Key Points
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CoreWeave's interest expense climbed every quarter over the past year, reaching $640 million in the second quarter.
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Management says it has cut the company's weighted average cost of debt by almost 300 basis points.
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Full-year guidance implies roughly $19 billion to $23 billion of capital spending still to come in the second half.
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Shares of artificial intelligence (AI) cloud infrastructure provider CoreWeave (NASDAQ:CRWV) trade around $82 as of this writing, down about 47% from their 52-week high. But the business keeps growing at an extraordinary pace. Second-quarter revenue rose 112% year over year to about $2.6 billion, and the company's revenue backlog reached about $104 billion (a figure that excludes more than $25 billion of new commitments added early in the third quarter).
The cost of financing that growth is climbing even faster. CoreWeave's interest expense was $640 million in the second quarter -- 2.4 times the $267 million it recorded a year earlier.
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And the bond market isn't helping. The 30-year Treasury yield has closed above 5% on 55 days since the start of January, the most closes above that mark in any year since 2006.
To be fair, CoreWeave doesn't borrow at 30-year maturities, and its debt doesn't price anywhere near Treasury yields. But in a bond market like that, I think borrowed money could stay expensive for a while. And CoreWeave needs a lot more of it.
More debt, cheaper debt
CoreWeave's interest expense has climbed every quarter for the past year, from $267 million in the second quarter of 2025 to $311 million, $388 million, $536 million, and now $640 million. The driver is the balance, not the rate. Total debt reached about $35 billion as of June 30, up from about $21 billion at the end of 2025. That is a lot of debt for a company that completed its initial public offering (IPO) less than 18 months ago.
The rate, in fact, has moved in CoreWeave's favor.
"Over the past year, we have reduced our weighted average cost of debt by almost 300 basis points, representing approximately $1.1 billion of annualized interest saving based on our end of Q2 debt load," chief financial officer Nitin Agrawal said in the company's second-quarter earnings call.
Those savings are real. Low-rate convertible notes and bigger credit facilities have replaced some of the expensive borrowing from earlier in its cloud build-out. The bill more than doubled anyway, because the balance grew far faster than the rate fell.
How expensive is all that debt?
CoreWeave's latest quarterly filing lists effective interest rates for its borrowings, and the range is wide: 2% on its convertible notes, mostly 9% to 11% on its term loans and senior notes, and 15% on its oldest term loan.
Weight each rate by its balance, and the blended cost works out to about 8.4%. On a balance this size, each percentage point costs more than $350 million a year.
New money is still arriving above that average. CoreWeave issued senior notes at 9.75% in April and 9.625% in June, plus euro-denominated notes at 8.5% -- effective rates of 9% to 10% once fees and discounts are folded in.
And the $2.6 billion term loan facility it added in August prices at 5.5 percentage points over the benchmark short-term lending rate.
The broader bond market offers little sign of relief coming. The 30-year yield touched 5.34% in mid-August, its highest since 2007, and sits at about 5.27% as of this writing.
The bill keeps climbing
Management expects third-quarter interest expense of $860 million to $940 million, a step up of about 41% at the midpoint, against $200 million to $260 million of adjusted operating income.
Operating profit was already far behind. Adjusted operating income was $128 million in the second quarter, down from $200 million a year earlier even as revenue more than doubled.
But the maturity schedule, at least, looks manageable. About $4.4 billion of principal comes due through year-end and $6.2 billion in 2027, while nearly $15 billion isn't due until after 2030. Refinancing isn't the near-term problem, in my opinion. New borrowing is.
That's because the spending isn't slowing down. CoreWeave spent $16.1 billion on capital expenditures in the first half, and its full-year guidance of $35 billion to $39 billion implies roughly $19 billion to $23 billion more in the second half.
Against that, CoreWeave held about $5.5 billion of cash at the end of June -- arguably not much next to spending plans that size.
Ultimately, the second quarter showed a company getting better at borrowing while needing more of it than ever. Sure, the spending builds the AI infrastructure behind the $104 billion of contracted revenue already on the books. But the interest bill is climbing faster than the operating profit that is supposed to carry it.
That gap is the number I'd watch. Interest expense ran about $500 million ahead of adjusted operating income in the second quarter, and guidance implies the distance widens in the third.
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