Yandex NV Reports Strong Growth Amid Challenges

Yandex NV ((NBIS)) has held its Q2 earnings call. Read on for the main highlights of the call.

The recent earnings call from Yandex NV presented a largely positive sentiment, highlighting significant revenue growth and positive EBITDA in its core business. The company showcased strong customer acquisitions, although there were some concerns regarding oversold GPUs, full-year negative EBITDA, and potential tariff impacts.

Record Revenue Growth

Nebius Group, a part of Yandex NV, reported a remarkable $105.1 million in revenue, marking a 625% increase year-over-year and a 106% rise quarter-over-quarter. This impressive growth underscores the company’s robust performance and market demand.

Positive EBITDA

The company achieved positive EBITDA in its core AI infrastructure business ahead of projections, demonstrating operational efficiency and effective cost management.

Increased ARR Guidance

Reflecting confidence in sustained growth, Yandex NV increased its annualized run rate revenue guidance from $700 million – $1 billion to $900 million – $1.1 billion, indicating strong future revenue potential.

Data Center Expansion

To support growing demand, Nebius is set to have 220 megawatts of connected power by the end of the year, with plans to secure more than 1 gigawatt by the end of 2026, highlighting their commitment to infrastructure expansion.

Major Customer Wins

The company successfully added large global technology customers, including Cloudflare, Prosus, and Shopify, showcasing its ability to attract and retain high-profile clients.

Strong Financing Position

Yandex NV has raised over $4 billion in capital and has access to billions more through noncore businesses and equity stakes, ensuring a strong financial position to support future growth initiatives.

Oversold Previous Generation GPUs

Growth was somewhat hindered by being oversold on previous generation GPUs, as the company awaits the new GPU generation, which could impact future performance.

Full Year Negative EBITDA

Despite positive adjusted EBITDA in its core business, the group adjusted EBITDA is expected to remain negative for the full year, indicating some financial challenges ahead.

Tariff Concerns

There is uncertainty around U.S. tariffs, which could potentially affect business margins, posing a risk to future profitability.

Forward-Looking Guidance

Looking ahead, Yandex NV has set ambitious targets, with revenue reaching $105.1 million, driven by demand in their AI infrastructure business. The annualized run rate revenue increased significantly, prompting a revised year-end ARR guidance of $900 million to $1.1 billion. The company plans to secure 220 megawatts of connected power by year-end and aims for over 1 gigawatt by 2026, alongside maintaining a CapEx guidance of around $2 billion for 2025.

In summary, the earnings call from Yandex NV reflected a positive outlook with substantial revenue growth and strategic customer acquisitions. While there are challenges such as oversold GPUs and tariff concerns, the company’s strong financial position and forward-looking guidance suggest continued growth and expansion in the coming years.