# How CoreWeave makes money

CXProWealth Business Lens · CoreWeave (CRWV) · Q2 FY2026

Read from the 10-Q for the period 2026-04-01 to 2026-06-30, filed 2026-08-12 with the SEC (accession 0001769628-26-000366): https://www.sec.gov/Archives/edgar/data/1769628/000176962826000366/

Business Lens explains how a company earns, spends and keeps its money, from its own filings. It is insight and context, never a view on the shares, a target, or advice. Figures are raw units as filed; percentages are percentage points.

## Headline figures

- Revenue: $2.6B (+162.2% on the year)
- Operating income: -$49.0M (operating margin -1.9%)
- Net income: -$626.0M (net margin -24.3%)
- Gross margin: 65.9%
- Free cash flow: -$5.7B (-223.0% of revenue)
- Cash conversion (operating cash flow / net income): -1.08x
- Capital expenditure: 249.4% of revenue

## Where the money goes (Q2 FY2026)

- Revenue → Total operating expenses: $2.6B
- Total operating expenses → Cost of revenue: $879.0M
- Total operating expenses → Technology and infrastructure: $1.5B
- Total operating expenses → Sales and marketing: $60.0M
- Total operating expenses → General and administrative: $178.0M
- Net loss → Total operating expenses: $49.0M
- Other income (expense), net → Interest expense, net: $125.0M
- Net loss → Interest expense, net: $515.0M
- Net loss → Provision for income taxes: $62.0M

## Income statement, as filed

| Line | Q2 FY2026 | Of revenue |
|---|---:|---:|
| Revenue | $2.6B | 100% |
| Cost of revenue | $879.0M | 34.1% |
| Technology and infrastructure | $1.5B | 58.5% |
| Sales and marketing | $60.0M | 2.3% |
| General and administrative | $178.0M | 6.9% |
| **Total operating expenses** | $2.6B | 101.9% |
| **Operating income (loss)** | -$49.0M | 1.9% |
| Gain (loss) on fair value adjustments | $0 | 0.0% |
| Interest expense, net | -$640.0M | 24.9% |
| Other income (expense), net | $125.0M | 4.9% |
| **Loss before income taxes** | -$564.0M | 21.9% |
| Provision for income taxes | $62.0M | 2.4% |
| **Net loss** | -$626.0M | 24.3% |
| Other comprehensive loss | -$23.0M | 0.9% |
| **Total comprehensive loss** | -$649.0M | 25.2% |
| Net loss attributable to common stockholders, basic | -$626.0M | 24.3% |
| Net loss attributable to common stockholders, diluted | -$626.0M | 24.3% |
| Net loss per share attributable to common stockholders, basic (usd per share) | -$1 | 0.0% |
| Net loss per share attributable to common stockholders, diluted (usd per share) | -$1 | 0.0% |
| Weighted-average shares used in computing net loss per share attributable to common stockholders, basic (in shares) | 551,000,000 |  |
| Weighted-average shares used in computing net loss per share attributable to common stockholders, diluted (in shares) | 551,000,000 |  |

## History

| Period | Revenue | Operating income | Net income | Operating cash flow | Capital expenditure | Free cash flow |
|---|---:|---:|---:|---:|---:|---:|
| FY2023 | $229.0M | -$14.0M | -$594.0M | $1.8B | $2.9B | -$1.1B |
| FY2024 | $1.9B | $324.0M | -$863.0M | $2.7B | $8.7B | -$6.0B |
| FY2025 | $5.1B | -$46.0M | -$1.2B | $3.1B | $10.3B | -$7.3B |

Latest trend (the newest full year against the year before; a reading, not a forecast):

- Revenue: +167.9% (year before +736.2%): slowing
- Operating income: -114.2% (year before -2,214.3%): accelerating
- Net income: — (year before —): too short a history to read
- Free cash flow: — (year before —): too short a history to read

## Operating figures stated in the filing

- Contracted backlog (remaining performance obligations): $103.7B (as of 2026-06-30). "As of June 30, 2026, the Company had $ 103.7 billion of unsatisfied RPO, of which 41 % was expected to be recognized over the initial 24 months ending June 30, 2028, 39 % between months 25 and 48, and the remaining balance recognized between months 49 and 78." (Item 1. Financial Statements)
- Share of backlog expected within 24 months: 41.0% (as of 2026-06-30). "As of June 30, 2026, the Company had $ 103.7 billion of unsatisfied RPO, of which 41 % was expected to be recognized over the initial 24 months ending June 30, 2028, 39 % between months 25 and 48, and the remaining balance recognized between months 49 and 78." (Item 1. Financial Statements)
- Share of revenue increase from existing customers: 93.0% (as of 2026-06-30). "Approximately 93% of the revenue increase in both the three and six months ended June 30, 2026 was attributable to expansion within our existing customer base, with the remainder attributable to new customers." (Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations)
- Share of revenue from committed contracts: 98.0% (as of 2026-06-30). "Revenue recognized related to customer commitments, including revenue from delivering capacity prior to commitment start dates, represented 98 % of total revenue for the three months ended June 30, 2026 and 2025, and 98 % of total revenue for the six months ended June 30, 2026 and 2025." (Item 1. Financial Statements)
- Share of revenue from committed contracts: 98.0% (as of 2025-06-30). "Revenue recognized related to customer commitments, including revenue from delivering capacity prior to commitment start dates, represented 98 % of total revenue for the three months ended June 30, 2026 and 2025, and 98 % of total revenue for the six months ended June 30, 2026 and 2025." (Item 1. Financial Statements)
- Largest customer's share of revenue: 36.0% (as of 2026-06-30). "Customer A 36 % 71 % 40 % 72 %" (Item 1. Financial Statements)
- Largest customer's share of revenue: 71.0% (as of 2025-06-30). "Customer A 36 % 71 % 40 % 72 %" (Item 1. Financial Statements)
- Second-largest customer's share of revenue: 26.0% (as of 2026-06-30). "Customer B 26 % * 23 % *" (Item 1. Financial Statements)
- Third-largest customer's share of revenue: 10.0% (as of 2026-06-30). "Customer C 10 % * * *" (Item 1. Financial Statements)
- Contracted power not yet delivered, largest single-site lease: 393 mw (as of 2026-06-30). "As of June 30, 2026, 393 MW of electrical power remained undelivered at the site and was expected to be delivered in phases in 2026 and 2028." (Item 1. Financial Statements)
- Contracted power not yet delivered, other construction-cost leases: 355 mw (as of 2026-06-30). "As of June 30, 2026, 355 MW of electrical power remains undelivered at these sites and are expected to be delivered in phases between 2026 and 2028." (Item 1. Financial Statements)

## Key insights

### Interest, not operations, drives the $626M loss

The operating loss was only $49M, but interest expense of $640M, equal to 24.9% of revenue, accounts for most of the $626M net loss.

The operating line moved from income of $19M a year earlier to a loss of $49M. Interest expense, net was $640M against $267M, which the filing attributes to higher borrowing levels and total debt. Interest grew faster than revenue and reached 24.9% of it. Other income of $125M, mostly gains on strategic investments and foreign exchange, offset part of it, and a $62M tax provision was recorded despite a $564M pre-tax loss. _(from the filing)_
The filing ties its competitive position to what it pays for money: "If we are unable to continue lowering our cost of capital, our ability to effectively compete, especially with larger competitors that have greater financial and other resources, as well as our operating results, financial condition, and business, may be adversely impacted." _(from the filing)_
The business works as a spread: contracted capacity has to earn an operating profit larger than the interest on the debt that built it. Today capacity still under construction already carries interest while the operating line is slightly negative, so part of the gap is timing. Whether it closes depends on sites reaching full billing and on new borrowing getting cheaper while contract prices hold. _(analysis)_

### The 65.9% gross margin leaves out the GPUs

Cost of revenue covers rent and power; server and GPU depreciation sits in technology and infrastructure at 58.5% of revenue, lifting total operating costs to 101.9%.

Cost of revenue was $879M, 34.1% of revenue; the filing attributes its rise to new and expanded data centers, through rent, power and the depreciation of power systems. Technology and infrastructure was $1.51B, 58.5% of revenue, mainly depreciation on equipment placed in service. With sales and marketing at 2.3% and general and administrative at 6.9%, total operating expenses were 101.9% of revenue. _(from the filing)_
A year earlier cost of revenue was 25.8% of revenue and technology and infrastructure 55.3%. Both shares rose because the two lines grew 180.8% and 124.9% against revenue growth of 112.5%. _(from the filing)_
Read alone, 65.9% looks like a software margin. The closer measure of the economics is the operating margin of -1.9%, because the hardware that produces the revenue is depreciated below the gross line. Any comparison with other cloud providers should first check where each one books equipment depreciation. _(analysis)_

### Operating cash funded 10.6% of the quarter's build

Capital spending of $6.42B, 249.4% of revenue, met operating cash flow of $679M, leaving free cash flow of -$5.74B for debt and equity to cover.

Capital spending was $6.42B and operating cash flow $679M, so operations covered 10.6% of the build. Free cash flow was -$5.74B, or -223.0% of revenue. The cash line swings between quarters: in the March quarter operating cash flow was $2.98B against capital spending of $7.70B. _(from the filing)_
The filing describes delayed draw term loans "drawn as we build infrastructure to support customer requirements" and repaid from contracted cash flows, and adds: "We anticipate that future investments may require significant debt and/or equity financing." Weighted shares rose to 551M from 487M, with private placements of stock this year. _(from the filing)_
The pattern is not new. Free cash flow was -$5.95B and -$7.25B in the two prior full years, and the June quarter alone came to -$5.74B, so the pace of building has risen rather than eased. _(from the filing)_

### The top customer's share fell from 71% to 36%

Revenue more than doubled while the largest customer's share halved, two others reached 26% and 10%, and 93% of the increase came from existing customers.

The largest customer was 36% of revenue against 71% a year earlier. A second customer was 26% and a third 10%, and neither crossed the reporting threshold a year earlier. Approximately 93% of the revenue increase came from expansion within the existing customer base, the rest from new customers. _(from the filing)_
Applied to revenue of $2.58B and $1.21B, those shares put the largest customer's spending roughly level with a year earlier. Its share fell because other accounts grew, not because it shrank. Concentration has widened from one buyer to three rather than gone away. _(analysis)_
The filing expects a small number of customers to keep carrying most of the revenue, and notes that large customers may build their own infrastructure, move work to competitors or redesign systems to need less capacity. _(from the filing)_

### Competitive edge

- **98% of revenue comes from committed contracts** Remaining performance obligations of $103.7B, 41% due within two years, mean capacity is built for signed demand rather than expected demand.
- **Existing customers supplied 93% of revenue growth** Sales and marketing cost $60M, 2.3% of revenue, while existing accounts supplied 93% of the increase, so growth needs little selling effort.
- **Overhead grew 2.3% while revenue grew 112.5%** General and administrative cost was $178M against $174M, falling 7.4 points to 6.9% of revenue, so scale already shows in overhead.

### What to watch

- **The backlog waits on power still undelivered** At leased sites, 393 MW and 355 MW of contracted power remained undelivered at the end of June, and revenue starts only once capacity is handed over.
- **One chip vendor and an assumed equipment life** Every GPU in use is NVIDIA's, and depreciation, mostly in the 58.5% technology line, rests on estimates of how long that hardware keeps earning.
- **The build keeps needing new debt and shares** Weighted shares rose to 551M from 487M and the loss per share widened to $1.14 from $0.60, and the filing expects significant further financing.

## Investor view

**CoreWeave builds against $103.7B of signed contracts, and the interest on that build now outweighs its operating result**

### How it makes money

CoreWeave rents computing capacity built for AI: clusters of NVIDIA GPUs, the networking between them, storage, and its own software to schedule and run the work. Customers buy it on contract or on demand, and the filing is plain about which matters: "Our revenue primarily comes from committed contracts." Revenue tied to customer commitments was 98% of the quarter's revenue, the same share as a year earlier. _(from the filing)_
The cost of delivering that capacity is split across two lines. Cost of revenue, $879M or 34.1% of revenue, is the data center: rent, power and the depreciation of power installations. Technology and infrastructure, $1.51B or 58.5% of revenue, is mostly depreciation of the servers, switches and networking equipment themselves. The 65.9% gross margin therefore counts the buildings and the power but not the GPUs, whose cost sits in the second line. _(from the filing)_
The contracts reach years ahead. Remaining performance obligations, the revenue the company is contracted to deliver but has not yet recognized, stood at $103.7B at the end of June, with 41% expected to be recognized within the next two years and the rest further out. Growth comes mostly from customers who are already there: 93% of the revenue increase came from expansion within the existing customer base. _(from the filing)_
The capacity is paid for before it earns. Capital spending of $6.42B in the quarter was 249.4% of revenue, and free cash flow was -$5.74B. The filing says the gap is closed with debt and equity, including delayed draw term loans that are "drawn as we build infrastructure to support customer requirements" and repaid from contracted cash flows, and adds: "We anticipate that future investments may require significant debt and/or equity financing." _(from the filing)_

### What shifted

Revenue was $2.58B against $1.21B a year earlier, up 112.5%. The filing ties the rise to demand from existing and new contracts and to the larger data center footprint that let it deliver, with 93% of the increase coming from existing customers. The mix of buyers moved at the same time: the largest customer was 36% of revenue against 71% a year earlier, and two more customers now cross the reporting line, at 26% and 10%. _(from the filing)_
Delivery costs grew faster than revenue. Cost of revenue rose 180.8% and took 34.1% of revenue, up 8.3 points; the filing attributes it to new and expanded data centers, through higher rent, power and the depreciation of power systems. Technology and infrastructure rose 124.9% to 58.5% of revenue, up 3.24 points, mainly depreciation on equipment placed in service. General and administrative barely moved, up 2.3%, and fell 7.4 points to 6.9% of revenue. _(from the filing)_
The operating line turned from income of $19M a year earlier to a loss of $49M, an operating margin of -1.9%. Below it, interest expense was $640M against $267M, which the filing attributes to higher borrowing levels and total debt. Interest equalled 24.9% of revenue. Other income of $125M, mostly gains on strategic investments and foreign exchange, softened the result. The net loss was $626M against $290M, a net margin of -24.3%. _(from the filing)_
Cash moved the other way from the March quarter. Operating cash flow was $679M against $2.98B in the quarter before, and capital spending was $6.42B against $7.70B. Free cash flow was -$5.74B, or -223.0% of revenue. The loss per share was $1.14 against $0.60 a year earlier, spread over 551M weighted shares against 487M, with the share count enlarged by private placements of stock this year. _(from the filing)_

### Risks in the filing

Power comes first. The company depends on utilities, grid operators and regulators for enough electricity at acceptable cost, and names outages, grid limits and volatile power prices. It also commits to sites and long power contracts before customers sign for them, and says so directly: "This asymmetric dynamic could adversely affect our business, financial position, results from operations and prospects." _(from the filing)_
Supply is narrow. The company does not make its components and relies on a few suppliers; customer contracts specify the chip vendor, so "all of the GPUs used in our infrastructure today are NVIDIA GPUs." The filing names export controls, tariffs, memory and storage shortages, and tension between China and Taiwan as threats to supply and cost. Most data centers are leased from third parties, whose delays or failures the company does not control. _(from the filing)_
A small number of customers carry the revenue, and losing or shrinking one would hurt results. The filing notes that large customers may build their own infrastructure, move work to competitors or redesign systems to need less capacity. It also warns that AI demand itself is uncertain: more efficient models, computing on devices or in smaller sites, or a slowdown in the gains from larger models could reduce the need for centralized compute. _(from the filing)_
The build needs ever more capital, and the company carries substantial debt that could limit its flexibility and divert cash to debt payments. New equity or convertible debt would dilute existing holders. The filing also cautions that recent growth is no guide: "Our revenue may stop increasing or may decrease in the future." _(from the filing)_
Three of these risks already show in the quarter's numbers rather than only in the text. Debt shows in interest expense larger than the whole operating result. Concentration shows in several customers above the reporting threshold. The timing risk of building ahead of demand shows in delivery costs rising faster than revenue. Power and supply risks have not yet appeared in the figures; they would first show as revenue arriving later than the backlog implies. _(analysis)_

## Founder view: mechanisms

### Sign the customer, then build

CoreWeave sells capacity on multi-year commitments before the data center behind it is finished. The customer contract comes first, and the hardware, lease and power are sized to it. That turns an infrastructure business with very high upfront cost into something closer to a contractor with a long revenue tail: the risk shifts from whether demand appears to whether the company can deliver on time and at the planned cost. _(analysis)_

### Borrow against the contracts

Signed contracts with creditworthy customers become the security for debt. CoreWeave places hardware and the contract that pays for it in a separate entity, borrows against the expected payments, and repays as the customer pays. That lets a company with net losses fund expansion far beyond what its own cash or equity would allow, at the price of interest that sits between the operating result and the bottom line. _(analysis)_

### Grow inside existing customers

Once a customer's AI workloads run on CoreWeave's clusters and software, the next block of capacity is easiest to sell to that same customer. Switching means moving data, retuning jobs and requalifying performance, so incumbency favours the current supplier. Growth then comes from deeper commitments with a few accounts, and the commercial work is adding new accounts while the existing ones expand. _(analysis)_

### Overhead stays flat while assets scale

Almost all of CoreWeave's cost is the capacity itself: buildings, power and hardware. Corporate overhead and selling cost are small and grow slowly, because a few large contracts need few salespeople and administration does not scale with the number of GPUs. Each new contracted block therefore adds mostly delivery cost, and the question becomes whether the margin on that block is positive after its own depreciation and financing. _(analysis)_

## Member research

Signed-in members read, on the page: what CoreWeave's numbers depend on from here, and the playbook behind each mechanism (what needs scale, what transfers, how to test it, the metric that would show it).

## Sources

- CoreWeave 10-Q for the period to 2026-06-30: https://www.sec.gov/Archives/edgar/data/1769628/000176962826000366/ (2026-08-12)

Methodology business-lens-1.0 · schema 1.2.0 · run business-lens-2026-11-02 · as of 2026-11-02