Nebius has outlined $40 billion in planned spending for 2027, a figure well above what Wall Street anticipated, but the neocloud company's strategy depends on projects that are already showing signs of strain.
The buildout is meant to be funded through customer pre-payments and loans backed by customer contracts, effectively using the future value of its data centers to pay for their construction. That approach carries risk if projects stall or get canceled. "Building at this scale is hard, and delays are part of our industry right now," CEO Arkady Volozh said on Thursday's earnings call. "We are not immune."
The earnings report follows reports that Microsoft is cooling on neocloud deals that miss deadlines. Microsoft is one of Nebius's largest customers, paying for AI capacity at a Vineland, New Jersey data center that is now months behind schedule. The contract is worth up to $19.4 billion, but only just over half of the Microsoft capacity is now planned for delivery by the end of the year, with the rest pushed to Q2 2027.
The delay stems from DataOne, the third-party site operator, winding down temporary generation faster than expected as the site switches to Bloom Energy fuel cells, according to chief product and infrastructure officer Andrey Korolenko. In August, the investigative site Floodlight found at least 45 natural gas generators operating at the DataOne site without permits; New Jersey regulators fined the facility $1.1 million. DataOne also faces a noise-complaint lawsuit from nearby residents.
Under Nebius's summary of the Microsoft contract, Microsoft can terminate affected service after a grace period if dates are missed and no alternative capacity is offered, and the deal includes financial penalties for late delivery. Nebius said Microsoft "has been part of the planning process" but did not say whether it agreed to the new dates.
Chief revenue officer Marc Boroditsky said deals with Microsoft and Meta both came with significant prepayments received long before delivery. Bloomberg reported that Microsoft is tightening oversight on third-party-run projects, including those by Nebius, IREN and Nscale, and sent employees to the New Jersey site. Microsoft noted its capex came in below expectations due to third-party delays, and Bloomberg reported it won't exercise an option to more than double its Nscale agreement for a Texas data center and recently stopped being an anchor customer for Nscale's planned Essex site after power delays.
Nebius says delays come from sites it doesn't control, while data centers it builds itself are on time or ahead of schedule and will supply most of its new capacity from 2027. New Q3 deals came with prepayments exceeding the cost of building capacity behind them, Boroditsky said. Nebius ended the quarter with $7.4 billion in cash.
Prepayments plus asset-backed financing of investment-grade contracts are expected to cover up to 85% of the $40 to $45 billion 2027 capex. CFO Maria Del Dado Alonso Sanchez named Microsoft and Meta as contracts that can be financed this way. Nebius forecast 2027 revenue of $12 to $13 billion and expects to break even on a pre-tax basis by the fourth quarter.
Third-quarter revenue was $981 million, up 571% year over year, roughly a third of which was a one-time payment tied to a new partnership model. Nebius cut its 2026 revenue forecast by $200 million to $3 billion, citing delays at third-party sites like New Jersey. Shares ended the day down 17%.
Source: TechCrunch