CoreWeave Triples Revenue to $1.2B in Q2, Stock Tanks in After Hours Trade
Main Idea
CoreWeave, an AI infrastructure provider, reported significant revenue growth but also substantial net losses, amid challenges including high operational costs and resistance to its acquisition of CoreScientific.
Key Points
1. CoreWeave's revenue reached about $1.2 billion, tripling year over year, but it recorded a $290 million net loss due to interest costs and operational expenses.
2. The company faces resistance to its $9 billion all-stock takeover of CoreScientific, with shares dropping over 10% in after-hours trading.
3. CoreWeave's adjusted net loss widened to roughly $131 million despite $200 million in adjusted operating income, impacted by operating expenses and stock-based compensation.
4. The company's revenue backlog was approximately $30 billion, with adjusted operating margins at 16%, raising concerns about profitability in a capital-intensive business.
5. Analysts highlight risks such as thin operating margins, heavy fixed costs, and potential cash flow issues if AI training budgets slow or customer consolidation occurs.
Description
CoreWeave reported strong Q2 revenue, but profitability lagged and shares fell in after hours trading amid rising costs and thinner margins.
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