CoreWeave, Inc.

Thank you for standing by. My name is Tina and I will be your conference operator today. At this time, I would like to welcome everyone to the CoreWeave second quarter 2025 earnings call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. To ask a question, simply press star followed by the number one on your telephone keypad. To withdraw your question, press star one again. It is now my pleasure to turn the call over to Deborah Crawford, Vice President of Investor Relations, you may begin.

Thank you. Good afternoon and welcome to CoreWeave's second quarter 2025 earnings conference call. Joining me today to discuss our results are Mike Intrader, CEO, and Nitin Agarwal, CFO. Before we get started, I would like to take this opportunity to remind you that our remarks today will include forward-looking statements. Actual results may differ materially from those contemplated by these forward-looking statements. Factors that could cause these results to differ materially are set forth in today's earnings press release and in our quarterly report on Form 10Q filed with the SEC. Any forward-looking statements that we make on this call are based on assumptions as of today, and we undertake no obligation to update these statements as a result of new information or future events. During this call, we will present both GAAP and certain non-GAAP financial measures. A reconciliation of GAAP to non-GAAP measures is included in today's earnings press release. The earnings press release and an accompanying investor presentation are available on our website at investors.coreweave.com. A replay of this call will also be available on our investor relations website. And now I'd like to turn the call over to Mike.

Thanks, Debra, and good afternoon, everyone. CoreWeave had a standout second quarter as we continue our hypergrowth journey against the backdrop of unprecedented demand for our AI cloud services. Adoption is expanding rapidly with the enterprise increasingly viewing AI as a strategic imperative and CoreWeave as the force multiplier that enables adoption, innovation, and growth for training as well as inference workloads. As a result, revenue grew a better than expected 207% year over year to $1.2 billion for the second quarter, with adjusted operating income of $200 million. This marks the first quarter in which we reached both $1 billion in revenue and $200 million of adjusted operating income. Scaling our capacity and services remains the key ingredient for our success in this structurally undersupplied market. To that end, we ended the quarter with nearly 470 megawatts of active power, and we increased total contracted power approximately 600 megawatts to 2.2 gigawatts. We are aggressively expanding our footprint on the back of intensifying demand signals from our customers, ensuring that we maintain a durable multi-year runway for growth. We are now on track to deliver over 900 megawatts of active power before the end of the year. We ended the second quarter with $30.1 billion in contracted backlog, up $4 billion from Q1 and doubling year-to-date. This includes not only the $4 billion expansion with OpenAI we previously discussed, but new customer wins ranging from large enterprise to AI startup. Importantly, we've also signed expansion contracts with both of our hyperscale customers in the past eight weeks. Our pipeline remains robust, growing, and increasingly diverse, driven by a full range of customers from media and entertainment to healthcare to finance to industrials and everything in between. The proliferation of AI capabilities into new use cases and industries is driving increased demand for our specialized cloud infrastructure and services. For instance, while it's early stages, in the first half of 2025, we saw more than a 4x increase in our VFX cloud service product conductor and entered a multi-year contract for NVIDIA's GB200 NVL72 system with Moon Valley, an AI video generation startup that lets filmmakers craft professional-grade clips with granular cinematic control. We are seeing an increased adoption in the financial services sector as we expand our relationship in proprietary trading like Jane Street and are adding mega-cap bank clients like Morgan Stanley and Goldman Sachs. We are also seeing significant growth from healthcare and life science verticals and are proud of our partnership with customers like Hippocratic AI, who built safe and secure AI agents to enable better healthcare outcomes. In short, AI applications are beginning to permeate all areas of the economy, both through startups and enterprise, and demand for our cloud AI services is aggressively growing. Our cloud portfolio is critical to CoreWeave's ability to meet this growing demand. Our focus on delivering the industry's most performant, purpose-built AI cloud infrastructure makes us the platform of choice for both training and inference across incumbent AI labs and new entrants alike. We're helping these customers redefine how data is consumed and utilized globally as their critical innovation partner, and we are being rewarded for our efforts as they shift additional spend to our platform. We continued to execute and invest aggressively in our platform, up and down the stack, to deliver the bleeding-edge AI cloud services performance and reliability that our customers require to power their AI innovations. For example, during the second quarter, we delivered NVIDIA's GB200, NVL72, and HGXB200 at-scale deployments, fully integrated into CoreWeave's Mission Control for reliability and performance management. Mission Control continues to be the cornerstone of CoreWeave's ability to scale at breakneck speed, building a fully automated and rigorous process for cluster lifecycle management with unmatched visibility for our customers. In addition to chaos, we began our private preview of an innovative archive tier object storage product with automatic tiering and industry-leading economics and with a simplified cost structure that makes optimizing storage costs for startups and enterprises seamless. As a result, customers are shifting petabytes of their core storage to CoreWeave in the form of multi-year contracts. We are providing support for additional third-party storage systems tightly integrated into Corui's technology stack with large-scale production deployments of VAST, WEKA, IBM Spectrum Scale, DDN, and Pure Storage. With Weights and Bias, we deliver an integrated full-stack observability feature giving researchers immediate feedback to diagnose the factors impacting performance and reliability of their AI workloads from the data center through network fabrics and storage, GPUs, and up to their machine learning code. We launched the CoreWeave and Weights and Bias Inference Service, utilizing our incredibly reliable compute platform to power research-friendly API for state-of-the-art AI models, including OpenAI's new open-source model, Meta's Lama 4, DeepSeq, Kimmy K2, and QN3. This new product allows customers to easily bring AI inference into production on their applications with tight integration into our Weave product, ensuring visibility into the service, quality, and safety. We continued our investment in Sunk, Slurm on Kubernetes. which is used by many of the largest AI labs and enterprises in the world, providing improved identity federation, research segmentation, and scale. We began introducing flexible capacity products to help our customers better manage their end customer demand. In addition to our on-demand and reserved inference offering, our spot product is in customer preview and will be introduced additional capacity product over the second half of the year. We also saw significant growth in our backbone and networking service as one of our largest AI lab customers leveraged our networking backbone to connect its multi-cloud inference infrastructure. Our product development roadmap is robust, and we are excited to announce new cloud services and capabilities over the remainder of the year that will further accelerate growth within the AI ecosystem and empower customers to meet their evolving business needs. We have entered new parts of the capital markets and accessed new pools of capital, driving our cost of capital lower. We priced both of our inaugural and second high-yield bond offerings in the past three months. These transactions were upsized due to strong demand and were priced at lower interest rates. More recently, we closed on a landmark secure GPU financing with many of the world's leading banks, a novel financing structure that CoreWeave has pioneered. As evidenced by these transactions, our access to the capital markets not only remains robust, but is deepening. We are grateful for this support in our mission and expect to continue to access less expensive capital sources as we continue to execute. We will continue to verticalize our platform and enhance our control, efficiency, and differentiation fueled by our investment both up the stack, as you saw with our acquisition of Weights and Biases last quarter, and down the stack, as highlighted by our proposed acquisition of Core Scientific last month. Our ability to scale state-of-the-art infrastructure will further be bolstered by the more than $6 billion data center investment we have announced in Lancaster, Pennsylvania, as well as a large data center project in Kenilworth, New Jersey, that we are co-developing via a joint venture with Blue Owl. These new sites are perfect examples of our broader data center strategy, which allow us to provide a mix of both large-scale training and low-latency inference compute across the country. Now, I'd like to come back to our proposed acquisition of Core Scientific. We believe the combination will accelerate value creation for shareholders of both companies. Both the CoreWeave and Core Scientific management teams and boards have evaluated this transaction extensively and concluded this is the best for both companies and their shareholders. The rationale behind the deal is quite simple and powerful. Verticalization creates tremendous operational and financial efficiencies that will strengthen our ability to serve our customers at scale. Owning the infrastructure will allow CoreWeave to scale faster and more efficiently. The integration of Core Scientific meaningfully advances our capacity to operate one of the largest and most sophisticated AI cloud platforms in the world. Upon closing, CoreWeave would own approximately 1.3 gigawatts of gross power capacity across Core Scientific's national data center footprint, with an incremental one gigawatt or more available for future expansions. This scale enhances our flexibility to take on new projects and meet accelerated customer demand. In addition, the acquisition would drive the immediate elimination of more than $10 billion in future lease liability overhead, as well as a more streamlined and efficient operating model. As a result, we anticipate $500 million in fully ramped annual run rate cost savings by the end of 2027, benefiting both the Core Scientific and CoreWeave shareholders directly. Vertical integration will allow us to finance infrastructure more efficiently, furthering one of our key objectives in lowering our cost of capital and enabling us to grow in a more capital efficient manner. We and Core Scientific look forward to discussing the transaction with you in the months ahead. Our respective teams are already engaged in pre-integration planning to ensure we're ready to hit the ground running. To that end, we are executing with pace and purpose amidst the market in which the supply-demand imbalance is only deepening as new enterprise adopters increasingly compete with large AI labs for limited capacity and services. We're building on our leadership across all key success criteria, from power access to AI cloud service performance to revenue and backlog growth. And we will keep getting stronger as we verticalize our data center infrastructure and cloud services. I am excited about the momentum that we are building upon and want to thank our customers, teams, and business and financial partners for making it possible.