CoreWeave (CRWV) Q3 2025: When The Interest Bill Becomes the Story
Why I'm not a shareholder: no moat, commoditized returns, and execution risk in a levered build-out
When I wrote When Growth Runs on Debt: The CoreWeave Case Study the core point wasn’t that AI infrastructure demand is fake. It’s that the economics of a GPU-rental neocloud can look phenomenal in revenue charts while the underlying machine runs on leverage, rapid asset obsolescence, and constant refinancing.
Since the March 2025 IPO, the CoreWeave (CRWV 0.00%↑) stock has lived that tension in real time - sharp post-IPO upside, then a violent repricing as investors started focusing on funding costs and execution risk rather than growth slogans.
Q3 2025 in One Sentence: Revenue Doubled, Operating Income Fell
On the headline numbers, Q3 2025 was spectacular: revenue was $1.4 billion, up 134% year-over-year (YoY), and backlog was $55.6 billion.
But the income statement tells the less-market-friendly version: operating expenses also exploded to $1.3 billion (+181% YoY), leaving GAAP operating income at $51.9 million, down 55.6% from $117 million a year ago: more growth but less operating income.
This is the Buffett line in numbers: “not all growth is good growth”, especially when the expense structure (and financing structure) grows faster than the underlying profitability.
In my original piece, I flagged the trajectory: rising debt would drag interest expense from large to structural, and eventually force the business to run for its lenders before it can run for shareholders. Q3 2025 makes that concern concrete: Interest expense was $310.6 million in Q3, nearly 3x the $104.4 million in Q3 2024. As a share of revenue, that’s about 23%. For the first nine months of 2025, interest expense was $841.4 million, up 297% versus the prior year period. Cash paid for interest (net of capitalized amounts) was $557.1 million year-to-date (YTD), versus $97.4 million the year before; showing this isn’t just an accounting artifact.
This is exactly what “growth funded by debt” looks like once rates and borrowing levels catch up: the financing line starts consuming the income statement.
Adjusted EBITDA: The Clean-Looking Metric That Removes the Messy Reality
CoreWeave’s Q3 2025 earnings deck leads with $838 million of adjusted EBITDA (61% margin). The problem is that for a business where assets age quickly and the fleet must be refreshed continuously to stay competitive, depreciation is economically closer to a recurring reinvestment requirement than a disposable, non-cash nuisance; precisely the point I made in the original article.
In Q3, depreciation and amortization on property & equipment was $630.5 million for the quarter. Add that to the $310.6 million of interest expense, and you get $941 million, about 68.9% of quarterly revenue; before you even factor in taxes.
When those two lines are treated as “below the line” and effectively ignored in the headline narrative, the business can look far more profitable than it is.
Cash Flow and CapEx: the Business is Still Not Self-Funding
CoreWeave generated $1.5 billion of operating cash flow (OCF) in the first nine months of 2025, down from $2.6 billion the year before. It spent $6.25 billion on purchases of property & equipment (CapEx) over the same period. The business model remains the same: operating cash helps, but the expansion plan overwhelms it, producing deeply negative free cash flow that must be bridged with debt. YTD proceeds from issuance of debt were $7.6 billion, with $3 billion of repayments. The company also discloses in their Q3 10-Q filing that debt-service cash flows totaled $3.6 billion YTD, including $3 billion of principal payments and $651 million of interest payments (including capitalized interest).
Balance Sheet: the Refinancing Question Didn’t Go Away, It Moved Closer
At September 30, 2025, total current assets were $4.7 billion, while total current liabilities were $9.7 billion, about a $5 billion gap, with $3.7 billion of current debt inside those current liabilities. Total debt (current + non-current) was $14 billion at quarter-end. This compares uncomfortably with the framing from my original article: a business whose “growth engine” requires external capital staying continuously available, at tolerable rates, while the asset base depreciates rapidly.
The “more debt” drumbeat hasn’t stopped after quarter-end: in December 2025, CoreWeave priced an upsized $2.25 billion convertible senior notes offering.
Execution Risk Meets Leverage: Capacity Delays Are Not Harmless in This Setup
During the Q3 earnings call, CoreWeave trimmed its outlook due to delays at a third-party data center partner. In a lightly levered model, delays are annoying. In a heavily levered, high-CapEx model, delays can become financially meaningful because you keep paying interest while the revenue you expected to support that interest arrives later.
CoreWeave announced an all-stock deal to acquire its data center partner Core Scientific in July 2025, explicitly tying it to scale, control, and cost of capital. But Core Scientific (CORZ 0.00%↑) shareholders ultimately voted it down and the deal was terminated in late October 2025, leaving CoreWeave still exposed to partner execution while maintaining the same broad leverage posture.
What Changed Since My Original Article? The Numbers Caught Up
If you strip this follow-up down to the thesis test:
Debt has continued to expand - $14 billion of debt on the balance sheet at September 30, 2025, plus additional post-quarter financing activity.
Interest costs are rising fast and have become a major share of revenue - 23% in Q3.
The company’s preferred profitability framing still leans on adjusted metrics that, by design, step over depreciation and financing - the two expenses most tightly coupled to long-term economics in this kind of business.
Final Thoughts: Obvious Growth Still Isn’t Obvious Returns
AI infrastructure demand can be real and enormous, and still be a tough place for shareholders if the industry’s returns get competed away while financing costs compound. CoreWeave’s Q3 2025 filing makes that trade-off sharper, not softer: faster scaling, heavier capital intensity, higher interest burden, and more reliance on continuous access to capital markets.
I am not a CoreWeave’s shareholder, and I do not intend to become one. More broadly, I have no interest in owning “GPU renters” as a category. As I argued in my original article, I struggle to see an intrinsic moat in a business model where the core assets are purchasable by anyone with capital, the product is largely a commodity (compute), and differentiation risks collapsing into price, financing access, and execution. In that setup, even strong demand can translate into mediocre investor economics.
The next few quarters, I’d watch three things more than revenue figure and adjusted EBITDA: interest expense and cash interest paid, net debt growth versus incremental gross profit, and whether CapEx intensity falls fast enough to credibly point toward durable free cash flow, without requiring one more major debt raise.