Investing.com -- Moody’s Ratings has assigned a Ba3 corporate family rating (CFR) and a Ba3-PD probability of default rating (PDR) to CoreWeave, Inc., a leading provider of cloud infrastructure specialized in AI workloads. The company’s proposed $1.5 billion senior unsecured notes due 2030 received a B1 rating, and a speculative grade liquidity rating of SGL-3 was also assigned. The outlook for CoreWeave is stable.

The proceeds from the senior unsecured notes will be used for general corporate purposes, including debt repayment and covering transaction-related fees and expenses. The ratings reflect CoreWeave’s high financial leverage and the expectation that the company will continue to rely on debt financing in the near-to-mid term to fund capital spending required for servicing recently signed large-scale customer contracts.

CoreWeave’s Ba3 CFR is supported by its robust revenue and EBITDA growth, stemming from its leading position as a software and cloud infrastructure provider managing complex AI workloads at scale for AI labs, hyperscalers, and enterprises. The company’s nearly $26 billion contracted revenue backlog as of March 31, 2025, with an average contract duration of approximately 4 years, also contributes to the rating.

However, the Ba3 CFR is restricted by CoreWeave’s high financial leverage, projected to be 6.9x as of year-end 2024, and the expectation of negative free cash flow until at least 2026 due to high capital spending required to service large-scale committed customer contracts. Additionally, the rating is constrained by significant customer concentration, with the top two customers representing 77% of 2024 revenue.

For year-end 2025, Moody’s projects CoreWeave to generate around $6 billion of revenue, growing over 200% over the prior year, supported by its contracted revenue backlog and our expectation of contract expansions with existing customers and new customer additions. However, incremental debt required to fund capital spending for committed customer contracts is expected to drive a free cash flow deficit greater than $15 billion and for financial leverage to slightly increase to the mid-7x range.

The stable outlook reflects Moody’s view that CoreWeave will maintain its upward growth trajectory and increase margins supported by its large contracted revenue balances. The stable outlook also reflects the expectation that the company will maintain at least adequate liquidity to fund free cash flow deficits driven by high capital spending to service customer contracts and that financial leverage will decline below 4x by year-end 2026.

The ratings could be upgraded if CoreWeave continues strong revenue and EBITDA growth execution resulting in financial leverage declining and approaching 3.5x. A downgrade could occur if financial leverage is sustained above 4.5x, revenue growth is slower than expected, or operating margins deteriorate, which could be due to a deterioration of CoreWeave’s market position, or liquidity deteriorates.

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