CoreWeave Inc. has experienced a remarkable performance since its initial public offering in March, with its stock increasing by almost 300% compared to its IPO price. The company maintained strong demand for its offerings during the second quarter, although the stock has shown some decline following the most recent earnings report.
Although CoreWeave exceeded revenue forecasts for the period, it announced on Tuesday that the loss was greater than what analysts had expected. The stock declined by 10.4% in after-hours trading.
CoreWeave announced second-quarter revenue of $1.2 billion, representing an increase of approximately 200% compared to the previous year. CEO Michael Intrator stated that the AI cloud-computing firm is "expanding quickly as we aim to address the extraordinary demand for AI."
Analysts monitored by FactSet were expecting approximately $1 billion in revenue for the second quarter.
The firm also highlighted a revenue backlog of $30.1 billion as of June 30. Leadership noted that capacity is expected to stay limited in the future, as energy availability for data centers continues to be a major challenge.
Although the sales figures were impressive, CoreWeave reported a larger-than-anticipated loss during the previous quarter. The firm disclosed a net loss of $291 million, whereas analysts had predicted a loss of $199 million. The leadership explained the increased loss as a result of significant investment in customer acquisition and infrastructure, highlighting the initial expenses necessary to sustain the company's swift expansion.
The adjusted net loss increased to $131 million, representing a -11% margin, which was below the expected loss of $103 million. During the same quarter in the previous year, the company recorded a loss of $5 million, with a -1% margin.
CoreWeave announced adjusted earnings before interest, taxes, depreciation, and amortization for the quarter amounted to $753 million, whereas analysts had expected $677 million.
The company's management reported revenue projections ranging from $1.26 billion to $1.3 billion for the third quarter. However, analysts had anticipated $1.25 billion.
Due to strong demand, CoreWeave has increased its full-year revenue forecast for the second straight quarter. The company now anticipates sales ranging from $5.15 billion to $5.35 billion by the end of the year, up from its earlier projection of $4.9 billion to $5.1 billion.
"We are starting the second half of the year in a strong position, with solid performance in meeting customer demands at scale, as well as effective actions in the capital markets and a solid backlog along with a very promising demand pipeline," said Chief Financial Officer Nitin Agrawal during the earnings call, as reported in a FactSet transcript.
He admitted that "the timing of data-center capacity becoming available and the deployment of new GPU generations into service could lead to considerable fluctuations from quarter to quarter" in capital spending, with the company anticipating a "significant portion" of its $20 billion to $23 billion in annual estimated capital expenditures to occur in the fourth quarter.
Earlier this week, JP Morgan analyst Mark Murphy predicted larger, although "more irregular," orders for CoreWeave in the future. Murphy pointed to the company's expanding number of enterprise clients — which currently features tech giants such as Nvidia Corp. and Microsoft Corp. — as a positive factor for upcoming growth.
At the same time, Murphy mentioned that supply limitations have been a challenge for cloud providers throughout the industry as companies compete to secure sufficient Nvidia graphics processing units.
Following a mixed earnings announcement, additional factors to watch are on the horizon for investors. CoreWeave's stock has experienced significant fluctuations, and further instability may occur as the stock's lockup period is scheduled to end on Thursday. This implies that insiders will now be permitted to sell their shares after having been previously restricted from doing so.