CoreWeave, the cloud provider renting out Nvidia-powered computing for artificial intelligence, reported third-quarter revenue of $3.66 billion on Tuesday, up 168 percent on a year earlier and ahead of the $3.55 billion analysts had expected.
The company, which has become a bellwether for the durability of AI infrastructure spending, also raised its full-year revenue forecast to between $13.0 billion and $13.3 billion, from $12.4 billion to $13.2 billion previously. Its contracted revenue backlog reached $132.5 billion at the end of September, up from about $104 billion three months earlier.
Chief executive Michael Intrator called it a breakout quarter, saying adjusted operating margins had reached double digits a quarter ahead of plan. Adjusted operating income rose 75 percent to $379 million, although the margin narrowed to 10 percent from 16 percent a year ago.
The growth came at a steep price. CoreWeave posted a net loss of $709 million for the quarter, and interest expense more than doubled to $846 million from $310 million a year earlier, swallowing the operating profit and then some. Debt and lease liabilities rose by $14.6 billion in the quarter to $66 billion, and yields on its 2030 bonds stand at about 15.2 percent, a sign of how warily bond markets view the borrowing.
The results land after a bruising month for the shares, which have fallen by nearly half as investors questioned whether the AI build-out is being funded on sustainable terms. CoreWeave, which operates about 52 data centres and counts Nvidia as a roughly 9 percent shareholder, has never turned a profit. Intrator told investors last month that the order backlog was large enough to more than cover its debt, and on Tuesday’s call he said the company would move away from unsecured public debt towards delayed-draw facilities secured against customer contracts.
Investors took the numbers as reassurance, at least for now. The shares closed 0.5 percent lower at $48.73 in regular trading on Tuesday, then rose about 6 percent in after-hours trading once the results were out.
Sources: Reuters; CoreWeave press release via Business Wire; Barron’s.
