Key Highlights
- Wall Street forecasts Q2 revenue reaching $2.6 billion, marking a 111% year-over-year increase
- CRWV shares have plummeted over 30% following the company’s May earnings announcement
- Q2 capital spending projected to hit $9 billion, while the company carries $25 billion in total debt
- Profitability on an adjusted pre-tax basis isn’t anticipated until 2028
- SpaceX enters the competitive landscape, offering compute services to Anthropic and Google
CoreWeave is scheduled to release its second quarter financial results following Tuesday’s market close, with investors eagerly awaiting the numbers.
CoreWeave, Inc. Class A Common Stock, CRWV
Wall Street consensus points to quarterly revenue of $2.6 billion, which would represent a 111% surge compared to the year-ago period. This momentum extends an impressive growth trajectory that has propelled the company from just $16 million in annual revenue in 2022 to a projected $12.6 billion for the current year.
Shares closed Monday’s session at $88.19, declining 2.74% for the day. The stock has experienced a sharp correction of more than 30% since the company’s previous earnings disclosure in May.
CoreWeave continues to spend heavily on infrastructure. Q2 capital expenditures are anticipated to reach as high as $9 billion, a substantial increase from $2.4 billion during the comparable quarter in 2023.
As of the end of March, the company reported $25 billion in outstanding debt, alongside $8.8 billion in available but unused credit facilities. Since then, management has arranged up to $14 billion in fresh financing, which includes a $1 billion equity injection from Jane Street, a prominent hedge fund.
Combined depreciation and interest expenses accounted for 81% of first quarter revenue. The company posted an adjusted pre-tax loss of $491 million in Q1, expanding from a $104 million loss in the prior year period.
For Q2, Wall Street expects an adjusted loss per share of -$1.18, representing a 339% year-over-year deterioration. Operating margin is forecast to contract 82% versus last year, settling around 2.86%.
Backlog Expectations
Investors will pay close attention to CoreWeave’s revenue backlog metrics, with projections showing growth of 246% to $104.4 billion. Remaining performance obligations are estimated to surge 284% to $115.6 billion.
The current backlog primarily consists of AI cloud infrastructure agreements with major technology firms including Microsoft, Meta, OpenAI, and additional partners. Bulls supporting the stock have consistently pointed to the substantial size of this contract pipeline as a reason for optimism.
The company doesn’t expect to achieve positive adjusted pre-tax earnings until 2028.
Market Challenges and Insider Transactions
A fresh competitive challenge has emerged for CoreWeave. SpaceX has started offering computing resources from its proprietary data centers to clients like Anthropic and Google. Additionally, Meta is exploring potential entry into this market segment, with CEO Mark Zuckerberg discussing the possibility during recent earnings calls.
Nvidia maintains a strategic partnership with the company. The chip giant owns a 9% equity position in CoreWeave and has pledged $6.3 billion to guarantee payment for unused server capacity within CoreWeave facilities.
Regarding insider transactions, CEO Michael Intrator divested 307,692 CRWV shares during the previous week at an average execution price of $91.80. From the time insiders gained selling permission approximately one year ago, the stock has fallen 10%, while the broader S&P 500 index has appreciated 20% during the same timeframe.
BofA analyst Tal Liani indicated he’ll be monitoring announcements regarding data center deployment schedules, capital expenditure projections, and any evidence of margin enhancement as the year progresses.
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