AI infrastructure provider CoreWeave, in which Nvidia holds a significant stake, reported that its revenue more than doubled in the fourth quarter of last year, while its losses unexpectedly widened instead of shrinking. This high-growth, high-investment report card highlights the substantial costs associated with the rapid expansion in the AI computing power sector.
For the fiscal fourth quarter ended December 31, 2025, CoreWeave's revenue increased by over 110% compared to the same period last year, surpassing analyst revenue expectations by more than 1%. For the full 2025 fiscal year, revenue reached $5.131 billion, representing a year-over-year increase of approximately 168%. The company's CEO, Michael Intrator, stated that in 2025, CoreWeave became the "fastest cloud service provider in history to achieve $5 billion in annual revenue."
CoreWeave's Chief Financial Officer, Nitin Agrawal, disclosed that as of the end of 2025, the company's backlog of contracted revenue surged to $66.8 billion, more than four times the amount at the start of the year. This sharp increase in backlog indicates that demand for AI computing power continues to accelerate. Agrawal commented, "This provides us with excellent visibility for 2026 and beyond. CoreWeave is fully prepared to achieve sustained high growth."
However, CoreWeave's profitability came under significant pressure in the fourth quarter. The company swung to an operating loss from a profit in the same quarter of 2024. The loss per share widened by 160% year-over-year to $0.89, which was more than four times the analyst consensus estimate for a loss of $0.21 per share. The net loss reached $452 million, nearly 8.9 times the loss of $51 million reported a year earlier. Key factors dragging down profitability included rapidly increasing depreciation and amortization related to compute capacity expansion, significantly higher interest expenses, and amplified stock-based compensation costs following the company's initial public offering.
During the earnings call, CoreWeave management revealed that they expect capital expenditures for 2026 to be at least $30 billion. This implies that this year's capital spending will be at least triple the level of 2025.
The company also projected that profits will expand each quarter in 2026, with a double-digit percentage growth expected in the fourth quarter. For the first quarter, sales are forecast between $1.9 billion and $2.0 billion, with adjusted operating profit ranging from $0 to $40 million. By the end of 2026, annual recurring revenue is anticipated to be between $17 billion and $19 billion, reaching $30 billion by 2027.
Following the earnings release, CoreWeave's stock, which had closed down over 0.4% on Thursday, declined sharply in after-hours trading. During the earnings call, the after-hours drop extended to more than 10%.
Analysis suggests that, based on the report itself, market "scrutiny" is primarily focused on the decline in profit margins due to expansion, the widening losses, and the significant rise in interest burden. Given high valuation expectations, investors are particularly sensitive to the quality of growth and capital efficiency. Furthermore, CoreWeave's earnings report did not provide detailed performance guidance, which can easily amplify uncertainty in after-hours trading. Investors are likely to pay closer attention to whether the 2026 growth rate can be sustained, if capital expenditure intensity will continue to rise, and when profit margins might improve.
**AI Compute Demand Drives Growth, Customer Base Expands**
Fourth-quarter revenue jumped to $1.572 billion from $747 million in the prior-year period, an increase of approximately 110.4%. The company attributed the growth to broader customer adoption of CoreWeave Cloud for running "diverse, continuously growing workloads" and disclosed several customer and partnership developments:
On the customer side: Coverage spans AI labs, hyperscale cloud providers, and enterprise clients, with mentions including Cognition, CrowdStrike, Cursor, Mercado Libre, Midjourney, and Runway. On the partnership side: The company emphasized the continued expansion of relationships with existing hyperscale cloud customers and announced a global partnership with CrowdStrike, targeting a secure AI cloud foundation for the "agentic era."
For CoreWeave, the key to this "AI infrastructure supply" business lies not only in securing contracts but also in the ability to consistently deliver GPU and power resources. The company reported adding approximately 260 MW of active power capacity in the fourth quarter, bringing total active power capacity to over 850 MW. It also increased total contracted power to approximately 3.1 GW and further diversified its supplier portfolio.
**Backlog Revenue Signals High Visibility, but Delivery and Capital Pressures Mount**
As of the end of 2025, CoreWeave's backlog of contracted revenue stood at $66.8 billion. The company specifically noted that this metric includes remaining performance obligations and other amounts under committed customer contracts expected to be recognized as revenue in the future, contingent upon meeting delivery and service availability requirements.
For investors, this number reinforces two aspects of "visibility":
Demand Visibility: During a period where AI training/inference demand remains tight, long-term contracts and backlog indicate stronger customer stickiness and a higher degree of locked-in future revenue. Delivery Visibility: Converting orders into revenue is primarily constrained by the speed of data center build-out, power provisioning, networking, and GPU deployment; this often corresponds to higher capital expenditures, supply chain coordination, and financing needs. The somewhat negative after-market reaction partly reflects a reassessment of "how much investment is required for growth and when profits will materialize."
Another metric related to the backlog is deferred revenue: As of the end of 2025, total deferred revenue was approximately $8.185 billion, consisting of $1.709 billion classified as short-term and $6.476 billion as long-term. An increase in deferred revenue typically represents revenue that has been contracted and billed but not yet recognized, which to some extent also supports operating cash flow.
**Operating Profit Turns Negative Year-over-Year, Interest and Depreciation Amplify Profit Volatility**
The deterioration in GAAP profitability in the fourth quarter was one of the direct triggers for the stock's weakness after hours:
Operating Margin Turns Negative: The fourth quarter saw an operating loss of $89 million, compared to an operating profit of $113 million in the same quarter of 2024. The operating margin fell to -6% from 15% a year earlier. Net Loss Widens: The net loss was $452 million for Q4, versus a net loss of $51 million in Q4 2024. The net loss margin widened to -29% from -7%. High Interest Expense: Net interest expense for the quarter was $388 million, about 2.6 times the $149 million expense in the prior-year period. For the full year, net interest expense reached $1.229 billion.
On the cost structure side, total operating expenses surged to $1.661 billion in the fourth quarter, 2.6 times the year-earlier level, primarily driven by:
Technology and infrastructure costs of $950 million, up from $398 million a year ago. Cost of revenue of $509 million, up from $182 million a year ago. General and administrative expenses of $150 million, up from $48 million a year ago. Stock-based compensation expense was $157 million in the fourth quarter (compared to just $8 million a year ago), reaching $630 million for the full year (up from $31 million a year ago). The "visible" impact of post-IPO stock-based compensation is significantly affecting GAAP profits.
It is noteworthy that CoreWeave's non-GAAP metrics still indicate a reasonably healthy underlying business, albeit with profits being pressured by financial and non-cash items:
Fourth-quarter adjusted EBITDA was $898 million, 3.3% below market expectations of $929 million. The adjusted EBITDA margin was 57%, down from 65% a year ago. Fourth-quarter adjusted operating profit was $88 million, with an adjusted operating margin of 6%, down from 16% a year ago. The fourth-quarter adjusted net loss was $284 million, compared to an adjusted net loss of $36 million a year ago.
The decline in profit margins signifies that as the company rapidly expands its compute supply, the squeeze on current profits from costs, depreciation, and financing structure is intensifying. This combination of "high growth but insufficient profit elasticity" often makes the stock price more sensitive following earnings reports.
**Operating Cash Flow Positive, Heavy-Asset Expansion Brings Higher Leverage and Refinancing Needs**
Regarding cash flow, CoreWeave generated net operating cash flow of $1.559 billion in the fourth quarter and $3.058 billion for the full year. The strength in operating cash flow was partly due to an increase in deferred revenue (which rose by $2.772 billion in Q4), but also reflected the "cash consumption effect" of growth – an increase in accounts receivable resulted in a cash outflow of $1.5 billion in the quarter, and a full-year cash outflow of $2.749 billion.
The investment side highlights the "capital-intensive nature of an AI infrastructure company":
Capital expenditures for property and equipment were $4.06 billion in the fourth quarter. Full-year capital expenditures totaled $10.309 billion.
By the end of 2025, the company's heavy asset base on the balance sheet had grown rapidly: net property, plant, and equipment stood at $30.557 billion (compared to $11.915 billion at the end of 2024), and right-of-use assets were $8.231 billion. Liabilities also expanded accordingly: total interest-bearing debt amounted to approximately $21.373 billion (of which $6.708 billion is due within one year). Combined with high interest expenses, the market remains cautious about its financing costs, refinancing schedule, and sensitivity to interest rates.
The company also disclosed actions to "enhance financial flexibility," including issuing approximately $2.6 billion in convertible notes and expanding its revolving credit facility to $2.5 billion. For a company still in the "compute deployment phase," such moves help extend the funding runway, but they also lead investors to focus more closely on the pace of balance sheet expansion and the path to capital return.
**Business and Technology Progress: Accelerating 'Platform' Capabilities Around Nvidia Ecosystem and Developer Workflows**
On the product and ecosystem front, CoreWeave continued to strengthen its "built for AI" differentiation narrative, including:
Becoming the first cloud provider designated as an Nvidia Exemplar Cloud supporting GB200 NVL72 training workloads. Receiving the SemiAnalysis Platinum ClusterMAX rating for the second consecutive time. Launching AI Object Storage for AI workloads and announcing "zero egress fee migration." Releasing Serverless RL and expanding Mission Control capabilities. Expanding platform capabilities and developer workflows through acquisitions of Monolith and Marimo. Launching CoreWeave Federal to target government and public sector scenarios and participating in a related U.S. Department of Energy program.
These moves collectively point in one direction: beyond just "GPU supply + data centers," CoreWeave is attempting to shift competition from pure compute rental towards a more platform-based toolchain and workflow approach, aiming to increase customer stickiness and monetization efficiency per unit of compute. The market will likely focus next on whether this platform strategy can deliver more stable profit margins alongside scale expansion, and how the company outlines its 2026 delivery timeline and profitability path during the earnings call.
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