CoreWeave, a company that rents out AI computing power, is asking customers to pay upfront and signing shorter contracts as it looks for ways to fund its expansion without turning to the unsecured debt market.
The company reported third-quarter revenue of $3.66 billion on Tuesday, up 168 percent from a year earlier. It posted a net loss of $709 million and paid $846 million in interest expense for the quarter.
CEO Michael Intrator told analysts on the earnings call that CoreWeave will not use the unsecured debt market at current yields, nor does it need to. The company has a backlog of $132.5 billion and plans to fund most of the infrastructure it still has to build through contract-backed loans drawn as needed.
CoreWeave expects about $9 billion in customer prepayments and deposits over the next three months, with more than $3 billion tied to new contracts for capacity that is already built and needs no further hardware spending. Rivals Nebius and IREN have also relied on large prepayments from Microsoft.
The company raised prices about 25 percent in July and another 10 percent later in the quarter, and prices are still rising this quarter. Intrator said the increases more than offset higher costs. He said short-term deals sell capacity at more than $40 million per megawatt a year, while new infrastructure on four- and five-year contracts is moving to $20 million to $25 million per megawatt.
In August, CoreWeave closed a $2.6 billion loan called DDTL 5.5, its first loan designed for shorter-term customer contracts, which lets it borrow in installments. Lenders tend to prefer longer contracts, even at lower prices, because they offer more predictable cash flow.
The approach could boost profits, but it adds risk around contract renewals and pricing if demand weakens.
