CoreWeave (CRWV) Prepares for IPO with Ambitious Revenue Growth Plans

🗝️ Key Points

• Cloud service provider CoreWeave, known for offering services powered by NVIDIA (NVDA) processors to clients like Meta (META) and Microsoft (MSFT), is set to go public with the stock ticker "CRWV." According to its IPO prospectus, CoreWeave anticipates a revenue surge of over 700% in 2024, reaching $1.92 billion, despite a projected net loss of $863 million.
• A significant 77% of its revenue for that year is expected to come from just two clients, with Microsoft contributing 62% of that total.CoreWeave has yet to fulfill over $15 billion in contracts.
• In the fourth quarter, the company's revenue hit $747.4 million, with a gross margin of around 76%.

Cloud service provider CoreWeave, known for offering services powered by NVIDIA (NVDA) processors to clients like Meta (META) and Microsoft (MSFT), is set to go public with the stock ticker “CRWV.” According to its IPO prospectus, CoreWeave anticipates a revenue surge of over 700% in 2024, reaching $1.92 billion, despite a projected net loss of $863 million. A significant 77% of its revenue for that year is expected to come from just two clients, with Microsoft contributing 62% of that total.

CoreWeave has yet to fulfill over $15 billion in contracts. In the fourth quarter, the company’s revenue hit $747.4 million, with a gross margin of around 76%. However, operating income stood at $112.7 million, and after interest expenses, net losses amounted to $51.4 million. Year-end debt was nearly $8 billion.

Originally named Atlantic Crypto and founded in 2017, CoreWeave initially focused on infrastructure for Ethereum cryptocurrency mining. As digital currency prices declined, the company pivoted towards GPU acquisition and rebranded, emphasizing graphics rendering and AI. CEO Michael Intrator noted challenges for GPU-dependent businesses due to traditional cloud service limitations, which CoreWeave aims to resolve by providing more computation options and competitive pricing.

Pre-IPO, Intrator holds about 38% voting power, hedge fund Magnetar 7%, and NVIDIA 1%. By the end of 2024, CoreWeave will operate 32 data centers with over 250,000 NVIDIA GPUs, mostly from the previous Hopper architecture. NVIDIA’s Blackwell GPUs began production in November.

The IPO is led by Morgan Stanley, with JPMorgan and Goldman Sachs as co-managers. CoreWeave enters a quiet tech IPO market, with recent entries like ServiceTitan and Reddit seeing little competition since the end of 2021 due to rising interest rates and inflation. In the AI infrastructure space, competitor Cerebras has also filed for IPO but faces delays due to U.S. governmental reviews.

CoreWeave rose to prominence after OpenAI’s ChatGPT launch in late 2022, capitalizing on the demand for GPUs. Microsoft collaborated with CoreWeave through its Azure cloud unit to support OpenAI’s needs. Despite challenges, Microsoft continues substantial construction and leasing efforts, planning expansions into 2027 and 2028.

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