CRWV — Q2 2026 Financial Report Analysis

Overview

CoreWeave rents out large clusters of Nvidia GPUs (the chips used to train and run AI models) from data centers it leases. In the second quarter of 2026 (April–June), revenue more than doubled to $2.58 billion, up 112% from $1.21 billion a year earlier and up 24% from the first quarter's $2.08 billion. But the cost of building that capacity grew even faster: depreciation, data-center rent and interest on debt pushed the company to a GAAP operating loss of $49 million (versus a $19 million profit a year ago) and a net loss of $626 million, more than double last year's $290 million. The quarter is a clear picture of the CoreWeave model: very fast, contract-backed sales growth, paid for with borrowed money whose cost currently exceeds all of the operating profit.

At a glance

• $104 billion of contracted future revenue (CoreWeave's "revenue backlog", up 246% from a year earlier) — roughly 40 quarters of revenue at the current pace, and it excludes more than $25 billion of further commitments signed in early Q3. Demand is not the problem.
• $640 million of net interest expense, equal to 25% of revenue and about 13 times the $49 million operating loss. Management guides Q3 interest to $860–$940 million, well above its own guidance for Q3 adjusted operating income ($200–$260 million).
• $35.6 billion of debt at June 30, up from $21.6 billion at the end of 2025, plus $16.3 billion of data-center lease obligations on the balance sheet and $35.5 billion of signed leases that haven't started yet — against $5.0 billion of shareholders' equity.

Key figures

Source: CoreWeave Form 10-Q for the quarter ended June 30, 2026 and the Q2 2026 earnings release (Exhibit 99.1); backlog and capex definitions from the company's September 2026 investor presentation filed on Form 8-K.

Takeaway: CoreWeave's revenue problem is solved for years ahead — its problem is the price of the money it borrows to deliver that revenue. Q2 interest expense ($640 million) was five times adjusted operating income ($128 million), and Q3 guidance keeps interest above operating profit even on management's adjusted measure. Whether the shares work depends on adjusted operating margin climbing to the "low-teens" management promises for Q4 faster than the debt pile grows.

What drove revenue

The 10-Q attributes the growth to "increased demand from both existing and new customer contracts and our fulfillment of that demand through our expanded data center footprint." Two details matter:

• About 93% of the revenue increase came from existing customers expanding, not new ones. 98% of revenue comes from committed (multi-month or multi-year) contracts rather than pay-as-you-go use.
• Capacity is the constraint. Active power — the electricity CoreWeave's data centers can actually draw, a practical proxy for how many GPUs it can run — rose by nearly 500 megawatts in the quarter to 1.5 gigawatts. Contracted power (sites signed but not all built) reached about 3.7 gigawatts. Revenue grows roughly as fast as new capacity is switched on.

US customers accounted for $2.39 billion of revenue; all other countries $186 million (up from $64 million).

Why the profit went the wrong way

Revenue rose $1.36 billion; operating expenses rose $1.43 billion. The filing identifies where:

• Depreciation — the accounting charge that spreads the cost of servers and GPUs over their useful lives — within technology and infrastructure expense rose about $752 million, from $537 million to roughly $1.3 billion, as newly bought servers and networking gear were "placed in service." Total depreciation and amortization was $1.39 billion, 54% of revenue (46% a year ago).
• Cost of revenue rose 181% to $879 million, mainly from about $335 million more data-center rent and $87 million more power and utilities spend, as new sites opened. It went from 26% to 34% of revenue.
• Interest expense rose 140% to $640 million, "primarily attributable to increased borrowing levels and total debt obligations."

Sales and marketing ($60 million) and general and administrative costs ($178 million, up only 2%) are small; this is overwhelmingly a capital-cost business.

There is a timing effect worth understanding: GPUs start depreciating and leases start charging rent when capacity is built, often before it is fully earning revenue. More than 300 megawatts of the quarter's new power came online in June, according to management on the earnings call, so Q2 carried much of that cost with only weeks of matching revenue. That is the main reason management expects margins to improve in the second half.

Debt, leases and capital spending

This is the core of any CoreWeave analysis.

Capital spending. Cash paid for property and equipment was $6.4 billion in Q2 and $14.1 billion in the first half (versus $3.9 billion in H1 2025). On the company's own capex definition (additions to property and equipment, adjusted for construction in progress), Q2 capex was $9.35 billion. Full-year 2026 capex guidance is now $35–$39 billion.

Debt. Total indebtedness was $35.6 billion at June 30 (principal), up from $21.6 billion at December 31, 2025. The mix:

• $13.6 billion of delayed-draw term loans — loans drawn in stages as specific data centers are built, secured by those assets and by the customer contracts they serve, and repaid from those contracts' cash flows. On the balance sheet, $3.7 billion of debt is "non-recourse" (lenders can only claim the specific assets, not the parent company).
• $16.6 billion of bonds, including high-yield senior notes with coupons of roughly 9–9.75%, a euro-denominated note, and $6.6 billion of convertible notes (bonds that can turn into shares if the stock rises enough).
• Financing from equipment manufacturers and a software vendor, with a 9% weighted rate on the short-term portion.

Principal due: $4.4 billion in the rest of 2026 and $6.2 billion in 2027. The company's weighted average interest rate has fallen to 8.3% from 9.0% at the end of 2025, per its September presentation — but the debt balance has grown far faster than the rate has fallen, which is why interest expense keeps rising.

Leases. CoreWeave leases all of its data centers. It carries $16.3 billion of operating lease liabilities on the balance sheet (double December's $8.2 billion), and has signed further leases not yet started with $35.5 billion of estimated future payments, starting between 2026 and 2029. One additional data-center lease carries payments tied to the landlord's construction costs, up to a contractual maximum of $14.7 billion over 16 years, which is not included in that $35.5 billion.

Liquidity. Cash and equivalents were $5.5 billion and undrawn committed borrowing capacity was $10.0 billion, for total liquidity of $15.6 billion. The 10-Q says this is sufficient for the next 12 months, while warning that "future investments may require significant debt and/or equity financing" and that selling more equity "would result in dilution."

Financing since quarter-end. In August a subsidiary signed a further $2.6 billion delayed-draw loan (SOFR + 5.5%), $1.2 billion of it already drawn. In September CoreWeave sold $3.7 billion of 2.875% convertible notes due 2033 (conversion price about $97.85 per share, versus a $79.88 share price at pricing) and spent about $499 million of the proceeds on "capped calls," hedges that reduce dilution if the notes convert. The same week it signed an equity distribution agreement with a group of banks allowing it to sell new shares into the market over time. Raising money is now a continuous activity, not an occasional one.

Customer concentration

Three customers made up 72% of Q2 revenue (36%, 26% and 10%). That is less concentrated than a year ago, when one customer alone was 71% — but still very high. The two largest customers also accounted for 32% each of accounts receivable (money owed to CoreWeave). The 10-Q names contracts that are expected to make OpenAI and Meta significant customers, including a March 2026 Meta order of up to approximately $21.0 billion running into 2032; the filing does not say which company is "Customer A" or "Customer B."

The backlog cushions this risk: 41% of the $103.7 billion of remaining performance obligations (contracted revenue not yet delivered) is expected within 24 months, 39% in months 25–48 and the rest out to month 78. But those contracts only turn into revenue if CoreWeave delivers capacity on time — the figure is already reduced for estimated credits and delivery delays — and the 10-Q's risk factors warn that a top customer cutting demand would hurt results significantly. A financial-services push (about 10% of backlog, per the September presentation) and enterprise wins such as Caterpillar are early steps toward broadening the base.

What the headline numbers hide

• "Adjusted EBITDA" of $1.51 billion is not profit. EBITDA (earnings before interest, taxes, depreciation and amortization) adds back exactly the two costs that define this business: $1.39 billion of depreciation on GPUs that wear out and become obsolete within a few years, and $640 million of interest on the debt that bought them. It also excludes $165 million of stock-based pay. The 59% margin shows cash-generating ability before paying for the equipment; the $626 million GAAP net loss is what is left for shareholders after it.
• Adjusted operating income fell, not rose. It dropped to $128 million (5% margin) from $200 million (16%) a year ago, though it recovered from $21 million in Q1 2026. The only adjustments from the GAAP operating loss are stock pay ($165 million), $11 million of acquired-intangible amortization and $1 million of deal costs.
• The net loss was flattered by a one-off gain. "Other income" of $125 million included $109 million of unrealized gains on strategic investments and about $34 million of foreign-exchange gains, partly offset by a $38 million share of losses from a data-center joint venture. Without the investment gain, the pre-tax loss would have been about $673 million rather than $564 million. The company also booked a $62 million tax charge despite the loss, because it cannot record a tax benefit on its accumulated losses.
• Operating cash flow looks better than earnings, for reasons that won't repeat forever. Operating cash flow was $679 million in Q2 and $3.66 billion in the first half, against a $1.37 billion H1 net loss. That gap is mostly non-cash depreciation, but also a $1.37 billion H1 rise in deferred revenue (customers paying in advance; the balance reached $9.7 billion) and a $607 million drop in receivables. Prepayments are effectively customers helping finance the build-out — useful, but a one-time inflow per contract.
• Free cash flow is deeply negative. H1 operating cash flow of $3.66 billion minus $14.1 billion of cash capex is about -$10.5 billion. The gap was funded by $16.7 billion of new borrowings (with $5.2 billion repaid) and $3.0 billion of new shares.
• Per-share losses are diluted by new shares. The weighted average share count rose 13% to 551 million, after $2.0 billion of stock sold to Nvidia in January (at $87.20) and $1.0 billion to Jane Street in April (at $109). The loss per share widened 90%, less than the 116% widening of the dollar loss, because it is spread over more shares.
• Legal overhang. A securities class action filed in January 2026 and related shareholder derivative suits allege misleading statements; the company says the claims are without merit and has not estimated any loss.

Outlook

Management did not publish guidance in the press release; it gave it on the August 11 earnings call (as reported by MarketBeat):

• Q3 2026: revenue $3.45–$3.6 billion (34–40% above Q2), adjusted operating income $200–$260 million, interest expense $860–$940 million, capex $11.5–$13.5 billion.
• Full-year 2026: revenue raised to $12.4–$13.2 billion, adjusted operating income raised to $960 million–$1.15 billion, capex $35–$39 billion, a year-end annualized revenue run-rate of $18.5–$19.5 billion, and active power above 1.85 gigawatts (from above 1.7 gigawatts). Management expects adjusted operating margin to reach the low teens in Q4.

With $4.65 billion of H1 revenue, the full-year range implies $7.75–$8.55 billion in the second half — a steep ramp that depends on capacity coming online on schedule. The September investor presentation also points to pricing power: a roughly 70% price increase across GPU types in July 2026 and about 25% higher expected contribution margin on contracts signed in Q2 than in recent quarters.

Our read: the revenue path is well supported by signed contracts and rising prices; the open question is the bottom line. Even at the top of Q3 guidance, adjusted operating income ($260 million) is far below the low end of interest expense ($860 million), so another GAAP net loss in Q3 is the likely outcome. The things to watch in the Q3 report (expected around mid-November, based on last year's timing): whether adjusted operating margin moves toward the promised low teens; whether interest expense lands inside the guided range as cheaper funding such as the 2.875% convertible replaces 9%-plus bonds at the margin; how much new stock is sold under the new share-sale program; and whether the $25 billion-plus of early-Q3 signings lifts backlog well past $104 billion without deepening reliance on the top three customers.