The business of running a fast-growing but young cloud computing firm in the age of AI is not necessarily a profitable one. Take CoreWeave, perhaps the best known of a crop of neoclouds trying to take on the well-established cloud firms. On Tuesday it reported second-quarter earnings showing that revenue rose 112% to $2.575 billion while cash burn rose by about the same percentage to $5.7 billion. Oops.Investors didn’t seem to care: CoreWeave stock jumped 13% in after-hours trading. In CoreWeave’s case, Wall Street may be more focused on other profitability metrics, such as the widely used earnings before interest, taxes, depreciation and amortization, which the company adjusted to exclude stock compensation. On that measure, CoreWeave is looking healthy! Its “adjusted Ebitda” doubled to $1.5 billion. But while Ebitda can be a useful metric for some companies, it’s a nonsensical metric for analyzing CoreWeave.
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