telling investors that customer prepayments and financing tied to existing contracts are expected to cover the large majority of next year's capital spending. The disclosure came alongside a revenue and earnings beat that pushed the company's results above analyst estimates, according to Seeking Alpha.

Third-Quarter Results

Nebius reported GAAP earnings per share of -$0.13, beating consensus by $1.11, on revenue of $980.8 million, which came in $73.63 million above expectations, per Seeking Alpha's summary of the results. Group adjusted EBITDA reached $465.8 million in the quarter, an improvement of $471.0 million year-over-year, according to the company's shareholder letter. The company said the gain was driven primarily by its Nebius AI cloud business, which generated adjusted EBITDA of $518.2 million at a 53.2% margin, per the same letter.

The 2027 Funding Plan

In its shareholder letter, Nebius said it expects prepayments and financing against existing contracts with investment-grade customers to cover 75%-85% of its 2027 capital expenditures, adding that it has a wide range of other funding options available. The company said it expects $10 billion in committed customer prepayments in 2026, rising to $17-20 billion in 2027, and pointed to a July transaction as the template: the first facility under its asset-backed financing framework, $775 million at SOFR plus 2.50%, secured against long-term agreements with an investment-grade customer. Nebius said its agreements with Microsoft and Meta can be financed the same way and that, with more than $40 billion of similar committed revenue, it views the structure as a repeatable framework. On the contract side, the letter put remaining performance obligations at $38.7 billion as of the end of September, up 3% from $37.5 billion at the end of June, and said customers have committed more than $12 billion in contract value since the start of the third quarter, on the company's strongest terms to date. Nebius also reported $7.4 billion in cash and cash equivalents at quarter-end, alongside equity stakes it holds in other businesses and cash from operations, which it described as a growing funding source as margins expand. CNBC reported that Nebius said it raised $5.75 billion in debt financing during the quarter; the shareholder letter attributes that to convertible notes issued in August, plus approximately $1.0 billion of net proceeds under its at-the-market program in the third quarter. Interpretation: because the stated plan leans on contract-linked funding rather than new unsecured borrowing, its execution is tied to those committed contracts converting to cash on schedule. For context, CNBC reported that Nebius' results followed better-than-expected earnings from fellow neoclouds CoreWeave and IREN over the past week, which lifted their shares after steep selloffs driven by concerns about the sustainability of the AI buildout, and that CoreWeave's bond yields spiked past 16% last week before the company told analysts it expects to keep parent-level debt financing under $5 billion through 2027.