CoreWeave, Inc. Class A ((CRWV)) has held its Q3 earnings call. Read on for the main highlights of the call.
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CoreWeave, Inc. Reports Strong Q3 Growth Amid Challenges
The recent earnings call for CoreWeave, Inc. Class A painted a picture of robust growth tempered by operational challenges. The company showcased significant revenue growth and expansion in data center capacity, alongside successful diversification of its customer base. However, the call also highlighted challenges such as data center delivery delays, high operating expenses, and increased interest expenses. Despite these hurdles, CoreWeave’s strong financial position and innovative financing strategies suggest a promising outlook for future growth.
Record Revenue Growth
CoreWeave, Inc. reported an impressive Q3 revenue of $1.4 billion, marking a 134% increase year over year. The revenue backlog ended at $55.6 billion, nearly doubling in the third quarter alone, showcasing the company’s strong market performance and demand for its services.
Significant Expansion and Contracts
The company achieved a milestone by adding over $25 billion in revenue backlog in Q3 and reaching $50 billion in Remaining Performance Obligations (RPO) faster than any cloud provider in history. This growth was fueled by large-scale compute contracts with major customers like Meta and OpenAI.
Data Center and Power Capacity Growth
CoreWeave expanded its active power footprint by 120 megawatts to approximately 590 megawatts, with contracted power capacity now exceeding 2.9 gigawatts. This expansion underscores the company’s commitment to scaling its infrastructure to meet growing demand.
Diversification of Revenue Base
The company successfully diversified its revenue base, with the number of customers exceeding $100 million in revenue tripling year over year. Notably, no single customer represents more than approximately 35% of the revenue backlog, a significant decrease from 85% at the start of the year.
Innovative Financing and Strong Capital Position
CoreWeave secured $14 billion in debt and equity transactions year to date, reflecting its strong capital position. The company reported an adjusted EBITDA for Q3 of $838 million, with a margin of 61%, indicating efficient financial management.
Delay in Data Center Deliveries
The company faced temporary delays related to a third-party data center developer, impacting Q4 expectations. Despite these delays, the affected customer adjusted the delivery schedule, preserving the total value of the original contract.
High Operating Expenses
Operating expenses in Q3 were $1.3 billion, including $144 million in stock-based compensation. These expenses were driven by significant investments in data center and server infrastructure, highlighting the company’s focus on long-term growth.
Net Loss and Increased Interest Expense
CoreWeave reported a net loss of $110 million for Q3, with interest expenses rising to $311 million due to increased debt for scaling infrastructure. This reflects the financial challenges associated with rapid expansion.
CapEx and Construction Delays
Capital expenditures in Q3 totaled $1.9 billion, lower than anticipated due to delays from a third-party data center provider. Construction in progress increased by $2.8 billion quarter over quarter, indicating ongoing infrastructure development.
Forward-Looking Guidance
Looking ahead, CoreWeave, Inc. expects 2025 revenue to range between $5.05 billion and $5.15 billion, with adjusted operating income projected between $690 million and $720 million. Despite current capacity constraints, the company remains optimistic about its growth trajectory, supported by its expanded power capacity and robust backlog.
In summary, CoreWeave, Inc.’s earnings call highlighted a period of significant growth and strategic expansion, tempered by operational challenges. The company’s strong financial position and innovative strategies suggest a promising future, with expectations of continued revenue growth and infrastructure development.