CoreWeave Raises Its Forecast, Shuns Unsecured Debt for Now

LIVINGSTON, N.J., Nov. 10 — CoreWeave,CoreWeave, which rents out cloud graphics processors for artificial intelligence, raised its forecast for 2026 on Tuesday after third-quarter revenue of $3.66 billion beat analysts’ estimates. It now expects revenue of $13.0 billion to $13.3 billion this year.

Then it said how it would not pay for the rest. “At current yields, we do not intend to issue additional parent-level unsecured debt through 2027,” Nitin Agrawal, its finance chief, said, as quoted by CNBC. Instead it leans on loans backed by customer contracts and on cash paid in advance: about $9 billion “in customer prepayments and deposits expected in the next three months alone,” by its own account.

The answer went to the question hanging over the company. CoreWeave’s shares had lost more than 40 percent in a month, rising interest rates had pushed lenders out of the market, and some of its bond yields had recently topped 16 percent, CNBC reported. The results came on a day when the 10-year Treasury yield rose to about 5 percent, from 4.86 percent, by CNBC’s quote, after October’s prices ran hot.

The Money

The quarter was large and still loss-making. Revenue rose 168 percent from $1.37 billion a year earlier, against the $3.55 billion that analysts polled by LSEG had expected, CNBC reported. CoreWeave lost $709 million under generally accepted accounting principles, against $110 million a year earlier. Net interest expense was $846 million, more than four times its $207 million operating income, by our arithmetic, and it expects $1.05 billion to $1.15 billion of interest in the fourth quarter.The DebtCoreWeave’s balance sheet shows $41.6 billion of recourse debt and $5.3 billion of non-recourse debt on Sept. 30, about $46.9 billion in all, by our sum; CNBC put it at “almost $47 billion.” It held $4.1 billion in cash and cash equivalents.

Its plan leans on the lenders it says are still open. On the call, according to a transcript published by The Motley Fool, Michael Intrator, the chief executive, said: “Looking ahead, we will not use the unsecured debt market to fund our business at current yields. Nor do we need to.” He said its weighted average cost of debt was 7.9 percent at the end of the quarter, and that it had collected prepayments on 70 percent of its deals this year. Mr. Agrawal said a new delayed-draw term loan, expected “in the coming weeks,” would be an investment-grade facility, expected to yield 7 to 7.5 percent at current rates.Delayed-Draw Term LoanA loan matched to a specific customer contract and drawn as the equipment is bought and delivered; the contract’s cash flow pays the interest and repays the principal, as Mr. Intrator described it on the call. Mr. Agrawal said CoreWeave expects to raise less than $5 billion in additional parent-level capital through 2027, according to the Motley Fool transcript.

At current yields, we do not intend to issue additional parent-level unsecured debt through 2027.

“The business can execute well and still face a tougher financing environment,” Joe Tigay, a portfolio manager at Equity Armor Investments, wrote in an email quoted by CNBC. “Strong demand is encouraging; the cost and availability of capital remain critical.”

The Power

CoreWeave added more than 200 megawatts of active power in the quarter, to over 1.7 gigawatts, and signed for more than 900 megawatts more, taking contracted power to over 4.6 gigawatts. More than 1.3 gigawatts of that is abroad, including in India, Indonesia and Spain. It still expects more than 1.85 gigawatts of active power at year-end, a target it did not raise, and it raised the low end of its 2026 capital-spending forecast, to $37 billion to $39 billion from $35 billion to $39 billion, to deliver infrastructure “sooner than planned.” By our arithmetic from its rounded figures, the gap between power signed and power switched on widened to about 2.9 gigawatts, from about 2.2 gigawatts in June.

Its revenue backlog was about $132.5 billion on Sept. 30, up from about $104 billion on June 30, a figure its second-quarter release said left out more than $25 billion of commitments added early in the third quarter.Revenue BacklogCoreWeave counts its remaining performance obligations plus other amounts it estimates it will recognize under committed customer contracts, “subject to the satisfaction of delivery and availability of service requirements.” If it held to that backlog alone, Mr. Agrawal said, “we would expect capex for 2027 to remain in line with our 2026 capex investment, while revenue and EBITDA grow significantly,” as CNBC quoted him.

Asked on the call about Texas, whose governor-elect CoreWeave has written to, Mr. Intrator said “the overwhelming majority of our power is either online or fully permitted and under construction” there, according to the Motley Fool transcript. “So to begin with, we do not anticipate any impact from the seismic regulatory shift that’s occurred,” he said, as quoted by CNBC. He also said CoreWeave was choosing not to sell all its capacity to buyers already waiting, so as to bring it to market later at better economics.Run RateCoreWeave now expects to leave 2026 with annualized run-rate revenue of $20 billion to $21 billion, a measure it calculates as the last month of a quarter’s revenue multiplied by 12.

CoreWeave’s shares closed Tuesday at $48.73, down 0.51 percent, before the report, and stood at $53.83 at 5:17 a.m. Eastern on Wednesday, up 10.47 percent in trading before the open, according to CNBC. Nebius, another so-called neocloud, whose shares have fallen by a similar amount, reports on Thursday, CNBC noted.