For CoreWeave to succeed with its third-quarter financial report on Monday, several factors were crucial, with a primary one being the demonstration that its secured future income could reach the $50 billion mark. Street had established as a benchmark for the AI data-center and infrastructure operator.
TL;DR
- CoreWeave secured $55.6 billion in revenue backlog, beating expectations with deals from Meta and OpenAI.
- Despite strong backlog, CoreWeave's stock declined due to AI infrastructure bubble concerns and data center delays.
- The company lowered 2025 revenue projections and reduced capital expenditure forecasts significantly.
- CoreWeave reported a net loss of $110 million, but debt and lease obligations continue to grow.
In its announcement, CoreWeave confirmed it nearly doubled its revenue backlog, which includes “remaining performance obligations” (RPOs) and other amounts it estimates will be recognized as revenue, to $55.6 Up from $30 billion in the prior quarter. The growing backlog, reflecting anticipated customer revenue, was fueled by agreements with Meta, OpenAI, and the French AI firm Poolside. Both earnings and revenue surpassed what analysts had projected.
The firm also disclosed a rise in its balance sheet's debt, while simultaneously adjusting its full-year revenue projections lower. After releasing its earnings and holding a call with analysts, the company's stock saw a 6% decline in after-hours trading.
Some investors have trained a gimlet eye on CoreWeave as more skeptics kick the tires of the booming AI trade and the concurrent infrastructure buildout. Concerns regarding CoreWeave, perceived by some as a potential canary-like indicator of vulnerability during the AI surge, and about the broader AI infrastructure development have caused the stock's trajectory to decline by over 30% since the middle of August's peak temperatures.
CoreWeave's revenue outlook was lowered due to setbacks in building some of its data centers. “While we are experiencing relentless demand for our platform, data center developers across the industry are also enduring unprecedented pressure across supply chains,” CEO Michael Intrator said during the analysts’ Phone call. “In our case, we are affected by temporary delays related to a third-party data-center developer who is behind schedule.”
Nitin Agrawal, the chief financial officer, projected 2025 revenue to be between $5.05 billion and $5.15 billion. This forecast represents a minor decrease compared to the guidance previously given by Intrator during the second-quarter earnings discussion, which was set at $5.15. Billion to $5.35 billion. Intrator stated that the customer affected by the delay consented to modify the delivery timeline and prolong the expiration date, ensuring CoreWeave would uphold the full worth of the initial agreement.
Agrawal said the company’s 2025 capex spending would be between $12 billion to $14 billion, down significantly from the $20 billion to $23 billion Intrator forecast last quarter. Agrawal stated that CoreWeave anticipates a significant increase in capital expenditures for 2026.
“Given the significant growth in our backlog and continued insatiable demand for our cloud services, we expect capex in 2026 to be well in excess of double that of 2025,” Agrawal said.
Sales up, losses down, debt climbs
CoreWeave reported revenues of $1.4 billion for the quarter, up from $584 million in the same quarter last year and beat analysts’ estimates. Profitability, at least according to conventional GAAP metrics ,, is still not being achieved. CoreWeave reported a net loss of $110 million, although it was an improvement over its $359.8 million loss in the third quarter last year and also better than analysts expected.
Adjusted net loss, which shows financial performance without extraordinary items, was $41 million for the quarter compared to the same quarter last year when it was break-even, Agrawal said. Adjusted EBITDA, which shows earnings without certain one-time expenses, were $838 million in the third quarter, compared to $379 million in Q3 2024.
Operating income, a metric that shows profit from core businesses, fell to $51.9 million, compared to the same quarter last year when it was $117.1 million. Operating margins shrunk to 4% from 20%.
Meanwhile, adjusted operating income, which shows a different view on core business performance, was $217 million for the third quarter, compared to $125 million in the third quarter of 2024, said Agrawal, the CFO. CoreWeave’s third quarter adjusted operating margin was 16%, due to higher revenues, lower costs, and the timing of data center deliveries from third parties.
While Monday was just this side of positive for CoreWeave, analysts who are bearish on the AI cloud computing company remain leery of its finances. They see the company as at risk of being overwhelmed by the significant financial commitments it has taken on to build out data centers , which currently look disproportionately large compared to its revenues and cash flow. Based on its latest earnings release, CoreWeave has $9.7 billion in bills due within the next 12 months on its balance sheet, and a total of $14 billion in current and longer-term debt. Last quarter, those figures were $7.6 billion and $11 billion, respectively.
CoreWeave also has $34 billion in scheduled lease payments on contracts that will commence between now and 2028. Interest expense reached $311 million for the quarter, nearly triple the figure from the year-earlier period, of $104 million.
CoreWeave bulls, meanwhile, remain confident that revenues from the company’s book of contracts will eventually far outstrip its debt obligations. During the past three months, CoreWeave has announced a spate of significant deals, booking a $14.2 billion deal to provide Meta with computing capacity and an agreement with Poolside for a data center with 40,000 of Nvidia’s coveted GPUs.