Nebius Group’s $3 Billion Partnership with Meta Eases Impact of Weak Q3 Results
CoreWeave has made headlines with a significant $14 billion agreement with Meta aimed at bolstering artificial intelligence compute capabilities. This partnership comes amid a challenging financial landscape for the company, reflected in its third-quarter (Q3) results.
CoreWeave Q3 Financial Overview
For Q3, CoreWeave reported revenue of $1.36 billion, surpassing analyst expectations of $1.23 billion. The company’s adjusted operating income also exceeded forecasts, coming in at $217.15 million compared to an expectation of $177.2 million.
- Revenue: $1.36 billion
- Adjusted Operating Income: $217.15 million
The revenue backlog for CoreWeave rose to an impressive $55.6 billion at the quarter’s conclusion, nearly doubling from $30.1 billion in Q2. However, despite this robust performance, the firm revised its 2025 sales forecast down to $5.05 billion to $5.15 billion, a decrease from an earlier outlook of $5.15 billion to $5.35 billion.
Challenges Impacting Future Projections
CoreWeave’s difficulties in ramping up compute capacity have affected its share prices significantly, leading to declines in premarket trading. The company ended the quarter with an active power capacity of 590 megawatts, below the anticipated 625 megawatts.
During a recent earnings call, CEO Michael Intrator highlighted issues related to the physical infrastructure of data centers, particularly at the powered shell level, rather than power access. He stated, “There’s plenty of power right now, and we believe that there will be ample power for the next couple of years.”
Strategic Partnerships and Developments
Alongside its deal with Meta, CoreWeave has also expanded its agreement with OpenAI and secured a $6.3 billion contract with Nvidia regarding unused cloud computing capacity. The company attempted vertical integration by pursuing an acquisition of Core Scientific, but this proposal was rejected by shareholders on October 30.
Looking Ahead
Despite the positive sales figures and robust revenue backlog, CoreWeave faces significant challenges as it strives to align its operational capabilities with the anticipated demand from its new partnerships. The path ahead will require careful navigation of supply chain issues and infrastructure development to fulfill its ambitious revenue targets.
The ongoing industry adjustments and partnerships with major technology players like Meta, OpenAI, and Nvidia position CoreWeave for potential growth, albeit with caution stemming from recent guidance cuts.
