00:00Earnings are always tough when the market has built up a lot of optimism around the business.
00:05So why do you think they're a little bit concerned about the forward-looking guidance when it comes to revenue,
00:10when it comes to operating profit?
00:11So look, I think this was, and I said this in the earnings call, a transformational and extraordinary earnings force.
00:21The company really hit on all cylinders.
00:26We beat on revenue.
00:29We reaffirmed our annual revenue targets from a nominal perspective.
00:36We reaffirmed our 2026 ARR operating margin targets.
00:43Really a great quarter for us by the numbers, but also extending our product.
00:53We can't keep up.
00:54With demand from existing customers, which are historically been AI labs and AI native and cloud.
01:03And now they're expanding?
01:04Yeah, and we're just being overwhelmed by new verticals that are coming in and integrating AI at scale into their
01:15workflows.
01:16And so you heard me talk a little bit about some of the trading and finance companies like Jane Street
01:22and Hudson River Trading.
01:25You know, that's adding to, you know, JP Morgan and Morgan Stanley, who are already clients.
01:31You know, you heard me talk a little bit about some of the physical AI into the robotics space, you
01:36know, where, you know, great new clients coming on to our infrastructure.
01:40It's really exciting.
01:42You know, stock's going to bounce around.
01:45You know, we understand that.
01:46But, you know, one of the best things about being a founder and a CEO and one of the best
01:52things about and one of the hardest things about being a founder and CEO is, you know, I try to
01:58keep my eye on the parts of the business that are succeeding and growing and expanding.
02:05And, you know, we're winning the day, right?
02:07We drove down our cost of capital.
02:08We expanded our backlog by $40 billion.
02:12We did all the things that we needed to do.
02:14So I'm thrilled with the quarter.
02:16I think it was fantastic.
02:17You know, seemingly there's a little bit of trepidation around next quarter's revenue.
02:23So how do you, yeah, how do you get next quarter?
02:25And indeed, the second half, people are optimistic.
02:28You're saying, I'm optimistic that profitability will ramp up in the second half.
02:32How does that happen?
02:32Oh, so, you know, I mean, look, we, it's almost mathematical at some point, right?
02:38Like where, you know, you're building infrastructure.
02:41That infrastructure takes time to bring online.
02:43We are going through a massive build out across the company right now.
02:47It's why the operating margins have compressed is because we're going through this enormous scaling exercise.
02:55As you push through that, all of that infrastructure comes on to billing.
02:59And once it comes on to billing, you are going to see a sequential expansion of the operating margins until
03:05we go from, you know, 1% in Q1 all the way up through low double digits by Q4.
03:13And, you know, that's sort of baked in because of the infrastructure coming online, the software capacity to deliver that
03:20infrastructure.
03:21You know, we're highly confident we're going to hit those numbers.
03:25There was anxiety about another company, a client, not hitting internal numbers.
03:30And I'm talking about OpenAI.
03:31And look, Sarah Fry has come on and spoken to colleagues here at Bloomberg News and pushed back against that,
03:36saying they're seeing a wall of demand.
03:38But how confident are you that your clients are seeing that demand and are good for the money for the
03:42buildup?
03:42Yeah. So one of the things I talked about yesterday during our earnings call is that the demand for our
03:52paper in the debt markets has been nothing shy of astounding.
03:58You know, we did one of our delayed draw facilities closed two days ago.
04:03So the the clients in it were Cohere and OpenAI exclusively.
04:10And the the two things happened.
04:13One, it was 5x oversubscribed, which is enormous.
04:16It also closed 50 basis points below the marketed range.
04:20And that is a clear indication of enormous buying interest for financing the paper.
04:26With regards to to paying.
04:28Look, you know, OpenAI is extraordinary company.
04:31Right. One in 10 people on the planet use their product every year.
04:35But, you know, and we think that they're in a wonderful position.
04:39But we've also built an incredibly diversified portfolio of companies that use our infrastructure.
04:45This this quarter we announced Anthropic.
04:48We announced a massive deal.
04:50Twenty one billion dollars with Meta.
04:51We announced, you know, a six billion dollar deal with Jane Street.
04:55You know, like the number of clients that are using our infrastructure are expanding.
05:01You know, the diversification is expanding.
05:04OpenAI is an important client, but one of many.
05:07Let's talk about an important partner and in your supply chain.
05:11And that's Nvidia.
05:12Look, how confident you are with the strength of your relationship there.
05:15Nvidia has made deals with you, invested in you.
05:18And also doing that with, shall I say, even competitors in the space.
05:21Is that ever an anxiety?
05:22No.
05:24I take that as an incredible affirmation of the fact that the world needs more of this infrastructure
05:30and the demand for the infrastructure and the product that we deliver is, you know, overwhelming.
05:36And, you know, at the end of the day, you know, Nvidia has got to do what it's got to
05:40do for its business.
05:41I really focus on my clients.
05:42And my clients are coming back to us and they are saying again and again, you deliver the best product.
05:48The way that your software stack enables our engineers to use it most efficiently, most cost effectively and most successfully.
05:57And therefore, we want to buy more.
05:59And so the problem that I've got is how do I bring on enough infrastructure to sate and to deliver
06:05the infrastructure that my clients are clamoring for?
06:08Dig into the problems because there have been delays at times with certain of them coming online and that's to
06:14do with a partnership.
06:15What is the biggest chokehold for you at the moment?
06:17So, you know, CoreWeave is becoming a massive player in the space.
06:23And, you know, we are currently approaching 50 data centers that we are delivering infrastructure from.
06:32There is no single data center provider that represents more than 17% of our infrastructure.
06:38We have a massive effort internal to the company to go through self-builds so that we have greater operational
06:45control over the delivery of data center capacity.
06:48You know, we're doing all the right things by diversifying to ensure that no single data center can materially impact
06:58the trajectory of the company.
06:59That is further reinforced by just the size and scale of the installed capacity, right?
07:09So, you know, if you have a gigawatt worth of capacity and a data hall represents, you know, 50 megawatts,
07:16you know, and you're bringing 50 megawatt, the impact of a week delay on 50 megawatts in a gigawatt environment
07:25is very different than earlier on when you're bringing on 50 megawatts and you only have 50 megawatts online.
07:31A week delay rattles your entire ability to project where you're going.
07:36And we no longer have that problem.
07:38We have achieved escape velocity, both in terms of our data center capacity as well as our revenue, as well
07:45as our ability to provide guidance into the back half of this year.
07:49We're super excited about that.
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