CoreWeave, Inc. (CRWV) Q3 2025 Earnings Call Transcript
Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
Overview
The earnings call summary presents a mixed picture. Basic financial performance shows strong revenue guidance, but increased interest expenses and CapEx could raise concerns. Product development is positive with fungible infrastructure and strong market strategy. However, Q&A reveals systemic delays and vague responses from management, creating uncertainty. Shareholder return plans are not mentioned. Despite some optimistic guidance, risks from supply chain issues and lack of clear solutions temper enthusiasm, resulting in a neutral sentiment.
Key Financial Performance
Revenue $1.4 billion, up 134% year-over-year. The increase was driven by robust customer demand and strong execution.
Revenue Backlog $55.6 billion, almost doubling in the third quarter alone. This growth reflects the breadth of demand for CoreWeave's cloud services.
Operating Expenses $1.3 billion, including stock-based compensation expense of $144 million. The increase was due to ramped investments in data center and server infrastructure, marketing, and scaling the go-to-market organization.
Adjusted Operating Income $217 million compared to $125 million in Q3 of 2024. Adjusted operating margin was 16%. The improvement was due to higher revenue, lower costs from timing of data center deliveries, and improved fleet efficiencies.
Net Loss $110 million, compared to $360 million net loss in Q3 of 2024. The improvement was due to better interest rates on debt and increased revenue.
Adjusted Net Loss $41 million compared to approximately breakeven in Q3 of 2024. The change was influenced by increased debt to support infrastructure scaling.
Adjusted EBITDA $838 million compared to $379 million in Q3 of 2024, increasing more than 2x year-over-year. Adjusted EBITDA margin was 61%.
Capital Expenditures (CapEx) $1.9 billion, lower than anticipated due to delays related to third-party data center deliveries. Construction in progress increased to $6.9 billion, up $2.8 billion quarter-over-quarter.
Cash and Liquidity $3 billion in cash, cash equivalents, restricted cash, and marketable securities as of September 30.
Interest Expense $311 million compared to $104 million in Q3 of 2024. The increase was due to higher debt levels to support infrastructure scaling, partly offset by better interest rates.
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Operating Highlights
CoreWeave AI Object Storage: Launched as a fully managed storage service, eliminating friction of moving data between regions, clouds, and tiers with zero egress or transaction fees. Cuts customer costs by over 75% and has already seen significant interest.
GB300s Deployment: CoreWeave was the first to market with GB300s, setting benchmarks for real-world AI performance.
New Acquisitions: Acquired OpenPipe, Marimo, and Monolith to expand product offerings and capabilities, including serverless reinforcement learning tools and industrial AI applications.
Revenue Growth: Achieved $1.4 billion in Q3 revenue, up 134% year-over-year. Revenue backlog reached $55.6 billion, almost doubling in Q3.
Customer Base Diversification: No single customer represents more than 35% of revenue backlog, down from 50% last quarter. Over 60% of revenue backlog tied to investment-grade customers.
Public Sector Expansion: Launched CoreWeave Federal to serve U.S. government agencies and defense. NASA is leveraging CoreWeave for scientific exploration.
Geographic Expansion: Added 8 new data centers in the U.S. and expanded into Europe, including a major presence in Scotland in partnership with the U.K. government.
Data Center Expansion: Increased contracted power capacity to 2.9 gigawatts, with 1 gigawatt available for future growth. Added 8 new data centers and diversified across size and geography.
Operational Excellence: Recognized for industry leadership with Platinum ClusterMAX ranking for the second time. Expanded observability and security suites to handle critical workloads.
Strategic Partnerships: Strengthened relationships with major customers like Meta, OpenAI, and CrowdStrike. Partnered with Vast Data to enhance product portfolio.
M&A Strategy: Used acquisitions to accelerate product development and expand into new markets, including industrial AI applications.
Leadership Expansion: Hired Jon Jones as Chief Revenue Officer to scale global revenue and drive market expansion.
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Risk or Challenges
Supply Chain Disruptions: Temporary delays related to a third-party data center developer who is behind schedule, impacting fourth quarter expectations. This delay affects the delivery of powered-shell capacity, which is critical for meeting customer demand.
Capacity Constraints: The company operates in a highly supply-constrained environment where demand for its AI cloud platform far exceeds available capacity. This could limit growth and customer satisfaction if not addressed.
Customer Concentration Risk: Although reduced, customer concentration remains a risk, with no single customer representing more than 35% of revenue backlog. This is down from 50% last quarter but still poses a potential vulnerability.
Economic and Financial Risks: The company reported a net loss of $110 million in Q3, driven by increased debt to support infrastructure scaling. Interest expense also rose significantly, which could strain financial resources.
Regulatory and Public Sector Challenges: Expansion into the public sector, including U.S. government agencies, introduces unique performance and security requirements that could pose operational and compliance challenges.
Execution Risks in Strategic Expansion: The termination of the proposed acquisition of Core Scientific due to valuation disagreements highlights potential challenges in executing strategic acquisitions. Additionally, the company is embarking on self-build projects, which could introduce operational risks.
Infrastructure and Operational Risks: The company is experiencing unprecedented pressure across supply chains, which could impact its ability to scale effectively. The delays in data center deliveries are a specific example of this risk.
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Guidance & Outlook
Revenue Guidance for 2025: CoreWeave expects 2025 revenue in the range of $5.05 billion to $5.15 billion.
Adjusted Operating Income for 2025: Anticipated to be between $690 million to $720 million.
Active Power Capacity by End of 2025: Expected to exceed 850 megawatts.
Interest Expense for 2025: Projected to range from $1.21 billion to $1.25 billion, driven by increased debt for CapEx growth.
Capital Expenditures for 2025: Expected to range between $12 billion to $14 billion, with a significant portion deferred to Q1 2026 due to delays in powered-shell delivery.
Capital Expenditures for 2026: Projected to be well in excess of double the 2025 CapEx, driven by growing backlog and demand for cloud services.
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Shareholder Return Plan
The selected topic was not discussed during the call.
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Key Q&A
Q:Can you speak to the situation relating to the third-party provider, specifically regarding shortages of power or manpower, and whether other providers can meet their commitments?
A:Michael Intrator explained that the challenges are systemic within the supply chains for global AI infrastructure. CoreWeave has diversified its data center providers and set up self-build efforts to mitigate delays. The issue is not a shortage of power but rather powered shells. Despite delays, customers have adjusted contracts to allow full delivery of contract value.
Q:Does this situation relate to Core Scientific in any way?
A:Michael Intrator avoided naming specific data center providers but emphasized that the delays are a systemic industry problem. CoreWeave has scaled delivery successfully, reaching 590 megawatts, and delays will not impact their backlog or contract value.
Q:How fungible is your infrastructure, and can it be used for different customers or purposes like inference and training?
A:Michael Intrator confirmed that the infrastructure is fungible and built to demanding specifications, making it usable for both inference and training. CoreWeave's robust software suite enhances flexibility and effectiveness, making it a leading solution in the market.
Q:How far are you from reaching a point where external disruptions no longer affect your revenue outlook?
A:Michael Intrator stated that as CoreWeave scales and builds out its 2.9 gigawatts of power, the impact of individual delays will diminish. Most of the 2.9 gigawatts will be operational within 12-24 months, smoothing out disruptions.
Q:What will be CoreWeave's unique value proposition in 3-4 years when supply equals demand?
A:Michael Intrator highlighted CoreWeave's ability to deliver GPUs faster, create specialized software, and customize its cloud for specific use cases. These factors, along with continued innovation, will maintain its competitive edge.
Q:What are the implications of delays on 2026 revenue and growth rates?
A:Michael Intrator and Nitin Agrawal explained that delays are short-term and will be resolved by Q1 next year. The total revenue and contract value remain unaffected, and 2026 CapEx is expected to more than double compared to 2025.
Q:Do supply chain impacts affect the cadence of signing new customers?
A:Michael Intrator clarified that supply chain issues are specific to one data center and do not impact the ability to onboard new customers. CoreWeave is parallelizing infrastructure builds across 32 data centers.
Q:Does the NVIDIA deal show up in the backlog metric, and what does it offer?
A:Nitin Agrawal explained that the NVIDIA deal allows for capacity to be resold to smaller customers, providing flexibility and eliminating utilization risks. While it appears in revenue backlog, it is largely excluded from RPO due to accounting rules.
Q:Is the 40% CapEx cut for the year due to one customer?
A:Nitin Agrawal confirmed that the CapEx reduction is related to delays with a single data center provider and does not indicate broader delays.
Q:How does CoreWeave plan to fund its CapEx next year?
A:Michael Intrator stated that CoreWeave will explore various financing options, including leasing, and ensures financing is secured for each deal before signing customers.
Q:How does shifting to self-build impact CapEx and time to market?
A:Michael Intrator clarified that self-build is an additional strategy to mitigate risks and will complement third-party data center providers. It embeds CoreWeave deeper into supply chains and enhances effectiveness.
Q:How does CoreWeave plan to contract out its remaining capacity given high demand?
A:Michael Intrator emphasized thoughtful diversification and allocation of infrastructure to meaningful applications. Nitin Agrawal noted that no customer represents more than 35% of revenue backlog, and 60% of the backlog is with investment-grade customers.
Q:Does CoreWeave have any IP to address bottlenecks like powered-shell delays?
A:Michael Intrator explained that CoreWeave has built an organization to manage self-builds and supply chains, gaining firsthand information to address systemic challenges effectively.
Q:Review of Unclear Management Responses
A:Michael Intrator avoided directly addressing whether the situation relates to Core Scientific, instead focusing on systemic industry challenges. Additionally, he did not provide specific details on how CoreWeave's IP directly addresses powered-shell bottlenecks, using general terms about organizational capabilities.
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Earnings Word Cloud
The most frequently occurring keywords in this quarter's earning call
AI Object
AI adoption
AI tool
Core Scientific
CoreWeave Cloud
CoreWeave cloud
CoreWeave outcome
CoreWeave platform
CrowdStrike
GBs
Object Storage
OpenPipe
agency
agent
agreement
center developer
cloud provider
cloud service
contract customer
control
delay
demand CoreWeave
development
diversification
enterprise customer
excellence
expectation
exploration
forefront
frontier AI
geography
government
innovator
market capability
partner
phase
pioneer
portfolio center
role
schedule
security
suite
win
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The earnings call summary presents a mixed picture. Basic financial performance shows strong revenue guidance, but increased interest expenses and CapEx could raise concerns. Product development is positive with fungible infrastructure and strong market strategy. However, Q&A reveals systemic delays and vague responses from management, creating uncertainty. Shareholder return plans are not mentioned. Despite some optimistic guidance, risks from supply chain issues and lack of clear solutions temper enthusiasm, resulting in a neutral sentiment.
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