CoreWeave lifts revenue outlook as backlog reaches $132.5 billion

By Priya Raman

CoreWeave raised full-year revenue guidance to $13 billion to $13.3 billion after third-quarter revenue rose 168% year over year to $3.66 billion and its revenue backlog reached $132.5 billion.

What did CoreWeave report?

CoreWeave is a leading neocloud company (a cloud-computing operator focused on intensive artificial intelligence (AI) workloads). It leases data centers built around Nvidia graphics processing units.

In a regulatory filing dated the 10th, CoreWeave reported third-quarter revenue of $3.66 billion for July through September, also given as 4.9209 trillion won. The result exceeded the $3.55 billion consensus estimate compiled by financial data provider London Stock Exchange Group (LSEG).

The company reported a net loss of $709 million, against $110 million in the year-ago period. Revenue growth did not prevent a wider loss. The figures do not show how operating costs, financing expenses and other items contributed to that deterioration.

Uncertainty had clouded the data-center business after the Democratic Party's sweeping win in last week's midterm elections. The account also cited Nvidia Chief Executive Jensen Huang's admission of an affair with a woman suspected of spying for China. Neither development carried a quantified financial effect in the report. Analysts said the earnings gave CoreWeave "some breathing room."

How much did guidance change?

CoreWeave lifted its full-year revenue forecast to $13 billion to $13.3 billion, above LSEG's $12.86 billion estimate and the $12.4 billion to $13.2 billion range issued in August.

It forecast adjusted operating profit (operating profit with specified exclusions) of $1.275 billion to $1.375 billion, above the $1.07 billion estimate surveyed by Visible Alpha. In August, CoreWeave had projected adjusted operating profit of $960 million to $1.15 billion.

The figures do not identify the exclusions or reconcile adjusted operating profit with the $709 million net loss. That omission limits direct comparison between the operating target and bottom-line performance.

What must CoreWeave build?

CoreWeave maintained its projection that active power capacity would reach 1.85 gigawatts by year-end. The measure denotes power available for customer workloads; one gigawatt equals one billion watts.

The company set an annual capital-expenditure target (spending on long-lived operating assets) of $37 billion to $39 billion, which implies 155% growth at the midpoint, while Visible Alpha analysts had expected $37.69 billion.

Visible Alpha's $37.69 billion expectation fell inside that range. It still signals major cash requirements. The figures show neither the financing mix nor expected asset returns, leaving the funding path and asset productivity unresolved.

Can backlog absorb the debt burden?

Debt stood at $47 billion at the end of the third quarter, up from $35 billion in the preceding quarter. The figures do not specify which borrowing or cash-flow items produced the $12 billion increase.

Revenue backlog (future revenue under customer orders) rose to $132.5 billion from $104.2 billion in the second quarter, a nearly 30% three-month increase. At roughly ten times the $13.3 billion ceiling of current full-year revenue guidance, the backlog provides revenue visibility. It does not establish when that revenue will be recognized or what it will cost to deliver.

Pessimism about the AI market pushed the yield on CoreWeave's unsecured bonds (debt without collateral backing) to 15%. That yield indicates a high market cost of borrowing. High interest costs have sharply increased CoreWeave's funding burden. The market appeared "relieved for now" because the backlog grew nearly 30% in three months.

How did shares react?

CoreWeave shares fell 0.51% in regular trading after the earnings release, then rose 2.61% in after-hours trading as of 5:03 p.m. Eastern time. The modest reversal left the financing questions unresolved.

The quarter beat revenue estimates and expanded the backlog. It did not resolve the funding gap. Debt remained $47 billion, with unsecured-bond yields at 15%. Annual capital expenditure was set at $37 billion to $39 billion.