AI demand supports CoreWeave's Q2 revenue doubling, raises full-year guidance, but profit performance is disappointing, plunging after hours | Earnings report insights

The recent financial report shows that CoreWeave, a cloud artificial intelligence (AI) infrastructure service provider supported by NVIDIA, continues to receive strong demand for AI cloud platforms, with revenue in the second quarter maintaining triple-digit growth. However, the extent of the outperformance was not as significant as in the first quarter, and the pace of loss reduction was also below Wall Street expectations.

The guidance provided by CoreWeave during the earnings call was mixed. The company raised its full-year revenue guidance again due to strong AI demand but kept its full-year operating profit guidance unchanged, with the third-quarter operating profit guidance falling short of expectations.

After the earnings report was released, CoreWeave's stock price, which rose over 6% on Tuesday, plummeted in after-hours trading, at one point dropping over 7%. During the earnings call, the after-hours decline further expanded to over 10%.

As a "new star" in the AI concept stocks in the U.S. market this year, CoreWeave's stock price has increased by over 240% since its listing more than four months ago, reflecting investors' optimism about the company's spending in the AI field. Since CoreWeave's business model involves purchasing NVIDIA AI chips and other data center equipment only after customers sign usage contracts, the company is also seen as a barometer for the AI-related spending boom.

Before CoreWeave released its financial report on Tuesday, some commentators pointed out that after the stock price surge, the market had set a higher expectation threshold for CoreWeave's second quarterly report since its listing. In other words, if the financial report was not impressive enough, it would fail to impress investors, and if there were any shortcomings, the stock price was more likely to decline.

On August 12, Tuesday, Eastern Time, CoreWeave announced its second-quarter performance for 2025 and provided guidance for the third quarter and the full year during the earnings call.

1) Key Financial Data:

Revenue: Second-quarter operating revenue was $1.213 billion, a year-on-year increase of 206.7%, while analysts expected $1.08 billion, with a year-on-year growth of 420% in the first quarter.

EPS: The diluted earnings per share (EPS) for the second quarter was -$0.6, narrowing the year-on-year loss by approximately 63%, while analysts expected -$0.52, compared to -$1.49 in the first quarter, which expanded by 140% year-on-year.

Net Loss: The net loss for the second quarter was $290 million, narrowing by 10% year-on-year, while the loss in the first quarter expanded by 143% year-on-year.

Operating Profit: The adjusted operating profit for the second quarter was approximately $200 million, a year-on-year increase of 134%, compared to a year-on-year growth of about 550% in the first quarter.

Profit Margin: The adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) for the second quarter was $753 million, a year-on-year increase of 201%. The EBITDA profit margin for the second quarter was 62%, a year-on-year decrease of 1 percentage point, while analysts expected 61.9%, with a year-on-year increase of 7 percentage points to 62% in the first quarter.

2) Performance Guidance:

Revenue: Third-quarter revenue is expected to be between $1.26 billion and $1.3 billion, with analysts expecting $1.25 billion. Full-year revenue is expected to be between $5.15 billion and $5.35 billion, up from the previous estimate of $4.9 billion to $5.1 billion.

Capital Expenditure: Third-quarter capital expenditure is expected to be between $2.9 billion and $3.4 billion, with full-year capital expenditure expected to be between $20 billion and $23 billion, unchanged from previous estimates. Analysts expect $21.03 billion.

Operating Profit: Third-quarter adjusted operating profit is expected to be between $160 million and $190 million, with analysts expecting $192 million. Full-year adjusted operating profit is expected to be between $800 million and $830 million, unchanged from previous estimates.

Second Quarter Revenue Hits New Quarterly High, Exceeds Expectations, EPS Loss Greater Than Expected

The financial report shows that CoreWeave's revenue in the second quarter exceeded the company's entire guidance range of $1.06 billion to $1.1 billion, breaking through $1.2 billion and setting a new quarterly record, surpassing the previous record set in the first quarter.

However, the year-on-year revenue growth rate of over 200% in the second quarter has eased compared to the 420% in the first quarter. The second-quarter revenue was about 12% higher than analysts' expectations, and the extent of the outperformance compared to Wall Street expectations was also lower than the approximately 15% in the first quarter.

Moreover, the EPS loss in the second quarter narrowed by 63% year-on-year, which was less than analysts' expectations of a narrowing of about 68%.

In the second quarter, the indicator reflecting the volume of unfulfilled cloud business contracts for CoreWeave—the remaining performance contract amount (Revenue Backlog)—was $30.1 billion, a year-on-year increase of 86%, exceeding the year-on-year growth rate of 63% in the first quarter, and a quarter-on-quarter increase of 16.2%.

CoreWeave stated that the year-on-year growth in the remaining performance contract amount in the second quarter was due to the signing of a strategic agreement with OpenAI, and the quarter-on-quarter growth was due to the signing and expansion of agreements with OpenAI in the first half of this year, as well as a contract signed with a hyperscale cloud service provider.

When announcing the first-quarter report, CoreWeave's executives stated that the new agreement reached with OpenAI in March had not yet been included in the reported backlog, as the company had not yet determined how to account for this transaction in its financial statements. CoreWeave previously stated that the transaction could be worth up to $11.9 billion.

Full-Year Revenue Guidance Range Increased by at Least 5%, Third-Quarter Operating Profit Guidance at the Low End Far Below Expectations

In terms of performance guidance, CoreWeave expects revenue to continue to set new quarterly highs, with the entire third-quarter revenue guidance range of $1.26 billion to $1.3 billion exceeding analysts' expectations CoreWeave has raised its full-year revenue guidance by $250 million at both the low and high ends, which represents an increase of 5.1% and 4.9% respectively compared to the previous guidance announced during the first quarter earnings report.

CoreWeave's third-quarter capital expenditure guidance is roughly flat compared to the second quarter, with the full-year capital expenditure guidance remaining unchanged. The midpoint of the guidance range of $20 billion to $23 billion is $21.5 billion, slightly higher than the analyst expectation of $21.03 billion.

CoreWeave's adjusted operating profit guidance for the entire third quarter is below analyst expectations, with the low end being 16.7% lower than expected and the high end being 1% lower. The midpoint of the guidance range is 8.3% lower than expected. The full-year operating profit guidance range remains unchanged.

The First Company to Massively Provide a Complete Blackwell GPU Portfolio, CEO Says AI Demand is "Unprecedented"

In the announcement of the second-quarter earnings report, CoreWeave's CEO Michael Intrator mentioned that AI demand is "unprecedented" and pointed out the company's advantage in supplying NVIDIA's next-generation Blackwell architecture chips. He stated:

"The strong performance in the second quarter indicates that all aspects of our business continue to maintain a momentum of sustained growth. To meet the unprecedented AI demand, we are rapidly expanding.

Our purpose-built AI cloud platform is continuously setting new benchmarks in performance and scalability, including being the first company to massively provide a complete Blackwell GPU product portfolio, making CoreWeave the preferred platform for the world's most advanced AI workloads and AI pioneers."

Wall Street Journal has noted that the core logic behind the surge in CoreWeave's stock price is that the company is seen as one of the few public market tools that allow investors to indirectly bet on OpenAI's success. Although OpenAI is not publicly listed, it holds shares in CoreWeave and has signed a cloud infrastructure supply contract worth billions of dollars with the latter, lasting until April 2029.

Additionally, CoreWeave is currently a preferred partner of NVIDIA, the highest-valued company in the world, and is referred to as NVIDIA's "favorite child," with NVIDIA holding a 7% stake in it.

In early July this year, CoreWeave was the first to obtain AI server systems based on NVIDIA's latest high-end chips—the GB300 NVL72 server rack. The server manufacturer Dell announced this news on the same day, and on July 3rd, CoreWeave's stock price closed up nearly 9%.

Lock-up Period Ending, Stock Price Faces Risks

A recent risk facing CoreWeave's stock price is the impending end of the lock-up period.

The IPO lock-up period for CoreWeave's stock will expire two days after this earnings report is released, specifically at 10 AM Eastern Time on August 15th, which may expose the stock to selling pressure. However, some Wall Street analysts believe that CoreWeave can absorb the volatility brought by the "unlocking." Citigroup's report released earlier this Thursday stated that 83% of CoreWeave Class A shares will be "unlocked" when the lock-up period expires, but Citigroup believes that strong fundamentals can help absorb the increase in circulating shares.

Citigroup reiterated its optimistic outlook on AI demand and CRWV's ability to exceed recent revenue targets