From a personal perspective, the second quarter financial report of CRWV indicates a positive turning point in demand and pricing. 1. CRWV's previous guidance for Q2 revenue was $2.4-2.6 billion, with actual revenue of $2.575 billion, close to the upper limit of the guidance and slightly higher than Wall Street's consensus expectation of approximately $2.56 billion. The real highlight of the financial report is: 1) Adjusted operating profit reached $128 million, exceeding the previous guidance limit of $90 million; 2) The profit margin for the first quarter was about 1%, and for the second quarter it was 5%. The operating profit margin has just begun to rebound from an extremely low level; 3) Interest expenses amounted to 640 million US dollars, slightly lower than the previous guidance of 650-730 million US dollars; 4) The pricing and profit margin of the new contract have significantly improved, and the guidance for annual revenue and operating profit has been further raised. The market is re pricing the unit economy and profit margin path 2. The guidance for the third and fourth quarters is very strong 1) The Q3 revenue guidance midpoint is approximately $3.525 billion, with a month on month growth of approximately 37%; The year-on-year growth in the third quarter of the 25th year was about 158%. After Q3 adjustment, the midpoint of operating profit was 230 million US dollars, corresponding to a profit margin of about 6.5%, higher than Q2's 5%, indicating that the company expects its operating leverage to continue to improve. 2) The guidance for the fourth quarter is very strong. According to the mid point mechanical calculation of the full year guidance, the mid point revenue for the year is 12.8 billion US dollars, the first half revenue is 4.653 billion US dollars, and the median revenue guidance for Q3 is 3.525 billion US dollars. It can be estimated that Q4 revenue will be about 4.622 billion US dollars, which means that Q4 still needs to increase by about 31% compared to Q3. According to this method, the implied Q4 operating profit margin can be calculated to be approximately 676 million US dollars, and the mechanical calculation corresponds to an adjusted Q4 operating profit margin of approximately 14.6%. The operating profit margin continues to rise. Of course, it can also be said that whether the annual guidance can be fulfilled largely depends on the significant revenue and profit margin steps in Q4. 3. Backlog: Strong demand certainty, but significantly extended deadline 1) At the end of the second quarter, CRWV's revenue backlog reached $104.2 billion, a year-on-year increase of 246%. The company also stated that this figure does not include the more than $25 billion in new customer commitments since early July. If the latter is only used as a demand signal, the total amount of the two exceeds 129 billion US dollars. 2) The core is the change in Backlog structure About 40% within 24 months, 39% between 25-48 months, and 21% after 48 months. Calculated at 104.2 billion meijin, it is roughly: Confirmed approximately $41.7 billion within 24 months; Approximately 40.6 billion US dollars will be confirmed within 25-48 months; Confirmed $21.9 billion 48 months later. The Backlog/4 converted into revenue within 24 months is basically more than four times the Q2 accounts receivable and more than double the Q4 strong optimistic guidance. 3) At the end of the second quarter, CRWV had approximately 1.5GW of available power, with an increase of approximately 500MW during the quarter, of which over 300MW was added in June alone. As of August 11th, the contracted power capacity is approximately 4.2GW; 4. Capital expenditures, free cash flow, and balance sheet 1) Capex has a huge scale Q2 company defines Capex as approximately $9.352 billion, equivalent to approximately 3.63 times quarterly revenue. Capex was approximately $16.139 billion in the first half of the year, which is equivalent to about 3.47 times the revenue of the first half of the year. It is necessary to clarify the company's definition of Capex as including assets acquired through financing leases and adjusting for changes in construction in progress. Therefore, the Q2 cash purchase of fixed assets reflected in the cash flow statement is 6.422 billion US dollars. 2) The conversion of operating cash flow to normal does not necessarily mean the conversion of free cash flow to normal Q2 operating cash flow was positive at $679 million, a significant improvement from the negative $251 million in the same period last year. But it includes a non cash item of depreciation and amortization of 1.393 billion US dollars; The increase in deferred income of approximately 790 million US dollars resulted in an inflow of working capital; Customer prepayments and contract liabilities support cash flow. Free cash flow is still negative. This model can create higher shareholder returns as long as the contract performance, utilization rate, and resale value are established; 3) Balance Sheet: Financing costs improve, but absolute debt burden continues to rise As of the end of the second quarter, the cash was approximately $5.524 billion, and the total long-term debt and lease obligations exceeded $51 billion. Q2 financing cash flow shows that the company has obtained approximately $13.5 billion in debt financing, while repaying approximately $3.9 billion in debt and obtaining approximately $1 billion in equity financing. In other words, there is strong capital market financing support behind this quarter's revenue and Capex expansion. 5. The most critical industry signal 1) The profit margin of the new contract has increased by 5-10 percentage points The management stated that the expected contribution profit margin of the newly added contracts in Q2 is about 5-10 percentage points higher than the contracts signed in recent quarters. This is the most important positive message of the entire conference call, as it means that new revenue is no longer just about "trading higher Capex for higher revenue", but may bring better incremental returns. 2) The overall SKU price increased by about 25% in July The management stated that a price adjustment of approximately 25% was made for various SKUs in July, while transferring some component cost increases. This indicates that the current AI cloud market has not yet entered a fierce price war, at least in terms of high-end GPUs and short-term deliverable capacity, supply is still significantly tight than demand. 3) The residual value of the older generation GPU performs better than market concerns The management disclosed that a batch of A100 contracts have been extended until 2029, and the prices are attractive; The pricing of the previous generation GPU remains at or above the level of a year ago. This is an important counterargument to the view that GPUs will be completely scrapped after three years. 4) Vera Rubin is becoming the next profit margin driver CRWV stated that it was one of the first cloud service providers to complete the deployment and validation of NVIDIA Vera Rubin NVL72, and the management stated that Vera Rubin is an important source of profit margin improvement for the new contract. Overall, CRWV's financial report proves that its industry demand, pricing, and delivery capabilities are better than market expectations. The management has given extremely strong guidance for the third quarter and implied fourth quarter, which may be due to the surge in stock prices after hours. The financial report of ultra large CSPs proves that the demand for computing power is growing rapidly and commercialization is also accelerating. Now, it is evident that new cloud vendors' mid to large CSPs are also starting to prove this. I estimate that NBIS's financial report tomorrow will also be very good