CoreWeave Q3 Earnings Beat Estimates While Customers Prepaid $9 Billion for the Build

CoreWeave shares jumped 12% after the bell on Tuesday, and the CoreWeave Q3 earnings release that moved them reads like two different quarters stapled together. On the first page, everything is a record: revenue of $3.66 billion, up 168% in a year, a backlog of $132.5 billion, and guidance raised on every line that matters. A few pages in, the same quarter shows an operating loss, $846 million of interest, $1.23 billion of negative adjusted free cash flow, and shareholders’ equity down to a $390 million deficit. The market cheered the first page. The second page decides whether the company can keep building. Its answer is the customers, who are about to prepay $9 billion for the build.

Revenue came in at $3.66 billion, against $3.54 billion expected by FactSet and $3.55 billion by LSEG. CoreWeave revenue is now running at roughly $20 billion a year, and the backlog grew $28.5 billion in a single quarter to $132.5 billion, with new contracts from OpenAI and Microsoft. The company raised its full-year guidance to $13.0 billion to $13.3 billion of revenue, and $1.275 billion to $1.375 billion of adjusted operating income. It finished the quarter with 3.7 gigawatts of active power against 5.6 gigawatts contracted. The loss was $709 million. That is $1.27 a share, against $0.22 a year earlier. CoreWeave stock closed Tuesday at $48.73. It was down half a percent on the day, after losing more than 40% of its value in the previous month.

Interest expense was $846 million, up from $310 million a year earlier. That is 1.4 times the quarter’s adjusted operating income of $603 million. The operating result, before those adjustments, was a loss. CoreWeave interest expense is the only number the company guided for the fourth quarter: $1.05 billion to $1.15 billion. The full-year interest guide rose to $3.6 billion to $3.7 billion. Capital spending ran to $6.82 billion in the quarter, $1.86 for every dollar of revenue. The year now calls for $38.5 billion to $40.0 billion. Cash from operations was $1.42 billion. Adjusted free cash flow was negative $1.23 billion, worse than the negative $1.06 billion a year ago, when revenue was barely more than a third of what it is now.

CoreWeave’s operating loss, on the accounting the release has to use, was $48 million, against $12 million a year earlier. The $603 million of adjusted operating income the release calls a record is a non-GAAP figure, and the gap between the two is mostly stock-based compensation and other add-backs. Adjusted EBITDA was $1.55 billion. Its margin fell to 42%, from 55% a year ago. General and administrative expense more than doubled. It was $617.5 million, against $253.6 million a year earlier. Over the first nine months of the year, the net loss reached $1.87 billion, or $3.53 a share, on $8.75 billion of revenue. The records in the release’s headlines are real, and they are all adjusted.

Shareholders’ equity ended September at a deficit of $390 million, against a positive $3.2 billion at the end of December. The equity belonging to CoreWeave, Inc.’s shareholders went negative in nine months. Long-term debt rose to $27.6 billion from $19.7 billion. Total liabilities reached $45.5 billion. Receivables doubled to $4.23 billion. Unrestricted cash fell to $1.87 billion from $2.21 billion at the end of June. Financing brought in $5.28 billion. Investing took $6.90 billion against $1.42 billion from operations.

“Expect to receive approximately $9 billion of customer prepayments and deposits over the next three months, which the Company expects will help address financing needs and provide a balance sheet benefit,” the release says. Michael Intrator, the chief executive, put the same point in his statement. The record backlog, he said, “including new contracts with OpenAI and Microsoft, along with our planned execution of nearly $9 billion of customer prepayments and deposits over the next three months, demonstrates our ability to support and accelerate our customers’ growth.” The customers are paying in advance for capacity that does not exist yet, and the company is counting that money as its financing plan. Its bonds, meanwhile, were yielding more than 16% at the end of October. The release also lists a new partnership to integrate CoreWeave’s platform into Microsoft Azure, and partnerships with Aker ASA, Applied Digital, Bloomberg and Nvidia.

The holders arguing about the stock on Reddit on Tuesday night were not arguing about the revenue. “backlog jumped to $132.5B from $104B in June, so demand clearly isn’t the problem. it’s the ~$47B of debt and $1.05-1.15B of interest guided for Q4 alone that makes this a rates trade imo,” wrote u/B1g_C4p1T4l on r/stocks. Another holder in the same thread, u/Dudeman1000, asked the question the release leaves open: “how much capex was needed for the 20 billion ARR, and how much ARR will the 39B in 2026 capex produce? Most important question by far with them.” The release gives the capex, $38.5 billion to $40.0 billion for the year, and the run rate, $20 billion to $21 billion on exit from 2026. It does not say what one buys of the other. Active power rose by only 0.3 gigawatts in the quarter while the backlog rose $28.5 billion, and 1.9 gigawatts of contracted power is not yet active.

The one bull voice in the thread read the same numbers the other way. “People are DYING for the days to be bad, but the AI trade will hit another high before 2027 is out. The numbers are still so, so good,” wrote u/Orzhov_Syndicalist. On r/CRWV, u/El_Cactus_Fantastico was not holding for the recovery: “if you aren’t talking about their debt and required additional financing to keep building then i feel like you’re leaving out the main concern people have right now. For now – im going to keep trading the volitility.” Intrator’s statement talks about momentum, records and the customers choosing the platform. The holders talk about rates, capex and whether the interest gets paid. Nebius, the other neocloud the market sold off alongside CoreWeave, reports on Thursday. Wells Fargo cut its price target to $115 from $160. It kept its buy rating. The bank said financing concerns were overshadowing the fundamentals.

The only number CoreWeave guided for the fourth quarter is the interest bill: $1.05 billion to $1.15 billion. Customer deposits on the balance sheet stood at $5.9 billion at the end of September, up from $5.2 billion at the start of the year, money already collected for capacity not yet delivered.