Nebius Group has released its unaudited Q3 2024 results. They show a remarkable jump in revenue of 1.7x over the previous quarter from $25 million to $43.3 million. Its core AI infrastructure business grew by 2.7x and now accounts for almost two-thirds of the group revenue. That growth is even more spectacular year-on-year, as it shows growth of 6.5x.
Importantly, the boost in Q3 saw the company significantly reduce its losses over the previous quarter. It also saw a reduction in its adjusted net loss for the first nine months of FY24 compared to the same period in FY23.
The company has over $2.288 billion in cash and cash equivalents, which it intends to use to underpin a series of investments. It has already made capital investments of over $387.6 in the first nine months of 2024, and that will continue to increase. One driver behind that is the planned investment of $1 billion in its European data centre businesses by September 2025.
In addition to its core AI infrastructure business, Nebius Group operates three companies: Tolakam, TripleTen and Avride. All three operate under their brands, contributing to the uptick in earnings.
A positive outlook for Nebius Group
This positive earnings report comes on the back of a busy time for the company. It has announced a multiyear deal between Avride and Uber. Uber and Uber Eats will use Avride’s autonomous delivery robots and vehicles. It is beginning the deployment of sidewalk robots in Auston, TX. Dallas, TX, and Jersey City, NJ, will follow that.
It also announced it would triple the capacity at its key Finnish data centre to 75MW and deploy 60,00 GPUs. This will give it an annual revenue potential of $1 billion when at full capacity. This is just part of the company’s plan to invest $1 billion in its European data centre business.
Another key announcement was the launch of a new AI-native NVIDIA cloud platform. It claims that this will accelerate AI innovation for customers. They will have access to over 400 cloud engineers with deep AI expertise to help them create LLMs.
More importantly, the company saw its stock start trading again on the NASDAQ stock exchange. Its shares had been suspended after the Russian invasion of Ukraine while the company sought to divest itself of its Russian assets. Before that, the shares were traded as Yandex, NV, and now they trade as NBIS. As of today, the stock price was $19.73, still a long way off its peak of $86.07 in November 2021.
Enterprise Times: What does this mean?
This is a good set of results for Nebius Group. Its transition from Yandex to Nebius has been difficult and had a significant impact on its earnings. However, it has successfully negotiated those challenges, and it is now showing an acceleration in earnings. Investors will be watching closely to see what happens over the next quarter and how the three separate business units perform.
The company has also announced the appointment of Goldman Sachs as its exclusive financial advisor. It will be interesting to see what comes of this. It has the funds to fund existing operations and build out new infrastructure. Does it also have the will and the funds to make acquisitions? If so, will these be technology-based, or will it look at another data centre operator to accelerate its already announced $1 billion European investment?
