Q1 2025 Nebius Group NV Earnings Call
Maybe it's group's first quarter 2025 earnings call. My name is Neil Doshi I'm head of Investor Relations. Joining me today to discuss our results are on a carnival lawshe founder and CEO and members of the management team. Our remarks. Today will include forward looking statements, which are based on assumptions as of today actual results may differ materially.
As a result of various factors, including those set forth in todays earnings press release and in our annual report on form 20-F filed with the STC we.
We undertake no obligation to update any forward looking statements during.
During the 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, and accompanying shareholder letter and in Investor presentation are available on our website at <unk> Dot com forward Slash investor Dash hub.
We ask that you enter your questions into the webcast portal and we will be reviewing and consolidating the questions for Q&A.
And now I'd like to turn the call over to our cotton and the team who will go over a few slides that we presented for the investor.
Investor presentation.
Speaker Change: Thanks <unk>.
Okay.
Speaker Change: Thank you everyone for joining our Q1 'twenty 'twenty results call.
Speaker Change: So we'll start we're seeing the demand for AI compute was very strong in <unk>.
Speaker Change: Quarter.
Speaker Change: And actually our results show it.
Speaker Change: Revenue grew nearly 400%.
Speaker Change: <unk>.
Speaker Change: <unk> run rates revenue grew nearly 700%.
Speaker Change: We saw great momentum in our core infrastructure business.
Speaker Change: We ended the quarter with a solid cash balance of $1 4 billion doors.
Speaker Change: We actually continue to invest in our infrastructure.
Speaker Change: To that point.
Speaker Change: We are.
Speaker Change: The building our capacity.
Speaker Change: To serve customers around the world.
Speaker Change: This is a global race is your sense.
Speaker Change: And we are well placed with our footprint in the U S Europe and now in the Middle East.
Speaker Change: As you can see here on the slide we added three new locations recently.
Speaker Change: And theres more to come.
Speaker Change: We are exploring new locations for capacity build out and we hope to share more with new news with you.
Speaker Change: Very soon.
Speaker Change: Yeah.
Speaker Change: Oh.
Speaker Change: We also announced.
Speaker Change: Some of your partnerships this quarter.
Speaker Change: You announced.
Speaker Change: Relationship with immediate as well as metal.
Speaker Change: And finally, we had a very productive quarter with respect to building out our technology stack and we are getting industry recognition for both offering.
Speaker Change: Here is an example, similar analysis around ranked us in Goldman here.
Speaker Change: GPU cloud question marks brazing system.
Speaker Change: And now I will hand over.
Speaker Change: So April income.
Speaker Change: To discuss some of the key products, we launched in Q1.
Speaker Change: Thank you, Eric and Hello, everyone.
Speaker Change: We believe that the.
Speaker Change: Quality job.
Speaker Change: Could you persuade them against.
Enter your meeting I D followed by pound.
Speaker Change: Auto new quotes.
Speaker Change: We made great progress on in Q1 and further develop our.
Speaker Change: Both open.
Speaker Change: A number of notable product launches.
Speaker Change: We first of all we launched the slower in beef cost.
Speaker Change: Great.
Speaker Change: Automatic recovery for the first thoughts practices can cut checks the issues before.
Enter your participant I D followed by police entered the meeting password followed by.
Speaker Change: Actually for you.
The pound.
Speaker Change: These changes.
Speaker Change: Reduces downtime and improved capacity and ability to own our infrastructure.
You have joined the meeting as an attendee and will be muted throughout the meeting. This meeting is being recorded and our annualized this meeting is fall goodbye.
Speaker Change: Slip.
Speaker Change: So around 5% improvement on available for commercial use which is quite significant.
Speaker Change: Several platform services were released.
Speaker Change: From the beta phase to the general insurance and the flow through.
Speaker Change: Book as an example, but it was much more.
Speaker Change: We also invested a lot of efforts in reliability and performance of the platform.
Speaker Change: Notably we launched them.
Speaker Change: Enhanced object storage.
Speaker Change: And these insurers that large data sets can be assessed in urine.
Speaker Change: Trillium fronts, reducing banka results.
Speaker Change: And building on that foundation of our homegrown.
Speaker Change: We have also partnered with three leading storage providers such as you did in America.
Speaker Change: And that's enabled us to deliver the best.
Speaker Change: Possible experience whole customer scenarios going forward with electrical generation clusters.
Speaker Change: Last but not least we expanded integrations with external won't be a platform that shows net outflow destock sky pilot.
Speaker Change: It allows customers to bring the existing pools.
Speaker Change: Some of the new mortgage.
Speaker Change: And the partners then I will talk about our partners.
Speaker Change: Thanks Andre in addition to strengthening our product in Q1, we also made significant progress towards expanding our partner ecosystem.
Ondrej: For further building out our data storage solution portfolio as Ondrej mentioned with industry leaders.
Ondrej: We ended our core AI cloud capabilities to the ISP landscape with tight technical integration and we made announcements enabling customers to consume <unk> infrastructure across a wide segment of the industry.
Ondrej: Equally important are the relationships, we have with a full range of AI marketplaces established channel partners that help us meet the customer demand for our <unk> AI infrastructure across the globe.
Ondrej: I'd also like to talk about in video as you know in video as an investor in our company and we have a long history of working with the Nvidia team and we want to continue to build on that relationship in Q1, we made several announcements with them.
Ondrej: One.
Ondrej: In the Q1 timeframe Nivison, Nvidia announced that this would be one of the first AI cloud to offer the Nvidia Blackwell Ultra AI factory platform, while we also.
Ondrej: <unk> became a launch partner for Nvidia Dynamo.
Ondrej: Most efficient solutions for scaling compute during inference and <unk> was also named one of five reference platform and video cloud partners in this timeframe, helping us as we specialize and deliver accelerated services built on NCP reference architectures and and finally, some breaking news Ws will support.
Ondrej: Nvidia <unk> club leptin marketplace at launch, we couldnt be more excited with our partnerships not not just within video but across the landscape.
Robyn: So with that I would like to hand, it over to Robyn.
Robyn: Yeah. Thank you Danielle lets take a little bit about customers.
Our strategy is to preserve wide variety of customers with our robust platform.
Robyn: They have hundreds of customers.
Robyn: Managed and self service.
Robyn: Used NATO scaled platform, both training and inference workloads across various industries, such as Pac man.
Robyn: Media and entertainment life Science and more.
Robyn: With our expanding capacity footprint and global sales support.
Robyn: Now able to serve customers 24 seven.
Robyn: Truly a tailored approach of our high level experts on both sides of the Atlantic.
Robyn: That together with advanced software platform goes beyond to commoditize GPU as a service offerings.
Robyn: These highlights our flexibility and ability to rapidly adapt to the evolving needs of our diverse customer base.
Robyn: While delivery high quality solutions powered by our Tech stack.
Robyn: This is what our customers value the most they recognize that we are building in the <unk> cloud.
Robyn: At the scalar lateral of capabilities.
Robyn: Actually all of those factors contributed to our strong Q1 results.
And going forward, the demand environment or AI compute remain remains robust.
Robyn: And our sales momentum has continued into Q2.
Robyn: APL annualized run rate revenue was 300 and me down.
And we are continuing to experience strong demand.
Robyn: Intimate.
Speaker Change: And now I'll pass it to Tom Black coal to walk through our guidance.
Tom Black: Yeah, Thanks, very much Ryan.
Speaker Change: As Robin said, we had we've had a great start to the year with very very strong first quarter and we've carried it with hanging in strong momentum into the second quarter. So we feel very confident in our ability to achieve the <unk> guidance for the whole year that we gave which was $750 million to $1 billion at we're well on track to achieve this.
Speaker Change: So we're also reiterating our overall revenue guidance for the group.
Speaker Change: Which is in the range of $500 million to $700 million.
Speaker Change: So I think China hit profitability yet so.
Speaker Change: Maintaining our adjusted EBITDA guidance fiscal yeah. So just to elaborate on that a bit we expect while we expect adjusted EBITDA to be negative for the affiliate we plan to turn positive at some point in the second half of 2025.
Speaker Change: On Capex.
Speaker Change: Any planning capex of approximately $2 billion for 2025.
Speaker Change: This is a bit up from the previous guidance of $1 5 billion due to a couple of factors first we had some.
Speaker Change: Capex spend that had been planned for late Q4, which actually fell in early Q1.
Speaker Change: So some of that that leads to the increase towards $2 billion and also as we've always said that one of the opportunistic when it comes to really ramping up.
Speaker Change: Infrastructure capacity as we see demand and so we wanted to be able to sort of chase demand.
Speaker Change: Manuel and so we've had we are considering some additional investments beyond the initial data center expansion plan. For example, you may have seen some coverage recently around the data center in Israel, which we think is a great opportunity is a great market.
Speaker Change: Actual will come on and get some more color on that.
Speaker Change: Let's turn the call.
Speaker Change: So looking to the midterm.
Speaker Change: Did a great business, it's in a great industry, and we think the future opportunity is immense.
Speaker Change: When we look at the midterm.
Speaker Change: We're thinking we believe that this business will achieve mid single digit millions.
Speaker Change: $1 in revenue and we are actively building out our capacity pipeline.
Speaker Change: That scale of revenue growth.
Speaker Change: The reality is that there are also scenarios, where we could grow more aggressively.
Speaker Change: And so Andrew and his team are very focused on really building out the whole infrastructure potential pipeline.
Speaker Change: That would enable us to deliver potentially more than eight gigawatts of capacity in the midterm. So if we do that that would help us so that would allow us to achieve significantly more revenue and the kind of midterm guidance that we're talking about here. So we will be opportunistic and we'll go after opportunities as we see them.
Speaker Change: I'm getting some of it some of the factors that could drive that additional incremental growth on top of the midterm guidance as we see more adoption from enterprise level customers and also potential set of larger longer term contracts and again.
Speaker Change: Okay, do you will get a bit more color on that legislation.
In terms of profitability and this is.
Speaker Change: A business that we can grow profitably.
Speaker Change: And we anticipate medium term EBIT margin to range from 20% to 30% range.
Speaker Change: So this will be supported by AI cloud business reaches scale. We also have we have an important differentiator, which is the full stack and particularly the software at the top end of the stack and the software.
Speaker Change: It's a very important part of our business model, what makes us attractive to clients sticky to clients and ultimately we think it's what's going to allow us to achieve higher margin pretty high margin business models and really.
Speaker Change: <unk> customers in different ways and wider range of customers that allow us to basically get increased effective revenue at GPU. So not just the GPU as a service model, but it's a broader range of revenue sources.
Speaker Change: So we also I think it's also important to note that we actually take a very conservative view on depreciation so actually with all of these numbers. We apply here are for your depreciation schedule.
Speaker Change: Others, I think you typically use more of a five or six year dip.
Speaker Change: As Jeff said within our industry.
Speaker Change: Longer term I think what we say, 20%, 30% of EBITDA EBITDA margins and Midtown longtime we could go beyond that I think there is a number of scenarios as we continued to scale up and expand the business that we could go well north of 30% and the long term.
Speaker Change: So just.
Speaker Change: Just to wrap up.
Speaker Change: We are building AI infrastructure successfully and at scale I.
Speaker Change: I think as you've heard us talk about on previous calls fund.
Speaker Change: Fundamentally we think our differentiation and what sets us apart it really comes down to two things.
Speaker Change: Bubble is the quality of our technology. It's also our access to capital that could allow us to take advantage of that technology and to ramp up and scale up quickly.
Speaker Change: So briefly on the technology.
Speaker Change: We havent amazing team of engineers.
Speaker Change: Mobility amazing hardware software and services.
Speaker Change: And that really is that the best address in the industry. It will take years to build a team of that at that quality and I'm really proud to have them.
Speaker Change: That building great tax building out that Nathan AI cloud and we're expanding the range of AI native customers that we're able to service and really the ASR that we felt it goes well beyond just what you might call. It a classic bare metal offering.
Speaker Change: Upfront partnerships as Daniel talked about with the ecosystem and all of this is allowing us to reach and service a broader range of customers.
Speaker Change: In terms of capital itself so.
Speaker Change: We think we're actually in a very favorable position and naturally quite a unique position among the crowds to really finance as future growth in an efficient way.
Speaker Change: So we have significant capital funding potential for the coal business, which actually comes from our various.
Speaker Change: Ownership and equity stakes of noncore businesses.
Speaker Change: And these are the monetization of these potential equity stakes can really translate efficiently and to bottom line results of the core business.
Speaker Change: So just to give some examples of what we what we're referring to it yet you may have seen quick house in the news lately, we have a 28% of roughly 28% minority stake in the business and this can potentially be a very important source of future capsule.
Speaker Change: So according to some of the recent press reports that the fundraising round underway at the moment, which would potentially value of the business at around $6 billion.
Speaker Change: And we believe that business will continue to perform extremely well and grow significantly from current levels.
Speaker Change: We have to lockup.
Speaker Change: And we are extremely pleased to announce that the emergence of strategic investors in general as us anyhow.
Speaker Change: It's coming into the structure and we think that that investment involvement in the business is really going to help propel us to scale up among the top tier of AI data companies globally.
Speaker Change: Great backing for these investors and by what's important for US. We think this is great for telco is great for us as well because we and for our shareholders because we maintain a significant majority economic interest until August so it will benefit from all of the upside.
Speaker Change: We also have 80 right. It's one of the best autonomous vehicle.
Speaker Change: <unk> and <unk>.
Speaker Change: They're doing great. This year and the last question, we've announced it Institute.
Speaker Change: Partnerships with players like Bouba.
Speaker Change: Grubhub Records.
Speaker Change: These partnerships really underscore I think the strength is that tech and the team and places that really among a select group of global leaders in that field.
Speaker Change: The readout on Eddie right as we've mentioned previously we're actually wait until the active talking to potential investors and strategic investors that could come into the business that we believe would really help them scale up even faster and truly built into their businesses, but again, while we while we would always look to retain significant economic interest in the upside.
Speaker Change: It's really our ability to use these assets and these stakes, which gives us a really.
Speaker Change: Attractive source of financing so when we think about the future civilians.
Speaker Change: Does it lessen in the core business.
Speaker Change: And we'll be able to very effectively one, texas businesses and to grow extremely efficiently in a way that really minimizes any dilution to existing shareholders, while allowing us to stay very disciplined in terms of the debt.
Speaker Change: So just again just to kind of summarize once we achieve adjusted EBITDA profitability, a strong balance sheet and continued low interest burden.
Speaker Change: Our revenue growth to translate very efficiently into bottom line results. So.
Speaker Change: I'll stop there and then Neil I'll hand back over to you for Q&A.
Speaker Change: Great.
Speaker Change: Cost for just a minute just a moment just to clarify my question.
Speaker Change: Great.
Speaker Change: Alright, so let's start with your first question.
Speaker Change: Guidance midterm revenue and margins, but do you mean by midterm and what are the building blocks to getting there Brian.
Brian: Yes, Thank you Neil.
Speaker Change: <unk>.
Speaker Change: Our base case Len.
Speaker Change: All forward several billion dollars of revenue in the midterm.
Speaker Change: Over the next few years.
Speaker Change: While our base case assumes that we grow our capacity to support this type of revenue go from anticipated by its level. So 100 megawatt our ambition is to grow much larger and much faster.
Speaker Change: We are building at the epicenter of pipeline to provide scalability to more than one gigawatt of borrower.
Speaker Change: Okay.
Speaker Change: Also.
Speaker Change: As Tom said earlier.
Speaker Change: <unk> quickly, we get there will be a function of.
Speaker Change: How fast you can scale and capture demand through more.
Speaker Change:
Speaker Change: Enterprise level customers and.
Speaker Change: For longer term contracts.
Speaker Change: And also a few words about the.
Speaker Change: Margins.
Speaker Change: Sure.
Speaker Change: Target both transit failure.
Speaker Change: Margins is a function of.
Speaker Change: A few factors.
Speaker Change: Uh huh.
Speaker Change: Greater mix of workloads, who are we can run our GPU. Please.
Speaker Change: At a high level of utilization for a longer period of time.
Speaker Change: Second I would say is.
Speaker Change: <unk>.
Speaker Change: Software.
Speaker Change: Food.
Speaker Change: A lot of.
Speaker Change: Efforts into developing our software.
Speaker Change: Each of them.
Speaker Change: Allow us.
Speaker Change: Assumed contribution from high margin software and services revenue over the long term.
Speaker Change: And fourth dimension. In addition, we've taken a more conservative view on that.
Speaker Change: Depreciation.
Speaker Change: Where we use the full year.
Speaker Change: <unk> schedule, while others use.
Speaker Change: Five or six year.
Speaker Change: So.
Speaker Change: More and more workloads shifts to influence this will come to higher margins for us as well.
Robyn: Great. Thanks Robyn.
Robyn: Ron maybe you could take the next question to purchase around Q&A IRR was ahead of what you discussed on the last earnings call.
Robyn: What really drove that strength and how are you feeling about the full year.
Robyn: Yes, as I said overall demand environment in Q1 was strong.
Robyn: For customers, who want the DOCSIS two gpus.
Robyn: And we see that demand strengthen each month.
Robyn: Our.
Robyn: Customers I believe recognize the value of our infrastructure and software.
Robyn: Okay.
Robyn: We were able to provide reliable and scalable service.
Robyn: Our software enables customers to start accessing clusters with thousands of Gpus adjustments a matter of days.
Tom Black: And what tweaks and we heard from Tom.
Robyn: Our core customers.
Tom Black: Recognition of that.
Tom Black: We also saw the benefits of our sales team ramping up.
Tom Black: And especially.
Tom Black: The investments in our pre sales and solution architects and customer success team.
Tom Black: Now we can provide 94 seven.
Tom Black: While global support.
Tom Black: And I believe it significantly.
Tom Black: Significantly contributed to improve our sales process and obviously.
Tom Black: Obviously.
Bulk sale.
Tom Black: <unk> success.
Tom Black: Yeah.
Tom Black: Our brand awareness is also growing.
Tom Black: It will get a lot of effort there and also thanks to industry recognition for example came in and out of this question remarks.
Tom Black: Fabulous.
Kathy: Kathy mentioned.
Tom Black: Contributed.
Tom Black: And we see that our pipeline becomes more deep.
Tom Black: <unk> strong strong.
Tom Black: Also.
Tom Black: Sure.
Tom Black: See that our approach to bring the newest chips online as early as possible like not responding to.
Tom Black: Specific contracts, but in this like more quality manner.
Tom Black: And our flexibility to provide there.
Tom Black: Real cloud terms to the combination of pay as you go or.
Tom Black: Iterations of different land.
Tom Black: Is paying back as well.
Tom Black: A good example.
We do take a moment in February we approved.
Tom Black: We quickly respond to the peak demand too.
Tom Black: H 200 chips that we have deployed in a more volumes that maybe some other players.
Tom Black: Group.
Tom Black: All that resulted in the strong growth and we reached.
Record number.
Our managed customers during Q1.
Tom Black: A.
Tom Black: A few words about the full year.
Tom Black: We continue to see a solid start of Q2.
Tom Black: The demand.
Tom Black: It remains robust.
Tom Black: Unrealized run rate revenue of.
Tom Black: 310 me down.
Tom Black: Confirms that and we are seeing that.
Tom Black: Strong momentum continued to lag.
Tom Black: And in the second half of the year, we expect to bring Blackhawks oil customers, which should provide further support to our revenue profile.
Tom Black: Gives us confidence that we can deliver on our guidance of 752 $1 billion.
Tom Black: What's driving them by the end of Q4 trains identified.
Tom Black: Alright, Thanks, Brian.
Speaker Change: So you discussed getting to a positive adjusted EBITDA margins by the end of the year can you provide an update when do you think that'll happen maybe we'll go to Tom for this.
Tom Black: Yes, sure. So I guess I touched on this briefly in the presentation that just to pick up film Festival.
Tom Black: Achieving positive adjusted EBITDA is an important milestone for us and it really highlights that we're very focused on getting to profitability and as we set out midterm targets. We believe this is a business that can post really strong profitability going forward.
Tom Black: So specifically with again with respect to adjusted EBITDA.
Tom Black: Intangible reached positive territory at some point during the second half of the App.
Tom Black: One thing I would note is actually if we break it down and look at the core infrastructure business. Then we'll get we'll move in faster there and we'll get to positive adjusted EBITDA, probably sometime in first quarter.
Tom Black: The next goal is we'll obviously need to then focus on reaching positive adjusted EBIT.
Tom Black: And we're working full steam towards satcom.
Tom Black: Great.
Tom Black: Tom maybe sticking with you.
Speaker Change: There's a question here about Capex, we have raised the capex guidance can we provide any update on the reasons for this.
Tom Black: Yeah sure I mean so.
Tom Black: Our primary business model is predicated on building capacity for demand.
Tom Black: And we've been very fortunate to be able to finance all of our capex that our cash on hand and up until now.
Tom Black: So looking at this year So festival in terms of the kind of the specific guidance for this year as I mentioned as I mentioned earlier, we had some capex spend that had been keyed up for the end of the fourth quarter of last year, which got pushed into the first quarter.
Tom Black: That's just down to sort of a typical quarter to quarter fluctuations based on sort of various factors related to data center build outs.
Tom Black: But we've taken.
Tom Black: We want to be opportunistic in how we view the targets that we set out as base cases, but that there are a lot of scenarios, where we can do more and go more aggressively and will we see an opportunity to do so that's in a way that is value accretive threshold as we want to be able to do so so for example, again when we see an opportunity to ramp up capacity faster around.
Tom Black: Existing demand that we can see.
Tom Black: We wouldn't be able to do so so the AMB Israel data center is one that we hadn't initially have an RF our roadmap, but it was an opportunity that came along and fell and we felt that was a good one for us to go forward.
We're very pleased.
Tom Black: Probably that's where I'm going to get a bit more color around that but it is a great market and whether it be getting into that market. So it's a new geography on top of some of the previous geographies daily production.
Tom Black: So in terms of those and so the incremental data center build outs like Israel from a revenue standpoint, it will be it will be investing putting capacity in place later this year.
Tom Black: The revenue will be we will see more contributing to 2026.
Tom Black: Keeping us very much on that path towards that sort of mid single digit billions for revenue that we spoke about.
Tom Black: Great maybe.
Tom Black: Maybe.
Speaker Change: Keeping with the theme of Capex, Tom I know you touched a little bit in the slides on how we're going to finance our future growth. So how do we expect to finance.
Speaker Change: The capex expansion given that the cash balance analysis below 20%.
Speaker Change: Yeah sure so.
Speaker Change: So just to kind of recap.
Speaker Change: If you look at Q1.
Speaker Change: We've already spent $544 million in the past quarter towards that overall $2 billion capex or <unk> and.
Okay.
And Tom maybe sticking with you.
Speaker Change: There's a question here about Capex, we have raised the capex guidance can we provide any update on the reasons for this.
Speaker Change: At the end of the quarter, we have one 4 billion of cash remains on the balance sheet.
Speaker Change: So.
Speaker Change: Yeah sure so.
Speaker Change: We feel good about our ability to finance that Capex and also again I just come back to this point, so kind of going beyond that and looking.
Speaker Change: Our primary business model is predicated on building capacity for demand.
Speaker Change: And we've been very fortunate to be able to finance a lot of our capex with our cash on hand up until now.
Speaker Change: Looking further afield.
Speaker Change: Could you fix that we have in these non core businesses again, we believe will provide us a very significant finding sources for future.
Speaker Change: So looking at this year. So first of all in terms of the kind of the specific guidance for this yet as I mentioned as I mentioned earlier, we had some capex spend that had been keyed up for the end of the fourth quarter of last year, which got pushed into the first quarter.
Speaker Change: So if we can continue to ramp up and scandals going on this year.
Speaker Change: In ways that really minimized dilution to salvage and allows us to stay very disciplined on that and I think sort of an important point.
Speaker Change: That's just down to sort of typical quarter to quarter fluctuations based on sort of various factors related to data center build outs.
Speaker Change: Obviously the company, we have access to more traditional funding sources and we will look at those from time to time, but when you bring in an accident.
Speaker Change: But we've taken.
Speaker Change: I appreciate it.
Speaker Change: We want to be opportunistic we view the targets that we've set out as base cases, but that there are a lot of scenarios, where we can do more and go more aggressively at what do we see an opportunity to do so that's in a way that is value accretive to our shareholders, we want to be able to do so.
Speaker Change: And I guess just.
Speaker Change: Another point that I would make is that again given that we have right now.
Speaker Change: With no debt.
Speaker Change: Anticipate continued to have relatively low levels of debt so that means that.
Speaker Change: We're going to be able to reinvest a significant amount of our revenue back into draft driving value creation in our core AI infrastructure business.
Speaker Change: For example, again, when we see an opportunity to ramp up capacity faster around existing demand that we can see we wouldn't be able to do so so the again the Israel data center is one that we hadn't initially have an RF our roadmap, but it was an opportunity that came along and we felt that was a good one for us to go forward and so we're very pleased and I think I.
Speaker Change: Great.
Speaker Change: It looks like we are getting at.
Speaker Change: Have a higher level question here was just around future growth, so maybe or maybe.
Speaker Change: Maybe you can tell us where youre seeing the growth in the future in this business.
Speaker Change: Well.
Speaker Change: Probably either late stage, I'll ask bathroom and to get a bit more color around that but it's a great market and we're very excited to be getting into that market, so and that sort of if the new geography on top of some of the previous geography. So we could focus on.
Speaker Change: Okay.
Speaker Change: The customer base the majority of them.
Speaker Change: They have a loose.
Speaker Change: New where a company so that the notion of the recent couple of years.
Speaker Change: So in terms of those and so the incremental data center build outs like Israel from a revenue standpoint, it will be we'll be investing putting the capacity in place later this year.
Speaker Change: And actually continue to come to the market.
Speaker Change: They are very advanced.
The coal demand in Egypt.
Speaker Change: It's mark.
Speaker Change: And the revenue will be we will see more it's contributing to 2026 keys.
Speaker Change: Growing which will really like them they like us.
Speaker Change: Those companies are.
Speaker Change: Keeping us very much on that path towards the sort of mid single digit billions of revenue that we spoke about earlier in the presentation.
Speaker Change: Usually venture backed and understandably the majority of them are in the U S.
Speaker Change: That's why we're so focused on building out would be the center of capacity in the U S right now.
Speaker Change: Maybe.
Speaker Change: Keeping with the theme of Capex, Tom I know you touched a little bit in the slides on how we're going to finance our future growth. So how do we expect to finance the capex expansion given that the cash balance now is below what we are planning to spend.
Speaker Change: So all the growth you currently see in maybe as well this quarter results.
Speaker Change: The results most of our revenues.
Speaker Change: They come mostly from this market now.
Speaker Change: Yeah sure so.
Speaker Change: So just to kind of recap.
Speaker Change: If you look at Q1, so we've.
Speaker Change: The second very promising sector.
Speaker Change: We've already spent $544 million in the first quarter to what's that over a $2 billion capex, which are <unk> and <unk>.
By the way.
Speaker Change: Is northern mental revenue yet.
Speaker Change: Is all of those.
Speaker Change: At the end of the quarter, we have one 4 billion of cash remaining on the balance sheet.
Speaker Change: From a frontier.
Speaker Change: B customers.
Speaker Change: We haven't talked to this market here.
Speaker Change: So.
Speaker Change: Good about our ability to finance that Capex and also again I would just come back to this point, so kind of going beyond that and looking.
Speaker Change: But we're doing a lot.
Speaker Change: To serve them and help them to grow faster.
Speaker Change: In order to serve.
Speaker Change: Looking further afield the equity stakes that we have in these noncore businesses again, we believe will provide us a very significant funding sources for future.
Speaker Change: And those customers.
Speaker Change: We will need much more much bigger and in data centers.
Speaker Change: We are actually getting ready for this.
Speaker Change: So we can continue to ramp up and scale beyond this year in ways that really minimize against dilution to shareholders and allow us to stay very disciplined on that and I think it's a really important point.
Speaker Change: This way we have.
Speaker Change: Okay pipeline to get to this morning.
Speaker Change: <unk> for the.
Speaker Change: Capacity.
Speaker Change: So we are not there yet but.
Speaker Change: Obviously the company, we have access to more traditional funding sources and we will look at those from time to time when we believe it makes sense then.
Speaker Change: But we will be there soon.
Speaker Change: The second sector.
Speaker Change: Victor maybe the most promising.
Speaker Change: In terms of the growth is the enterprises.
Speaker Change: I appreciate it.
Speaker Change: And I guess, just another point that I would make is that again given that we haven't but right now we have very low.
Speaker Change: AI technology today.
Rich just a small fraction of the corporate clients typically talks about it.
Speaker Change: With no debt.
Speaker Change: Anticipate continued to have relatively low levels of debt so that means that.
Speaker Change: But at the same time this is ware.
Speaker Change: We're going to be able to reinvest a significant amount of our revenue back into draft driving value creation in our core AI infrastructure business.
Speaker Change: We would expect the majority of.
Speaker Change: Is it failure, which will be created.
Speaker Change: And by the way, our full stack solution and higher level services, which are provided is very much driven.
Speaker Change: Great.
Speaker Change: It looks like we're getting a kind of a higher level question here was just around future growth. So maybe are cut.
Speaker Change: Cynthia.
Speaker Change: Are these markets.
Speaker Change: Maybe you can tell us where youre seeing the growth in the future in this business.
Speaker Change: Is much more global by nature, because the real industry.
Speaker Change: Well.
Speaker Change: Enterprises everywhere.
Speaker Change: Okay.
Speaker Change: Many countries.
Speaker Change: The customer base the majority of them.
Speaker Change: These were all European and global infrastructure business.
Speaker Change:
Speaker Change: All of those.
Speaker Change: New where a company is that the notion of the recent couple of years.
Speaker Change: Be in high demand.
Speaker Change: Oh and by the way I will tell you, though just so hydro skus. We are one of very few AI clouds co providers.
Speaker Change: Continue to come to the market every month.
Speaker Change: They are very advanced technology.
Speaker Change: Providers.
Speaker Change: Technology, we called EMEA.
Speaker Change: So we can serve.
Speaker Change: Corporate clients in multiple geographies.
Speaker Change: The smart move.
Speaker Change: First growing which would really like them in the lake.
Speaker Change: So business the most promising sector for us I believe.
Speaker Change: Those companies are usually venture backed.
Speaker Change: In the near future and.
Speaker Change: And there is also the fourth sector, which we also.
Speaker Change: And understandably the majority of them are in the U S.
Carefully.
Speaker Change: That's why we are so focused on building data center capacity in the U S right now.
Speaker Change: Additional markets.
Speaker Change: Initially our approach, we hear more and more about them.
Speaker Change: All the girls you currently see in maybe as well this quarter results.
Speaker Change: And here again, we see a huge opportunity for us.
Speaker Change: The results most of our revenues.
Speaker Change: Sure.
Speaker Change: And we plan to build factories.
Speaker Change: They come mostly from this market now.
Speaker Change: Different countries and geographies in the U S and Europe Middle East and.
Speaker Change: The secret in very promising sector.
Speaker Change: Okay.
Speaker Change: Hum.
Speaker Change: By the way.
Speaker Change: Is northern mill revenue yet.
Speaker Change: But all in all those four sectors ml. The whole market is suggests the beginning for AI technology, Hawaii business.
Speaker Change: Is all of those.
Speaker Change: So from a frontier up's big customers.
Speaker Change: The our infrastructure will be in high demand.
Speaker Change: We havent, Texas market here.
Speaker Change: But we're doing a lot to be ready.
Speaker Change: In many industries and our manager geographies.
Speaker Change: And to serve them and help them to grow faster.
Speaker Change: And then as we do that.
Speaker Change: To serve this demand.
Speaker Change: In order to serve.
Speaker Change: That's great. Thanks Scotty.
Speaker Change: For those customers.
Speaker Change: Yeah.
Speaker Change: We will need much more and much bigger in data centers.
Speaker Change: Alright lets see next question how does to look at deconsolidation impact to your business I can probably take that so <unk>.
Speaker Change: We are actually getting ready for this this.
Speaker Change: This way we have.
Speaker Change: Okay pipeline to get to this more than 100 gigawatts of capacity.
Speaker Change: <unk> is our AI and data solutions provider.
Speaker Change: Then really good job in terms of building their business they have high quality customers like Amazon Anthropic, Microsoft Poolside, we craft and Shopify and.
Speaker Change: So we're not there yet.
Speaker Change: We will be there. So that's the second sector, the <unk> sector and maybe the most promising sector in terms of growth is the enterprises.
Speaker Change: And we believe to look really has great growth prospects.
Speaker Change: And this is really validated by their investments from the <unk> expedition and Macau crack in the CTO of Shopify.
Speaker Change: AI technology today.
Speaker Change: Rich just a small fraction of the corporate clients typically talks about it.
Speaker Change: Given these growth prospects, we're happy to retain a significant majority economics taken to Luca.
Speaker Change: But at the same time this is ware.
Speaker Change: The World expects the majority of it was a failure.
Speaker Change: As we now are voting shares dropped below 50%, we will be consolidated to look at since the transaction closed in may we will be updating our financials and guidance ex <unk> in our Q2 earnings report.
Speaker Change: We will be creating.
Speaker Change: And by the way a full stack solution and higher level services, which are provided is very much driven exactly.
Speaker Change: Exactly here.
Speaker Change: This market is.
Speaker Change: Much more global by nature, because the real industry really enterprises everywhere in the world in many countries.
Speaker Change: Okay.
Speaker Change: Alright, it looks like we have a few questions around infrastructure, maybe we can start with Andrea on this 100 can you provide an update on your capacity expansion plans for this year.
Speaker Change: And this is where all European and global infrastructure business.
Speaker Change: I'll be in high demand.
Speaker Change: For NIM.
Speaker Change: We.
Speaker Change: Oh and by the way I will tell you, though just so hyperscale is we are one of very few clubs corporate leaders.
Speaker Change: We are aggressively.
Speaker Change: We will.
Speaker Change: Acquired digitally.
Speaker Change: <unk> and expanding the footprint.
Speaker Change: So we can serve.
Speaker Change: What we know in February was the New Jersey data Center.
Speaker Change: Corporate clients in multiple geographies.
Speaker Change: So this is the most promising sector for us I believe.
Speaker Change: Due to the project.
Speaker Change: Dubai partner according to our specifications.
Speaker Change: In near future.
Speaker Change: And there is also the fourth sector, which we also.
Speaker Change: Please go ahead.
Speaker Change: And this is quite important because.
Speaker Change: You should carefully.
Speaker Change: Potential market.
Speaker Change: Yes.
Speaker Change: Among national AI approaches, we hear more and more about them.
Speaker Change: Helps us to deliver the efficiency of the power usage, including efficiency again will it be.
Speaker Change: And here again, we see a huge opportunity for us.
Speaker Change: What we demand from ourselves.
Speaker Change: And we plan to build factories in different countries and geographies in the U S and Europe, and middle East and materials elsewhere.
Speaker Change: And we expect that the first of our two new Jersey.
Speaker Change: To be operational in the late summer.
Speaker Change: We'll continue to rollout.
Speaker Change: Yeah.
Speaker Change: Periodical basis.
Speaker Change: But all in all those four.
Speaker Change: Four sectors ml the whole market is just the beginning for a technology business.
Speaker Change: <unk> with the demand.
Speaker Change: It will be also announced the Kansas City.
Speaker Change: The first part of it is.
Speaker Change: Yeah, our infrastructure will be in high demand.
Speaker Change: What are you.
Speaker Change: Many in the season in many geographies and that is will be there to serve this demand.
Speaker Change: The rational and that was the first.
Speaker Change: The loss.
Speaker Change: Deployment of the Hooker.
unknown: That's great. Thanks Scotty.
Speaker Change: GPU generation for us.
Speaker Change: Yeah.
Speaker Change: And at the moment the blackboard.
Speaker Change: Alright lets see next question how does to look at deconsolidation impact to your business I can probably take that so <unk>.
Speaker Change: Before I turn the second part of that kind of goes into that.
Speaker Change: Theoretical and deploy.
Speaker Change: To look at is our AI data solutions provider.
Speaker Change: With later.
Speaker Change: The second quarter.
Speaker Change: Done a really good job in terms of building their business they have high quality customers like Amazon and Dropback, Microsoft Poolside re craft and Shopify and we believe to look at really has great growth prospects.
Speaker Change: We will conduct fully launched the iPhone.
Which is fully operational.
Speaker Change:
Speaker Change: The moment.
Speaker Change: <unk> seen a month ago.
Speaker Change: Quite well.
Speaker Change: And this is really validated by their investments from the <unk> expedition and Macau crack in the CTO Shopify.
Speaker Change: Is that still on track.
Speaker Change: The first phase of the expenditure will be operational in.
Speaker Change: Given these growth prospects, we're happy to retain a significant majority economic stake into Luca.
Speaker Change: Late in Q3, and the second place we will be.
Speaker Change: Boyd.
Speaker Change: Closer to the yearend.
Speaker Change: And as we now are voting shares dropped below 50%, we will be de consolidated to look at since the transaction closed in may we will be updating our financials and guidance ex <unk> in our Q2 earnings report.
Speaker Change: And.
Speaker Change: Traditionally we will have over on the <unk>.
Speaker Change: Lots of capacity.
Speaker Change: Sure.
Speaker Change: Great.
Speaker Change: Thank you Andre.
Speaker Change: Can you share more about the new site in Israel and can you discuss your expansion strategy beyond the EU and U S comment or are you kind of alluded to this maybe robin you can you can talk a little bit more about this and elaborate on Israel.
Speaker Change: Okay.
Speaker Change: Alright, it looks like we are.
Speaker Change: A few questions around infrastructure, maybe we can start with Andre on this one and Andre can you provide us an update on your capacity expansion plans for this year.
Speaker Change: Sure.
Speaker Change: Yes. Thank you.
Speaker Change: Yeah.
Speaker Change: We.
I feel comfortable.
Speaker Change: We are aggressively.
Speaker Change: Launching launching in Israel is.
Speaker Change: Acquiring.
Speaker Change: It seems recovers to expanding the footprint.
Speaker Change: It means for US is opened and one more market.
Speaker Change: What we know.
Andreas: As Andreas said.
Speaker Change: February was the New Jersey data Center and this is due to suite project.
Andreas: Very much continues to be focus includes scale up capacity.
Speaker Change: Dubai partner according to our specifications.
Andreas: Europe and U S, but we don't want to compete with anybody.
Andreas: Those pockets so first of all it's a new market demands.
Speaker Change: Got it.
Speaker Change: And this is quite important because.
Speaker Change: Israel has.
Speaker Change: Yes.
Andreas: Uh huh.
Speaker Change: Helps us to deliver.
Speaker Change: Great market that the logo startups enterprises.
Speaker Change: True to before usage liquidity efficiency would be.
Speaker Change: R&D centers of the global corporate incentives.
Speaker Change: What would be removed from our results.
Speaker Change: This is <unk>.
Speaker Change: And we expect that the first of all of us to.
Speaker Change: Great game for us to do a lot of customers.
Speaker Change: To be operational in the late summer.
Speaker Change: But what is also important that there's a dollar of sales but progress nonetheless.
Speaker Change: Those will continue to rollout.
Speaker Change: Periodical basis in conjunction with our demand.
Speaker Change: In support internationally and factories.
Speaker Change: And we are.
Speaker Change: We also announced the Kansas City.
Speaker Change: To support and build more nationally factories around the world.
Speaker Change: And.
Speaker Change: The first part of it is.
Speaker Change: What are you.
Speaker Change: And we will look to see how we can lock into those.
Speaker Change: The operational and that was one.
Speaker Change: So the loss.
Speaker Change: Deployment of the Hooper.
Speaker Change: Initiatives.
Speaker Change: Debuted generation for us.
Speaker Change: Across Europe Middle East and.
Speaker Change: And at the moment there are black holes.
The rest of the world.
Speaker Change: Ultimately like opportunistic in looking total so this market is I've got eating.
Speaker Change: And the second part of the kind of go see too big.
Speaker Change: Available in the Qualcomm.
Speaker Change: <unk> seven.
Speaker Change: Sure.
Ron: Great. Thanks, Ron.
Speaker Change: Second quarter.
Speaker Change: We also announced and actually launched the iPhone.
Ron: Alright can you share an update on your GPU rollout plan for this year Andre.
Speaker Change: Which is fully operational.
Speaker Change: At the moment.
Ron: Oh.
Ron: So.
Speaker Change: And our <unk> sealant is going quite well.
Ron: Aside from the Israel diversity.
Ron: We're very much on track with the.
Speaker Change: Exactly on track and we expect the first phase of the expansion will be operational in.
Ron: Rollout.
Ron: Planned earlier.
Ron: We this.
Ron: <unk> redeployed.
Speaker Change: Late in Q3, and the second phase will be will.
Ron: In Q1, specifically we deployed.
Speaker Change: Boyd.
Ron: Hoppers generation each component specifically.
Speaker Change: Colby.
Speaker Change: Year end.
Speaker Change: And.
Ron: At the moment, we are rolling out the Blackhawk as already mentioned.
Speaker Change: Operationally, we will have over on the <unk> of capacity.
Ron: And they will be available on the Broadcom shortly.
Speaker Change: Deployed this year.
Speaker Change: Great.
Ron: We also.
Speaker Change: Thank you Andre.
To deploy.
Speaker Change: So can you share more about the new site in Israel and can you discuss your expansion strategy beyond the EU and U S comment or are you kind of alluded to this maybe robin you can you can talk a little bit more about this and elaborate on Israel.
Ron: Chris Blackwell penalty, so the GBP 100 side of it.
Ron: We expect that.
Ron: In Q3.
Ron: The Blackberry.
Ron: Terrific.
Ron: We'll start with the first importance.
Robin: Yeah. Thank you Neal.
Ron: And the majority of this year.
Robin: They feel comfortable.
Ron: They.
Robin: Lunching launching in Israel.
He actually deployment.
Ron: Great.
Robin: <unk>.
Robin: It means for US is the open one more market.
Ron: Thank you Andre.
Speaker Change: Maybe sticking with you again and the other question around regulatory issues around tariffs.
Robin: As Andres said, we will very much continue to be focus on the scale up capacity.
Ron: And any thoughts on it.
Speaker Change: The impact of tariffs on our data center expansion plans.
Robin: Europe and U S, but we don't want to give it the film.
Speaker Change: Also just how are you thinking about the cost to our business.
Robin: Those markets.
Robin: First of all it's a new market demands.
Speaker Change: Good question.
Robin: Israel has.
Speaker Change: Definitely.
Robin: Great to a market that the logo startups enterprises and R&D centers of global corporations.
Speaker Change: Okay.
Speaker Change: Often these are subtle.
Speaker Change: Yes.
Speaker Change: So clear.
Robin: Mrs.
Speaker Change: Around global occurs.
Robin: Sure.
Robin: Great gate for us to a lot of customers.
Speaker Change: But based on where we stand now we don't believe.
Robin: But what's also important this is our first but probably not the last step in supporting nationally I factories.
Speaker Change: The current status of the result, we measure.
Changes to our expansion plans.
Speaker Change: We also believe that we can move it through the.
Robin: And we hope to support and build more nationally factories around the world.
Speaker Change: Kevin.
Speaker Change: Environment.
Speaker Change: Without significantly lower costs.
Robin: And we'll look to see how we can lock into.
Speaker Change: Okay.
Speaker Change: However.
Speaker Change: They just they're very.
Staying on exploration.
Robin: <unk> initiatives.
Speaker Change: Please can change quite quickly.
Robin: Across Europe, Middle East and the rest of the world.
Speaker Change: So.
Robin: Ultimately look like.
Speaker Change: During the Q1.
Robin: And he's taken booking tool to this market as I've got eating.
Speaker Change: And we are actually.
Speaker Change: Regarding the situation.
Robin: As I mentioned.
Speaker Change: Great. Thanks Andre.
Ron: Great. Thanks, Ron.
Speaker Change: Okay.
Speaker Change: Alright can you share an update on your GPU rollout plan for this year Andre.
Speaker Change: So it looks like we have.
Some questions about customers. So maybe I'll give this to Daniel Daniel tell us more about the analogous as customers and why are they choosing that guess.
Robin: Oh.
Robin: So.
Robin: Aside from the Israel capacity, where we are.
Speaker Change: Over other providers.
Daniel: Great. Thanks, Neil and thanks for the question.
Robin: Our strong track with the rollout that we.
Speaker Change: First of all our customers choose us because we offer high performance resilient and scalable alternative for other cloud providers.
Robin: The plant earlier.
Robin: This year, we deployed.
Robin: In Q1 statistically redeployed.
Speaker Change: But what really makes a difference our differentiation lies in our deep expertise in hyperscale infrastructure in our role as a hands on practitioner along with our customers. So we're not just another platform vendor. What this does is ultimately enable us to drive a greater return for every dollar of our customers.
Robin: Hoppers generation each component specifically.
Robin: At the moment, we are rolling out the Blackhawk as already mentioned.
Robin: And they will be available on the platform shortly.
Robin: We also.
Robin: To deploy.
Robin: As blackboard penalty so the GBP 100 side of it were expected.
Speaker Change: So examples of that in Q1, we saw great momentum in new wins and vertical industries like healthcare and life Sciences.
Robin: In Q3.
Speaker Change: Like media and entertainment and financial services.
Robin: The Blackberry.
Robin: Our generation.
Speaker Change: One customer of ours captions is a leading AI video platform. They partnered with us to scale GPU training for the next generation audio to video model Mirage.
Robin: Start with the first deployment.
Robin: And the majority of this year, we will.
Robin: Actually deploying the blood vessels.
Robin: Great.
Speaker Change: So by leveraging our infrastructure they accelerated their time to market.
Robin: Thank you Andre.
Robin: Maybe sticking with you again and the other question around regulatory issues around tariffs.
Speaker Change: Empower their creators to deliver emotionally compelling.
Speaker Change: As a story driven content and ultimately pushed the boundaries of AI powered storytelling. So a great example.
Robin: Any thoughts on.
Robin: The impact of tariffs on our data center expansion plans and also just how are you thinking about the cost to our business.
Speaker Change: Media and entertainment industry.
Speaker Change: It will be <unk>.
Speaker Change: <unk> Biopharma.
Robin: Good question.
Speaker Change: Partner of ours.
Speaker Change: It's to build a framework for <unk> molecular generation.
Robin: There is definitely.
Robin: Was this a certain.
Speaker Change: And ultimately by increasing the amount.
Robin: I mean.
Speaker Change: Multimodal tools that they could model they achieved.
Robin: So clear around global cars.
Speaker Change: Typically valid structures and really enabled faster scalable RMB and accelerated the innovation that they have in drug materials discovery, So really monetizing in unlocking the power for AI for those customers and that's just the beginning so looking ahead.
Robin: But based on where we stand now.
Robin: I don't believe.
Robin: The current status with the result of a major.
Robin: Changes, especially.
Robin: Especially funds.
Robin: We also believe that we can navigate through that.
Speaker Change: And we are doubling down on the virtualization of AI solutions across the enterprise.
Robin: Current.
Robin: Environment.
Robin: So this could impact all of our costs.
Speaker Change: Customers ranging from retail to robotics as they embed AI into their core operations.
Robin: Oh.
Robin: However.
Speaker Change: One of the right there with them to drive measurable results.
Robin: Just a very dynamic situation.
Tom Black: Great. Thanks Danielle.
Robin: This can change quite quickly as the overview.
Speaker Change: We're getting a few questions around contract.
Speaker Change: So maybe Brian can you tell us a bit more or give us an update on what type of contracts were seeing in the market maybe in terms of structure duration.
Robin: So.
Robin: During the Q1.
Robin: And we are actively.
Robin: Regarding the situation.
Brian: Yeah. Thank you Neal.
Robin: Great. Thanks Andre.
Robin: Okay.
Brian: The first thing I want to highlight that definitive upcoming scenarios is our flexibility.
Robin: So it looks like we have.
Robin: Some questions about customers. So maybe I'll give this to Daniel Daniel tell us more about the <unk> customers and why are they choosing that gets over a rather providers.
Brian: That allow us to support and grow.
Brian: Nathan.
Daniel: Great. Thanks, Neil and thanks for the question.
Brian: Doctors.
And <unk>.
Daniel: First of all our customers choose us because we offer a high performance resilient and scalable alternative for other cloud providers.
Brian: Their needs and flexibility.
Brian: Contract lengths and to go from several mines.
Daniel: What what really makes a difference our differentiation lies in our deep expertise in hyperscale infrastructure in our role as a practitioner along with our customers. So we're not just another platform vendor. What this does is ultimately enable us to drive a greater return for every AI dollar our customer spend.
Brian: <unk> year and beyond.
Brian: In addition.
Brian: As we are just starting to bring.
Brian: <unk>.
Brian: That's opening up more discussions about longer term contracts.
Brian: New generation high interest.
Daniel: Some examples of that in Q1, we saw great momentum in new Windsor vertical industries, like healthcare and life Sciences, like media and entertainment and financial services.
Brian: And.
Brian: GBP 110 GB at 303.
Brian: Explain these to drive more demand and give us stability on the types of contracts.
Daniel: One customer of ours captions is a leading AI video platform. They partnered with us to scale GPU training for the next generation audio to video model Mirage.
Brian: We will be able to secure.
Speaker Change: Great. Thanks, Ron.
Speaker Change: Alright questioner on Nvidia can you talk a little bit more about the Nvidia relationship hows that progressing Danny lag sure sometimes in your slides, but anything more you want to elaborate there.
Daniel: And so by leveraging our infrastructure they accelerated their time to market.
Daniel: Sure they are creators to deliver emotionally compelling.
Daniel: Story, driven content and ultimately pushed the boundaries of AI powered storytelling. So a great example.
Speaker Change: Yes, I think between Andre we've covered a lot I'll do a little bit of reiterating here just in case anybody missed a few details.
Daniel: And the media and entertainment industry.
Speaker Change: We have not just the tight collaboration with our longstanding collaboration with Nvidia.
Another example would be <unk>, they're a top biopharma.
Daniel: <unk> of ours. These.
Speaker Change: They have been an investor in a capital raise last December with us.
Daniel: These <unk> to build a framework for <unk> molecular generation.
Speaker Change: We have a very robust go to market that we've built with them in Q1 in particular like I mentioned before.
Daniel: And ultimately by increasing the <unk>.
Daniel: Altra molecules that they could model they achieved.
Speaker Change: Ross the Blackwell families, particularly as we announced so blackboard ultra AI factory platform.
Daniel: Typically valid structures and really enabled faster scalable R&D and accelerated the innovation that they have been dragging materials discovery, so really monetizing in unlocking the power for AI for those customers and that's just the beginning so looking ahead.
Speaker Change: We are going to be one of the first vendors the GBP 300.
Speaker Change: <unk> 72 powered instances.
Speaker Change: We think this is going to be a real game changer in the market.
Speaker Change: We're doubling down on the vertical nation of AI solutions across the enterprise customers ranging from retail to robotics as they embed AI deeper into their core operations, we want to be right there with them to drive measurable results great. Thanks Danielle.
We're right there with Nvidia as those rollouts.
Speaker Change: We also talked about the ecosystem and Nvidia Dynamo.
Speaker Change: This open source <unk> framework and so as we continue to rollout the.
Speaker Change: Scale and the variety of the AI factories that are needed in the market.
Daniel: We're getting a few questions around contracts.
Speaker Change: We're right there with them.
Speaker Change: In real time.
Speaker Change: So maybe Roman can you tell us a bit more or give us an update on what type of contracts, we're seeing in the market maybe in terms of structure and duration.
Speaker Change: And then.
Speaker Change: The other thing that I mentioned earlier, but it is still important.
Speaker Change: The ability to stand up our cloud based off of Nvidia architecture that actually performs to spec and delivers at least $1 for every dollar invested if not more is what the Nvidia cloud partner program is all about and what the reference architectures that we're one of five partners really delivers for customers. It is a clear validation of our tech.
Speaker Change: Yes, Thank you Neil.
Daniel: <unk>.
Daniel: The first thing I want to highlight that the benefits of coming to enables is our flexibility.
Daniel: That allow us to support and grow.
Daniel: <unk> Tech startups.
Speaker Change: <unk> leadership.
Daniel: And meat.
Speaker Change: And that just rolls over into the market place that they are standing up with <unk> cloud leptin and lots of other opportunities whether it be with the startup community or expanding out in helping enterprises monetize AI, we've been very much in lockstep with the video.
Daniel: Their needs and flexibility.
Daniel: Contract lengths and to go from several months.
Daniel: Full year and beyond.
Daniel: In addition.
Daniel: As we are just starting to bring.
Speaker Change: Very long time and look to have a very bright future.
Daniel: <unk>.
Daniel: That's opening up more discussions about longer term contracts.
Tom Black: Great. Thanks Danielle.
Tom Black: We're definitely getting some questions around our our software stack.
Daniel: New generation high interest.
And we also get these questions quite a bit.
Daniel: And.
Tom Black: Speaking with shareholders and investors so.
Daniel: So you beat the parameters of <unk> 300.
Tom Black: It seems like we've launched a lot of products.
Daniel: We expect these to drive more demand and give us flexibility on the types of contracts.
Tom Black: In Q1 on the software side and how does how does our software stack compared with our competitors.
Daniel: We will be able to execute.
But really where the biggest launches Andre maybe you want to take that.
unknown: Great. Thanks, Ron.
Daniel: Yeah.
Speaker Change: Alright questioner on Nvidia can you talk a little bit more about the Nvidia relationship hows that progressing Daniel I know you shared some thoughts in your slide deck.
Tom Black: Okay.
Tom Black: Yes.
Tom Black: We further <unk>.
Tom Black: With a clear goal to do.
Tom Black: Yes.
Daniel: Anything more you want to elaborate there.
Tom Black: From the day one.
Daniel: Yes, I think between Andre now we've covered a lot I'll do a little bit of reiterating here just in case anybody missed a few details obviously, we have not just the tight collaboration but our longstanding collaboration with Nvidia.
Tom Black: Our focus has been.
Tom Black: Great.
Tom Black: Specifically built for the future.
Tom Black: Workloads.
Tom Black: Okay.
Tom Black: And our stock is.
Tom Black: Basically three layers. The first one is the layer that lenders our hardware.
Daniel: <unk> been an investor in a capital raise last December with us and we.
Daniel: We have a very robust go to market that we built with them in Q1 in particular like I mentioned before across the Blackwell families, particularly as we announced the Blackwell Ultra AI factory platform.
Tom Black: And since we designed our hardware.
Tom Black: <unk> report for <unk>.
Tom Black: Its performance and optimize the usage.
Tom Black: The second layer is.
Daniel: We are going to be one of the first vendors to stand up the GBP 300, Nvme 72 powered instances and we think this is going to be a real game changer in the market.
But we view the Google cloud platform.
Tom Black: Pretty similar.
Tom Black: Hyperscale.
Tom Black: So a virtualized environment so customers.
Daniel: We're right there with Nvidia as those rollouts.
Tom Black: We've submitted to them.
Daniel: We also talked about the ecosystem and Nvidia Dynamo.
Tom Black: But those community overall.
Tom Black: And the third layer.
Daniel: This open source <unk> framework and so as we continue to rollout the scale and the variety of the AI factories that are needed in the market.
Tom Black: Application, where we are.
Tom Black: When you can deliver pre configured third party tools.
Tom Black: The sutures.
Daniel: We're right there with them.
Daniel: In real time.
Tom Black: Further in two or three years.
Daniel: And then.
Tom Black: Opening process.
Daniel: The other thing that I mentioned earlier, but it is still important.
Tom Black: So we should quite a lot of products in Q1.
Daniel: The ability to stand up our cloud based off of Nvidia architecture that actually performed to spec and delivers at least $1 for every dollar invested if not more is what the Nvidia cloud partner program is all about and what the reference architectures that we're one of five partners really delivers for customers. It is a clear validation of our tech.
Tom Black: Free goods.
Tom Black: Drawn 50 products across.
Erica to open the <unk>.
Tom Black: Julia.
Tom Black: Oh.
Tom Black: Notably.
We will send them.
Tom Black: The opening we launched the Sloan Greece.
Tom Black: What's your bridge.
Tom Black: Good.
Daniel: <unk> leadership.
Tom Black: And so it shows up and went to recovery.
Daniel: And that just rolls over into the marketplace that they are standing up with <unk> cloud leptin and lots of other opportunities whether it be with the startup community or expanding out in helping enterprises monetize AI, we've been very much in lockstep with Nvidia FERC for very long time and look to have a very bright future.
Tom Black: Prior to <unk>.
Tom Black: The issue of detection.
Tom Black: For the actual.
Tom Black: <unk>.
Tom Black: These changes.
Tom Black: Significantly reviews.
Tom Black: The downtime for the customers and improve the time to recover.
Great. Thanks Danielle.
Daniel: We're definitely getting some questions around our software stack.
Tom Black: Oversight.
Tom Black: We may be a lot of efforts.
Daniel: And we also get these questions quite a bit when speaking with shareholders and investors. So.
Tom Black: A lot of improvements on the.
Tom Black: Our object storage.
Daniel: It seems like we've launched a lot of products.
Tom Black: No just to be boosted this piece of reasons right for.
Daniel: In Q1 on the software side and how does how does our software stack compare with our competitors.
Tom Black: Per compute node.
Daniel: But really where it can have the biggest launches Andre maybe you want to take this.
Tom Black: Again the insurers.
Tom Black: Data.
Tom Black: Data sets can be assessed in so quickly.
Daniel: Okay.
Daniel: Yes.
Tom Black: Quickly enough to pull the trigger.
Daniel: We further <unk>.
Tom Black: We've run.
Daniel: Clear goal to build.
Tom Black: <unk> pools.
Daniel: Yes.
Tom Black: Finally, the results.
Daniel: That means from the day one.
Tom Black: Unit trains.
Tom Black: Yeah.
Daniel: Our focus is the greatest.
Tom Black: Also the partnership.
Tom Black: With a leading <unk> companies.
Daniel: Specifically built for the.
Daniel: Workloads.
Tom Black: It helps.
Tom Black: That helps us to provide more flexibility to our customers.
Daniel: Okay.
Daniel: And our stack is basically three layers. The first one is that layer.
Tom Black: No.
Tom Black: So there it is well the integrations, we believe that is very important.
Daniel: With our hardware.
Daniel: Since we designed our hardware.
Tom Black: To integrate with them.
Tom Black: At least to me quite firms such as metal flow Destocking scribe firewall and that just.
Daniel: <unk> terminal per booth, who when you tour.
Daniel: Its performance and optimize the usage.
Tom Black: It allows the customers.
Daniel: The second layer is that we build the full cloud platform.
Tom Black: To bring the jokes <unk> existing pools.
Tom Black: Awesome.
Daniel: It's pretty similar.
Tom Black: Minimal friction.
Daniel: Hyperscale.
Daniel: So a virtualized environment, so customers give us more flexibility.
Tom Black: Great. Thank you Andre.
Tom Black: Sure.
What is it.
Daniel: But those could be the overall.
Tom Black: So in terms of financial performance, Thanks offered to our to our back to our finance.
Daniel: And the third layer.
Daniel: Application layer.
Daniel: Yeah.
Tom Black: How does that drive revenue and margins Tom maybe you can you can take a stab at this question.
When you can deliver the pre configured with third party tools.
Daniel: The sutures.
Tom Black: Yes sure.
Daniel: <unk> for the entire periods of open processes.
Tom Black: So I think it's important to understand that our software stack, it's a critical part of the offering.
Daniel: So we should quite a lot of products in Q1.
Tom Black: Many of our customers rely on the stacks out to manage and execute that work loads and again, we're relatively unique in having that full stack offering within video cloud space makes it also just makes us very sticky with customers. So some of the.
Daniel: Free goods.
Daniel: Drawn 50 products across the area.
Daniel: Erika opened.
Daniel: Peter.
Daniel: Notably.
Daniel: We will send them.
Tom Black: Some of the things that for example in the last one or two it allows us to provision large clusters of Gpus quickly so customers can start that jobs not waiting.
Daniel: On the opening we launched the Sloan Breeze courtyard bridge upgrade.
Daniel: And so it shows how much of a recovery.
Tom Black: We've created various tools to help them manage that data models to track that progress.
Daniel: There are two system checks.
Daniel:
Daniel: The issue of detection.
Tom Black: Joe I mean, when we think about revenue contribution I mean, I suppose revenue contribution if you could breakout of today, it's relatively small.
Daniel: Before the actual.
Daniel: Jumps in these changes.
Daniel: Significantly reviews.
Tom Black: But it's really a very much an added value part of the offering and again it just drives overall cost to customers coming to us and drive to overall revenue.
Daniel: The downtime for the customers.
Daniel: The time to recovery.
Daniel: Oversight.
Daniel: We may be a lot of efforts.
Tom Black: It's part of it's out of the road offering.
Daniel: A lot of improvements on the.
Tom Black: Looking at we are going to be very focused on building it out and building out use cases, and continuing to make the products more sticky with customers going forward. So I think over time.
Daniel: Our object storage.
Daniel: No just to be boosted this diesel reasons right for <unk>.
Daniel: No.
Tom Black: It can be probably become even a more significant driver of high margin revenue, but it's really about helping us access a wider range of customers off of higher margin services high margin products keeping them on the platform and so it's an important part of our overall revenue growth is kind of going into an attack.
Daniel: You bet.
Daniel: Insurers that did.
Daniel: The data.
Daniel: Datasets.
Daniel: So quickly.
Daniel: Quickly enough to pull the trigger.
Daniel: On some debt in pools.
Daniel: Turning to the results.
Daniel: During training.
Yeah.
Daniel: Okay.
Tom Black: Great and coming.
Daniel: Also the partnership.
Tom Black: Coming back to the funding question, just maybe a little bit more pointed here so.
Daniel: With a leading <unk> companies.
Daniel: Okay.
Tom Black: Question is you'll need funding for this year, but also for the coming years and how are you thinking about financing options I know, Tom you talked a little bit about that on slide and kind of in the Capex question, but anything else you want to kind of reiterate on this point I.
Daniel: Helps us to provide more flexibility to our customers.
Daniel: Okay.
Daniel: So there it is well the integrations, we believe that it's very important.
Daniel: To integrate with the <unk>.
Daniel: But firms such as metal flow Destocking Sky firewood.
Tom Black: I will just actually kind of reiterate I briefly on this again, it's important for us as we think about funding because we wanted to do this in a way that minimize the shareholder dilution and allows us to be prudent and intensive that we're in a great position to do that with the cash we have on our balance sheet and with potential to monetize these various stakes in the non core businesses.
Daniel: Just.
Daniel: It allows the customers.
Daniel: To bring the jokes <unk> existing pools.
Daniel: Awesome.
Daniel: Minimal friction.
Daniel: Great. Thank you Andre.
Daniel: What is it in terms of financial performance tank software to our to our back to our finance.
Well of course in due course, we'll look it up in our ability to <unk>, considering other more classical opportunities because of capital markets and similar update us when we have more but again, we feel very good about our ability to continue to fund this growth.
Daniel: Is that true.
Daniel: Right.
Speaker Change: Revenue and margins Tom maybe you can you can take a stab at this question.
Tom Black: Just on what the available sources of capital that we have to us.
Tom: Yes sure.
Tom: I think it's important to understand that our software stack. It's a critical part of the offering so many of our customers rely on the stacks out to manage and execute our crowds and again I think we're relatively unique in having that full stack offering with an omni neoplasm space makes it also just makes us very sticky with customers. So some of the things.
Tom Black: Great.
Tom Black: There's a question on the other business.
Tom Black: <unk> right.
Tom Black: Now you said you may explore strategic options can you maybe share a little bit more about why you're excited about EV right and maybe what those options could potentially be.
Tom Black: Got it.
Tom: For example in the last century, it allows us to provision large clusters of Gpus quickly so customers can start that jobs not waiting.
Tom Black: Well, yes, so thanks.
There is just a.
Tom Black: Few independents autonomous vehicle platforms that can compete in the <unk>.
Tom: We've created various tools to help them manage that data models to track that progress.
Tom Black: U S market.
Tom Black: Definitely the market is excited about.
Tom: Joe I mean, when we think about revenue contribution I mean, I suppose revenue contribution if you could break out as of today, it's relatively small.
Tom Black: Women has achieved.
Tom Black: Got it.
Speaker Change: And one of the very few players that can actually build a platform.
Tom: But it's really a very much an added value part of the offering and again it just drives the overall cost of the customers coming to us and drive to overall revenue.
Speaker Change: Comparable to that it's very likely.
Speaker Change: And as you can see.
Tom: Part of it is part of the road offering.
Speaker Change: Market players big players actually recognize this.
We're going to.
Tom: To be very focused on building it out and building out use cases, and continuing to make the products, while sticky with customers going forward. So I think over time.
Speaker Change: Look at their recent announcements.
Speaker Change: <unk> partnerships with Uber.
Speaker Change: It was <unk>.
Tom: It can be probably become even a more significant driver of high margin revenue, but it's really about helping us access a wider range of customers off of higher margin services high margin products keeping them on the platform and so it's an important part of our overall revenue growth kind of going into that time.
Speaker Change: The big players.
Speaker Change:
Speaker Change: And as we said.
Speaker Change: They need to grow they need to grow much faster.
Speaker Change: It's yet another capital intensive businesses in our portfolio.
Speaker Change: And we are in active discussions we could confirm that.
Tom: Great and yeah.
Speaker Change: Discussions with potential strategic partners and investors.
Tom: Coming back to the funding question, just maybe a little bit more pointed here so.
Speaker Change: We can actually really helps to drive growth.
Tom: Question, you will need funding for this year, but also for the coming years and how are you thinking about financing options and I know, Tom you talked a little bit about that on slide and kind of in the Capex question, but anything else you want to kind of reiterate on this point.
And initial project right.
Speaker Change: Maybe one last question a clarifying question can you can you explain exactly what you mean by by mid term Tom.
Tom Black: Tom maybe you want to take this one.
Speaker Change: Yes, sure. So again just to just to.
Tom: It's actually kind of reiterate I briefly on this again, it's important for us as we think about funding the growth. We wanted to do this in a way that minimizes the childhood dilution and allows us to be prudent in terms of debt. We're in a great position to do that with the cash we have on the balance sheet and with the potential to monetize these various states in the non core businesses.
Speaker Change: Recap on that so as we look into the midterm you know we really believe this business can scale quickly and achieve in a sort of single.
Speaker Change: Mid single digit billions of dollars of revenue several what we mean by midterm.
Speaker Change: With effectively a few years.
Speaker Change: And at the same time as we've tried to sort of outline we will we're working very hard to go as geographically as we can and then we will get there to get there as soon as possible and we have I think or how do you sort of frame how we think.
Tom: Well of course in two costs will look it up in our ability to both be considering other more classical opportunities get a capital markets and we will update us on when we have more but again, we feel very good about our ability to continue to fund this growth.
Speaker Change: About the future growth and so again a lot of a lot of existing revenues for sah stems around this kind of AI neck nature customer base I think he got cut he set out at the other sort of incremental sources of growth around enterprise customers that they exited the big labs, and so on and so forth. So.
Tom: Based on the available sources of capital that we have to us.
Tom: Great.
Tom: There's a question on the other business.
Tom: Particularly right.
Tom: Now you said you may explore strategic options can you maybe share a little bit more about why you're excited about EV right and maybe what those options could potentially be.
Speaker Change: And I think with <unk>, a few years and logos, but curious again great.
Tom: Okay.
Speaker Change: Alright. Thank you everyone for participating on our first quarter 2020 earnings call and we will see you again on our Q2 call. Thanks. Thank.
Tom: Well, yes, so thanks.
Tom: There is just a few.
Tom: <unk> independent autonomous vehicle platforms that can compete in the <unk>.
Speaker Change: Thank you.
Tom: U S markets.
Tom: Definitely the market is excited about.
Tom: <unk> has achieved.
Tom: Got it.
Tom: And one of the very few players that can actually build a platform.
Tom: Comparable to that.
Tom: Yeah.
Tom: And as you can see.
Tom: Market players big market players.
Tom: Nowadays.
Tom: Look at their recent announcements.
Tom: Partnerships with Uber.
Tom: Hume die.
Tom: Players.
Tom:
Tom: And as we said.
Tom: They need to grow they need to grow much faster.
Tom: It's yet another capital intense businesses in our portfolio.
Tom: And we are in active discussions we can confirm that we can we're in active discussions with potential strategic partners and investors.
Kevin: Kevin mentioned that really helps to drive growth.
Kevin: And initial project right.
Tom: Maybe one last question a clarifying question can you can you explain exactly what you mean by by mid term Tom.
Speaker Change: Tom maybe you want to take this one.
Tom: Yes, sure. So again just to just to.
Tom: Recap on that so as we look into the midterm you know we really believe this business can scale quickly and achieve sort of single.
Tom: Mid single digit billions of dollars of revenue.
Tom: What we mean by midterm.
Tom: Effectively a few yes.
Tom: And at the same time as we've tried to sort of outline we will we're working very hard to go as aggressively as we can and then look at our ink to get there as soon as possible and we have I think like how do you sort of frame, how we're thinking about the future growth and so again a lot of a lot of our existing revenue stream for us and it stems around this.
Tom: The AI neck nature customer base, but I think I kind of set out at the other sort of incremental sources of growth around enterprise customers, the big sort of the big labs and so on is helpful.
Tom: And online with <unk>, a few years and we will go as quickly as we again.
Tom: Great.
Tom: Great. Thank you everyone for participating on our first quarter 2025 earnings call and we will see you again on our Q2 call. Thanks. Thank.
Tom: Thank you.