Yandex NV ((NBIS)) has held its Q4 earnings call. Read on for the main highlights of the call.
Discover the Best Stocks and Maximize Your Portfolio:
- See what stocks are receiving strong buy ratings from top-rated analysts.
- Filter, analyze, and streamline your search for investment opportunities with TipRanks’ Stock Screener.
During Yandex NV’s recent earnings call, a general sentiment of optimism was evident, driven by the company’s substantial growth and strategic progress. Despite some challenges, such as longer deal lead times and customer churn, the company remains positive about its future revenue targets and expansion plans for 2025.
Successful Public Offering and Capital Raise
Nebius marked a remarkable milestone by becoming the first publicly traded AI-specialized cloud company in October 2024. The company successfully raised $700 million in an oversubscribed capital offering this December, attracting significant investments from industry leaders like NVIDIA, Accel, and Orbis.
Data Center and GPU Deployment Expansion
In a bid to enhance its infrastructure, Nebius has expanded its data center footprint and GPU deployments across Europe and the U.S. The company aims to reach a projected capacity of 100 megawatts by the end of 2025, with scalability potential exceeding 300 megawatts, underscoring its commitment to meet growing demand.
Strong Revenue Growth and Future Projections
Nebius is on a positive trajectory with a projected annualized run rate revenue expected to hit at least $220 million by March 2025. This momentum is expected to accelerate, with December 2025 projections estimating revenues between $750 million and $1 billion.
Strategic Partnerships and Business Unit Successes
The company has leveraged strategic partnerships and business unit successes to fuel its growth. Avride has secured contracts with major players like Uber and Grubhub, while Toloka’s revenue saw a 140% year-over-year increase. Additionally, TripleTen has doubled its new student additions, reinforcing its status as a leading IT bootcamp in the U.S.
Longer Lead Times for Deals
Nebius faced challenges with extended lead times for customer deals in Q4 2024, attributed to more selective customer approaches and in-depth proof-of-concept testing. This has resulted in delays but is part of the company’s strategy to ensure robust client engagements.
Customer Churn and Revenue Timing Issues
The company experienced some customer churn and revenue timing issues during Q4 2024 as large customer engagements concluded without immediate replacements. This has posed challenges but is being actively addressed by the company.
Pressure on H100 Pricing
Nebius encountered pricing pressures on its H100 GPUs in Q4 2024, partly anticipated due to the launch of the H200s. This pricing challenge is a reflection of the competitive dynamics in the GPU market.
Forward-Looking Guidance
Looking ahead, CEO Arkady Volozh shared an optimistic outlook for 2025. With $2.4 billion in cash reserves, including the recent capital raise, the company is well-positioned for further growth. Key initiatives include the launch of a new AI cloud platform and an Inference-as-a-Service platform, AI Studio. Nebius plans to enhance its data center capacity in the U.S. and Europe, leverage cutting-edge GPU technology, and expand its sales and marketing efforts, particularly in the U.S.
In conclusion, Yandex NV’s earnings call highlighted a promising future with strategic advancements and robust growth prospects, despite certain operational challenges. The company’s innovative initiatives and strategic partnerships set a positive tone for its ambitious 2025 goals.
