CoreWeave's Q1 2026: Contradictions Emerge on Project Financing Timelines, Hyperscaler Deals, Power Capacity, and Bitcoin Contracts

The above is the analysis of the conflicting points in this earnings call

Date of Call: None provided

Financials Results

• Revenue: $64.2M, up 84% YOY from $34.8M in FQ1 2025
• EPS: $(0.11) per share (GAAP); adjusted EPS $(0.03); prior-year EPS not disclosed

Guidance:

• Project financing for Polaris Forge 1 expected to close within the fiscal quarter; terms targeted around ~70% LTC and SOFR + 400–450 bps blended.
• Tenant fit-out revenue to ramp significantly next quarter; completion through calendar 2025.
• Lease income for first 100MW at PF1 to begin toward end of calendar 2025 as it comes fully online.
• Polaris Forge 2: first building starts coming online in late 2026; full capacity in 2027; initial utility power ~280MW; in advanced lease talks with an investment-grade hyperscaler.
• $5B Macquarie preferred equity facility plus project finance expected to fully fund PF1; enables $20–$25B total capital capacity.
• Target ~$1B NOI run rate within five years; CoreWeave lease supports ~$0.5B annual NOI.

Business Commentary:

* HPC Data Center Expansion: - Applied Digital expanded its long-term lease agreements at its Ellendale, North Dakota campus, increasing the total contract value to approximately $11 billion. - This expansion was driven by the need for data centers capable of supporting advanced AI GPUs and the scarcity of such facilities in the market.

• Power Infrastructure and Demand:
• The company is developing a robust multi-gigawatt pipeline to meet the growing demand for HPC data centers, which is expected to exceed 90 gigawatts.

• The primary focus is scaling and construction due to a significant power shortfall, with the Department of Energy estimating a need for 40 to 50 gigawatts.

• Strategic Partnerships and Financing:

• Applied Digital secured an initial $112.5 million draw from a $5 billion preferred equity facility with Macquarie Asset Management.

• These financing structures and partnerships are designed to minimize dilution and fund future campus expansions, aligning with a strategy to scale data center development.

• Revenue Growth and Fit-Out Services:

• Revenues for the first fiscal quarter increased by 84% year-on-year, reaching $64.2 million, driven by $26.3 million in revenue from tenant fit-out services.

• The increase in revenue is attributed to the CoreWeave fit-out project, which demonstrates the strategic value of offering end-to-end services to deploy state-of-the-art data centers.

• Community Engagement and Environmental Impact:

• The company is committed to investing in rural communities, creating local job opportunities, and enhancing infrastructure to minimize environmental impact.
• This approach is part of their mission to contribute positively to the regions they serve, emphasizing responsible growth and community partnerships.

Sentiment Analysis:

• Management expanded CoreWeave leases to 400MW (~$11B total contract value). Fit-out revenue was $26.3M and is expected to ramp significantly next quarter, with lease income starting by year-end 2025. They secured an initial $112.5M draw from a $5B preferred equity facility, have 700MW under construction, and see a robust 4GW active pipeline. They aim for ~$1B NOI run rate within five years, citing the CoreWeave lease supporting ~$0.5B annual NOI.

Q&A:

• Question from Nick Giles (B. Riley Securities): What are the remaining steps and scope of the project financing—first 150MW or the full 400MW at Polaris Forge 1?
  Response: Financing will cover both PF1 buildings; documents are being finalized with terms targeted to match or improve on peers.

• Question from Nick Giles (B. Riley Securities): Provide an update on power infrastructure and offtake for Polaris Forge 2.
  Response: Initial utility power is ~280MW; necessary infrastructure is underway; first building online in late 2026 and full capacity in 2027.

• Question from Rob Brown (Lake Street Capital Markets): Timing and likelihood of new hyperscaler leases at additional sites?
  Response: Negotiations are ongoing and continuous, with some deals potentially closing in 90–120 days amid accelerating demand.

• Question from Rob Brown (Lake Street Capital Markets): What limits scaling PF1 and PF2 to 1GW?
  Response: Transmission and broader grid generation additions are the constraints; builds will be timed to match staged power arrivals.

• Question from Mike Grondahl (Northland Securities): What does the $5B Macquarie facility enable going forward?
  Response: It provides a scalable capital structure, minimizes public-company dilution, and with project finance unlocks $20–$25B total build capacity.

• Question from Mike Grondahl (Northland Securities): Expected PF1 project-finance terms?
  Response: Target ~70% LTC with a blended SOFR + 400–450 bps, bifurcated into lower-cost mortgage and mezzanine tranches; aiming to close this fiscal quarter.

• Question from Darren Aftahi (ROTH Capital Partners): How do you define the 4GW active pipeline?
  Response: Projects likely to move into construction in 6–12 months with permitting and power efforts already underway.

• Question from Darren Aftahi (ROTH Capital Partners): Can you staff multiple sites on 12–14 month timelines?
  Response: Yes; internal team and supply chain are in place to run parallel campuses, leveraging diversified local labor pools.

• Question from Logan on for George Sutton (Craig-Hallum Capital Group): Are hyperscalers requiring 1GW sites, and how will Harwood lease economics compare?
  Response: Typical ask is 200MW quickly with a path to 1GW; returns are managed by maintaining a consistent spread versus cost of capital based on tenant credit.

• Question from Michael Donovan (Compass Point): Any changes in long-lead equipment lead times or pricing?
  Response: Industry lead times are stretched, but AD pre-secured capacity two years ago, limiting pricing and delay impacts.

• Question from Michael Donovan (Compass Point): Will additional company funding be needed for PF1?
  Response: No; PF1 is expected to be fully funded via Macquarie preferred equity and project financing.

• Question from Austin Ortiz for John Todaro (Needham): Update on South Dakota power timing and hurdles.
  Response: Power is available in 2026; the key gating factor is achieving a sales tax exemption for IT equipment.