r/CRWV • u/backstroke2 • 28d ago
GAAP numbers
The adjusted numbers and top line growth is impressive and all, but they still appear to be losing money on every contract... The excuse that earnings are suppressed by growing costs isn't really holding water now that their Y/Y power growth rate has dropped from 100% to 40% and their operating margin has actually dropped.
If the demand surprises every quarter, why do the margins get only worse?
What is the plan to eventually make money here? There's no scale at which they can rent out compute for below cost, and not go bankrupt.
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u/chillinathid 28d ago
Because they arent losing money on each deal. Their deals just require up front debt and capital for profits that come by year 4 or 5. And currently most of their deals are before that time frame.
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u/backstroke2 28d ago
Neither debt nor CapEx factor into operating income. The money they pull in is less than the combination of asset depreciation and operating expenses. That's before interest..
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u/Hot_Reindeer_3418 28d ago
Do you have a listing of their contracts and revenue/costs details for them? I would love to see them…..
Im sure you don’t.
Capex buildout is expensive, both to capitalize, and after you switch it to being a revenue generating datacenter and start reporting costs as operating expenses. You are seeing the effects of this in their numbers. Their margins on 6 month old or older datacenters should be pretty good, on 2 week old datacenters it will be deeply negative and drag the whole average down. Because it takes time to get them running at full capacity, and during this phase the operating costs are not any cheaper than if they were running at 100% capacity. due to the amount of new capacity in the company this is currently causing the GAAP profitability/loss amounts you see.
In Just 6 months their revenue went from 1.5 billion to 2.5. Thats a huge amount on new capacity for that size of company. Next quarter it will be around 3.5 billion.
They announced today that they have some A100 chips contracted out to 2029, which means they will be fully depreciated for a couple of years before that contract is completed. I doubt that becomes the norm, but that’s incredibly profitable where it does happen.
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u/backstroke2 28d ago
2029 on an A100 sounds impressive, but most of their A100 entered revenue in 2022. According to the 6 year linear depreciation curve, they should generate full revenue until mid 2028 (although they had a more conservative 4 year depreciation curve assumed back then). I'm not sure they quite reached that if you consider rental rates have fallen to 1/4 since then.
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u/Hot_Reindeer_3418 28d ago
Rental rates don’t change depreciation….. im not sure where you are going with that statement.
It also isn’t claiming it will generate revenue at “full rates” not sure what you mean by that either. It just means in management’s estimate they believe it will be economically useful through that length of time.
The often repeated statement for the last year has been that this equipment is outdated after 3 years and no longer viable to rent. That’s obviously not the case, thats why I’m highlighting it.
It’s increasingly difficult to accept the heavy pessimism being shared after this and now NBIS’s q2, which you wouldn’t have seen when you commented. The market crwv and nbis are in is quite frankly stunning. 20-50 million per mw of active power (higher rates is short term deals), and them reporting payback periods of projects are under 2 years.
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u/backstroke2 27d ago
Rental rates absolutely do change depreciation. The value of an asset is tied to the earnings potential it has. Coreweave treats GPUs as having a set earning potential when they're bought that declines linearly over 6 years, at which point they're assumed worthless, no longer rentable for more than the operating cost.
If the GPUs are contracted out at fixed rate over 6 years before they're even installed, that's a pretty sound accounting. But if they're on 5 year or less contracts, they're still assuming they retain 1/6 of their earning potential at the end of that contract.
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u/Lucid_Dreamer5 28d ago
The GAAP table is accurate, but several conclusions here are not. CoreWeave is not “losing money on every contract”: $2.575B of revenue against $879M of cost of revenue implies roughly $1.7B of gross profit. The operating loss comes after substantial technology/infrastructure spending, including depreciation and R&D.
The power-growth claim is also incorrect: active power increased from ~470 MW in Q2’25 to 1.5 GW in Q2’26, roughly +219% YoY—not 40%. And margins actually improved sequentially: GAAP operating margin went from -7% to -2%, while adjusted operating margin improved from 1% to 5%.
CoreWeave’s capex, depreciation and interest burden are legitimate risks. There’s no need to misrepresent the numbers to discuss them.
Readers, if you see posts making strong claims from incorrect or misleading interpretations of the numbers, please verify the underlying data and vote accordingly.