CoreWeave Beats Third-Quarter Estimates, Raises Full-Year Revenue Forecast
Summary
- CoreWeave said its third-quarter revenue and net loss per share beat market expectations, signaling improved results.
- The company said growth remained intact as it raised its full-year revenue forecast and reported backlog of $132.5 billion.
- It also said high debt, interest costs and changes in the data center investment environment remain major risk factors for future profitability.
Forecast Trend Report by Period
U.S. artificial intelligence cloud company CoreWeave reported quarterly results that topped market expectations and raised its revenue forecast for the year.
Bloomberg reported on November 10 that CoreWeave expects full-year revenue of $13 billion to $13.3 billion. That raises the top end of its previous forecast of $13.2 billion and reflects stronger demand driven by expanding investment in AI infrastructure. CoreWeave shares rose about 1% in after-hours trading following the earnings release.
CoreWeave posted third-quarter revenue of $3.66 billion, beating the market estimate of $3.56 billion. Net loss per share was $1.27, narrower than the expected $1.46 loss. Remaining performance obligations, a measure of backlog that could convert into future revenue, stood at $132.5 billion at the end of the third quarter.
Chief Executive Officer Michael Intrator called the quarter one that underscored the company’s growth momentum. He added that a range of financing tools was supporting the company’s expansion and that customer demand for AI computing remained intact.
Still, the company’s heavy debt load remains a risk factor. CoreWeave has borrowed tens of billions of dollars and invested heavily in securing data centers and semiconductors to provide AI computing infrastructure to OpenAI, Meta and Microsoft. Its stock had fallen about 32% this year before the earnings release.
Gil Luria, an analyst at D.A. Davidson, said CoreWeave’s interest expense far exceeds its adjusted operating profit. "The profit generated from the data center business alone makes it difficult to repay the growing debt," he said, adding that the company’s current business structure carries a heavy financial burden.
Political and business uncertainty around investment in AI data centers is also increasing. Since the U.S. midterm elections, some areas have seen moves to limit new data center construction. Texas Governor-elect Gina Inohosa has called for an immediate halt to data center development, and CoreWeave sent a letter to discuss possible areas of cooperation.
Microsoft, one of CoreWeave’s main customers, is also tightening oversight of its investments, citing project delays and cost issues at some AI cloud operators. While CoreWeave continues to post earnings growth, financing costs tied to heavy borrowing and shifts in the data center investment climate remain key variables for future profitability.
