CoreWeave Projects $9 Billion in Customer Prepayments

CoreWeave expects to receive $9 billion in customer prepayments over the next three months. The company announced this figure on Tuesday as it reported third-quarter results that exceeded market expectations. These advance payments are designed to support the firm’s infrastructure growth while lowering its dependence on borrowing.

Shares of CoreWeave rose nearly 6% in after-hours trading following the report. The company generated $3.66 billion in revenue for the quarter, a 168% increase from the same period last year. This figure surpassed the $3.54 billion consensus estimate compiled by FactSet. The net loss per share was $1.27, which matched analyst predictions.

Management raised its full-year revenue forecast to a range of $13 billion to $13.3 billion. The firm also increased the lower bound of its expected infrastructure spending to $37 billion to $39 billion. Capital expenditures for the quarter totaled $14.5 billion, exceeding the $11.9 billion estimate from FactSet.

The stock had fallen nearly 60% over the previous six months due to concerns about the company's high debt levels. Chief Executive Michael Intrator stated that CoreWeave would avoid unsecured borrowing at current yields. Instead, the company plans to utilize delay-draw term loans, which allow it to access predetermined financing amounts over time.

Nick Del Deo, an analyst at MoffettNathanson, described the shift toward prepayments as a favorable approach. He noted that this method carries less risk than taking on additional debt. However, Del Deo suggested that CoreWeave might still need an equity sale or equity-linked financing next year.

Demand for the company's services is running at 10 times its 2027 capacity. Chief Financial Officer Nitin Agrawal explained that long-term contracts price processing power at $20 million to $25 million per megawatt. Short-term commitments can reach $40 million per megawatt, allowing initial investments to be recovered within six to 18 months.

CoreWeave also introduced a new AI development platform called CoreWeave Forge. Intrator said this platform brought in 70% of the company's new cloud customers during the third quarter. The firm stated that cash flows from customer contracts alone could cover its substantial spending needs.