CoreWeave (CRWV.US) Q3 revenue surged 168% year-over-year, raised full-year revenue guidance, shares rose about 5% after hours at one point.

CoreWeave (CRWV.US), an AI cloud computing services provider, reported third-quarter results on Tuesday showing that quarterly revenue rose 168% year-over-year, beating Wall Street expectations, driven by continued growth in AI computing demand, and the company raised its full-year revenue guidance. The report helped ease investor concerns to some extent about the company's heavy debt and slowing business growth, pushing its shares up about 5% at one point in after-hours trading. The report showed that CoreWeave's third-quarter revenue reached $3.661 billion, up 168% from $1.365 billion a year earlier, above the average analyst estimate of $3.56 billion compiled by media outlets, and up about 42% quarter-over-quarter. Under U.S. generally accepted accounting principles (GAAP), the company's third-quarter net loss was $709 million, compared with a net loss of $110 million a year earlier and a net loss of $626 million in the previous quarter. Diluted loss per share was $1.27, which, although higher than $0.22 a year earlier, was better than analysts' expected loss per share of $1.46. On a non-GAAP basis, the company's third-quarter adjusted net loss was $529 million, compared with an adjusted net loss of $41 million a year earlier and an adjusted net loss of $567 million in the previous quarter. The adjusted net loss margin was 14%, improving from 22% in the previous quarter. In terms of profitability, CoreWeave's third-quarter adjusted EBITDA reached $2.256 billion, up about 169% from $838 million a year earlier, and the adjusted EBITDA margin reached 62%, the highest level in nearly five quarters. The company's third-quarter GAAP operating income was $207 million, up from $52 million a year earlier, with the operating margin rising to 6% from 4%. Adjusted operating income was $379 million, up about 75% from $217 million a year earlier, and the adjusted operating margin was 10%, higher than 5% in the previous quarter but lower than 16% a year earlier. Raises full-year revenue guidance as AI computing demand remains strong Looking ahead to the full year, CoreWeave expects 2026 revenue to reach $13 billion to $13.3 billion, above its previous revenue forecast of up to $13.2 billion. The company's upward revision to its full-year revenue guidance shows that market demand for AI computing power remains strong despite challenges such as rising financing costs and project delays in AI data center construction. CoreWeave said the rapid revenue growth in the third quarter was mainly due to strong demand for its AI cloud computing platform, a favorable pricing environment and continued improvement in business execution. In terms of customer expansion, the company added enterprise customers such as Canva, Serve Robotics, Substack and Wayve in the third quarter, while further expanding partnerships with existing customers including OpenAI, Perplexity and Cohere. CoreWeave also launched an AI development platform called CoreWeave Forge, integrating functions such as model training, inference, monitoring and evaluation, in an attempt to expand from merely providing AI computing infrastructure into the field of AI software and development tools. Remaining performance obligations reach $132.5 billion, up 138% year-over-year CoreWeave disclosed that as of the end of the third quarter, its total revenue backlog reached $132.5 billion, up 138% from $55.6 billion a year earlier. Of that, about 36% of the revenue backlog is expected to be recognized as revenue within the next 24 months, 38% is expected to be recognized in months 25 to 48, and the remaining 26% is expected to be recognized after 48 months. The company said the growth in revenue backlog mainly came from existing and new customers, including AI labs, large cloud computing service providers, enterprise customers and AI-native companies. However, these revenue backlog orders are not equivalent to revenue already realized, and related revenue recognition still depends on whether the company can provide computing capacity and related services as required by contracts. In terms of infrastructure construction, as of the end of September, CoreWeave had 52 data centers in operation, with more than 1.7 gigawatts of power capacity in use and more than 4.6 gigawatts of contracted power capacity. In the third quarter alone, the company added more than 900 megawatts of contracted power capacity. The company also further expanded its international business footprint, with contracted power capacity in markets such as India, Indonesia and Spain totaling more than 1.3 gigawatts. Q3 capital expenditure reaches $14.5 billion; massive debt still worries investors Despite rapid revenue growth, CoreWeave's huge capital expenditure and debt burden remain a focus for the market. The report showed that the company's third-quarter capital expenditure reached $14.511 billion, a sharp increase from $1.850 billion a year earlier and also higher than about $9.4 billion in the previous quarter. In the first nine months of the year, the company's cumulative capital expenditure reached $30.650 billion, reflecting that AI data center and GPU infrastructure construction remains in a phase of large-scale investment. At the same time, the company's financing costs continued to rise. Third-quarter net interest expense reached $846 million, up about 173% from $310 million a year earlier and also higher than $640 million in the previous quarter. It is worth noting that although CoreWeave achieved GAAP operating income of $207 million in the third quarter, high interest expense left the company with a net loss of $709 million in the end. To support business expansion, the company raised about $4.2 billion in the third quarter by expanding the size of its convertible senior notes offering and completed a $2.6 billion debt financing arrangement. In addition, the company established a stock issuance program under which it may sell up to 35 million Class A common shares. Data center construction obstacles increase; Microsoft Corporation strengthens project review In addition to financing pressure, policy and execution risks facing AI data center construction are also increasing. According to reports, after the U.S. midterm elections, some newly elected officials have taken a more cautious or even opposing stance on data center projects. Gina Hinojosa, elected governor of Texas, called for an immediate moratorium on data center development, and CoreWeave has sent a letter seeking cooperation on related issues. Meanwhile, Microsoft Corporation (MSFT.US) is strengthening oversight of projects at some emerging cloud computing service providers and withdrawing from some projects deemed too risky. Previously, Microsoft Corporation helped drive the rapid development of the emerging AI cloud computing industry by signing tens of billions of dollars of computing capacity procurement contracts. But as some projects experienced construction delays and cost issues, Microsoft Corporation's review of related partnerships has become stricter. As an important chip supplier and investor in CoreWeave, NVIDIA Corporation also maintains a close relationship with the company. NVIDIA Corporation CEO Jensen Huang said last month that CoreWeave's financial strength is continuing to improve. Despite the above challenges, CoreWeave's latest report still shows no obvious signs of a slowdown in AI computing demand. The company's revenue significantly beat market expectations, its full-year revenue outlook was raised, and its revenue backlog continued to grow, providing investors with some confidence. However, CoreWeave's stock has performed weakly this year. As of Tuesday's close, the stock had fallen 32% year-to-date. After the report was released, the company's shares rose about 5% in after-hours trading, indicating a positive market reaction to the latest results. For investors, whether CoreWeave can convert its massive long-term contracts into actual revenue and, while continuing to expand infrastructure, control financing costs and improve cash flow will be key to determining its long-term profitability prospects.