Nebius Group N.V.

Hello, and welcome to Nebius Group's fourth quarter and full year 2024 earnings conference call. My name is Neil Doshi, head of investor relations. Joining me today to discuss our results are Arkady Valosh, founder and CEO, and the rest of the Nebius management team. Before we get started, I would like to take this opportunity to remind you that our remarks today will include forward-looking statements. Actual results may differ materially from those contemplated by these forward-looking statements. Factors that could cause these results to differ materially are set forth in today's earnings press release and in our quarterly report on Form 6-K filed with the SEC. Any forward-looking statements that we make on the call are based on assumptions as of today, and we undertake no obligation to update these statements as a result of new information or future events. During this call, we will present both GAAP and certain non-GAAP financial measures. A reconciliation of GAAP to non-GAAP measures is included in today's earnings press release. The earnings press release is available on our website at group.nebius.com slash investor-hub. And now I'd like to turn the call over to Arkady.

Thank you, Neil. And welcome everyone to our fourth quarter earnings call. As we said on our last call, our aim is to build one of the world's largest AI infrastructure companies. We believe that we are well positioned to do this because we have a proven track record of building and running efficient data centers with stable power, delivering GPU-based AI compute infrastructure, cloud, and offering a wide range of value-added services to businesses that are adopting Gen AI. Since we publicly launched Nebius in July of last year, just seven months ago, we have been extremely focused on putting in place the foundation to support our future growth in 2025 and beyond. I'd like to share what we accomplished in the fourth quarter alone. First, we resumed trading as a public company in October, becoming the first publicly traded AI specialized cloud. This came much faster than expected as we were still building our corporate and business functions. We also raised $700 million in capital in December in an oversubscribed offering, a deal that saw the likes of NVIDIA, Accel, Orbis, and others enter our capital structure. On the infrastructure side, we successfully expanded our data center footprint and our GPU deployments, and we are building the foundation which will enable us to aggressively scale up this year in the US and Europe. Also, we launched our new AI cloud platform and migrated all of our customers to it in Q4. We also launched our inference as a service platform called AI Studio. And we made great progress in building our global sales and marketing team with a particular focus on the US market. In that context, I'm very pleased with everything we were able to accomplish in Q4. Our sales function is now up and running and we are seeing the results. More clients are coming onto the platform and our more diversified customer base is already contributing to strong growth run rate revenue. Based on contracts already in place, March annualized run rate revenue will be at least $220 million. And we have more potential contracts in the pipeline. Given this momentum, as well as the anticipated impact of additional data center capacity that we're building as well, as next generation Blackwell's GPU coming online later this year, our projected December 2025 analyzed run rate revenue of $750 million to $1 billion is well within reach. Looking ahead to 2025, we have basically three strategic focus areas. The first is our unique full-stack AI technology. In addition to our European data centers in Finland and France, we started deploying GPU clusters in Iceland and in Kansas City, which was the first capacity in the US for us. Also, we will soon be announcing our first US data center that we will be built to our own design. And we will continue to enhance and expand our AI cloud and influence as a service platforms. The second area of focus was the capital to invest in our future growth. At the end of last year, we had $2.4 billion in cash, including those $700 million raised in Q4 from high-quality investors. And being a public company also gives us access to a wide variety of efficient financing options. And finally, another focus point is our corporate structure. Here we have been particularly focused on our sales and marketing and customer support teams. We made great hires from within our industry in the last quarter and we are already seeing positive results in terms of run rate revenue growth as we start 2025. In addition to our core infrastructure business, Our business units are doing very well. AviRide, our autonomous technology platform business, signed a contract with Uber as one of just three autonomous technology partners in the U.S., along with Wayman Zoox. Uber Eats has already deployed AviRide robots for food delivery in Austin, Dallas, and Jersey City. Everide also signed a contract with GrabHub, which now uses Everide robots for food deliveries for college campuses across the United States, starting with Ohio State University. In addition, Everide's robots have recently received certification in Japan. The team will start to explore opportunities there as well. Tarloka, our data trading platform for GenAI, grew full-year revenue by 140% and diversified its customer base by adding several of the leading AI labs to its client portfolio. It has also completed its transition to a new platform, which is tuned for complex GenAI tasks, such as red teaming for AI agents, evaluation of reasoning models, and scalable training by coding and mass expectations. Triple 10, our edtech business, education tech business, doubles its new student additions year over year in 24, and maintains this position as one of the leading IT bootcamps in US by student feedback. Finally, as a reminder, we still own 28% stake in Clickhouse, which we believe is a significant potential source of value, although it is not part of our consolidated results. Well, all in all, 2024 was just the starting point for Nebulous Group. And I'm excited to enter 2025 with significant momentum and big ambitions to scale and grow our business. And now I turn over to Tom for questions.

Thank you very much, Akadi. And thanks to those of you who've already sent through your questions. We'll try and cover as much ground as we can on this call. And actually, the first question is about capacity expansion plans. And so I'll actually come to Andrei Karalienko for this first one. And so, Andrei, can you discuss a little bit more the broader plans for capacity expansion over 2025?