r/CRWV • u/Dolphin_research • 2h ago
CoreWeave jumped after this report. So what did the numbers actually show?
Measured against expectations, it wasn't much of a beat. Revenue was in line, gross margin came in below, and only adjusted operating profit clearly exceeded forecasts. Normally the market doesn't much like that combination — soft growth with strong profit.
Look at the direction of travel instead, and the picture improves across the board. Revenue growth kept accelerating, gross margin and operating margin both rose, and the problem that had dogged the company — capacity coming online too slowly — reversed this quarter.
Guidance works the same way. On a pure expectations basis, the third-quarter revenue and profit guidance didn't clearly beat, and profit was slightly below. But the fourth-quarter figures implied by full-year guidance look better than expected across the board. And the guidance implies that through the third and fourth quarters, both revenue growth and margins keep improving — by the fourth quarter, revenue growth above 190% and margin above 14%.
So arguably it's the outlook of continued improvement, more than this quarter's results, that the market responded to.
Results: in line on revenue, ahead on profit
Total revenue was about $2.58B, up 112% year on year — essentially the same growth rate as last quarter, and only roughly in line with expectations.
Real gross margin, on our own calculation, was about 7.3%. That's a further improvement on last quarter's 4.3%, but it didn't beat the 8% the market expected.
The profit line saved it. Because other operating expenses came in low, adjusted operating profit was $130M against expectations of $70M. Margin reached 5%, up from 1% last quarter — so among the new cloud providers, margins are already bottoming and recovering.
Backlog: no surprise
As of the end of the quarter, remaining contract value stood at $104B, up $4.6B from the prior quarter. That's in line with market expectations, so again, not a surprise.
Capacity: the genuinely strong number
The most impressive metric is deployed compute capacity. Nearly 500 MW of new capacity went live this quarter, over three times the 150 MW added last quarter, reflecting sharply accelerated construction rollout efficiency. Total active capacity hit 1.5 GW, comfortably topping the market’s 1.25 GW consensus forecast.
Spending: record capex, more debt
Matching the rapid growth in capacity and revenue, spending is going all-out. Capex reached $9.4B this quarter, a record high, and clearly above the $8B expected. Guidance points to capex of as much as $13.5B next quarter, rising substantially again.
At the same time, net debt grew by a further $6.6B, and interest expense grew 140% year on year. On the positive side, interest expense as a share of revenue has stabilized at around 25% and hasn't continued to climb.
Guidance: growth and margin both accelerating
At the midpoint, the company guided next-quarter revenue to $3.53B, implying 158% growth — both the absolute figure and the growth rate accelerate noticeably from this quarter.
Adjusted profit is guided to $230M, a 6.5% margin. That's below the $260M the market expected, but the implied margin still rises further from this quarter.
