CoreWeave, Inc. Class A Common Stock (CRWV) | The Buildout — AI Infrastructure
The Verdict
CoreWeave rents AI compute. It buys NVIDIA GPUs and the surrounding hardware, leases or builds data-center shells, secures power, and sells the resulting capacity and software to AI builders — hyperscalers, frontier labs, financial firms, enterprises and the public sector. Management's framing is that the specialization itself is the product: it argues the continuous AI lifecycle cannot be supported by adding GPUs to a general-purpose cloud. The company is mid-transition on three axes, all management-stated: from single-product GPU rental toward a multi-product platform, from training-heavy workloads toward an inference-majority mix, and from a pure lessee of third-party data centers toward partial owner of its own sites.
| Market Cap | — |
| Revenue (TTM) | $7.6B |
| Revenue Growth | +115.3% |
| EBITDA Margin (TTM) | 49.6% |
| Net Debt | $45.2B |
| Earnings Beats | 1 of 5 |
| P/E (TTM) | — |
| EV/EBITDA (TTM) | — |
What We Like
- The Q2 2026 revenue backlog rose 246% Y/Y, and management added more than $25B of net new customer commitments in the early weeks of Q3 — commitments explicitly not included in the Q2 backlog figure.
- The margin inflection landed: adjusted operating income was $128M, a 5% margin, in Q2 2026 versus $21M and 1% in Q1 2026, above the high end of the $30–90M guided range. Q3 is guided to $200–260M and Q4 margins to 'low teens.'
- Pricing moved up across vintages. The company raised prices approximately 25% across SKUs in July 2026 — not yet reflected in Q2 margin — and said pricing for prior-generation SKUs is at or above where it was years ago. A recently signed A100 contract extends into 2029.
- New lines are compounding: managed inference booked ARR grew from $1M to more than $100M since launch, with a target of at least $250M exiting 2026, and non-GPU products including storage, CPU, networking and software exceeded $400M of ARR as of Q2.
- Capacity is being added fast: active power reached 1.5 GW in Q2 2026, contracted power was 4.2 GW as of the call, and management guides to more than 1.85 GW of active power exiting 2026 with a 2030 target of at least 8 GW.
What We’re Watching
- Capacity conversion. Growth is gated by energization and installation, not demand. Q2 2026 sequential revenue growth slowed to +24% from +32%, which management attributed to about 300 MW of the quarter's roughly 500 MW landing in June.
- The 2027 ARR framework. The prior target of more than $30B of run-rate revenue exiting 2027, more than 75% contracted, was not reaffirmed when asked on the Q2 2026 call; the question was redirected to the 2026 exit guide.
- Interest expense and losses. Q2 2026 net loss was $626M against $640M of interest expense, and Q3 interest expense is guided to $860–940M.
- Customer concentration. Microsoft was approximately 67% of FY2025 revenue and the top two customers were 65% of Q1 2026 revenue; the 10-Q says concentration with a limited number of top customers is likely to continue.
The thesis strengthened on execution and loosened on the forward framework. Management delivered the highest-visibility item it had set for itself — the sequential margin inflection — beat its own Q2 adjusted operating income guide by a wide margin, and raised full-year revenue, adjusted operating income, CapEx, exit ARR and exit active power. Against that, the 2027 ARR target went unaddressed, and the language that every new-capacity contract would begin generating revenue by year-end 2026 became 'through 2026 and 2027.' The open question is whether contracted power keeps converting to revenue on schedule while interest expense scales faster than the operating line.
Earnings
Q2 2026 revenue was $2.6B, up 112% year over year and 24% sequentially, at a 65.9% gross margin. Adjusted operating income reached a 5% margin, up from 1% in Q1 2026 and above the high end of the $30–90M guidance range.
| Metric | Q2 FY2026 | Q1 FY2026 | Q2 FY2025 | YoY |
|---|---|---|---|---|
| Revenue | $2.6B | $2.1B | $1.2B | +112.3% |
| Gross margin | 65.9% | 65.5% | 74.2% | -830bps |
| EBITDA | $1.3B | $1.0B | $579M | +132.2% |
| EPS | $-1.14 | $-1.40 | $-0.60 | +90.3% |
| Revenue backlog | $104.2B | $99.4B | n/a | +246% YoY |
| Adjusted operating income | $128M | $21M | $200M | Down from Q2 2025 |
the quarter in which we saw margins inflect expanding sequentially as we had discussed over the past several quarters— CFO, 2026-08-11
Management tone: The register changed between the two calls. On the Q1 2026 call, management was defending a margin story at a stated trough — adjusted operating income of $21M and a 1% margin — with sequential expansion promised through the year. On the Q2 2026 call the tone moved to demonstration: the CFO described it as 'the quarter in which we saw margins inflect expanding sequentially as we had discussed over the past several quarters.' Management volunteered a pricing action and a residual-value datapoint without prompting, said 'the truth of the matter is the limiting factor isn't just power, it's labor, it's memory, it's storage,' and acknowledged increased competition while pointing to expanding demand, pricing and margin. Where specificity would have helped an analyst most — quantifying supply-chain lock-in and the 2027 ARR bridge — management reframed rather than answered.
Management Guidance
For Q3 2026, management guided revenue of $3.45–3.6B, adjusted operating income of $200–260M with margins reaching 'low teens' in Q4, interest expense of $860–940M and CapEx of $11.5–13.5B, tied to the significant amount of new capacity being delivered to customers. For FY2026 it raised revenue to $12.4–13.2B, adjusted operating income to $960M–1.15B, CapEx to $35–39B, exit ARR to $18.5–19.5B and exit active power to more than 1.85 GW. It reaffirmed the target of at least 8 GW of active power by 2030 and a long-term margin target of 25–30%.
Trajectory
Revenue growth is steady year over year and decelerating sequentially. Revenue was $2,078M in Q1 2026 and $2,575M in Q2 2026 — up 112% Y/Y in both quarters, but up 32% and then 24% sequentially, which management attributes to build-schedule timing rather than demand. Gross margin was 65.5% in Q1 2026 and 65.9% in Q2 2026, down from 74.2% in Q2 2025, as rent, power and power-related depreciation grew faster than revenue at the gross line. Below the gross line the picture is two-sided: EBITDA (operating income plus D&A) rose to $1,344M in Q2 2026 from $579M a year earlier, while net loss was $626M and free cash flow was negative $5.7B.
The Model
The model projects FY+1 revenue of $13,075M and EBITDA of $6,792M, a 51.95% margin, and FY+2 revenue of $26,750M and EBITDA of $14,806M, a 55.35% margin. The near term is anchored by capacity already contracted and by the power expected online: management guides to exit 2026 at $18.5–19.5B of ARR and more than 1.85 GW of active power, with more than two-thirds of the Q2 backlog attached to delivery-commenced contracts by year-end. FY+2 is the conversion year, and it depends on how much of the $104.2B backlog turns into revenue as contracted power — 3.7 GW at Q2 end, 4.2 GW as of the call, plus more than 1.5 GW of further potential — is energized. Dispersion across the model's runs is 19% on FY+2 revenue, with a minimum of $24,000M, a median of $26,750M and a maximum of $29,000M.
| Metric | FY2025 | Next FY (E) | Following FY (E) |
|---|---|---|---|
| Revenue | $5.1B | $13.1B | $26.8B |
| YoY Growth | — | +154.8% | +104.6% |
| EBITDA | $2.4B | $6.8B | $14.8B |
| EBITDA Margin | 46.9% | 52.0% | 55.4% |
Projections are the median of 4 independent model runs.
For Q3 2026, management guided revenue of $3.45–3.6B, adjusted operating income of $200–260M with margins reaching 'low teens' in Q4, interest expense of $860–940M and CapEx of $11.5–13.5B, tied to the significant amount of new capacity being delivered to customers. For FY2026 it raised revenue to $12.4–13.2B, adjusted operating income to $960M–1.15B, CapEx to $35–39B, exit ARR to $18.5–19.5B and exit active power to more than 1.85 GW. It reaffirmed the target of at least 8 GW of active power by 2030 and a long-term margin target of 25–30%.
What Could Go Right — and Wrong
- The July 2026 price increase of approximately 25% across SKUs flows through to margin with no matching increase in input costs.
- Contracted power converts to revenue on schedule, so sequential revenue growth reaccelerates in Q3 and Q4 2026.
- More than two-thirds of the Q2 2026 backlog is attached to delivery-commenced contracts by year-end, confirming backlog is converting rather than accumulating.
- Managed inference reaches at least $250M of ARR exiting 2026, adding a higher-margin, shorter-duration revenue line that also absorbs GPUs coming off contract.
- The first self-build site comes online later in 2026 as expected, adding a vertical-integration lever to long-term margins.
- Energization slips. Growth is gated by power, labor, memory, storage and the ability to bring up infrastructure, and a delay pushes revenue into later periods.
- Interest expense runs above the guided $860–940M Q3 2026 range or the next financing prices wider. Total debt was $51.6B at June 30, 2026, and on 2026-09-17 the company announced an ATM for up to 35,000,000 Class A shares and a proposed $3.0B convertible.
- A top customer reduces, defers or renegotiates. Microsoft was about 67% of FY2025 revenue and is also a named competitor.
- Pricing rolls over, weakening both the margin path and the residual-value assumption that currently rests on a single disclosed datapoint — the A100 contract extending into 2029.
- Hyperscaler self-build or custom silicon changes the third-party demand calculus; Meta has a disclosed 1 GW venture and AWS Trainium is at a more than $25B run rate.
Looking Ahead
The next twelve months turn on conversion. Q3 2026 results test whether the power added late in Q2 and the July price increase reach the income statement, against guidance of $3.45–3.6B of revenue and $200–260M of adjusted operating income. By year-end, the company guides to $18.5–19.5B of exit ARR, more than 1.85 GW of active power, the managed inference ARR target and more than two-thirds of the Q2 backlog attached to delivery-commenced contracts. Two dated items sit outside the earnings calendar: the ATM program for up to 35,000,000 Class A shares and the proposed $3.0B convertible senior notes due 2033, both announced 2026-09-17. The first self-build site is expected online later in 2026, and the 2030 target of at least 8 GW of active power stands.
- Q3 2026Q3 results vs guidance — Tests revenue of $3.45–3.6B and adjusted operating income of $200–260M.
- Later 2026First self-build site online — Tests vertical integration as a long-term margin lever.
- End 2026Exit ARR and power — Guides to $18.5–19.5B ARR and more than 1.85 GW of active power.
- End 2026Backlog-quality threshold — Tests whether more than two-thirds of Q2 backlog is delivery-commenced.
- 2027CoreWeave Omni scaling — Tests whether the sovereign and enterprise channel adds revenue.
- 2030Eight-gigawatt power target — Reaffirmed target of at least 8 GW of active power by 2030.
Financials
Annual Summary
| Metric | FY2024 | FY2025 | TTM | YoY |
|---|---|---|---|---|
| Revenue | $1.9B | $5.1B | $7.6B | +167.9% |
| Gross Margin | 73.0% | 72.0% | 67.4% | 102bps |
| EBITDA | $1.2B | $2.4B | $3.8B | +102.8% |
| EBITDA Margin | 62.0% | 46.9% | 49.6% | 1,507bps |
| Net Income | −$863M | −$1.2B | −$1.9B | -35.2% |
| Free Cash Flow | −$6.0B | −$7.3B | −$13.7B | — |
| Net Cash | — | — | — | — |
Key Ratios (Trailing)
- P/E TTM—
- EV/EBITDA TTM—
- EV/Revenue TTM—
- Price/FCF TTM—
- Gross Margin (TTM)67.4%
- EBITDA Margin (TTM)49.6%
- Net Margin (TTM)-25.4%
- ROIC-0.4%
- FCF Conversion-363.1%
- SBC / Revenue8.2%
The Company
CoreWeave describes itself as 'The Essential Cloud for AI.' It operates a specialized cloud built for AI workloads and rents it out. The 10-K says the platform 'enables the full lifecycle of AI, including large-scale model training, inference, data movement, continuous iteration, and agentic workflows.' It sells GPU compute as reserved instances, on-demand, Flex Reservation and Spot; managed software including orchestration, storage, networking and managed inference; and application software and engineering services. AI is effectively the whole business, and no material non-AI revenue is disclosed.
It operates from leased and self-built data centers. The 10-K says it runs 'a distributed and interconnected portfolio of data centers across the United States, Europe, and Canada, operating in six countries total,' with leased sites in the U.S., U.K., Spain, Sweden and Norway and headquarters in Livingston, New Jersey. It reports one operating segment and discloses no revenue by product or service. On the Q1 2026 call the CEO described operating 'close to 50 data centers,' with no single data center provider delivering more than 17% of active infrastructure. The company is moving toward owning some of its own sites — its first self-build is expected online later in 2026 — and holds a joint venture for a campus in Kenilworth, New Jersey with an unnamed partner.
Business Segments
Competitive Landscape
The 10-K names the general-purpose cloud providers as key competitors: Amazon (AWS), Google (Google Cloud Platform), Microsoft (Azure) and Oracle, which it describes as offering cloud computing as part of a broader, diversified product portfolio. Microsoft is simultaneously the largest customer, at approximately 67% of FY2025 revenue. The supply-chain material adds a long list of specialized neo-cloud peers, and the neighbor read-through shows several of them sold out and raising price. Management's own position on the Q2 2026 call was that 'even with this increased competition, we are seeing demand, pricing and margin all expanding.'
- Amazon (AWS)Named in the 10-K as a key competitor offering general purpose cloud services as part of a broader, diversified product portfolio.
- Google (Google Cloud Platform)Named in the 10-K as a key competitor offering general purpose cloud services as part of a broader, diversified product portfolio.
- Microsoft (Azure)Named in the 10-K as a key competitor and is simultaneously the company's largest customer at approximately 67% of FY2025 revenue.
- OracleNamed in the 10-K as a key competitor offering general purpose cloud services as part of a broader, diversified product portfolio.
- NebiusListed among specialized neo-cloud peers in the supply-chain wiring map; the neighbor read-through reports Nebius sold out with short-term deals at $40–50M per MW.
Supply Chain
CoreWeave sits between the hardware supply chain and AI demand: it buys NVIDIA GPUs and related hardware, secures data centers and power, and rents the resulting compute and software. NVIDIA supplies all GPUs in use today and is also an investor and a customer.
More on CRWV: Earnings recap