CoreWeave faced a pivotal moment as it unveiled its third-quarter financial results, aiming to meet Wall Street’s expectations of a massive $50 billion in contracted future revenues for the emergent AI data-center and infrastructure sector. In a notable announcement, the company reported a substantial increase in its revenue backlog, nearly doubling it to $55.6 billion from $30 billion in the previous quarter. This impressive surge stems from new contracts with major players such as Meta, OpenAI, and the French startup Poolside.
Despite the strong performance in earnings and revenue, which surpassed analysts’ forecasts, CoreWeave’s announcement was tempered by a rise in its debt levels and a downward revision of its full-year revenue guidance. Following the earnings release and subsequent analysts’ call, shares fell by 6% in after-hours trading, reflecting growing investor concerns.
Skepticism around CoreWeave has intensified among some investors, particularly amid an atmosphere of scrutiny over the rapid growth of AI-related businesses and the necessary infrastructure expansion. The company’s stock has seen a decline of more than 30% since mid-August, prompting questions about its viability as a potential indicator of broader weaknesses within the AI sector.
The reduction in revenue guidance was attributed to delays in the construction of several data centers. CEO Michael Intrator noted, “While we are experiencing relentless demand for our platform, data center developers across the industry are also enduring unprecedented pressure across supply chains.” He explained that a third-party developer managing a data-center project had fallen behind schedule, initially posing a challenge but later agreeing to modify the delivery timeline and extend contract expiration.
Chief Financial Officer Nitin Agrawal provided a revised full-year revenue forecast for 2025, estimating between $5.05 billion and $5.15 billion—slightly lower than earlier projections of $5.15 billion to $5.35 billion. Additionally, Agrawal indicated that capital expenditure (capex) for 2025 would range from $12 billion to $14 billion, a significant decrease from the earlier guidance of $20 billion to $23 billion. However, future growth expectations remain high, with projections for 2026 capex expected to more than double that of 2025.
In financial highlights, CoreWeave reported revenues of $1.4 billion for the quarter, a notable increase from $584 million a year earlier and above analyst estimates. Nevertheless, profitability remained elusive, with a net loss of $110 million—significantly reduced from the $359.8 million loss in the same quarter last year. The adjusted net loss was $41 million, contrasting with a breakeven quarter last year, and adjusted EBITDA rose to $838 million, up from $379 million in Q3 2024.
Operating income dipped to $51.9 million, down from $117.1 million in the same quarter last year, resulting in a reduced operating margin of 4% from 20%. Conversely, adjusted operating income was reported at $217 million, improving from $125 million a year prior, and reflecting a third-quarter adjusted operating margin of 16% due to increased revenues and better cost management.
Despite the predominantly positive developments for CoreWeave, analysts maintain a cautious stance regarding the company’s financial health. Concerns arise from significant financial commitments to infrastructure development, which currently overshadow its revenue streams and cash flow capabilities. At present, CoreWeave has $9.7 billion in obligations due within the next year and $14 billion in total debt, an increase from $7.6 billion and $11 billion, respectively, reported last quarter.
Additional financial pressures are highlighted by scheduled lease payments totaling $34 billion for contracts commencing through 2028, alongside a tripling of interest expenses to $311 million for the quarter compared to the previous year’s $104 million.
Despite the financial challenges, proponents of CoreWeave remain optimistic about its long-term revenue potential, citing significant recent contracts, including a $14.2 billion agreement to supply Meta with computing capacity and a deal with Poolside for a data center equipped with 40,000 of Nvidia’s GPUs.
