Nebius Group N.V. announces third quarter 2024 financial results

For the full disclosure announcement, including key financials, please click here (PDF).

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Amsterdam, October 31, 2024 - Nebius Group N.V. ("Nebius Group", the "Group" or the "Company"; NASDAQ: NBIS), a leading AI infrastructure company, today announced its unaudited financial results for the third quarter ended September 30, 2024.

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Nebius Group is a technology company building full-stack infrastructure to service the high-growth global AI industry, including large-scale GPU clusters, cloud platforms, and tools and services for developers. Headquartered in Amsterdam and listed on Nasdaq, the Company has a global footprint with R&D hubs across Europe, North America and Israel.

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Nebius Group's core business is an AI-centric cloud platform built for intensive AI workloads. With proprietary cloud software architecture and hardware designed in-house (including servers, racks and data center design), Nebius Group gives AI builders the compute, storage, managed services and tools they need to build, tune and run their models.

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The group also operates three additional businesses under their own distinctive brands:

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• Toloka - a data partner for all stages of AI development from training to evaluation;
• TripleTen - a leading edtech player in the US and certain other markets, re-skilling people for careers in tech;
• Avride - one of the most experienced teams developing autonomous driving technology for self-driving cars and delivery robots.

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Q3 2024 financial and operational highlights

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Nebius Group

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• The Group's Q3 2024 revenue increased 1.7 times compared to the previous quarter and totaled USD 43.3 million driven primarily by the rapid growth of the Company's core AI infrastructure business, which grew 2.7 times compared to the previous quarter and 6.5 times on year-on-year basis.
• Cash and cash equivalents as of September 30, 2024, stood at USD 2,288.2 million on a consolidated basis.
• Capital expenditures totaled USD 167.0 million and USD 387.6 million for the three and nine months ended September 30, 2024, respectively. We anticipate capital expenditures in Q4 2024 to exceed the amount spent in the first nine months of 2024 as we plan to accelerate investments in GPU procurement and data center capacity expansion to support the growth of our businesses.
• Cash outflow from operations amounted to USD 45.9 million and USD 255.3 million for three and nine months ended September 30, 2024, respectively.

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Nebius

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• In Q3 2024, Nebius (the Group's core AI infrastructure business) accounted for approximately two-thirds of the Group's total revenue.
• Nebius' cloud revenue surged 2.7 times QoQ (almost 8 times YoY against the low base), with annualized run-rate (ARR)⁽¹⁾ surpassing USD 120 million as of September 2024.
• The customer base expanded to over 40 managed clients in Q3 2024, up from 30 in Q2, with additions from the Fortune 500.
• Nebius began executing its plan to invest over USD 1 billion⁽²⁾ in AI infrastructure across Europe by mid-2025. In September 2024, Nebius announced the launch of a GPU cluster in Paris, which will become one of the first in Europe to feature NVIDIA H200 Tensor Core GPUs. Shortly afterwards, Nebius announced a major expansion of its data center in Finland to triple capacity to 75 MW by the end of 2025 or early 2026. This will enable Nebius to accommodate up to 60,000 GPUs⁽³⁾ at this location alone, with annual revenue potential of over USD 1 billion at full capacity utilization.⁽⁴⁾
• To capitalize on growth opportunities, Nebius introduced a number of strategic product developments:
  • Introduced Nebius AI Studio, a high-performance, cost-efficient self-service inference platform for foundation model users and application developers, offering a wide range of state-of-the-art open-source models, including Llama, Mistral and more.
  • Launched a specialized cloud platform for AI built on the NVIDIA accelerated computing framework (in early Q4).
  • Expanded its cloud services portfolio with offerings such as Soperator and Managed PostgreSQL for IK8S.

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^{(1) Annualized run-rate revenue by the end of the period (revenue for last month of the period multiplied by twelve).}

^{(2) Including the investments of approximately USD 400 million during the first nine months of 2024 ending September 30, 2024.}

^{(3) In H100 equivalent.}

^{(4) Based on assumed utilization and pricing as per the company's medium-term financial plan (as of September 2024).}

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Toloka

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• In Q3 2024, Toloka was the second largest contributor to the Group's total revenue.
• In Q3 2024, Toloka demonstrated strong traction in Generative AI projects, which accounted for over 85% of Toloka's total revenue in Q3 2024 and grew more than fourfold YoY. We believe this underscores growing demand for Toloka's AI solutions in the expanding generative AI market.
• Gross margins for Generative AI services ranged from the high forties to low fifties percent in Q3, driven by production efficiencies, increased automation and the effective use of synthetic data. Toloka plans to build on these efficiency gains while investing in further platform enhancements and data production capabilities.
• In addition to being one of the major data providers for a Big Tech foundational model producer, Toloka strengthened its customer portfolio with a number of leading specialized LLM producers, further diversifying its line-up of Generative AI customers.
• Toloka's research team, in collaboration with top universities, developed the Ultimate Benchmark for AI-Generated Text Detection and the Math Dataset Benchmark, which will support future efforts to expand client offerings and enhance expertise in specialized domains.
• Toloka reinforced its commitment to strong data security, securing a SOC 2 report after completing an audit and confirming compliance with stringent standards for data security and privacy set by the American Institute of CPAs.

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TripleTen

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• TripleTen's revenue growth in Q3 2024 was driven by a threefold increase YoY in the number of students enrolled in its bootcamp across key markets in the US and Latin America, as well as more than threefold growth YoY in bookings.⁽¹⁾
• During the nine months ending September 30, 2024, almost 10,000 new students joined TripleTen for reskilling.
• In Q3 2024, TripleTen's B2C offering grew to six courses after the launch of a UX/UI Designer program, which is expected to positively impact the number of bookings by growing the student base.

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^{(1) Represents the total value of anticipated payments based on the amount of students who have made an initial payment for a course.}

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Avride

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• In Q3 2024, Avride entered into a multiyear strategic partnership with Uber, bringing Avride's delivery robots and autonomous vehicles to Uber and Uber Eats platforms. The delivery partnership will launch first with sidewalk robots on Uber Eats in Austin and then expand to Dallas and Jersey City. As part of the partnership, Avride plans to integrate hundreds of robots into Uber Eats in 2025, with mobility partnerships expected to launch for rides in Dallas later that year.
• During the quarter, Avride continued negotiations with several food- and ridetech companies to expand its commercial reach and scale operations within and outside the US market.
• In Q3 2024, Avride regularly tested autonomous vehicles on public roads, utilizing its new autonomous car platform.
• Assembly of the next generation delivery robots, offering improved energy efficiency, maneuverability, redundancy, and overall cost-effectiveness, began at the Group's Taiwan manufacturing partner, with tests of the new model ongoing.

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Webcast information

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Nebius Group's management will hold an earnings webcast on October 31 at 5:00 AM (PDT) / 8:00 AM (EDT) / 1:00 PM (CET).

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To access the webcast, please use the registration link below:

https://goldmansachs.zoom.us/webinar/register/WN_YqZyrAQBRDijLCDhmEcSJQ

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Nebius Group N.V. announces third quarter 2024 financial results